Panama’s president has come forth with the long-awaited plans for the expansion of the Panama Canal.

The $5.5 billion expansion would widen the canal so that bigger ships with more cargo and traffic can go through. Right now, a full five percent of all world trade goes through this canal and there can be a four-day waiting period for ships trying to go through (when there are boat-traffic jams). Panama makes about $1.2 billion a year on crossing fees, but to its great credit, its economy does not stop at those boat fees, but multiplies away into vast financial services, banking, and human services, like hospitals. That’s where most of Panama’s economy is.

It’s probably the greatest engineering feat on the face of the earth – as well as one of the oldest. But it hasn’t been improved since 1914 and like all things it needs to improve because ships are improving as world trade expands.

People are scared to widen this canal because they fear the cost of this thing. They are afraid the country will go into debt and higher tolls will chase off traffic. I also suspect some are scared of globalization, given the strong anti-fre-trade movement in this country. The left-leaning, but very democratic president of Panama, Martin Torrijos, assures them this is in their interest. He wants their votes and to show his respect for them, he is initiating a referendum.

Let’s see how Panama’s people decide on what their future role in world trade will be.

The story is here. Notice that the source is a red Chinese newspaper. This underscores the importance this measure is to the Chinese who must use the canal to ship their manufactured goods to U.S and European markets.

Fun facts about the canal here.