ECONOMIC GROWTH IN PANAMA
Panama is home to the fastest-growing economy in the Americas. Almost overnight Panama City has changed from a Casablanca-on-the-Pacific to a slice of Manhattan transplanted to the tropics.
Today Panama, one of the major shipping ports in the world, has a population of over 3 million people, of which half live in the thriving metropolis of Panama City. Due to its importance to global commerce, it is a shoppers’ paradise. World-class medical care is readily available here at greatly reduced prices and an abundance of restaurants represent almost every country and ethnicity in the world.
THE PANAMA CANAL
The country’s most important man-made attraction is without a doubt the world-famous Panama Canal, which is considered one of the architectural marvels of the 20th century. The Canal’s spectacular construction goes through the interior of the rainforest, joining the Atlantic with the Pacific Ocean through the artificial Gatún Lake. The fascinating crossing of huge container vessels and cruise liners, and their elevation and descent in the locks, transform the Canal into a highly interesting attraction for nationals and visitors alike. At this present time the canal is being doubled in width to accommodate super tankers.
As in the past, fueled by transportation, storage and communications, construction, trade and tourism, the country is projected to reach economic growth of 11%.
• The Government continues to prioritize projects that improve quality of life for Panamanians
• Investments are made without resorting to new borrowing
• Continuity and the creation of social programs promoted in this administration has resulted in over 100 thousand Panamanians escaping poverty
Frank De Lima, Minister of Economy and Finances presented a report with figures showing a decline in unemployment and poverty, increased economic growth and good fiscal performance, which allows the government to implement more investments without resorting to new financing.
The minister, who was accompanied by his two deputy ministers and directors of the entity explained the responsible management that they have given to public funds and explained the financial performance in the fiscal period from January to August 2012.
With an economic growth of 10.6% in the first half of 2012, driven by transport, storage and communications, construction, trade and tourism, which in two years has increased its capacity by 30% – Panama is on the right track to finish the year with double-digit growth rate, as it did in 2011.
The boom is partly thanks to the canal, which Panama took control of in 1999. More than 4 per cent of world trade passes through its locks, with twice that expected when a $5.3 billion expansion, begun by the former president, is completed in 2014.
“It will be a game changer,” says Alberto Alemán, chief executive of Panama’s well-respected Canal Authority.
President Martinelli, a supermarket tycoon elected in 2009, has gone even further, supercharging economic growth with a $13 billion investment program – equivalent to half the country’s gross domestic product.
“Businessmen get things done,” boasts Mr Martinelli, who takes Singapore, another high-rise tropical success story, as his model. All this is a welcome rarity in Central America, which is more often associated with drug violence and economic despair. Panama was voted by The New York Times “best place to visit in 2012”.
Panama meets the golden rule of any successful hub: location, location, location. Shipping remains a crucial industry and multinationals, such as Procter & Gamble, SAB Miller, and the UN have made Panama their regional base.
There are no tedious visa restrictions, as in Miami. Five submarine-optic cables also pass through the country. Copa, the well-managed local airline, is meanwhile so busy it alone accounts for 4 per cent of Gross Domestic Product.
Uniquely in Latin America, the British, another trading nation, are Panama’s biggest foreign investors, with £8 billion committed so far. “We can’t build warehouses fast enough,” says Henry Onionskin, general manager of Panama-Pacifico, a $600 million investment by the property company London & Regional that will turn a former US air base into an industrial park replete with logistics and data plants, and a golf course.
Admiring officials from Colombia have visited to see how such “clustering” works.
Panama’s sophisticated banks are part of the answer, with diplomats suggesting the money-laundering business of old has moved on to Ecuador, another dollarized economy.
All this has turned Panama City into a building site. A 70-storey Trump Ocean Club and a Hard Rock “megapolis” with 1,500 rooms opened last year is due in April.
- A notable and appealing factor to most investors is the US Dollar based economy growing at a rate of over 10%.
- Panama is politically sound with a stable government
- Panama is economically sound and this makes Panama a good place to invest. Panama’s economic performance is, almost every year, better than just about every other country in Latin America. In fact, over the past 40 years, the country’s inflation rate has averaged less than 2% per year…that’s simply unheard of south of the United States. The Tripartite Committee has ranked Panama #1 in the region for low cost of living.
- Investing In Panama