New Year Resolutions for Panama

newsnviews2.jpg(costaricapages.com) No question about it, 2008 was another boom year for Panama. The country made its way on to the tourism and investment radar, began the ambitious Canal expansion project and saw its economy grow by nearly double digit figures.


All successes aside, the bleak outlook for the world economy in 2009 has many wondering if Panama can sustain this mini-boom.  Business and political leaders will need to deliver MORE to keep pace with other emerging tourism and investment destinations.


My short list of wishes for Panama in 2009:

 

  1. Find Eco-Religion - While Costa Rica has earned the reputation as the region’s “green” destination, Panama lags far behind regarding education, law enforcement and a general appreciation for the county’s rich natural beauty. To effectively preserve and promote Panama’s natural wonders, the nation must make a conscious decision to move toward eco-friendliness.
  2. Elect a Pro-Business, Pro-Tourism President - The upcoming election for Panama’s top slot (May ‘09) will be a crucial one.  The remaining candidates hold very different views on the correct direction for the country.  Whoever wins, my wish is that the new President makes decisions that will foster foreign investment and tourism growth.  Panama cannot sustain its current growth without more attention being paid to both tourism and residential infrastructure.
  3. Get Realistic About Property Values - This may be a wasted wish, but I really hope that property owners and investors will come to the realization that Panama, despite all its wonderful attributes, cannot command prices on par with Manhattan or Hawaii. The current blue sky asking prices are stifling small-scale residential and tourism development.
  4. Improve City Traffic - With growth come headaches, and the traffic in Panama City is one of them. The transit police are making efforts to improve traffic flow, but getting around town is for now, a miserable experience.
  5. Make Banking Easier - Just when did banking in Panama go from “Latin America’s best” to “huge pain in the neck”? I realize there’s plenty of fraud and money laundering out there for banks to worry about, but does opening an account really need to take weeks?
  6. Ease Immigration Processess - Having spent a decade now in Latin America, it’s odd to me how quickly these emerging countries seem to slam the door on immigration.  Do they succumb to pressures from the nations whose tax base a fleeing?  Just 24 months ago, all the expat websites were going on and on about how easy and fabulous it was to become a resident in Panama.  Ask somebody who has actually tried recently!  If Panamanian developers have any hopes of unloading thousands of condos in Panama City, they’re going to need more foreign residents.  Right now, the process is incredibly frustrating.  Strangely, while it’s difficult, expensive and time consuming for a foreigner looking to invest in Panama, that doesn’t seem to be the case for Colombian prostitutes. Go figure.
  7. Modify A Few Labor Codes - This is always the least popular point I can make with any locals, but it’s an important one.  As a guy who has invested significantly in tourism-related businesses, it’s obvious that the current labor laws (which require an employer to pay double and triple-time during holidays) weren’t designed with tourism in mind.  In addition to a bevy of pro-worker laws that are holdovers from the  big banana era, Panama has a ludicrous number of public holidays from November to March.  Unfortunately, tourists want to visit Panama when?  You guessed, it…November to March. To attract more hoteliers and other tourism providers, Panama will need to give some of those employers a holiday from antiquated labor laws.  Protecting workers is great, but some of these laws are so protective, they’ll only render Panamanian staff non-competitive with illegal labor.  Ask a California resident how this works out in the end.
  8. Lower Taxes - Sure, this is probably an easy one to harp on as a biz guy, but I’ve been flabbergasted  at the number of new taxes presented in the past few years.  Worse still is knowing that those with better connections than me are probably not paying them.  OK, I understand that financing a $8 billion dollar Canal Expansion isn’t cheap, but if Panama were to employ a flat tax or consumption tax, the potential wave of smart money arriving on its shores would be unprecedented.


CONCLUSION: I am a huge believer in the long-term potential that Panama has to offer investors, tourists and retirees.  The country has a wide range of fast growing industries and opportunities both big business and entrepreneurs. The pace of commerce, business intelligence of many locals and “go-go” environment is full of energy and excitement.  Now that excitement needs to be channeled with some direction, sound decisions and forward thinking.  If that can be achieved, the country has potential to be THE leader in Latin America business AND tourism.  Happy New Year Panama!