Panama Investor Blog

Panama's big ambition-Science & Research

For many it will be surprising to hear that Panama is diligently working to become a center for biological research and development, but it is true. I work with on a project with Dr. Ruben Berrocal Timmons, who is secretary of Science and Technology for Panama and he is serious about getting Panama ahead in this important endeavour. Although he is a cousin of the president he is also a well qualified physician and researcher that the president recruited from his Florida practice in order to have someone he knew and trusted work in this important position. An article came out this month by McMillan publishers that will give you some idea of what is going on in this arena.

 

Excerpt:

The investment is already in evidence. In March, ground is to be
broken on a $20-million science and technology innovation park near
Panama City; construction of a $5-million vivarium for the country’s
research animals is planned for this spring; the government is funding
about 100 Panamanians to undertake doctoral studies at universities
abroad, with incentives to return to Panama for research careers; and the
first complete in-country PhD research programme — in biotechnology
— has just begun at INDICASAT-AIP. Observers say that the country’s
efforts at a scientific renaissance could even serve as a model for other
nations seeking new life after conflicts.
The change in Panamanian science amazes some, including Ira
Rubinoff, who led the US Smithsonian Tropical Research Institute
in Panama for 34 years until 2008. “If you told me this would happen
25 years ago, I would say you were smoking something illicit,” he says.

Download the rest of the story here.... Download Panama's big ambition

Lonely Planet say's Panama in top ten must visit in 2011

It never hurts to get this kind of press as the lonely planet guide seems to be in the hands of most folks visiting Panama.  The lonely Planet says;

"After an uncontrolled growth that resulted in the creation of casinos, gated communities and glass towers of the Trump name, the fall in investment has forced a return to basics," says the ranking is in the Page lonely planet.com.

The return to basics, she says, is for travelers a return to the real thing: local festivals and guesthouses with sand floor in the region of Kuna Yala.

As a developer of a gated community I take no offence as Panama was going off the deep end in its appetite to build in the hopes that they will come. As the guide points out, the worlds economy put an end to that crazyness and now the contry has returned to some level of sanity.

Panama population data

Today La Prensa came out with the final results of last years census showing a slight increase in the number of inhabitants to 3,400,000. A bit more than half are male but what I find most interesting is that fully 50% of the country's population lives in the city. That leaves a vast area available in the rest of the country for the other half. No wonder the stress builds so significantly when one makes a visit to the city and how peaceful it really is when getting back into the countryside. According to the experts (?) the population is expected to grow at a rather slow rae over the next 20 years.

La Prensa:

 

Final count: 3.4 million

According to the final statistics from the National Census 2010, 3 million 405 thousand 813 inhabitants in the country.

Aleida C. Samaniego
ansamaniegol@prensa.com

After the many criticisms and concerns that led to the preliminary figures of the XI National Census of Population and Housing VII, the National Institute of Statistics and Census (INEC) of the Comptroller General's Office finally informed how many of us: 3 million 405 000 813 inhabitants.

The head of INEC, Danis Cedeno, said the total figure, one million 712 thousand 584 were men and one million 693 thousand 229 are women, which means that the country had more men than women.

The province of Panama, meanwhile, is still reporting the highest concentration of inhabitants: 70 713 000 million people or 50% of the population.

The results presented yesterday by the INEC differ from those initially released: 83 000 237 people are more than 3 million 322 thousand 576 people who had counted at first.

Why the difference?

Cedeño said that inspections were carried out throughout the country to ensure the quality and coverage of the 2010 National Census, which took a team of the entity to visit again some homes.

"Most of these checks were carried out in Panama City, specifically in the districts of Las Mañanitas, Tocumen and December 24," said Cedeño.

INEC director attributed the errors that occurred during the census, lack of accountability of some enumerators and supervisors who failed to comply with the task of completely cover the assigned area. For counting were hired about 125 000 13 000 enumerators and supervisors.

Census omission

Cedeño also reported that the census is an estimated 3% default, but not until when developing population estimates, with the support of Latin American Demographic Center, which officially determine of the census, as was the case with surveys above.

This failure rate is within acceptable parameters, as experts point out that failure should not exceed 5%.

"The Census coverage was achieved in 95% and estimates that 3.5 million of the Panamanian population had was a medium scenario," said the head of INEC.

At the time of planning and organization of the census was established three scenarios of possible outcomes, ranging between 2.9 million and 4 million. Based on this projection was established 3.3 million.

The head of INEC said that the statistics presented, and you can review the basic results in the direction www.contraloria.gob.pa, "are the main characteristics of the population, and housing and households by province. It also includes comparative tables based on data from the last three censuses, which reflect the dynamics of the population.

On housing, the census included a million 63 000 409 homes. Of this total, in the province of Panama there are 544 000 379.

Slow growth

The results allow to point out that Panama has gone from a high population growth (a rate of 3.17 between 1911 and 1920), a slower growth between 1990 and 2000 (with an annual rate of 2).

Between 2000 and 2010, for its part, the rate of population growth is 1.84, a situation that, according to estimates, will continue over the next 25 years.

Statistical experts attribute this to the decline in fertility throughout the country.

Panama, From Third World to First

This short but sweet article tells a bit more about our leader here in Panama. The President is a student of Lee Kuan Yew, leader of Singapore who in the 60's who took that small island republic from third world to first in just a short time. Reading the background of Singapore one can't help but see the similarities between these two small nations. The biggest hurdle in Panama will be the unions and political institutions as pointed out in this article. I find it gratifying that Singapore has a long history of immigration. It has a diverse population of close to 5 million people and 42% of the population in Singapore are foreigners who work and study there. Foreign workers make up 50% of the service sector. This is exactly what must happen in Panama if it is to really move into the first world, and now is the perfect time with the economy growing strong in Panama and high unemployement in most other countries. Timing is perfect to attract the best talent from all over the world.

Martinelli has referred to Singapore's success on several public occasions as his goal for Panama. Can he pull it off? Well, he has made a great start under difficult economic times so I would not bet against him. Singapore took a number of years to accomplish such a feat, so the momentum will have to continue long after Martinelli has left office in four years. In the meantime, enjoy the ride from third world to first.

 

Source: americaeconomia.com
Monday, November 15, 2010

"We do make decisions. That's the difference between corporate governance and political government. If we are wrong, perfect, we go back and go again. "

América Economía interviewed Panamanian President Ricardo Martinelli, revealing the unique personality of the man who is leading a revolution in the country.

"This is not a political government, it is handled with a business vision, something never seen before in the history of Panama, in Latin American or the world," says Martinelli, and defines what that vision means: "build teams, set goals and make decisions."

An investment program of U.S. $ 13,500 million, designed with advice from consultants McKinsey, adds to the investment already underway to expand the Canal, raising more than $ 20,000 million cash flow in an economy that still maintains 33% of its population in poverty. Another milestone Martinelli´s government accomplished is the tax reform, which would have hardly succeeded if the president was not an entrepreneur, "If Martinelli wasn´t a business man, surely would have said that we are going to the left," according to Roberto Alfaro, a former minister and diplomat.

On the other hand, the momentum and speed in which Martinelli wants to change Panama into a modern economy, conflicts with unions and political institutions of the country, but despite this he has maintained high public approval ratings.

The Best Foreign Retirement Havens- Forbes

Nothing really new except that Panama gets a positive mention in Forbes which of course is always good for business.

Forbes excerpts: We're not about to sing the praises of the bistros of Baghdad. But it is absolutely true that value and a high quality of life can be found in a retirement abroad. The trick is to approach it with a proper mindset--think adventure--and a lot of careful research.However, a number of Second and Third World venues capture our fancy, including Panama, Uruguay, Ecuador and, in this World Cup season, South Africa. Panama has the added advantage of being a relatively short plane ride from the U.S.

A decision to pick a foreign spot for retirement involves a host of trade-offs that only you can decide on. Besides health care and costs, issues include amenities, weather, scenery, food, culture, legalities, the hassle of everyday living and ease of stateside return. Plus one big intangible: Will you thrive in this new environment?

Freedom in the World 2010 - Panama

Panama ranks high with the UN. This is the latest report form the UN Refugee Agency:

Capital: Panama City
Population: 3,454,000

Political Rights Score: 1 *
Civil Liberties Score: 2 *
Status: Free

Overview

Ricardo Martinelli of the Democratic Change party took office as president in July 2009 after defeating Balbina Herrera, the candidate of the incumbent Democratic Revolutionary Party, by the widest margin in a presidential election since Panama's transition to democracy. Martinelli faced challenges related to Panama's slowed economic growth, record crime rates, and increasing exposure to drug trafficking.

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Panama was part of Colombia until 1903, when a U.S.-supported revolt resulted in the proclamation of an independent republic. A period of weak civilian rule ended with a 1968 military coup that brought General Omar Torrijos to power. After the signing of the 1977 Panama Canal Treaty with the United States, under which the canal was gradually transferred to Panamanian control by 1999, Torrijos promised democratization. However, a real transition to democracy would not come for another dozen years.

After Torrijos's death in 1981, General Manuel Noriega emerged as Panamanian Defense Force (PDF) chief. He rigged the 1984 elections to bring the Democratic Revolutionary Party (PRD), then the PDF's political arm, to power. The Democratic Alliance of Civic Opposition (ADOC) won the 1989 elections, but Noriega annulled the vote and declared himself head of state. He was removed during a U.S. military invasion late that year, and ADOC's Guillermo Endara became president. Both the PRD and the Arnulfista Party (PA) – named after the late former president Arnulfo Arias – won elections in the 1990s. Presidential and legislative elections in 2004 returned the PRD to power, with Martin Torrijos, the son of the former strongman, winning the presidency.

By 2008, Torrijos faced mounting protests related to safety standards for construction workers and the rising cost of living. He also stoked opposition that year by issuing decrees during a legislative recess that created new security services and appeared to partly reverse the 1994 abolition of the military.

In Panama's May 2009 presidential and parliamentary elections, Ricardo Martinelli of the center-right, business-oriented Democratic Change (CD) party easily won the presidency with 60 percent of the vote, the largest margin of victory obtained by any president since the end of military rule. Balbina Herrera of the PRD, who had served as housing minister under the outgoing administration, placed second with 37.6 percent, and former president Endara garnered 2 percent. In the parliamentary contest, the PRD won 26 of the 71 seats, followed by the Panamenista Party with 21 seats, the CD with 15, and smaller parties and independents each taking less than five seats. Voter turnout was relatively high at 74 percent.

As of the end of 2009, the U.S. Congress had yet to ratify a bilateral free-trade pact signed with Panama in 2007. Meanwhile, Panama pushed ahead with its $5.25 billion canal expansion project, set to be completed in 2014. Supporters of the project said it would boost Panama's economy, but opponents argued that the funds would be better spent on antipoverty programs, education, and health care. The canal is the country's largest source of income, but both it and the Colon Free Zone, a commerce and export-processing hub, felt the effects of the global economic slowdown in 2009. Workers in the free zone staged a strike in August to protest proposed increases in taxes and fees that they feared would do more damage to trade.

Washington Post on retiring to Panama

Nothing new in this other than Panama is getting great press and that will help sop up some empty apartments in the city.

Washington Post
By Laura Cohn

Sunday, June 27, 2010

When Sid and Barb Williams began searching for the perfect place to retire, they never thought they'd wind up living outside the United States. But they kept hearing about the benefits of retiring to Panama.

The Central American country not only offers a warmer clime than their hometown of Cincinnati but also provides a lower cost of living, generous financial incentives for retirees, and a reliable and affordable health-care system. Plus, Panama uses the U.S. dollar, so there's no need to hassle with foreign currency.

After visiting, the Williamses were so entranced by the area's beauty and value that they decided to go for it. In 2008, just as the stock market began to head south, they did, too. For less than $250,000, the Williamses bought a three-bedroom, three-bathroom (plus maid's quarters) condo in a new nine-story building overlooking the Pacific Ocean.

Today, they are happy about their decision and their timing. "We could have retired comfortably in the U.S.," says Sid, 66. "But we live three to four times better down here."

Read the rest here....

Panama ranks 7 for best cities to do business in Latin America

This is an interesting article that gives insight into why Proctor and Gamble selected Panama as the place to put their Latin American Headquarters as well as a number of other companies. In the ranking by America Economy Magazine, Panama moves up from previous rankings to the number 7 spot. Surprisingly, Miami is included in this ranking in the number one spot. Click image to see ranking details.

We who live here tend to see a lot of the negatives yet those coming from outside look more at the positives, especially when doing big business and comparing Panama to other Latin countries. As I have lived here in Panama for over 13 years I still believe it is the best place to live and yet a tough place to do business as an small player. Fortunately large multinationals do not face the same challenges as they have the clout and connections to smooth out the road. The pirates and corrupt officials don't even try with them. It is easier to pick off the little guy. I still believe Panama's future stability will need to base its economy on the many small entrepreneurs, both foreign and domestic, in order to become the best in Latin America.

This is a machine translation.

A human scale

  Gradually the size of cities is no longer decisive in Latin America to be competitive.  The improved management of urban spaces bounded and manmade clearer leadership can make a difference.

 For Procter & Gamble (P & G) was not easy to decide where to relocate. The giant consumer products had its Latin American headquarters in Caracas, but decided to seek a more welcoming environment for international business.  The question was where.  As alternatives, the company could use 12 Latin American cities where it has offices, among which include São Paulo, Buenos Aires, and Mexico City, capital of the relevant markets for the company in Latin America. However, no monster was not taken by urban and decided to anchor in the relatively small City of Panama in 2010. 

  "Panama City has a strategic location on the continent and in infrastructure facilities that allow easy and quick access to virtually all areas of Latin America directly," says Alejandra Cobb, manager of external relations at P & G.

  A strong point of tax incentives and favorable immigration policy to attract foreign executives, Panama City won the arrival of P & G, with its staff of executives, who are mainly Venezuelans.

  There are few foreign multinationals have chosen the small capital and seat of its regional headquarters, such as Caterpillar, Adidas, Heineken, Dell and 3M.  It has even attracted a multilatina as Cemex. A story that confirms the effectiveness of public policies to attract Panamanian foreign direct investment, which accounted for 10% of Panama's GDP in 2009.

According to Jaime Bocanegra, executive Panamanian Pricewaterhouse Coopers, the city has been caught up in technology services, infrastructure and human capital.  "Panama City is not the same 20 years ago, now has what a great city, but with the advantage of not having so much chaos."

  Miami returns to first
The lowering of costs, combined with their traditional attributes and attractive connectivity, allow the return of the city at the head of the rankings.

  In the logic of Bocanegra, the competitive equation of Panama City is a tie in the factors typical of urban competitiveness, and the addition of a small city and manageable.  Able to create, without major conflicts, urban environments conducive to business, as the City of Knowledge, a location for business and university consortia.  Howard O Base, where operating profits tax and migration for large foreign companies.  Both spaces, reused from the U.S. military bases before the nationalization of the Canal.  Panama City also delivers the best quality of life in the northern half of Latin America and comparable to that of the most pleasant cities in South America, such as Montevideo, Buenos Aires and Curitiba.

  The Panama City, which occupies the 7th position in the 2010 version of the ranking of most competitive cities in Latin America, reflects an emerging form of competition, a boy to large, in which there are separate policies aimed at obtaining a relatively specialized (focused on the headquarters of large companies) in the "market" of cities competing for international companies to join their economies.

Army Honors Kurt Muse for freedom fighting in Panama

Last weeks 20th anniversary of operation just cause came and went with little fanfare by Panamanians. For many it was a painful reminder of something they would like to forget. But there are many Panamanians who risked it all to have Noriega over throne in order to restore freedom to the country. Some paid the ultimate price and others nearly so. As I hear some bemoan the U.S. for what it did that December in 1989, I  wonder where Panama would be if they had not. Would there be a democracy, freedom of the press, prosperity or would we be seeing regular photo ops of Noriega with Chavez, Ortega, Castro and the like.

I was honored last year to have Kurt Muse, a Panamanian/US citizen,  as a special mystery guest here in Valle Escondido. He shared his incredible story of capture and incarceration at the hands of Noriega and his thugs. You can read his story in his spellbinding book,  "Six minutes to freedom".

Now Kurt has received high honor from the U.S.  Army’s Freedom Team Salute Commendation for helping to overthrow Panamanian General Manuel Noriega.

Muse, an Army Veteran, operated a bandit radio station in Panama that broadcast messages of freedom to the Panamanian people. He was arrested and imprisoned for nine months.

The radio station, called Voice of Liberty, encouraged Panamanians to vote Noriega out of office. “We beseech you to vote,” one broadcast explained. “Together we can bury General Noriega’s dictatorship under a mountain of ballots.”

Twenty years ago on December 20, 1989, the U.S. Military launched Operation Just Cause, the liberation of Panama, involving the largest parachute combat jump since WWII and the largest military action following Vietnam. One of the initial actions involved freeing Muse.

Army Delta Force Soldiers landed by helicopter on the roof of Muse's prison and neutralized the guards. Next they blew the lock off Muse's cell and escorted him to the helicopter. Upon their departure, their aircraft took fire and eventually crashed. Soon an armored vehicle arrived and whisked Muse and his rescuers to safety. Muse was back in the United States in time to celebrate Christmas with his family.

“Kurt Muse is a patriot,” said Colonel David Griffith, the Director of Freedom Team Salute. “It is a privilege to be able to honor him for the sacrifices he made in the name of freedom.”

Freedom Team Salute is a Secretary of the Army and Army Chief of Staff program that gives anyone the opportunity to say “Thank You” to discharged Army Veterans or civilians who provide support to Soldiers. It also gives Soldiers the opportunity to honor their parents, spouse and other family members for their sacrifice and support. Further, National Guard and Reserve Soldiers can honor their employers. The Freedom Team Salute Commendation consists of Certificate of Appreciation and Letter of Thanks signed by the Secretary of the Army and Army Chief of Staff and a customized Army Lapel pin.

For more information about Freedom Team Salute and honoring Veterans or Civilians, go to www.freedomteamsalute.com.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6127204&lang=en

Real Estate Forecast: 2010

This just in from the International Property Journal. Click to the link for the complete predictions by the various pundits, including me, the Panama pundit.

Global Property Experts Offer Their Predictions for What is Sure to be a Tumultuous Year 

 We asked an array of industry leaders: What will be the big news in international property in 2010?

Excerpts from International Property Journal:

Looking further afield, destinations such as Brazil, Panama, Middle East and the Far East will be all but unsalable.-James Wyatt, partner, Barton Wyatt International

Well, the big news won’t be a big rebound in the Spanish property market, because that’s not going to happen.-Mark Stucklin, analyst, SpanishPropertyInsight.com

This buyer activity is already happening at the top end of the market in the U.K. where foreign buyers are taking advantage of the devalued pound, a slow moving property market (tipped to get slower in 2010) and a stalled economy.-Martin Dell, director, Kyero.com, Spain

We see France as a developing market. It already has a stable and robust real estate and mortgage market, and as well being the most visited country in the world. Developers are now leveraging these credentials to provide more and more tempting deals, mainly utilizing high loan to value mortgages--only the credit worthy need apply!-Stuart Johnson, product sourcing manager, Experience International, U.K.

Most of the investment in second homes will be for retirees as their funds had been locked up in their primary residences.  As well as, there are great deals to be made in the second home market and investors will be taking advantage.-Debbie Maue, NAR liaison to Costa Rica, broker associate, Jameson Real Estate, Chicago

No one will be taking risks by either over-paying or buying in fringe areas hoping for a ‘ripple effect’, but they will continue to buy quality property, finished to a high specification located in the most desirable areas.-Adam Blaskey, managing director, North Beach, U.K.

My 2010 Prediction is that more banks will be closed in 2010 resulting in lot more properties foreclosing and driving our pricing down even more.-Dagmar Sands, former FIABCI-USA president, broker, Real Estate International, Inc.

The second home market around the world and in Panama will continue to be lethargic and may get worse if the economy continues to decline. To be successful in this troubled market will require innovation in both development and marketing.-Sam Taliaferro, director/developer, Valle Escondido, Panama