Panama Investor Blog

Contract for Line #2 of the Panama Metro System

Contract for Line 2 of the Panama Metro System

The contract of Metro Line 2 could become the most substantial “turnkey” project signed by the Government of Panama at a cost, estimated to be around $2 Billion.

 

In the specification of the tender, the Secretariat of the Panama Metro is asking companies to submit a financing option that will be evaluated between economic criteria to determine which will be awarded the work.

Once the winning proposal is unveiled, the Ministry of Finance will decide on the option of the contractor, or obtain resources by other means.

Deputy Economy Minister Ivan Zarak recalled the legacy commitments-this level of government will face $3.6 Billion in services contracted by Martinelli and said that "we can not put everything in the next four years."

The payments could be extended for eight years.

 

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"Direct Foreign Investment" Sustains Economic Growth in Panama

How can the Gross Domestic Product (GDP) grow 6.2% in a country where construction workers paralyzed most of the ongoing projects, including the expansion of the Panama Canal; a nation where the crisis endures in the Colon Free Zone (CFZ), due to a great debt of Venezuela to companies operating in the Free Zone, totaling USD 1,7 Billion; and where hotel occupancy is at its lowest point (67% in 2010 and 53% in June 2014)?

How can Panama be the country with the highest economic growth in Latin America and the Caribbean, if in the first half of this year - exports of goods in the nation grew only 0.1%, agricultural production continued to deteriorate, had to take cost-saving measures energy, falling production of hydraulic and thermal energy; and transit of vessels through the canal declined in the first six months of the year?

How is it that Panama's economy grows 6.2%? The government has just approved a cut in public spending of about $ 500 million, based between their technical arguments, which was not fulfilled in the first half with the programming of the collection of current revenues of the central government.

FOREIGN DIRECT INVESTMENT

What, then, is the macroeconomic variable that sustains economic growth in Panama of 6.2% in the first half? 
It Is Foreign Direct Investment (FDI), which grew 26% in the first six months of 2014 compared to the same period last year.

To get an idea of ​​the impact of FDI in the first half of the relationship of this variable with respect to real GDP was 15%.

In recent years, FDI has been a significant variable in the growth of the economy.

From 2000 to 2013, it went from $ 624 million to $ 4.65 Billion, an increase of over $4 Billion during these thirteen years, an expansion of 646% in this period.

One explanation of why FDI grows so strong in Panama is because foreign companies are constantly buying Panamanian companies. This phenomenon has involved almost all activities of the country, but mainly in the banking, industrial and trade sector.

If it is good or bad to depend on foreign investment for the growth of a country, that is another debate. At this time Foreign Direct Investment is what keeps Panama growing…

 

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USA is 12th, Panama 1st, in Global Well-being Poll

In a state of well-being

According to the Gallup-Healthways Well-Being Index, Panama ranks first among 135 countries, the U.S. ranks 12th, on subjective well-being - not just how much wealth or good health people have but how they feel about their lives. Countries ranked at the top and bottom:

 

Maybe there's something in Panama's canal water.

In a new poll, the Central American country ranks first among 135 countries on subjective well-being – not just how much wealth or health people have but how they feel about their lives.

Panamanians truly stand out for positivity: 61% are "thriving" on at least three measures of well-being, Gallup researcher Dan Witters says. The next closest country is Costa Rica at 44%. Six of the top 10 countries are in Latin America.

Panamanians in particular have the most upbeat attitudes, based on things such as smiling and laughing a lot and enjoying life.

Another recent poll found people in Panama had something to smile about, They were the most likely in the world to say it was a good time to find a job, reflecting a growing economy – driven in part by a Panama Canal expansion under construction.

 

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New Cruise Itinerary: Panama to Peru

From: USA Today

"Looking for an off-the-beaten-path adventure in South America? Expedition cruise line Lindblad is out with a new itinerary that features stops at some of the most remote islands along the coast of Colombia, Ecuador and Peru.

The adventure-travel pioneer will offer a single sailing of the 12-night "Coastal Treasures" itinerary on Sept. 27, 2015 aboard the 148-passenger National Geographic Explorer.

The voyage kicks off in Panama City, Panama and includes a sail into the Panama Canal and a stop at Islas Las Perlas off the Panama coast and Panama's Darien region before heading to islands off of Colombia and Ecuador.

Lindblad says Colombia's former president, Cesar Gaviria, will accompany passengers on the sailing, which will include a visit to Colombia's Utria National Park and Isla Gorgona.

Stops in Ecuador include the town of San Lorenzo and Isla de la Plata & Puerto Lopez as well as Isla Santa Clara.

The expedition-style Explorer also will stop at Isla Lobos de Tierra off the coast of Peru. The trip ends in Lima, Peru.

Fares for the voyage start at $12,590 per person. Flights from Miami to Panama City and back from Lima to Miami are included in the fare for passengers who book by Dec. 31"

 

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New satellite connection will open in Panama for Latin America

PANAMA (ACAN-EFE). -Panama Be the first country in Latin America to offer the IsatHub, a new service that allows satellite connection linking smart devices although outside the scope of the fixed and mobile terrestrial networks

This new service, part of the British company Inmarsat, will be released soon in Panama for Latin America, therefore, users can stay connected to the Internet, make calls, text messages and use their applications regardless where they are.

"You can be a thousand miles from the mobile network closer and could still connect with the rest of the world with applications, ranging from video calls to access their e-mail messages," the vice president for Development Strategy and Inmarsat Enterprise, Drew Brandy, in a statement.

He added that "people can keep in touch despite being in or without cellular or land cover an area of ​​low signal"

IsatHub has a higher data transfer rate than any other similar service, plus a line of specialized high-quality voice, Brandy said.

This new device is connected to the outer space through its network of Inmarsat mobile communication satellite -4, which operates globally, except in the most northern or southern polar regions, which has an average availability of 99.9% . 

 

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Panama: A destination for Investments and Jobs

People fleeing Venezuela because of personal and/or legal uncertainty, commodity shortages and the political crisis are usually between 25 and 45 years years old -  and belong to the upper-lower middle class. However, some analysts warn that the phenomenon can be moved to lower social strata.

Antonio Bernal, an analyst and professor of constitutional law at the University of Panama, said that thousands of Venezuelans came, at first, to be an entrepreneur. He explained that according to current official statistics, residing approximately 37,000 Venezuelans. "The vast majority are people who have a job, some are wealthy, unlike migration we've had from other countries like Colombia or the Dominican," he says.

 

The immigration agency recorded that there are over 233,000 Venezuelans  who went to the Isthmus of Panama as visitors or to work in 2013, a marked increase to be compared with the 147,000 who did so in 2010.

Venezuelans seeking work in Panama usually enter on tourist visas and then change their situation.

 

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The Government of Panama will increase the budget for 2015 by 7%

The Government of Panama presented on August 2nd - to the National Assembly the draft budget for 2015 by $19,5 Billion, 7% higher than this year, an official said.

The Panamanian Vice-minister of Economy, Ivan Zarak, said on Channel 2 local TV that the Cabinet approved the project and that it emphasizes investment US $4,4 Billion in the social agenda of the government.

Another $3,5 Billion will be allocated to financial investment.

He noted that $10 Billion will be spent on the functioning of the state, including the service of the public debt.

In this line, there are plans to pay $1,2 Billion for so-called "turnkey projects", corresponding to works made by the previous administration of Ricardo Martinelli (2009-2014) deferred payment.

The Government estimated an economic growth forecast of Panama for 2015 of 6.5% and inflation of 4.3%.

Zarak said Martinelli left to pay all US $ 2,700 million between 2015 and 2019 on projects such as the line of the Panama Metro One.

 

The official specified that the projection for 2015 "respects the debt limit" prescribed by law prosecutor social responsibility not exceed 2% deficit in Non-Financial Public Sector (NFPS) to gross domestic product (GDP).

He explained that for the next year it is expected to generate revenues of NFPS tax revenues and dividends about $11,5 Billion and the other $8 Billion to complete the costs obtained from equity and debt.

He clarified that "there was an abuse" in the management of projects deferred payment in the previous administration and this government will go to it when the situation warrants it, like attending an emergency natural disaster, being subjected to the procurement system, "would take at least three months" to respond.

By 2015, the government allocated a payment of $ 250 million to the Metro System and a "historical" starting $100 million to revive the agricultural sector, he said.

Other public investments will correspond to $110 million to implement urban renewal of the old case of the Caribbean city of Colon, $89 million to continue the cleansing of the Bay of Panama and $100 million for the program for Health Basic.

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