Panama Investor Blog

The Expansion of The Panama Canal leaves potential for Logistic Development

A vast area was uncovered, suitable for logistical development on the west side of the Cocoli Locks.

The expansion of the Panama Canal came with significant prizes.

When ordering the surrounding land of the mega-project, after placing the dredged material and clean up some areas that were previously used by the US Army as shooting ranges, there are up to 1,200 hectares that can be used for logistics development.

 

'Today there are 1,200 hectares recovered on the western shores of the Pacific entrance to the canal that can be used fully to strengthen the conglomerate of transport and logistics by building warehouses - offering value-added services, " said the manager of the Panama Canal Jorge Luis Quijano.

The uses of these lands can be varied, according to the Minister for Canal Affairs, Roberto Roy, between warehouses, storage of refrigerated goods, including a car port. However, he says, the development will be provided by the private sector and will take place after the expansion of the Panama Canal.

"The land of the Panama Canal cannot be sold, so they will be leased to companies that will develop those areas. This process must be approved by the board of the ACP, "

ACP projections indicate that 50 hectares could be used for parking port for ships carrying cars, and 900 hectares for logistics park in western Panama.

The proposals would be framed in a project for the ACP to diversify its business from industries around the Canal.

The plan includes a terminal supply for natural gas at the inlet of the Atlantic, an operations center, another ship repair, a water rail and the port of Corozal.

Meanwhile, the president of the Panama Chamber of Shipping, Vikash Deepak said he supports the projects that are being carried by the ACP and that the development of 1,200 hectares is crucial for the industry.

According to Deepak, as a nation we mustcarry out a strategy with a clear north. "We do not want to be a toll on a highway, when other ports are preparing to receive the cargo passing through the Panama Canal" he said.

The logistics conglomerate contributes 33.5% to the national economy and generates 50 thousand direct jobs and 65 thousand indirect jobs, representing 6.7% of national employment.

 

Frankfurt - Panama - Lufthansa launches direct flight

If Lufthansa made the decision to fly to Panama directly - there must be a GOOD reason.
Panama has become the "Hub of The Americas"  - Its the fastest growing economy in Central America.
More brings more - lets see how Panama develops after the first ship crosses the new expanded Canal.

 

$ 5B in Foreign Investment ---> Panama

Panama received in 2015 the sum of $ 5.038 million in foreign direct investment, an increase of 16.9% compared to 2014, according to the Comptroller General of the Republic. Most of the investment corresponds to what is known as reinvested earnings.

According to the UN agency, Panama "is well positioned to continue to receive important inputs"

Canal expansion and its next trade liberalization is an important magnet for investment, as reflected in the projects underway and planned for the port system.

In recent years, investment has diversified and also logistics, trade and financial sector have entered large sums of foreign capital into sectors such as renewable energy and mining. 

 

Tourism in Panama: $4,2 Billion in 2015

On average, each tourist spends $ 590.

Last year 7.1 Million people visited Panama

Of this amount, 2.3 million are tourists, hikers (200,000) and cruise ship passengers (55,000).

Additionally, within the 7.1 million people who came to Panama last year, 4.7 million (66%) made ​​only scale in the Tocumen International Airport  or were airline staff.

Panama, the Best Destination to Retire

The country achieved a perfect score (100 points) on the lines of profit, discounts, and resident visa.

Panama regained the top spot in the International Index of the best places to retire, since Panama had lost last year against its eternal rival Ecuador.

In recent years, the two countries have disputed the honor of being the best retreat for US retirees.

To develop the index, International Living takes aspects such as cost of living, benefits, infrastructure, climate; certainly weigh factors when making a decision to American retirees when looking for a second home.

Panama achieved a perfect score (100 points) on the lines of profit and discounts, and resident visa.

A survey of US retirees living in Panama, estimated at 50,000 people, indicating that retirees in the country are entitled to discount in most shops.

They also stress that services such as water, electricity, medical expenses and purchase of medicines, adults above 57 years are entitled to a discount on your bill.

Added to this, they qualify fast and easy the process of obtaining a resident visa, compared to other countries such as Mexico and Costa Rica who occupied the third and fourth position in the index.

In total, the study looked at 23 destinations, the Latin American majority, but also other far away as Vietnam, Cambodia, Ireland and Malta.

At home, Coronado (Panama Oeste), Boquete (Chiriqui), Pedasí (Los Santos), Santa Fe (Veraguas) home retirement communities.

For Coronado, this community is known for its proximity to the capital and economic growth that record the surrounding areas with the construction of shopping centers. While Boquete stands out for its climate and mountain scenery.

Of the 10 categories included in the index, Panama beat Ecuador on 6 and tied for related healthy lifestyle. Although the Southern country beat Panama in the line of buying and renting because of the lower cost of property in tourist area

Panama received good score in the infrastructure dedicated to the health, not only in the capital but throughout the country, especially with the English proficiency by professionals of this branch.

As for the cost of living, excluding housing costs, they indicate that a couple can live in the country on a monthly budget between $ 750 and $1,500 considering internet service and pay TV.

Panama, according to the report, continues to attract retirees with the opportunity to lead a lifestyle that their nations of origin would be impossible to obtain.

 

Here are the top 10 places to retire according to International Living's Global Retirement Index 2016

1. Panama
2. Ecuador
3. Mexico
4. Costa Rica
5. Malaysia
6. Colombia
7. Thailand
8. Nicaragua
9. Spain
10. Portugal

State Budget To Be Discussed In Panama

The Budget Committee of the National Assembly is scheduled to discuss the proposed state spending plan today.

The proposed 2016 spending plan is $20.1 billion.

Commission Chairman Jorge Alberto Rosas said the executive submitted the plan last week with changes that had been suggested after a series of meetings.

The committee recommended increasing the budgets of various entities, including the Ministry of Public Works, the University of Panama, the Ministry of Education, the Ministry of Health, the University of the Americas, the Panama Maritime Authority, the National Council for Development, the judiciary and the Public Prosecutor's Office, among others.

The budgetary recommendations can add close to $200 million to the budget.

Pineda explained that he is recommending reducing the budget of entities such as the Cold Chain.

Billion Dollar Deal for Solar Power in Panama

From Kenya to Bangladesh via Djibouti and Egypt, 2015 has been a year of grandiose development announcements for Canadian solar developer SkyPower, and the company is not quite done just yet.

This week SkyPower CEO and president Kerry Adler met with the President of Central American nation Panama, Juan Carlos Varela, to discuss the terms of a $1 billion investment in the country’s solar energy sector (link in Spanish), including plans to build 500 MW of large-scale solar farms over the next five years, as well as the construction of a $50 million solar and environmental research center.

The center will be dedicated to the advancement of solar PV innovation and other environmental sciences, with the aim being to "distinguish Panama as the definitive hub for new solar technologies and innovation in Central America".

SkyPower also states that it will fund the scholarships of 250 Panamanian students that are currently studying in the fields of solar technology and environmental sustainability. Funding will be provided via an annual grant of 10 scholarships per year, during the 25 years that the installed solar farms are generating power.

"SkyPower invests in countries that uphold their environmental sustainability and preservation while advancing their economies and industries," Adler said. "The future of Panama looks bright, as the leadership of Panama is clearly focused on the need for clean, renewable energy, and has embraced solar as a cost-effective means of addressing Panama’s energy needs today and as a critical part of its generation mix for its bright future."

SkyPower CCO Charles Cohen added that the $1 billion investment will also create an estimated 10,000 "total job years" in the country, as well as potential opportunities for Panama to export its own solar panels to other markets

Delay's in Panama Canal Expansion will cost Millions in Revenue

It is estimated that the Panama Canal will lose about $450 million in expected revenue due to delays in the opening of the expansion.

The project was supposed to be finished in October 2014, but the new opening date is April 2016.
The Panama Canal Authority (ACP) has projected a loss of $1 million per day for the delay.
Despite the recent leaks that were discovered in the Pacific locks, the contractor GUPC said that the project is still on track to be ready next April "after seven years of work and more than 100 million hours of work."

The contract was awarded to GUPC for $3.1 billion. It was supposed t be finished in 1,883 days.
The consortium has presented more than 10 claims to increase the amount of money it will receive. Those claims are in various stages of resolution.
Last January, a dispute resolution board partially granted the contractor a payment of $233 million and allowed it 176 additional days to deliver the work.

If that claim is upheld, it would still mean the project is delayed 350 days.
The contract includes a penalty of $300,000 for each day the project is delayed. ACP Administrator Jorge Luis Quijano said that any penalties will be resolved after the project is completed.
"It will be handled by our attorneys, but we are being economically affected by the delays," he said.

Airlines Looking to Expand in Panama!

Panama continues to be on the radar of major airlines. In the first months of 2016, Emirates Airline and the German carrier Lufthansa will begin service to Panama.

Talks are also being held between transportation officials and the Israeli airline El-Al and Turkish Airlines.
Tocumen Manager Joseph Fidanque III said that meetings have also been held with representatives from Virgin Atlantic, owned by billionaire Richard Branson, owner of Virgin Group.
This airline is considered among the most luxurious within the industry and operates transatlantic flights from London, England.
The expansion of Tocumen will enable the arrival of more wide-body planes, which are those used by European and Asian airlines for long-haul flights.
Currently 21 airlines operate out of Tocumen. The facility handles 15 million passengers a year.

$500 Million Colon Project Begins!

President Juan Carlos Varela Monday witnessed the beginning of the $500 million urban renewal project in Colón.

The work is being done by the consortium Nuevo Colón, comprised of the Panamanian firm Cusa and the Brazilian firm Odebrecht. It was awarded in June and includes the construction of 5,000 houses and improvements to water and sewage systems.
The event was held in a park on Avenida Central. It was attended by hundreds of people and included displays of the area's Afro-Caribbean culture. It culminated with a fireworks show.
"Long ago, I dreamed of this day in which we will move together to recover the city of Colon and rescue its cultural heritage," Varela said. "We will develop the great tourist and commercial potential that this city has."

The president also said he will push for the approval of a law to make the city a duty-free zone. That move is expected to help tourism in the city, which has a large cruise port.

Why Invest in Panama?

Its geographical position, located in the center of the American Continent, with access by land, sea and air, with a tropical climate throughout the year, a varied tourism offer, white sand beaches, and coral reefs, in addition to the numerous benefits that the country provides, has made Panama the Dubai of the Americas and will soon become the Singapore of the area.

According to the World Bank analysis, Panama’s economic growth has been one of the highest in Latin America during the recent decade, with an average GNP growth above 8% between 2006 and 2012. .

Compared to other countries in the region, Panama’s performance was relatively favorable during the global financial crisis with a growth of 3.2% in 2009. However, in 2010 the economy returned to its rhythm with a growth of 7.6%, and thereafter to achieve an increased GNP of 10.6% in 2011, 10.5% in 2012, 7.9% in 2013 and an estimated growth of 7.3% in 2014.

This strong economic growth reflects the improvement in social indicators. The poverty rate fell from 48.5% in 2002 to 27% in 2011, while extreme poverty decreased from 21% to 11% during that period.

The presence and expansion of the Panama Canal generate substantial income that is indirectly distributed in the country, thus allowing it to enjoy a sustained growth economy. The expansion of the canal is advancing as scheduled, which will soon generate new businesses never seen before in the country.

The legal currency in Panama is the United States Dollar that has made it possible for the country to have a prestigious International Banking Center with more than 70 banks that are renowned internationally, and to enjoy an inflation rate of less than 2% in the last 40 years and no risk of devaluations.

For these reasons, Panama has been chosen as the regional headquarters of important multinational companies such as Caterpillar, Procter and Gamble, Mapfre, Heineken, Mars, Nestlé, Roche, Basf, 3M, Singapore Aerospace Companies, Samsung Electronics, and many more.

Also some International Organizations such as UNICEF, UNDP, OAS, and the Spanish International Cooperation Agency (AECI), among others, have selected Panama to establish their operations.

The Impact of Maritime Industry in Panama

The potential of the maritime and logistics industry contributes 33.5 % to the gross domestic product ( GDP) , three times more than 15 years ago, when the Panama Canal had not reverted to Panamanian administration .
The maritime industry consists of all activities that are generated in some 12 sectors , among which the Panama Canal , port terminals and services offered to craft .
A study of the company Intracorp , commissioned by the Maritime Chamber of Panama (CMP ) , found that 33.5 % of the maritime industry which contributes to GDP , 20% corresponds to the Panama Canal , the maritime sector 18 % and 62 % at other logistics segments linked to world trade .
"These results not only show the importance of the sector in the economy of our country , but reinforces the strategy followed by the sector"

Besides the Canal and ports , maritime activity includes the sale of marine fuels , agencies and shipping lines , fisheries , transport by rail between the port terminals in the Pacific and the Atlantic , domestic shipping, pipeline , between other .

The Canal expansion should bring more maritime activity and its contribution to the economy could double in a few years , but its profit will depend on the agility of the actors to use it. It is not only about generating new activities or reinforcing existing , also train the human resources needed to meet demand.

Panama and Cuba Sign Agreement for Agriculture

Great things are coming for Panama and Cuba

An agreement for scientific and technical cooperation in agriculture was signed between the governments of Cuba and Panama, two weeks after Panamanian President Juan Carlos Varela paid an official visit to Cuba, where he met with Raul Castro.

The agreement, which is between two countries " with similar climatic and cultural conditions", was signed by the Cuban ambassador in Panama, Antonio Miguel Pardo Sanchez, and Panamanian Minister of Agriculture Jorge Arango, reports EFE.
Production of biopesticides, urban and suburban agriculture , organic farming, integrated pest management and renewable energy were the areas of cooperation covered by the memorandum of understanding, according to the report.
"Cuba is investigating much in the production of sugarcane, rice and beans,

something that interests and benefits Panama," said Arango in an official statement.
Meanwhile, the Cuban ambassador in Panama said the two countries "are working hard" to solve problems of their populations and "the challenge is to guarantee food, something that is difficult because of the climate change and El Niño phenomenon".

Port of Corozal will be Eco-Friendly

he port of Corozal will be the first green port in Latin America, which means that its operation will “consider not only social and economic aspects, but also the environment,” Consequently, the activities will cause minimal impact, while measures will be taken to control air quality, water, noise and waste that may affect neighboring communities.

The concept of green ports emerged a decade ago in Europe as a practical way to promote sustainable development, defined as “that can respond to the needs of the present without compromising the ability of future generations to meet their own needs”.

The initiative has been taken so seriously that five major global port operators are following it – two with a presence in Panama They agreed on September 7, 2015, to support the Port Authority of Rotterdam to promote from September 14 to 21, “environmental awareness and sustainable operations in future.” The global operators that signed the agreement are:

DP World
Hutchison Port Holdings (operator of the ports of Balboa and Cristobal)
PSA International (operator of PSA Panama International Terminal)
APM Terminals (APMT)
Shanghai International Port Group.

The concept takes into account the continuous involvement and communication with communities however the principles governing the design, construction and operation of the new port include:

Protect the community from harmful environmental impacts that may result from port operations;
Reduce emissions of greenhouse gases and other emissions from port operations;
Use the best available technology to prevent or reduce environmental impacts; distinguish the port as a leader in environmental management and environmental compliance; and
Implement sustainable practices in design and construction, operations and administrative practices across the harbor.

AMP has approved Paitilla Developments

The Maritime Authority of Panama (AMP) has ruled that the real estate projects Ocean Front and Sea Point in Paitilla are being constructed legally.

This was the conclusion of a technical report submitted on Sept. 14 to the Panama City Mayor's Office.

The document indicates that both projects "are being raised within their respective properties."

Ocean Front will be a 40-story building with two level apartments, while Sea Point will be composed of three towers of 30 floors and 108 apartments.

The projects have been opposed by some residents of the area. The group Soy Paitilla issued a statement yesterday that said the AMP has "facilitated the appropriation of the sea." It also criticized the report, saying it ignored evidence and was done to support the promoters of the projects.

They said the project will be to the detriment of the community, the environment and the interests of the state. They plan to hire a company to do an independent study to dispute the findings of the AMP.

Mayor José Isabel Blandón said that the result of the study was clear.

Lawyer Jorge Gavrilidis, who represents Ocean Front developer Pacific Hills, said the results of the study should bring a close to the opposition to the project.

"We already have more than one year of facing an administrative process of the AMP, and our position has always been the same, we're not invading maritime space," he said

Emirantes - World's Longest Commercial Flight will be between Panama and Dubai

The Middle East's biggest airline will soon be operating the world's longest commercial flight.

Emirates announced plans Thursday to begin daily round-trip flights between its Dubai hub and Panama City, its first destination in Central America. It says the 17-hour, 35-minute flight when heading west will be the longest anywhere.

Australia's Qantas currently operates the world's longest flight, from Dallas to Sydney, which takes just under 17 hours. Singapore Airlines previously operated an even longer flight connecting Singapore to Newark, but it scrapped it in 2013.

Emirates is backed by the government of Dubai and has expanded rapidly by routing international transit passengers and cargo through its hub in the Gulf commercial center.

Dubai and Panama City are approximately 8,584 miles apart:

The Panama City flights are scheduled to start February 1.

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Panama Lifts Ban on Gun Imports amid Rising Crime Wave

As Panama deals with increases in crime rates, forged gun permits, and rising gang activity, the government is set to lift the ban on firearm imports, in an effort to promote personal safety.

Public Safety Minister Rodolfo Aguilera said the country will follow in the footsteps of the United States and Switzerland, where the right to bear arms is believed to lead to fewer homicides.

“Everything seems to indicate that there is no direct correlation in the aphorism that says more guns mean more crime,” said Aguilera, who explained that relaxed gun laws have allowed the United States to reduce the homicide rate over the last 20 years.

Aguilera added that new regulations will include criminal and psychological background checks for future gun owners.

Under the current law, in effect since 2012, only state security forces can import firearms. Meanwhile, the Central American Integration System (SICA) has called for a comprehensive review of Panama’s firearm-import ban before any action is taken by the National Assembly.

“It’s a decision for each sovereign government to make, but we should take into account that for criminals, anything that is prohibited becomes more attractive,” said Hefer Morataya, director of SICA’s Central American Programme of Small Arms Control

However, not everyone agrees that easing gun restrictions will benefit Panamanian society.

Teresita de Arias, former congresswoman and leader of the People’s Party, said that lifting the ban on gun imports could backfire on the public.

“The issue of security will not be solved because every citizen has a weapon to defend themselves,” Arias said. She believes Aguilera’s comments on US homicide rates differ from reality, adding that the North American country itself struggles with the issue of gun control.

In the first three months of 2015, Panama registered 165 homicides in six different regions. According to the Ministry of Security, 70 percent of those homicides were committed with a firearm.

“There is no registry of the firearms that come in, much less exact data of how many there are,” said Security Vice Minister Rogelio Donadío. “Illegal weapons trafficking does not generate as much profit as drugs, but it does threaten citizen security.”

In 2012, the United Nations Office on Drugs and Crime estimated that an average of 700,000 firearms circulate through Panama’s streets.

 

MEF Plans to Mint 37.2 Million Balboas

Minister of Economy and Finance, Dulcidio De la Guardia , presented yesterday at the National Assembly a bill to coin to 37.2 million of Dollars , of which more than half (16 million) will correspond to currencies of Balboa , popularly known as " Martinellis " since the government of former President Ricardo Martinelli made ​​a similar coinage

 

5 Billion Dollars to be invested in Energy Industry of Panama

Minister of Economy and Finance official Iván Zarak said today that $5 billion will be invested in the country's energy sector through 2017.

He made that comment at a meeting of officials from Central America and the Caribbean.
He said that $3.8 billion will be invested by the private sector and $1.2 billion from the public sector.
There are a number of large private projects slated to come on line in the next two years that will add to the country's generating capacity. In addition, the government plans to invest in the interconnection project with Colombia ($500 million) and $700 million for electricity transmission lines.

Zarak clarified that in Panama, the electricity market faces challenges, among which are the need to reduce marginal costs and to diversify the energy matrix to meet the growing demand for energy.