There are dozens, probably hundreds, of web pages titled, "Why Panama?", or some variation. They are a jumble of glittering generalities (Panama is Paradise!) and various statistics ranging from discounts for retirees to the rising prices in our "hot" real estate market. Ours used to look like this too. We could continue with that, pointing out, as one example, that Panama's GDP growth in 2007 was 11.2%, higher than any other nation on earth with the exception of China that barely squeezed past us by two-tenths of a percent. Estimates for 2008 generally range between 6% and 7% as a result of the global financial crisis, but it could drop to 4% and still be higher than the great majority of nations under that recessionary scenario. Indeed, some of us would not mind that as it might allow Panama a chance to "catch up with itself", so to speak, after years of dramatic growth.
But this is the numbers game and, legitimate as the numbers may be, we aren't interested in being part of it. To those whose lexicon still includes the verb "to flip" as their motive for speculating in Panama real estate, we wish you the best, but we are not the right people to provide you with services.
We look at Panama with a two to ten year horizon. This is not to suggest we think the next couple years are going to be negative, not at all, but simply that we are not here for the short-term, thus short-term thinking is inappropriate. Panama is not a "flash in the pan". It has excellent current and future prospects. We look at three fundamental factors to answer the question, Why Panama?
- Panama is a channel, literally, through which flows the trade of the two great market regions of the world, East Asia and the North Atlantic. This is nothing new. When Panama City was formally founded on August 15, 1519 by Pedro Arias de ┴vila, he had not chosen Panama for its beautiful beaches or retiree benefits. He chose to plant the Spanish flag there for a simple reason that sums up much of Panama's history: the Atlantic is only 50 miles (80 kilometers) from the Pacific. By the time that a handful of English settlers created the first permanent community at Jamestown in North America, Panama City has been operating as a commercial center for nearly a century. Through wars, recessions, depressions, good times and bad, the Canal keeps operating, providing steady financial support to this tiny nation of a little more than three million people, smaller than most major metropolitan areas elsewhere. With the current expansion of the Canal, this is a promise for the future as well as a reality of the past.
- Panama is a platform for Latin American business. Due to recent changes in Panamanian laws and regulations, more and more global corporations see Panama as the logical choice for their Latin American center of operations. With names like Sony, 3M, Caterpillar, Hewlett Packard, China's Sinopec, and Singapore Aerospace, these are not small companies and they are not here for a year or two. They are bringing or soon will be bringing a few thousand professionals to Panama to live and work. We are aware of one major European corporation that does not wish to have its name used, but has made the commitment to bring its regional office to Panama, along with 800 professionals. And that's just one. Why do they come? Panama's commitment to free enterprise and its welcoming attitude toward business are factors, but we are also a "hub of hubs"...a transportation hub, a communications hub, and a financial hub. We may complain that the streets are crowded with too many new cars, but these "hubs" represent the infrastructure that business needs, making Panama a platform on which business can build its regional operations.
- Panama is a safe haven for Latin American people. When the drug cartels were at their worst in Colombia, tens of thousands of Colombians took their money and then their families out of Colombia and brought them to Panama. Today, Colombian-Panamanians are one more facet of our multi-ethnic society and are here to stay. Recently, tens of thousands of Venezuelans have sought refuge from the Chavez regime. We have been surprised by their willingness to make major long-term investments in Panama, indicating that they are also likely to be part of our society for years to come. Although smaller in numbers, for now, there are Mexicans, Bolivians, Peruvians, Chileans, Argentines, and a host of other Latin American nationalities who call Panama their new home. Our security and stability relative to other nations in the region and our booming economy have made us the safe haven of choice for ever-increasing numbers of people who value that security and stability and have the money to seek it. For some of them, Panama has replaced the US as a safe haven. They know their money and their families are safe here and Panama is cheaper and faster to get to and more welcoming than Miami. Whether the result of political conflict or a global recession, there are Latin Americans who will need a safe haven and we have a clear comparative advantage in this regard.
Statistics can show the results of the past, but the factors above are the foundation for outstanding statistics in the future.
If our perspective matches yours, then let us know. Perhaps we can do business together.