A severe drought and El Niño are straining Panama's water supply, affecting the Panama Canal and threatening the livelihoods of farmers in the Arco Seco region.
Panama is facing a critical water shortage, with the rainy season failing to replenish vital water sources. Farmers in the Arco Seco region report diminished pastures and reduced milk production, forcing some to sell or slaughter livestock. The government has declared a national state of emergency, citing rainfall deficits of over 50% in some areas.
The Panama Canal, a key economic asset, is also at risk. Freshwater lakes that supply the canal’s locks also provide drinking water for nearly half of Panama’s population. Officials warn that El Niño could worsen conditions, with restrictions on vessel transits already implemented. The government is investing $80 million in resilience measures and planning a $1.5 billion reservoir project, though it faces opposition from affected communities.
Why it matters
The water crisis threatens Panama’s economy and the livelihoods of nearly half its population, who depend on the canal’s freshwater supply.
This section reflects Dumpling editorial interpretation and is provided for context only.
What to watch
The progress of the Indio River reservoir project and its impact on displaced communities will be a key indicator of the government’s response to the crisis.
This section reflects Dumpling editorial interpretation and is provided for context only.