Friday, November 30, 2007

Panama Emerges as Regional Economic Contender

Latin Business Chronicle - Panama: Regional Champion
Office of Spanish Foreign Commerce - El Valor de las Inversiones en Construccion Crece 119%

Panama's economy is surging and the country is becoming a business hub of Latin America. In addition to the Panama Canal and its favorable location between North and South America, Panama is increasingly being viewed as a destination for tourists as well as multinational corporations. According to various sources, this country of 3.2 million people is Latin America's most globalized country, best country for importing and and exporting container goods, and has the region's fastest-growing tourist sector.

Panama has also been estimated by the IMF to have Latin America's fastest-growing economy and is ranked just behind Chile and Mexico in terms of competitiveness. Corporations also view Panama as a desirable location for operations. The DHL corporation uses Panama as a regional headquarters. Dell, Hewlett-Packard, and Caterpillar all have significant or announced operations in Panama. Panama has the highest number of international bank offices of any country in Latin America.

The economic growth in Panama has spurred a construction and infrastructure boom. Construction accounted for $155 million in the month of October, which is a 119% increase on the previous year. Since the beginning of 2007, nearly $1.25 billion has been invested in construction in Panama. Skyscrapers in Panama City continue to be built at a fast pace. Panama has also recently begun the widening of the Panama Canal, a controversial and costly $5 billion project.

Energy is another area where strong growth is predicted. Several multi-billion dollar refinery complexes have been announced. These are expected to serve the United States and Asian markets.

1. Is it in Panama's best interests to have as diverse an economy as possible, especially in light of Nicaragua's threats in recent years to build a new shipping canal to rival Panama's?
2. Has Panama escaped the natural resources 'curse' that historically has been present in some countries of South America?

No comments: