“We are seeking our own path in the world, but we have to copy the good things that other countries have done, for example what Singapore has done and what the Dominican Republic has done in tourism,” Martinelli told the Monitor following the recent investors conference, “Panama: Where the World Meets.”
Though it sounds like a tall order, Panama, which enjoyed 7.5 percent economic growth last year – more than double the Central American average – seems up to the challenge. According to projections from the United Nations and the International Monetary Fund, Panama will lead the region in economic growth over the next five years, thanks in large part to a five-year, $20 billion public-investment plan highlighted by a $5.25 billion expansion of the Panama Canal, to finish in 2014.
But there are signs that this pro-business government can’t have everything it wants all at once.
On March 3, Martinelli reluctantly announced his government was repealing its controversial Reforms to the Mining Code (Law – an initiative that his administration had hoped would bring in billions of dollars in revenue and convert Panama into one of the largest mining nations in Latin America within 20 to 30 years.
Backpedaling on it and the mining law are indications, he insists, that his government is listening to the people. Analysts, however, claim the reversals are more a symptom of his government’s failure to consult civil society on projects that don’t necessarily jibe with Panama’s culture or traditional development model. And it’s giving some the impression of an erratic government that is shooting out in all directions. “
The government of Panama is working with Microsoft to make Panama one of the first countries to digitalize all government transactions.
This project was presented at Panama’s recent Competivity Forum Oct. 19th at the Playa Bonita Intercontinental Hotel.
The National Innovaction Authority aims to accomplish this by 2012. 50 million dollars have been designated for this project.
Even though Panama is a so-called underdeveloped country, this digitalization will increase efficiency and reduce corruption, enabling Panama to jump ahead in development.
Panama’s education system is also working with Microsoft to create online training for teachers, provide teachers and students with laptops and improve education in general- a critical intiative since Panama’s public education system is one of the weakest in Latin America.
The digitization of transactions will save the country an estimated 25 million a year.
Also, in 2011, the private sector will soon be able to make tax payments online- saving money by elimination countless hours of private sector time. Until now tax payments had to be made with certified checks.
The Martinelli government deserves congratulations for using innovation to develop Panama more quickly, more cost effectively and more effectively.
Remarks by Nancy Hanna, Chair, American Chamber of Commerce Tourism Committee.Sept. 9, 2010
Buenas Tardes. I am especially pleased once again to have Mr. Shamah here- our highly active and highly effective tourism minister. Hardly a week goes by when I don’t hear about some new thing you have done to make tourism happen.
I’m really excited about today’s program - Let me especially mention Panama’s handicrafts queen Agnes Santomeno of Reprosa- who has raised our souvenirs to a world class level, and Andrew Coate’s debut today of La Ruta Verde- the most exciting eco-project I have ever seen..
Today before our very eyes Panama is transforming itself to meet its historic destiny- to be the capital of the Americas. Panama’s destiny was first recognized by Simon Bolívar who called the first hemispheric conference- the Congress of Panama in 1826.
Fast forwarding to 911- 911 speeded up Panama’s destiny. Until 911, Miami was the de-facto capital of the Americas-both Latin America and the Caribbean- you know- the place you all liked to go for meetings, to shop, to have fun and take that side trip to Orlando.
911 ended Miami as the capital of the Americas. Why? Because companies in Latin America could not get visas to the USA for their people to attend meetings with consistency. If they needed to send 10 people to a training- they maybe 6 got visas. ( Just one example- Our own president of Amcham Don Elder was in Miami, with Caterpillar when could not get visas for trainings in the US- He recommended that Caterpillar set up a region HQ and training center in Panama- that training center which will need 12,000 hotel nights a year, just broke ground last month)
Panama has is now fulfilling its destiny to be the business capital of the Americas with its strategically central location, the most modern and safe capital city in the region, direct flights to more than 60 destinations and a long history as a business center and crossroads.
In line with Panama’s destiny, President Martinelli has the goal to make Panama the best place in Latin America to do business. Plans include a large convention center on Panama Bay between Casco Viejo and Amador. Due to the incentives of Law 41. More than 100 companies including such giants as Proctor and Gamble and Samsung set up their headquarters in Panama
So naturally, today most of our tourists are businessmen and that’s good.
But there is another Panama- one that is blessed with extraordinary natural attractions- “so beautiful you could cry” rainforests, islands, oceans and mountains with a flor and fauna that is one of the richest in the world and we have the Smithsonian to prove it!
In tourism, our greatest challenge is to balance the business growth, with actions to preserve the priceless treasure of Panama’s nature- not only for tourists to enjoy, but for the long term health and happiness of future generations. Amcham is committed both business development and the preservation of nature.
Enjoy today- let’s learn and let’s work together for both successful and sustainable tourism.
Panama as a business capital continues to get positive press
(Reuters) - A generation after Panama shed a tradition of military rule, canny fiscal management and good stewardship of its emblematic canal have made the tiny country a model of success for today’s frontier markets.
An investor darling that has grown rapidly over the last decade and even managed to dodge recession during the recent global downturn, Panama’s government debt has received a coveted investment grade rating by Fitch and S&P.
Panama will not realize its ambition of joining the world’s most developed nations until it cleans up its murky banking system and narrows a wealth gap that leaves a third of its people in poverty, but economists say it is well-positioned for steady growth.
“What’s striking is that this is such a broad-based economy,” said Boris Segura, an economist with the Royal Bank of Scotland. “Yes, they have the canal but there is also tourism, construction and a growing financial services sector.”
With a population of just 3.4 million, Panama will never be a China or a Japan but local leaders say it can aspire to become like Singapore, an affluent and diverse crossroads for international finance and trade.
“Nobody is going to come to Panama to sell to the domestic market. We tell investors ‘Come to Panama and sell to the world’”, Trade Minister Roberto Henriquez told Reuters. He sees the small isthmus nation’s future as a boutique exporter of high-margin goods and services.
See the whole article here:
The International Monetary Fund has just released an analysis of the economic progress of each country in the region over the next 5 years. Panama comes out on top with a projected growth rate of 5% for 2010 and between 6.1% and 6.5 % until 2015. This good news comes along with the recent good news that Panama now is now investment grade.
This analysis reflects confidence in Panama and its 5 billion dollar Panama Canal widening project and in the Martinelli government which is undertaking numerous important infrastructure projects-including two new international airports, a Panama City Metro, and a convention center. At the same time, the government is seriously reducing corruption- the major reason that Panama and other Latin American countries have been held back in their development. Transparency International estimates that corruption costs 30% of the GNP in Latin America.
Just a week before the May 3rd. elections, presidential candidate Ricardo Martinelli predicted he would win the Panama presidency by a “tsunami “. No one believed him. The polls showed him ahead but after all, the last time he ran for president in 2004 he got only 5% of the vote. But that is exactly what happened- he won by landslide- 60% in a 3 way race- the highest margin of any race in Panama’s recent history
Martinelli won because he convinced the Panamanian people he would do all the right things for both the populace and the business community- that he was the person who could solve the countries mounting problems including rampant corruption, increasing crime, a public school system that is the most expensive and one of the worst in Latin America and a Panama City transportation chaos that means city dwellers spend 10 years of their life on a bus or car getting to work.
Mr. Martinelli ran a campaign with a slogan about “Change ” just like President Obama. In fact according to an interview in The Panama Post, his models are Barack Obama “because he showed change is possible, Winston Churchhill “for his tenacity”, Otto Von Bismark for unifying Germany and next door neighbor Alvaro Uribe, the very successful of President of Columbia.
Change is what Panama needs as it stands at a crossroads- a country with one of the most promising futures in Latin America, but only if Mr. Martinelli can solve its current very pressing and serious problems.
Mr. Martinelli, age 57 is one of Panama’s most successful businessman having built the country’s largest supermarket chain. He did his undergraduate studies at the University of Arkansas and an MBA at the prestigious Costa Rica INCAE school of business afilliated with Harvard University. He is a brillant, no-nonsense, take charge type of guy. His election is hailed as a turn the right after a string of Latin American governments have turned to the left in recent years. He is pro-American, will work hard to get the Free Trade Agreement with the US signed this year and he is going to bring modern management and business know-how to solving Panama’s problems.
Panama watchers are heartened by his actions since his elections including a choice of ministers- some of whom are brilliant like economist and banker Alberto Vallerino as the head of the all important Ministry of the Economy and some of whole are “out of the box” appointments like Lucy Molinar as Minister of Education- a popular and formidable TV journalist of enormous integrity.
Mr. Martinelli’s election made news in the Wall Street Journal, New York Times and Time. Indeed, many investors looking for a good place to invest money these, are taking second look at Panama now because of his election. Among other things, he plans to will start building right away a metro to solve the devilish Panama City transportation problems, 5 new airports for the burgeoning tourism industry and a highway network including coastal route to connect Panama’s attractive Caribbean.
Mr. Martinelli takes office July 1st. From there on, there’s going to be plenty of interesting news out of Panama.
Why Buy Real Estate in
Who is investing in
In an April 2009 article in New York Times, Sam Taliaferro, an American developer in
“We’ve certainly seen a slow down in for homes in the $200,000 range. But we’ve seen a pickup in another market. The market we’re seeing now is a market of wealthy individuals who are looking for safety. They’re looking for a safe haven. They want to park their assets somewhere else because they see a train coming down the tracks.
They’re also looking for what would be a second home that will become a primary home. They’ll make this their primary home and be a resident outside the country and maybe keep a home in the
Real estate investments in
One cautionary note is the
The strong Panamanian business sector including an international banking sector of over 100 banks, is solid having not made the mistakes of its of the banks up North.
International organizations, the Panama government and local and international consulting firms are predicting Panama’s economy will grow between 1.2% and 5% in 2009. This is well below the 9.2% it grew in 2008, but better than most other countries where economies are contracting not growing.
A local website, Panama Economy Insight is predicting growth of only 1.2% for 2009 but a growth of 9% in 2110 and 2111.
Standard and Poor is the most pessimistic for 2009 with a prediction of 3.5%
Local consulting firms Indesa and Deloitte say 4%.
CEPAL ( Latin American Economic Commission, and the analysts at Credit Suisse and Citibank all predict 4.5%- 5%.
According to an article in La Prensa March 25th, Panama’s Finance Minister Hector Alexander says ” Considerando all the is happening worldwide with the recessions in the major world economies and other countries in the region, this is very good and shows Panama’s (economic) strength.
Below is a list of confirmed 8 megaprojects and another huge one in the works for 2008-2010.
Panama is a tiny country- if only half of these projects actually get built it will do very well, but most of these projects are going to happen
Megaprojects in Panama Confirmed for 2008-2010:
1.Canal widening: 2.8 billion
2. Petaquilla mine: 3.5 billion
3. Government infrastructure projects : 3 billion
4. Electrical plants: 945 million
5. Rodman Port: 100 million
6. Manzanillo Port Expansion and other ports: 611 million
7. Puerto Armulles oil pipeline: 100 million
8. London Regional project in Howard: 750 million ( a whole city) They broke ground last week.
9. Another project not yet nailed down: Puerto Armuelles Refinery: 8 billion ( Investors; Occidental Petroleum and the country of Qatar)
Negotiations are continuing for this biggie but they are coming along well .
10. Tourism is growing at 10% a year - a million a year and they spend 10 times more than Costa Rican tourists ( mostly because most tourists are businessmen). Panama’s tourism authority just released an excellent tourism master plan. Panama has more attractions than Costa Rica and its tourism industry is in its beginning stages.
After looking at this list, you know why our Panama City hotels have been so full.
Panama like all countries will be effected by the US and worldwide economic downturn which looks like will continue for a couple of years. However, in my opinion Panama will continue to do well economically inspite of the this worldwide downturn. Why? Several reasons. First, inspite of the US situation, these years will be a time of real growth in the developing countries of Latin America. Brazil will lead the way, but a number of factors make this a growth time for Latin America in general. The first reason Panama will do well is that Panama is becoming the Business Capital of Latin American and Caribbean Region. Every week I hear of a new company big and small that is making its corporate HQ in Panama. There are several reasons this is happening. Miami used to be the business capital of Latin America, but since 9/11, businesses in Latin America can no longer consistently get visas for thier employees to go to Miami or anywhere in the USA for that matter. So Latin America needs a new business capital and Panama has it all- the most central location, a modern, relatively safe capital city to live, work and do business and a national airline- Copa with more direct flights to Latin American and the Caribbean than any other airline in Latin America.
Most of the growth in tourism in recent years is actually “business tourists” coming to Panama City. Panama’s tourism will also continue to grow- Panama will become not only a top business destination but as infrastructure and airports are built outside Panama City, it will become a beach, mountain and ecotourism destination as well. Fact is Panama in these areas, has more to offer Costa Rica, and is just now beginning to develop its tourism potential
Apart from the current development of Panama as the business capital of the region, Panama itself has a number of mega-projects in the works that will mean jobs and a constant flow of capital- starting with of course the 5 billion Panama Canal expansion, some major oil pipeline and multimodel transport projects and perhaps a mega-refinery project. Panama has a population of only 3 million- so just a few major projects can make all the difference. In fact, according to CEPAL , Panama’s poverty rate has dropped dramatically in the past 5 years- from 37% to 27%.
Panama has major problems that will make economic progress for all still difficult , The poorest are hard to reach as they are mostly the Indian population on rural, isolated reservations, but with smart planning and a will-to-care they can be reached. Panama’s education system is one of the worst in Latin America in academic results even though Panama spends more than most countries on education. But again all Panama needs is leadership to address this problem because it will have the economic means in the coming years.