ABSTRACT
Internationally, the Panama Canal is arguably the best known and most significant feature of the region and there is concern over its capacity to continue handling the growing traffic between the Pacific and Atlantic Oceans. Clearance of forest in the basins of the rivers feeding the artificial lakes that provide water for the canal locks threatens to hamper navigation. The construction of an alternative inter-ocean canal through Nicaragua has been contemplated for a long time. Such a project would require international funding, most of which would have to come from the USA. United States influence has been strong in Central America, both economically and on account of the strategic significance of the region during the Cold War. For the USA itself, the Panama Canal is a vital link between its eastern and western coasts, while socialist movements in a region so close to home, as in Nicaragua, prompted concern in Washington and considerable involvement since the Second World War.
