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Voters in Panama Approve Major Expansion of Canal

Voters in Panama have approved an ambitious project to expand the Panama canal, to allow the largest modern cargo ships to squeeze through the shortcut between the Atlantic and Pacific Oceans. VOA's Cindy Saine reports from Miami on a decision Panama's government hopes will help lift its people out of poverty.

The Panama Canal, one of the engineering wonders of the world, is going to get its biggest overhaul in its storied 92-year history.

Supporters of the $5 billion expansion project are celebrating their victory in the yes-or-no-referendum held Sunday. About 78 percent of voters said 'yes' to broadening the canal, with a voter turnout of about 43 percent.

Many modern container ships are too large for the 80-kilometer canal linking the Atlantic and Pacific Oceans. The shortcut saves ships from a long journey around South America's treacherous Cape Horn.

The United States financed the building of the canal in 1914. It was dug out and dynamited by tens-of-thousands of mainly Caribbean laborers, and thousands lost their lives to malaria and yellow fever.

In keeping with a treaty negotiated by former President Jimmy Carter, the United States turned the canal over to Panama on December 31, 1999.

Gene Bigler served as counselor for economic and political affairs in the U.S. Embassy in Panama from 2000 until 2003, and was responsible for overseeing the transfer of the canal to Panama.

"The canal has had a dramatic impact ever since it was opened," he said. "In fact, it contributed to the development of the great West Coast ports of the United States almost immediately after it opened. It moved commerce around the world. It is tremendously important for a number of the countries of Latin America. Although it may be only four percent of global commerce, it can be over 60 percent of the commerce of countries like Ecuador, and I think Chile is almost that."

Panama's president, Martin Torrijos, reacted emotionally to the referendum results, saying Panamanians have laid the foundation to overcome the shame of having 40 percent of their people living in poverty.

Critics have warned the project could bankrupt Panama, if building costs spiral, and question who the expansion will actually benefit.

Gene Bigler says he believes the expansion will be a good thing for the people of Panama.

"It will create tens-of-thousands of jobs, that is without question," he said. "But getting the benefits down to the population will be a challenge. This government seems very dedicated, that is the government of President Martin Torrijos, seems really committed to getting educational benefits and other benefits down to the rest of the population in the country."

Bigler said the Panama Canal Authority is already working on getting more of the country connected to the Internet.

Work on the expansion is due to start in 2008, and to be completed in 2014.