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RACHEL MARTIN, HOST:

The Panama Canal was built almost 100 years ago and is now undergoing a major expansion. The waterway will be widened, making room for bigger ships, and that means more cargo¹ and more revenue. The expansion promises big rewards for Panama and the Americas. But will those benefits trickle² down in a country were almost 40 percent of the population is in poverty? Tim Padgett of member station WLRN in Miami went to Panama to find out.

TIM PADGETT, BYLINE³: Each year, ships like this one move 330 million tons of cargo through Panama. The U.S. built the canal in 1914, but more important to most Panamanians, is what happened 14 years ago. That's when the U.S. handed over to ownership to Panama. And Panama has made the most of it - turning the waterway into a business that generates $2.5 billion a year.

Panama's economy is growing faster than any other in Latin America. Panama City has a new subway. It's waterfront skyline now supports the region's tallest skyscraper⁴, the Trump⁵ Ocean Club. In fact, Panama, today, rivals the U.S. as a prime shopping destination for foreign visitors.

CARLOS URRIOLA: When you go to Miami, you will see a lot of people with their luggage in the malls buying things. Today, you see this in Panama.

PADGETT: Carlos Urriola is an executive with the Manzanillo International Terminal, a port that serves the canal.

URRIOLA: It's amazing that a small country of 3.5 million people have so much influence in what happens in world commerce.

PADGETT: And that influence promises to grow thanks to this - the $5 billion expansion of the Panama Canal. When the wider locks and channels are completed next year, the canal will be able to serve more massive ships. That should almost double the canal's annual revenues over the next decade and help Panama become a global maritime⁶ and financial hub.

But the canal hasn't solved Panama's glaring social inequality. Even the canal's top booster warns that could threaten the country's future. Jorge Quijano heads the Panama Canal Authority. He cites Panama's education system, rated one of the world's worst, as one deficiency that could ultimately scare away foreign investors⁷.

JORGE QUIJANO: There's so much investment coming in from outside and eventually what's going to happen is if we don't have the right people, those investments will go elsewhere.

PADGETT: The problems go beyond education. Close to 40 percent of Panamanians still live in poverty. Half the country's children are poor and almost a fifth suffer malnutrition⁸.

ELADIA CORDOBA: (Through translator) All the canal wealth isn't getting to poor people or the barrios. It's not coming to anyone's rescue here.

PADGETT: Eladia Cordoba is a widowed, unemployed⁹ mother in Panama City's El Chorrillo slum. The barrio sits practically beneath the capital's gleaming new office and condo towers. Córdoba spoke¹⁰ to me inside her tiny walk-up apartment while feeding her four young children a lunch of pasta and ketchup¹¹. And she's not confident that the winner of last month's presidential election, Juan Carlos Varela will do much to change her situation.

CORDOBA: (Through translator) As soon as they become president in Panama, they take care of the rich.

PADGETT: On the other side of the isthmus¹², next to the canal's Caribbean entrance, the larger predominately black port city of Colon¹³ has been left out of Panama's prosperity. Unemployment there is about 50 percent. And in recent years, frustrations¹⁴ have morphed into deadly street protests.

Roberto Darkins has taken part in those demonstrations¹⁵. He sells clothing on Colon's main street. Despite Panama's building boom, he, his wife and four kids can only afford a one-bedroom apartment in a decaying 19th century building.

ROBERTO DARKINS: You make a building and you charge $500, $700 a month. And the salary here is like, $200, $300 a month. Then who do you expect to go and live in those buildings?

political system will devour¹⁶ the fruits of the enlarged canal.

DARKINS: The more money you make, the more corruption¹⁷ they going to do.

PADGETT: All of which could undermine Panama's expansion, no matter how well it expands it's canal. For NPR News, I'm Tim Padgett.

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