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PANAMA: "I HAVE A DREAM"

I posted this because their are now an estimated 100,000 Colombians in Panama (60,000 legal and 40,000 illegal) in a small country with a population of about 2,850,000 people.

Colombian businesses, investments, banks and people are everywhere to be seen in Panama City. This article was written by a financial anaylist from the USA that covers Latin America.

Panama is a small country with few natural resources such as coal, oil or gas with most everything imported from somewhere. Because of it's progressive policies and attidude encouraging immigration from all corners of the global people are streaming into Panama including Colombians and they (immigrants) don't all come with emty pockets.

Panama: "I Have A Dream."

Panama has a dream. Panama wants to become a major service economy.

In addition to banking, transportation and warehousing, Panama wants to become a major tourism destination. Panama is now aiming to build a tourism complex to rival Costa Rica or Cancun, a lofty goal in itself. Panama is aiming for the stars. Panama wants to build an integrated service sector that can rival Miami. At first glance, Panama's proposition seems ludicrous.

Miami is a mega-city. It has the largest container
port in the U.S. It is the offshore banking hub for
Latin America. It has world class infrastructure, with
modern airports and highways. It has dozens of tourism
venues and luxury housing complexes. Most people laugh
at the notion that Panama and Miami could be uttered
in the same sentence.

However, not everyone is laughing.

Regional business leaders are mobilizing billions of
dollars into Panama. Central American, Panamanian,
Mexican and Colombian businessmen are building
ultra-modern shopping malls, hotels and luxury
apartments. Panama's construction sector surged 15%
y/y in 2004, boosting the country's level of economic
activity over 5% y/y.

There is a new skyline exploding over Panama City,
with modern structures that rival Brickell Avenue-at a
sliver of the cost. Chic restaurants are sprouting
along the causeway complex that will soon be home to
one of the major cruise ports of the Caribbean. The
new port facility will be a point of embarkation and
debarkation for cruise liners, replete with hotels and
shops.

Likewise, Panama City's airport is becoming a major
transportation hub for Latin America, with direct
flights to almost every large city in the region.

So, why would anyone go to Panama, instead of Miami?
Twenty minutes inside Miami Airport says it all. After
the endless visa requests to enter the U.S., Latin
Americans are subjected to endless queues, countless
insults and horrendous episodes of humiliation.

On top of that, Miami has become outrageously
expensive and the graveyard for scores of small Latin
American businessmen. Meanwhile, travel to Panama is
virtually hassle-free. The country is safe. Panama is
dollarized. It is cheap, and it is as Latin as Miami.

Yet, Panama has a tough row to hoe. The service
industry requires skilled workers-something that is
sorely missing in Panama. This may explain why
Panama's unemployment rate is hovering at 15%. Many of Panama's skilled workers are from Colombia,
Argentina and Asia.

However, foreign workers come at a premium over local
labor. Unfortunately, the labor situation is
increasing the level of social tension in Panama.
There were major incidents last week across several
poor districts.

This does not mean that Panama cannot improve the
quality of its workforce. However, this takes years
and a lot of money. To make matters worse, the
country's fiscal accounts are under a great deal of
pressure. In 2003, Panama's non-financial central
government fiscal deficit was 2.5% of GDP. Panama's
social security system (CSS) is on the verge of
collapse, and the government does not have room on
its balance sheet to take on additional debt. With a
GDP of $12.8 billion and a public sector debt load of
$8.6 billion, Panama's debt to GDP load is 67%.
Furthermore, Panama may be forced to build a new set
of locks. Therefore, the government is limited in what
it can do.

That is why the private sector is taking the lead.
Panama's dream is not being financed by the
government. Some of the most savvy business people in
Latin America are investing heavily in the Panamanian
economy. The private sector may also take the lead in
the construction of the new locks. Contrary to popular
belief, the undertaking will not be the same as the
original project-which blasted through the continental
divide. The expansion of the canal will use the
existing route. However, it will add a new set of
locks alongside the existing locks to accommodate
larger ships. Banks are lining up to finance the
project. The construction of the new locks could
provide work for the country's glut of unskilled
labor.

In the meantime, Panama will have to rely on
immigrants to provide the skilled labor needed for its
growing service sector. In the long run, immigration
will add to Panama's capital stock.

Panama has a dream. For many people, it is just pie in
the sky. However, every major undertaking on the
planet, including the construction of the Panama
Canal, started off only as a dream.

By viewpoint on Nov 5, 2004, 14:21 in Friendly Talkzone.

Peter (Moderator) (Dev team) says on Nov 5, 2004, 14:28:

Very interesting Thank you for sharing. I do agree that there are good elements in Panama for developing a larger global service centre than presently exists.

Poor but snappy

0 funny, 0 helpful.

adrimm (Moderator) says on Nov 5, 2004, 17:37:

Reasons why log-in should be required for posting. Speaking of it, would you look at that?! (above).

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Peter (Moderator) (Dev team) says on Nov 5, 2004, 19:31:

Well I wouldn’t even know why FLORIDA, AMERICAN TERRITORY can EVER be compared to a third world country. Not even in its wildest dream would it come closer. SORRY can't compare them.

Poor but snappy

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Peter (Moderator) (Dev team) says on Nov 6, 2004, 00:21:

The offending comment above was deleted.

Poor but snappy

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ColombianoX says on Nov 6, 2004, 21:16:

"Well I wouldn’t even know why FLORIDA, AMERICAN TERRITORY can EVER be compared to a third world country."

You know something, you're right. I can't think of one "third world country" that's been hit by four hurricanes in one season!

ColombianoX

'Defensor de la Colombianidad'

ColombianoX 'Defensor de la Colombianidad'

0 funny, 0 helpful.

kernow62 says on Nov 7, 2004, 04:55:

but Miami was spared the wrath of the hurricanes this time and yet they are lining up for FEMA aid as well! Sorry off topic rant, but here in Central Florida we are seeing FEMA aid go to Miami-Dade residents who perhaps lost a few leaves off a tree, whilst folks up here were lining up for water & ice. I shouldn't complain, after all our home suffered only minor damage, but it irks me.

Anyhow, back to the topic at hand.

On my next visit to Colombia I certainly will fly to Panama rather than Miami for my connection from Orlando. Miami airport is a hassle and we had to walk about 2 miles from one end to the other, barely making our connection, and the people are very rude. I wish they had direct flights from Orlando, I am sure it will happen soon.

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kernow62 says on Nov 7, 2004, 04:56:

0 funny, 0 helpful.