Despite all the sturm und drang, a minor invasion of its troops and an international law suit in the World Court at the Hague, Nicaragua has decided that it will not build an inter-ocean canal on the San Juan River, after all.

economia-20000904-01.jpgThe information was sent to Costa Rican Foreign Minister Rene Castro by Nicaraguan Deputy Foreign Minister Orlando Gomez Wednesday. Gomez cited a technical study by the Chinese-funder HK Nicaragua Canal Development Investment Co. Ltd.

Gomez sent all the Central American nations the news, promising details later. Just two weeks ago, during the visit of U.S. President Barak Obama, Nicaraguan President Daniel Ortega reiterated to Obama and the presidents of other Central American nations his determination to build the canal.

Although Deputy Minister of Foreign Relations Carlos Roverssi had noted the resistance of the Costa Rican government as an obstacle for Ortega to complete his project (see previous article) Roverssi still was skeptical. “We still can’t believe it,” he said, “We’re satisfied with the decision of the Nicaraguan government.”

Roverssi said he had information that potential investors would not get on board the project if Costa Rica opposed the plan. After problems encountered during the preparatory dredging of the river that provoked the Costa Rican government to protest environmental damage, Chinchilla’s Administration would not approve.

“This has been a difficult struggle the government of the republic, headed by the President,” he said, “to try of avoid using the San Juan for a canal due to the devastating effects it would cause in both Costa Rican and Nicaraguan territory.”

Analysis: Some of our sources tell us that Eden Pastora, who was authorized by Ortega to dredge the canal, told Costa Rican television that the main factor in the withdrawal from the canal plan was the death of Venezuelan President Hugo Chavez.

But not even oil-rich Venezuela could have financed the canal alone. It was no doubt that this was a contributing factor but not the deciding one. No doubt the “technical reasons” cited by the Nicaraguan Deputy Foreign Minister has to do with the cold diplomatic climate between the nations and economic factors.

Ortega will probably blame Costa Rica–that is standard with most Nicaraguan governments when they have egg on their faces. But make no mistake–Ortega has only himself to blame for the collapse of the project.

From the very beginning, Ortega’s attitude toward the spirited little republic to his south generally has been contemptuous and high handed. In nearly any other country he would be in deep political doo-doo for having either proposed such a grandiose plan or having failed.

But not in Nicaragua.