Wealthy investors, many from Colombia and Venezuela, have built real-estate and tourism projects, restaurants, clothing stores, car dealerships and computer businesses around Panama City.
Nicaragua, meanwhile, doesn't have any obvious means, besides the possibility of the canal, of rapidly accelerating its growth.
The government says it has created 700,000 jobs since President Daniel Ortega took office in 2007 and poverty has dropped from 50 percent in 2006 to 42 percent last year. But 1 million people remain out of work in a country of 6 million. If the canal is built, the Nicaraguan government says, within five years GDP would go from $11 billion a year to $25 billion, generating hundreds of thousands of new jobs.
"Those who oppose the canal want this country to keep suffering from underdevelopment and poverty," said Edwin Castro, congressional leader of Ortega's Sandinista Front.
Nicaragua is betting on businessman Wang Jing, who first appeared in Nicaragua last year as the head of the Xinwei Telecom Enterprise Group, which signed a contract with the government to improve the country's telecommunications system and promised to invest as much as $700 million dollars. So far, there's virtually no sign of any spending yet.
"We can't believe that they're going to build an inter-ocean canal, when from here it looks like they haven't even built a single telephone line, or done anything else since they made the announcement. It's all a lie," said opposition congressman Eliseo Nunez.
The head of Nicaragua's state telecommunications institute told reporters last week that the first new telecommunications antennas would be installed by Xinwei in late July or early August, and the delay had been caused by Xinwei's high manufacturing standards. Still, such problems have fueled widespread doubts inside Nicaragua, where many are skeptical about dreams of Panama-style riches.
"It's all a grand illusion that they're selling us, it's untrue that we're going to turn into another Panama," taxi driver Francisco Siles said as he picked up fares outside a Managua hospital. "We're going to keep being the same poor Nicaragua."