question_answer

'The Suez and the Panama canals are two vital man - made navigation canals which serve as gateways of commerce for both the eastern and western worlds.' In the light of this statement explain the economic significance of these two canals.

Answer:

This canal had been constructed in Egypt between Port Said in the North and Port Suez in the South linking the Mediterranean Sea and the Red Sea.

Suez Canal decreases the road between Europe and South Asia from 16000 km (travel from the Cape of Good Hope) to 10000 km.

Suez Canal helps especially to developed countries to trade with developing ones. Most of developing countries are placed in Middle East and Asia. Therefore, developed European countries open up factories in borders of those who have cheap labour force and land. Moreover finished products could be easily transported from ports in South Asia to Europe or United States.

This Canal strengthens the power of Egypt in world economy. With the taxes from the ships which use the Suez Canal, Egyptian economy keeps growing day-by-day. The required labour force comes from Egypt and reduces the unemployment rate in the country.

Suez Canal gives Egypt a strategic power to affect world trade by having a transportation road between developing and developed countries.

The Panama Canal connects the Atlantic Ocean in the East to the Pacific Ocean in the West.

It shortens the distance between New York and San Francisco by 13,000 km by sea. The canal permits shippers of commercial goods, ranging from automobiles to grain, to save time and money by transporting cargo more quickly. Prior to the completion of the canal, a ship sailing between ports in New York and San Francisco had to sail around Cape Horn, which took 67 days.