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Home Panama First Impressions Panama's diverse economy expands

Panama's diverse economy expands

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 This article was published in Latin Trade Magazine:

BRAVO Council / Panama
Aug 12, 2010 

Panama’s Entrepôt Economy in Evolution

BRAVO Council meeting focuses on the future of the most recent Latin American country to achieve an investment grade rating

Brisk tourism, a steady flow of capital and a prized upgrade for its sovereign debt have brought such good economic news for Panama that participants in a recent economic forum could almost overlook the role of the country’s economic engine – the Panama Canal.

Panama was not only the fastest growing regional economy in 2007-2008, but among the top performers in the region in 2009. The sustained strength of several economic sectors comes as the year-old government of President Ricardo Martinelli works to implement his campaign pledges and to burnish Panama’s reputation overseas – in tourism, business and other areas.
Salomón Shamah, director of the Tourism Agency in the Martinelli administration, said the government is following up on campaign promises, from building a metro system in Panama City to addressing the registration of private property titles in the country. “We are going to go forward with the process of doing the metro,” Shamah said. “We needed a transportation system that would be a model and relief for this city.”
Shamah spoke to a group of government leaders and business executives gathered for Latin Trade’s BRAVO Council, held in Panama City in the spring. Latin Trade Group Chairman Richard Burns led the discussion.
Shamah said that Panama has a compelling story in many sectors and wants to avoid pigeonholing itself in its country branding efforts.
The small country is an entrepôt of trade in the Americas, a major financial hub and a growing destination for tourism and investment, raising the question whether Panama will be more like Hong Kong, Singapore or Miami in the future.
“We haven’t talked about the Panama Canal, but it is our anchor of international recognition,” Shamah said.
Some observers have dubbed Panama as “Miami without the visas,” a reference to difficulties travelers sometimes have in obtaining a U.S. visa.
But Shamah said that there is no single answer as to how Panama is branding itself these days. He noted that he and fellow tourism officials want to avoid one label, such as green tourism, and instead appeal to a broader range of business and investment.
The tourism industry was also part of the discussion among participants, who included Panamanian real estate developer and hotelier Herman Bern, chairman of Empresas Bern; José Muñoz, senior director of development for Starwood Hotels & Resorts in Latin America; and David Hunt, executive director of the American Chamber of Commerce & Industry of Panama.
Shamah said that the government is working to have its domestic airlines certified internationally so that foreign tourists may fly directly to destinations within Panama without having to change airports.
The meeting took place shortly after Fitch Ratings upgraded the country’s sovereign bonds to investment grade rating, a credit rating shared with Brazil, Chile and Mexico. Standard & Poor’s subsequently upgraded Panama also.
Deputy Finance Minister Dulcidio de la Guardia said that the country had determined that achieving the investment grade rating was paramount. Officials worked to convince the rating agencies that the economy was strong and government spending in check. “We have been impacted significantly by the expansion of the Panama Canal, and we believe it will grow significantly in the future years,” de la Guardia said. The positive outlook is bolstered by other factors, such as a number of upcoming hotel openings.
The senior finance official also said that the Martinelli administration believed the country has several unexplored areas for potential expansion. “There are a few levers that we don’t talk too much about,” de la Guardia told the breakfast meeting.
“We have significant land holdings around the Panama Canal that we can sell for concessions,” he said. In addition, Panama has major untapped copper resources.



Last Updated on Sunday, 24 October 2010 11:59  
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