It is hard to think about the fact it will soon be a new year and a new decade. Time seems to move so quickly. After more than ten years in Panama, I have been privileged to witness the growth and development of this amazing country and it has been an astonishing fast-paced ride. But, it’s really just the beginning!
Today, Panama is viewed as having the strongest economy in Central America and one of the strongest in South America. Certainly not as large as Mexico, but Panama is viewed as more solid. Just last month, $1.3 billion USD was issued on the international capital market with historically low yields of 2.83% and 3.60%. Other countries such as Costa Rica and Mexico, have their bond dollars financed at more than 6%.
A Healthy Dollar-Based Economy
According to Moody Analytics, the world’s leading economic advisory and forecasting company, “Panama’s dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of the GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism.”
Because Panama is able to finance large projects relatively inexpensively, like widening the Panama Canal, which was completed at a cost of over 5 billion USD, growth and infrastructure development has continued at a rapid pace. Everything from new highways in the interior of the country to water treatment facilities all over the nation. Schools are adding subjects such as making English required and a variety of arts and music offerings.
The Fourth Bridge!
Construction on a fourth bridge spanning the Panama Canal began in 2019. This massive project will change how Panamanians move and commute on a daily basis. In addition to having six lanes for vehicular traffic, the new bridge will also carry the third line of the Metro and provide both pedestrian and cycling lanes. That is the third line, which means there are two other subway lines in and around Panama City that has been efficiently moving people for several years.
This new bridge will provide easy transport from the city to Panama Pacifico with easy access to all the international companies located in what was previously the Howard Air Force Base. Panama Pacifico is a huge development for Panama and it is a planned community with mixed use space for residents, international companies and supporting parks and green space. The cost for the new bridge is projected at 1.22 billion USD and completion is slated for 2022.
The Growing Tourism Market
In addition to the fourth bridge, work continues on the two-pier cruise terminal located on the Amador Causeway. Cruise lines, such as Norwegian and Crystal, have committed to starting and stopping cruises in Panama City. Previously, the only pier was on the Atlantic side and very few excursions brought passengers into Panama City. Lots of cruise ships traversed the canal, but few stayed for other tourism options, such as some of the all-inclusive resorts along the Pacific Ocean, the rain forests and birding. With starts and stops in Panama City, visitors will be inclined to take advantage of everything Panama has to offer!
Tocumen International Airport is currently handling way more travelers than originally designed. The second, stunningly beautiful airport terminal now under construction and continues to make progress toward completion. International carrier, Copa Airlines, maintains it’s major hub in Panama City and recently announced a promotion that would allow passengers, connecting in Panama for other international destination, to spend an extra few days (up to a maximum of seven) in Panama for no additional airfare. This will increase tourism and open Panama up to the traveling world
The new convention center, also located on the Amador Causeway, is nearing completion and conventions are booking for 2020. Up to 10,000 visitors will be accommodated daily. With the new airport, subway system, cruise terminal and convention center, hundreds of jobs are being created in the tourism and hospitality sector and that area is projected to grow by as much as seven percent year-over-year over the next four years.
A Robust Middle Class
With plenty of new jobs in construction, hospitality, education and banking, Panama is experiencing the realization of a robust middle-class. The Superintendence of Banks in Panama recently announced “mortgage credit continues to show positive signs for banks, registering a 5.2% growth for August 2019 compared to August 2018. This is equivalent to a USD 825 million increase and maintains it as one of the activities with the greatest contribution within the local credit sector.The domestic portfolio of consumer credit (credit cards, personal loans and vehicle loans) represents 22.8% of the balance of the local private portfolio so it is also a fundamental part of credit growth with 5.8%, or about USD 681 million in absolute values.”
It is interesting to note the most popular bands of cars in Panama are: Toyota, Nissan, Hyundai, KIA and Honda. It is always fun to watch the vehicles being driven off the auto container ships ,which have just traversed the Panama Canal, en route to destinations all over Central America.
Pork And Beef To China
Since it is mostly Asian-branded cars you now see on Panama’s roadways, it is also worth note that agreements with the government of China has recently opened the doors for Panamanian farmers to ship large amounts of both pork and beef to Chinese consumers. The world’s best coffee and chocolate, which are from Panama, are also making their way into Chinese homes.
Copper, Copper and 3,500 Jobs
This year, Panama also became home to the world’s largest operating copper mine. Spread across 33,606 acres, the Cobre Mine has been under construction for over a decade and is located about two hours from Panama City via vehicle. The first shipment of copper concentrated was exported in June 2019 to China, where it was processed. Today, ships leave regularly containing tons of copper ore. First Quantum, a Canadian mining company, owns and operated the mine while offering more than 3,500 high paying jobs. The mine has a lifetime of 40 years, which will ensure growth and development for Panama into the near future.
Michelin Star Chefs
When I first came to Panama, there were only a handful of restaurants catering to expats, international guests and the wealthy Panamanian. Today, there are so many fine restaurants, you really can’t try them all. The “Old City” of Casco Viejo, has been gentrified and is now home to five-star hotels, exclusive restaurants and cultural halls offering everything from ballet to the philharmonic.
Panama continues to offer one of the world’s best retirement programs for expats, but it also offers world-class healthcare, education and investment opportunities. I’m very excited about the future—I just hope it doesn’t happen too fast! Here’s to a new year and a new decade!