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The Panama Metro Starts
May 31st, 2009
The Martinelli administration is wasting no time in planning a metro transit system for Panama City. Even before taking office plans are underway for feasibility studies. At the same time critics are already saying the project will take too long, cost too much and require too much electricity.
On that later point we see that the current administration is cutting back of wind farm projects. With the price of fuel likely to go up and Panama having non fossil fuel means of creating electricity the wind farms seem like a sensible plan and not a thing to cut.
A metro transit system run by electricity generated by hydroelectic dams and wind farms certainly sounds better than tens of thousands more cars and buses on the roads. It sounds better than importing more oil which is predicted to take run at $150 a barrel again in two or three years.
From the viewpoint of investment in both residential and commercial real estate in Panama a metro link from the suburbs to the center of the city provides opportunity to develop around nodes in the transit system. Expect to see those with the foresight and the cash to be looking for property around Panama City in the near future and the feasibility studies progress.
Helicopter Crash Payments
May 30th, 2009
The Cabinet Council of Panama announced that it will award two and a half million dollars to the families of the five Panamanians who died in last year’s helicopter crash at the Banana Price store on Via España.
In addition to the Panamanians on board there were six Chileans who died in the crash and ensuing fire.
It is not certain how this will turn out as it appears that all involved have retained attorneys. However, a previous press report quoted an attorney as saying that one million dollars would be a reasonable settlement for all.
Pratt and Whitney who made the helicopter in question have just released their crash report. It turns out that a compressor blade broke causing engine failure and the pilot did not respond promptly enough with appropriate emergency procedures according to the report.
A host of maintenance issues were also cited in the report. The surprising fact mentioned in all of this is that at the time of the crash only a third of Panama’s National Air Service fleet was operable.
With all the money made on investment, real estate, and business in general in Panama in the last few years it would seem that there should have been sufficient dinero to train mechanics and buy appropriate parts. Maybe the new administration will revamp the tax system to find sufficient money to properly maintain Panama’s air force.
Panama National Air Service Investment
May 29th, 2009
It has been a year since the crash of a SAN-100 helicopter into the Banana Price department store on Via España in Calidonia. The crash report just came out and the National Air Service has received funding of $25 million for new helicopters and for repairs of existing fleet.
According to the crash report by manufacturer Pratt and Whitney the crash was caused by engine failure compounded by pilot error. It turns out that the crash was due to the breakage of a compressor blade in the motor and the pilot did not react with the correct emergency procedure.
What comes in secondarily on the report is a host of maintenance issues. The compressor blade had not been installed according to the service manual. There are also other maintenance items on the report including fuel injection nozzels not standard for the aircraft.
The use of non-recommended parts is a growing problem in the aircraft industry where users will purchase a cheaper part with all of the same specs except strength of metal or correct tolerances. From this viewpoint that may have been the case here. Also the report of incorrect installation speaks to training of aircraft mechanics.
Since last year the National Air Service has received monies for purchase of new helicopters and $10,000,000 for the repair of five helicopters. Of this later sum less than half has been used.
It turns out that last year only seven, or a third, of the National Air Service aircraft were in working order and currently only six. There are two new helicopters since last year.
Investment in Panama has, by in large, upgraded infrastructure to first world levels. It would appear that the National Air Service has been lagging behind in that upgrade. Buying new equipment does not help if you do not invest in the people and their training to maintain what you have and to constantly upgrade pilot training.
One would hope that with an upswing in the economy, more investment dollars and higher real estate values in Panama that some of that money will go to adequate supervision as well as funding of the National Air Service.
White Water Rafting Panama
May 28th, 2009
White Water Rafting is not something that one usually associates with Panama travel or living in Panama. However, there are several rivers in Panama, especially in Chirqui Province, that have rapids as high as class 4 during the rainy season, which is now.
If you travel to Panama from May to December you can sign up with one of the outfitters around Boquete and raft the Old Chiriqui River, Rio Chiriqui Viejo and experience class 4 excitement. If you would rather float down a more tame river that can be arranged too by picking a different river or putting in beneath the most treacherous parts of the river.
For the adventuresome Boquete also has outfitters who offer horseback rides in the mountains or even back down hill to a Pacific Island.
If you are the adventuresome sort who is looking for real estate in Panama Boquete or Volcan are great choices. People travel from all parts of the world to go birding around Boquete. You can have this patch of pristine nature just outside your front door.
If a little adventure real estate in Panama appeals to you contact us at ABPanama for a free real estate tour.
Really Old Panama Real Estate
May 26th, 2009
When what is now Canada and much of the United States was under an ice sheet a mile thick people were living and farming in Panama’s Azuero Peninsula. If you are interested in touring some really old Panama real estate come to Sarigua National Park near Chitre. Sarigua contains the ruins of a village dating back 11,000 years. The park is an interesting mix of archeology, coastal bird watching, mangrove swamps, and a area of desert/salt flats caused by the cutting of mangrove in order to promote cattle grazing in the later half of the 20th century.
If you enjoy this sort of thing stay over in Chitre and visit the Herrera Museum where most of the best ceramics and other items recovered from Sarigua are preserved. An interesting item at the museum is a reconstruction of a pre Columbian tomb based upon a 1519 description.
While you are this interesting part of Panama drive along the “Tuna Coast” towards Pedasi. This area has not been overly developed. It has a dryer climate than the rest of Panama and world class fishing offshore from which it gets its nickname.
Real estate in this area is very fairly priced. If you are interested in a tour of real estate in this part of Panama contact us at ABPanama.
Panama's Economy Grows Three Percent
May 25th, 2009
In the first trimester of 2009 Panama’s gross domestic product grew 3 percent. Despite a drop from the 9.2 percet growth rate of 2008 and 11.5 percent growth rate of 2007 this is spectacular news considering that almost all other world economies have shrunk in the last year.
However, living in Panama it has been apparent that, although the torid pace of growth of the last few years has slowed, that things have not come to a standstill. We see in the reports of the Panama Canal Authority (ACP) and there as been a drop of about three percent in transits and that perhaps a drop of five percent is expected in the later half of 2009. ACP also notes that they expect to see shipping recover in 2010 and 2011.
We have been talking about Panama tourism, Panama travel in general, and real estate propects in Panama during this lull in activity. In general, it seems that all sectors have slowed but not come to a stop. We have reported the substantial drop in farm exports, however, these crops are being sold locally and not spoiling. To the extent that more food is available locally it helps keep the cost of food down.
For those with cash this is still the time to look seriously at real estate in Panama before the recovery drives prices again.
Recession Update Panama
May 24th, 2009
The news states that Panama exports are down about 60% Since Panama’s exports are largely agricultural this amounted to fewer exports of melon, water melon, bananas, flour, and fish oil. What was not mentioned in reports was how much of a problem was caused by crop failure. There were heavy rains and field damage in Chirqui and Bocas del Toro in December just before planting and there was a severe drought at the end summer on the Azuero Peninsula.
Food prices finally stablized a month ago and real estate prices in Panama are still low considering the likely appreciation next year and after. Tourism continues but not at the previous pace. Some reduction in Panama travel is likely due to flu concerns as church parishioners wave instead of shake hands on Sundays.
Panama News May 23, 2009
May 23rd, 2009
The press reports that budgets have been cut throughout Panama’s government to prevent shortfalls. This is interesting in light of recent reports that people in Panama paid more income taxes last year.
Politics in the United States are in full swing in regard to the Free Trade Agreement. Pork producers joined Caterpillar and a host of other exporters in supporting the agreement noting that free trade increases trade and adds jobs in the USA.
An interesting statistic presented by Jim Owen, CEO and Chairman of Caterpillar is that after NAFTA Caterpillar’s exports to Canada and Mexico quadrupled!
We are on verge of seeing which major international consortium will win the bid for the new locks for the Panama Canal Expansion.
The issue of banking privacy in Panama comes up with discussions of the Free Trade Agreement as a bargaining chip. Don’t expect Panama to give away the store on this one.
Panama real estate remains a great deal and will remain so for a few months until the world economy moves further along.
Protectionism and Panama
May 22nd, 2009
The Free Trade Agreement between the United States and Panama is in US Senate hearings. The argument is being made that with the number of jobs that the US has lost going overseas the United States cannot afford a free trade agreement with Panama. There are a lot of holes in that argument.
First of all Panama already enjoys preferential treatment of its imports under previous agreements. What Panama imports to the USA is primarily melons! There is no big industrial base in Panama ready to take more manufacturing jobs from the USA. What the USA will gain from a free trade agreement is duty free import into Panama.
The whole world, save Panama, is in the midst of a recession. With the value of hindsight economists have realized that the primary reason that the recession at the end of the “roaring twenties” was turned into a worldwide depression largely because the United States started a trade war with the Smoot-Hawley Act that erected trade barriers to which the rest of the world responded shutting down world trade!
The USA is increasing its deficit with the various bank rescue plans and stimulus packages. It would be a shame to let all that effort go to waste by shutting down world trade instead of encouraging it.
A forgotten factor in this equation is that Panama re-exports a great deal of what passes into Panama. In a way Panama can become America’s agent for promoting US manufactured products in much of Latin America as exports increase into Panama and US exporters become more familiar with Panama.
United States farm products provide a huge relief to the United States’ balance of payments problem. Tariff relief will help increase farm exports.
So far as Panama goes more trade is better. Investment in Panama from foreign sources is the highest, per capita, in Latin America. Although high end residential real estate in Panama has been largely driven by foreign buyers the rest of the residential real estate market and the commercial real estate market in Panama is dependent upon and thriving because of Panama’s economic success.
The Free Trade Agreement is a win win deal and should be passed.
Free Trade Treaty Goes to Senate
May 21st, 2009
The Free Trade Treaty between the United States and Panama has gone to the US Senate for debate today.
Panama has be anxiously awaiting this moment in hopes that a free trade agreement with the United States, which is already Panama biggest trading partner, would increase exports to the world’s richest market.
The treaty has been held up by complaints in the United States regarding labor issues and banking secrecy in Panama. However, the Obama administration is pushing ratification for this treaty as well as those with Colombia and South Korea.
Investment in Panama can be expected to benefit from more open trade between Panama and the USA. As the economy improves across the board we can also expect to see the Panama real estate market start to accelerate.
But, treaty or no, Panama travel and living in Panama are still attractive and will draw North Americans either way.
Panama Shipping Decrease
May 19th, 2009
The Panama Canal Authority announced that it expects a decrease in tonnage of about 2 percent in 2009 versus 2008, despite projects of an improvement in the world economy by year end.What is happening is that there is decreased tonnage now which will recover by year end but the sum of the year’s shipping will be down.
Panama real estate is likewise in a pause but will show more activity by year end. When looking back this will have been the year of Panama real estate opportunity. The real estate market in Panama will be going up again in a few months and wise investors will jump in now with both feet.
By the time that shipping volumes are up, foreign investment is pouring in at even higher levels real estate in Panama will be back on its multiyear climb. If you are interested in our thoughts on the current state of the Panama real estate market drop in. We have over 23 years experience managing real estate portfolios and do business throughout Panama.
More Taxes Paid Translates to More Investment in Real Estate in Panama
All of the worrying aside it appears as though Panama has added jobs since last year. Panama investment and Panama real estate are likely to do well in response to this information. The income tax figures for January through April for Panama show a more than ten percent increase in income taxes paid. In addition the Social Security Administration reports 60,000 more enrollees. The tax increase also tells us that the job increase is in persons earning more than $800 a month, where taxes kick in.
From the viewpoint ofPanama real estate
the fact that more people are making taxable wages means that at some level wages are starting to catch up with
We have noted that the middle of the
are more dependent upon a healthy economy than the very high end, which has been more dependent upon foreigners.
The flu scare seems to be subsiding and the recession shows signs of abating. This good news coupled with the reassurance that, as we believed, Panama is weathering the storm rather well bodes well for investment in Panama and real estate investment particularly.
Repeat our advice. Now is the time to buy. As the economy improves worldwide and, especially as credit loosens in Panama, real estate prices will go up again and continue to do so as Panama’s economy grows.
Panama Travel, the Recession and the Flu
May 17th, 2009
There is going to be a meeting of health ministers starting tomorrow in Geneva. The A H1N1 influenza has spread to 39 countries and there have been over 8,000 cases confirmed. One hopes that the meeting leads to a consensus and a perspective that currently seems to be lacking.
Panama has seen a drop in tourists because of the recession. Now we are seeing cancellations due to concerns about the flu.
Panama real estate is a great opportunity right now and it would be wise not to scare folks away.
From this author’s viewpoint it is not so much that people are scared of the flu as they are concerned about what measures countries might take.
The press in Panama reported the holding of a foreign tourist who has a respiratory infection that turned out not to be the current influenza. Residents of Panama are concerned that they will get trapped outside of Panama if the country decides to close its borders despite expert opinion that such measures will not help.
Travel to and from Panama is currently not restricted and we hope that it will remain so. Experts on the subject of this disease note that it is less virulent than the usual yearly flu outbreaks. So, if this is the flu, and not ebola, let’s have folks cover their mouths with they cough or sneeze, wash their hands a lot and get on with life!
May 14th, 2009
Panama has two seacoasts waiting for your footprints and waters teeming with fish for you to catch. Panama City has nightlife that never ends. Panama travel has not been curtailed by the current flu epidemic. Despite the World Health Organization’s explicit recommendation not to restrict travel there was, briefly, the concern that nations, including Panama, would close their borders to those from countries with cases of the flu.
Panama is still seeing tourists and business travelers despite the flu scare. It turns out that the current strain of influenza is less virulent than expected and less dangerous than the usual seasonal influenza. Testing is in place and new cases are being treated.
Panama Travel is still a Great Deal
Panama has some of the world’s best sport fishing on both coasts but especially off the point of the Azuero Peninsula near
This area is a welcome respite from the cares of the world. Inland there are rolling hills and on the coasts there are gorgeous beaches. The surfing on the Pacific is come of the best in Central America.
The Bocas del Toro Archepeligo is an area of great natural beauty where you can sail among the islands in crystal clear waters by day and party in Bocas Town by night.
Colon now has a new homeport for the Enchantment of the Seas cruises. This is the only Caribbean cruise that originates outside of the USA. The season starts again in December and runs through Panama’s summer until April.
Panama City Sites
If you are looking for history Panama City has it. Panama was the first European city on the Pacific. You can see the ruins of the oldest city. It is a nice half-day walk around at Panama La Vieja. The current “old city” is Casco Viejo, a great tourist stop. This Spanish Colonial city was all there was to Panama City until the start of the 20th century.
Then Panama grew and Casco Viejo was left behind. That is no longer the case. Panama Viejo is experiencing a Renaissance. Developers are turning the faded elegance of old buildings down by the water into brightly painted restorations of their Spanish Colonial past. Although these buildings may have Internet inside they have the same brightly painted Spanish Baroque exteriors as in 1700.
Bay Cleanup Progressing
May 14th, 2009
According the director of IDAAN which is charge for multimillion dollar project to update Panama’s sewage collection system the overall project is 40% done. When the Cinta Costera project is done, including its underlying collection system, the IDAAN project will be 60% done.
The next phase is the construction of interceptor systems and a treatment plant. This will be at least a $200 Million project. According The International Development Bank who is loaning the money for this project as of 2006 280,000 cubic meters of untreated waste water was flowing daily into Panama Bay. Part of the problem can be seen in the population figures for Panama City. Since the built the Panama Canal Panama City gas grown from 50,000 to 1,000,000.
Now that the problem is being solved we can hope to see kids swimming in the bay in a few years and also see a nice boost to property values of Panama real estate on the Bay of Panama.
Panama Real Estate and Passive Mistakes
May 11th, 2009
Panama real estate has sort of taken a back seat in the news to the election and the flu outbreak. The world press is all over the election of a supermarket magnate or is it mogul as Panama’s new president? Every article one sees still seems to refer to the virus as a swine flu when it isn’t. Seems be no end to hype. Right now, at least, the hype is not totally directed at convincing you that not buying a home in Panama would be the mistake of a lifetime.
Interesting, isn’t it, than just when the advice is most sound no one is offering it.
The news reports that thousands of Panamanians are lining up for flu shots even though the current vaccine is for last year’s flu strains and will provide no immumnity against the A H1N1 strain.
A number of speculators are still licking their wounds over buying too late in the real estate boom and, for many, losing their investment.
What comes to mind is that there are two types of mistakes, active ones and passive ones. Buying real estate that you intend to flip when the market is leveling out is an active mistake so is getting a useless flu shot.
The Panama real estate market has returned to some of the same conditions as when the boom started a decade ago. With all of the wound licking, finger pointing, and sticking one’s head in the sand folks are missing a golden opportunity to invest before things take off again.
Panama’s megaproject, the Panama Canal Expansion is going forward with the announcement of which consortium wins the bid to build the third land locks. We are seeing that the world’s biggest shipper is raising rates in response to greater shipping volume and China is importing refined copper and steel at record levels.
So, friends, the recession is mending itself and we will see it in increased employment, more spending, and loosening of credit markets in the next years.
By then, friends, you will have missed a golden opportunity to invest in real estate in Panama, a country that will in all likelihood continue to match economic growth rates with China.
And, all of the economic reasons aside, Panama continues to be a great place to live, beautiful, with an excellent, and improving infrastructure.
Remember, passivity in a time of golden opportunity is a mistake!
Panama Real Estate Investment Update
May 10th, 2009
An interesting note appeared in the shipping news. Maersk, the world’s biggest shipping company is raising its rates from Asia to the the Americas on 20 and 40 foot shipping containeers. The company cites “unsustainable” rates and increased demand.
If you will recall the Panama Canal Authority (ACP) recently raised its tolls as planned to help pay for the Panama Canal Expansion and then rolled the rates back until the comming fall.
So, there has been less commerce across the Pacific but now Maersk is reporting an increase in demand. Tie that to the increased orders for copper and steel from China and you can see the economic recovery looming on the horizon along side of more container shipping through the Panama Canal.
As the canal traffic picks up again expect to see investment in support activities and
investment in real estate in Panama required for infrastructure to jump. There will be a delay in employment numbers until financing is in place but we expect to see the start of more commercial real estate projects in Panama in the coming year.
Athough the recession shows signs of abating real estate in Panama is still a great deal and will probably remain so throughout the next few months.
Influenza Update, May 10, 2009
May 10th, 2009
The number of confirmed cases has gone up to 2254 as more testing has been completed on waiting samples in the USA. The number of deaths remains at 2.
Panama now reports a third case, a contact of the 20ish Panamanian student who returned with the disease from the USA.
According to WHO there have been 4,379 confirmed cases worldwide in 29 countries. Costa Rica reports 8 cases and one death.
Deaths confirmed as caused by the A H1N1 influenza stand at Mexico-45, USA-2,
Canada-1, Costa Rica-1.
According to the Ministry of Health in Panama there are currently no plans to restrict activities to jprevent the spread of the virus.
However, we suggest that if you
that you remain aware of the possibiilty of restricted movement at a later date.
We are still enquiries
about real estate in Panama so it would appear not everyone is focused solely on the flu.
We remind our readers that a
home in Panama is still a home in paradise and that prices of
Panama real estate are likely to start going up again before year”s end.
Influenza Update May 9, 2009
May 9th, 2009
As US testing results come in the number of confirmed cases of A H1N1 influenza has risen to 1,639 and the number of deaths from confirmed cases of this strain of influenza remains at 2. Forty-three states have now reported confirmed cases of influenza which likely means that it is in every state and just not reported yet.
Regarding these statistics we can assume that people with mild cases do not go the doctor or doing so do not necessarily get reported whereas someone sick enough to go to the hospital will get reported. Thus it is unlikely that there are more deaths than the two reported and it is highly likely that there are a lot more cases of mild A H1N1 influenza in the USA, and probably in Panama.
According to the CDC and others this strain of influenza is totally new and as such virtually no one on the planet is immune. So, we will all eventually get what now appears to be a normally severe brand of influenza.
The WHO web page update (http://www.who.int/csr/don/2009_05_09/en/index.html) as of May 9, today, shows that Mexico has now confirmed 1,364 cases with 65 deaths and that Canada has confirmed 242 cases and one death from confirmed A H1N1.
Panama has reported two confirmed cases to the WHO and no deaths. According to the WHO report the deaths from A H1N1 have been confined to Mexico (65), the USA (2), and Canada (1). So far 29 countries have reported 3,440 cases. It is likely that the argument as above applies everywhere. Mild cases stay home and go unreported and severe cases end up with medical treatment and are tested. This bug is spreading and is likely everywhere just like every time there is a new strain of influenza.
The matter of why Mexico had such a high initial death rate is still being studied, however it appears that the measures taken in Mexico (essentially shutting down the country for several days) seem to have helped.
Rosario Turner of the health ministry reported Panama’s two cases yesterday. One is a student just returned from the USA and the other a child. Turner said that testing kits provided by the CDC (Communicable Disease Center) had just arrived and were used to test waiting blood samples confirming the two cases. Turner went on to say that public heath workers will try to track down contacts of the two confirmed cases.
It is likely that there are already are more cases, mild, in Panama. The problem with tracking down contacts of the two infected cases is that unless these folks were isolated when they first sneezed or coughed they have already infected lots of folks with this airborne virus.
The concern that this is a very aggressive, dangerous virus is so far unproven as the virus has spread.
For Whom is this Flu Dangerous?
We will probably all eventually get it and the very young (under age 2), old (over age 65), those with respiratory problems (asthma, emphysema, etc.), and those with immunosuppressed conditions (cancer chemotherapy or post transplant taking immunosuppressive medications) should seek medical attention and probably take Relenza or Tamiflu if they get sick.
If someone wants to slow the spread of this disease they will need to shut schools, businesses, and hold sporting events in empty stadiums like Mexico did. It appears to be too late to close borders.
The key phrase is “slow the spread” as everyone is succeptable to this disease and will eventually catch it when exposed. These bugs tend to stay around season after season. A practical concern will be if nations decide to close borders, too late
but still possible. If Panama travel were curtianed then travelers would be unable to return after trips abroad. Let’s hope that Panama keeps its head and does not close down.
Panama Gets a Boost
May 8th, 2009
The current Time magazine has a very complementary article about the election of Ricardo Martinelli and the associated possibilities for Panama.
This is the sort of free “publicity” that can give
Those of us here know that Panama’s economy is still growing despite a worldwide recession and that the Panama Canal is well run. We are aware of the possibilities when the
Panama Canal Expansion is finished.
Now Panama just got some free publicity. The article says nothing new but likens Panama to an emerging Western Hemisphere Singapore and talks about giving Miami a run as the “unofficial capital of Latin America.”
It is certain that as credit markets free up with the resolution of a worldwide recession that investment will not only continue in Panama but will increase. The subliminal message of the Time article is likely to speed up that process. Likewise, the article is a great reminder for those thinking of Panama retirement and the purchase of a home in Panama.
So, nothing is different but, yes, it is. We have a new president and the world’s focus will be on Panama and its emergence as a center of Latin American and world commerce.
Panama Influenza Update: May 7, 2009
May 7th, 2009
According to the World Health Organization’s influenza web site there are no confirmed cases reported from Panama.
Therefore travel to Panama should be considered safe. In fact, the WHO’s recommendation is that there be no travel restrictions for this disease.
The swine flu is spreading, however, and is apparently not really “swine” flu. There have been 642 confirmed cases of the A H1N1 influenza in 42 states of the United States according to the Communicable Disease Center (CDC). There also have been two US deaths from confirmed cases of this virus.
Mexico and the United States are the only two countries that have reported deaths from confirmed cases of the new influenza.
The A H1N1 flu has two genes from flu viruses that normally circulate in pigs in Europe and Asia and avian genes and human genes. Apparently virus can combine which happened in this case. Thus the experts are not refering to this as a “swine flu” anymore and are reminding people that you do not get this disease for eating pork.
You can see daily CDC updates on two sites. The CDC’s sites are http://www.cdc.gov/h1n1flu/recommendations.htm#table1 for comprehensive information and http://www.cdc.gov/h1n1flu/ for daily case updates.
For information on international cases go to the World Health Organization site, http://www.who.int/csr/disease/swineflu/updates/en/index.html. On this page click the most recent date listed for an update. The update for May 7, 2009 is as follows and the bold letters are mine.
International reported cases are as follows according to the WHO:
Mexico has reported 1112 laboratory confirmed human cases of infection, including 42 deaths.
The United States has reported 642 laboratory confirmed human cases, including two deaths.
The following countries have reported laboratory confirmed cases with no deaths:
Austria (1), Canada (201), China, Hong Kong Special Administrative Region (1), Colombia (1), Costa Rica (1), Denmark (1), El Salvador (2), France (5), Germany (9), Guatemala (1), Ireland (1), Israel (4), Italy (5), Netherlands (1), New Zealand (5), Portugal (1), Republic of Korea (2), Spain (73), Sweden (1), Switzerland (1) and the United Kingdom (28).
You will see that Panama has no reported cases and that there are no deaths from confirmed A H1N1 lu outside of Mexico and the United States.
Come world deals with the twin worries of recession and a new flu.
and take a look at
while the rest of the world worries about recession and the new flu.
We do not appear to have either here.
The health of the Panama Canal affects the economic health of Panama including the real estate market in Panama. The recession has reduced shipping rates slightly through the Panama Canal. However, scheduled rate increases meant to help pay for the Panama Canal Expansion, have raised concerns among shippers who have threatened to send ships around Cape Horn instead of pay increased Panama Canal fees.
The Panama Canal Authority (ACP) has just announced a temporary plan to reduce rates from the level of the announced increases. This adjustment will last from June 1 to September 30 of 2009.
According its own press release the Panama Canal Authority is “demonstrating sensitivity to customer needs” as it puts a hold on rate increases. However, the way they are doing this is go ahead with the rate increases and then “provide short term cost reduction” to its clients.
The rate increases were to be put into place in accordance with talks that ACP had with the world shipping community. ACP has received loan guarantees of $2.25 Billion for the proposed $5.25 Billion Panama Canal Expansion. ACP has planned to pay the estimated $3 Billion remaining out of revenues. Shippers agreed to the increase in tolls because the completed Panama Canal Expansion will allow more traffic, larger ships, and more profits for shippers.
So, both sides have their argument. Shippers note that the recession makes it cheaper to go around Cape Horn and ACP notes that a deal is a deal. However, economics being what they are ACP is going to raise rates and then give a discount for the next few months.
The Panama Canal, Investment, and Real Estate in Panama
The Panama Canal is Panama’s biggest business. It provides nearly a billion dollars a year for the national treasury and is major employer. As the expansion goes forward there will be a big cash infusion into the country with more jobs for locals and lots of foreign engineers, administrators, and other technical personnel renting or buying real estate in Panama. The ability of ACP and shippers to come to an understanding will go a long way to keep shipping tonnage at reasonable levels as the world works its way out of a major recession.
Panama has avoided the worst of the recession so far and with President Martinelli talking about more job producing mega projects is likely return to its 10% growth rate in a year or so.
is likely to get a boost as the winner of the bid for the new Panama Canal “third lane” locks starts sending personnel for this multi year construction project. Those first few engineers and administrators will be pleased to get good deals on Panama property as the high end of the market continues in “pause mode.” We at ABPanama expect to see prices on high-end real estate remain low for several months before Panama property values resume their climb.
Second Thoughts, Swine Flu
May 5th, 2009
We read in the news that Egypt has order the slaughter of all of its pigs. I wonder how many pigs are being raised in a Muslim coiuntry. that aside, no one with any expertise on the subject is saying that you can catch the swine flu from eating pork. They are, in fact, stressing that is is safe to eat pork.
Now we see that Mexican health authorities have announced the results of testing for swine flu. Among 679 people tested they found 300 cases of swine flu and of these ten people died. That leaves us to wonder about the reports of a hundred or so deaths from swine flu in Mexico.
There is the matter of a presumptive diagnosis which is what a physician often has to go by when treating a patient in urgent situations before all tests are back. Now, however, it appears to this writer that the swine flu may be more of an ordinary flu strain as cases outside of Mexico are not producing deaths.
None of this musing is meant to downplay the potential severity of a global pandemic with an aggressive strain of influenza. It is however meant to sound a note of caution when it comes to wholesale measures such as the slaughter of livestock or detaining people unnecessarily while tests are being done as has happened in Panama. In all likelihood the flu is in Panama and working its way through the population like a “normal” flu strain.
In the meantime travelers to Panama are wondering about being detained for a cold and business people are putting off travel until the situation resolves itself.
The happy news of the day is that 60 percent of Panama voters are pleased that their candidate won the presidency.
We expect that Mr. Martinelli will continue the pro business stance that has attracted investment to Panama’s business and real estate
For those with a home in Panama it may be time to sit tight and enjoy a cup of good Panama coffee before planning a trip North to see the kids, until we are sure that no one is going to be closing borders.
Panama Real Estate: The Shape of Things to Comes
May 4th, 2009
We have a new president in Panama. As the press throughout the world is noting Ricardo Martinelli does not follow the recent trend toward left wing leaders in Latin America. Mr. Martinelli is a successful businessman.
However, Mr. Martinelli has a populist streak to him. A campaign slogan of his was “moving on until there is a better life for all Panamanians.
Last night in his acceptance speech Mr. Martinelli reiterated his comment that it is not acceptable in Panama that forty percent of the population lives in poverty.
What we see different with Mr. Martinelli is that, unlike Mr. Chavez in Venezuela, he is not talking about nationalizing companies nor exporting his brand of politics throughout the region. It appears that Mr. Martinelli’s focus will be on jobs for Panamanians and a fairer tax system for all.
We don’t hear any hints of Ricardo Martinelli wanting to be President for Life.
Panama’s new president talk of a subway system for Panama City. A comprehensive rapid transit plan is long overdue in this prospering city. Like the Panama Canal Expansion and other mega projects a subway in Panama City would relieve traffic congestion, make the city more efficient, and, above all, create more jobs.
The focus on well thought out projects will continue to attract foreign investment keeping Panama number one in per capita foreign investment. And, business and construction continue to be strong so will opportunities in
Panama has so far escaped the worst of the worldwide recession, and, if it moves forward with plans that attract capital, will make it through relatively unscathed.
is temporarily in a shadow as the severity and reach of the swine flu comes to be known. However, as this issue resolves itself it is likely that tourism and business
will resume their previous rate of growth.
The political issue left over from last night is that the PRD will probably retain control of the national assembly having either a majority or the largest voting block. Thus it would appear that Mr. Martinelli will need to show an ability to negotiate and compromise to get what he wants. That is probably the fly in the ointment as far as Panama’s continued prosperity is concerned.
Will the PRD commit to a reasonable power sharing agreement or will they adopt the role of the spoiler in Panama politics.
For that issue we will need to wait and see.
Martinelli Wins Presidency
May 3rd, 2009
Panama will have a new president as of July 1.
For the first time in twenty years of democratic elections the candidate is not from one of the two major parites. Ricardo Martinelli is a successful businessman who is promising “democratic change.”
It would appear as though there will be
no major changes in Panama real estate investment laws regarding foreigners in Panama
nor in rules for
On the matter of travel more cases of swine flu are being noted world wide. However, the cases outside of Mexico have not carried a highg rate of fatalities.
In all likelyhood Panama travel will not be curtailed nor will we see a big drop in tourism once the milder than anticipated flu is noted.
What is notable today is that Panama has had twenty years of democracy and twenty years of progressive economic success.