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Daryl Ries of Keller Williams Panama, associate – Best Places In The World To Retire User Account
Panama City is the heart of BOOMING Panama. Panama City is a business town and entrepreneurs are welcome. You may come with a plan to get involved with a business, or not, but you could be tempted, for sure.
Investment is an open book ,so much happening from real estate to whatever. With the opening of the larger canal, myriad of opportunities exist, from school teachers to managers to retail anything and the list never stops as corporate honchos move in, and the global community lands in Panama, the biggest new 'happening' country with a powerhouse economy and cosmopolitan city.
Bilingual is preferable for best of both worlds here.
Robert Adams of Retirement Wave – Best Places In The World To Retire User Account
Reprinted with permission from Bob Davis, of Retirement Wave.

Report from Panama 2015

"Common sense is not so common."-- Voltaire (pen name for Francois-Marie Arouet), French writer and philosopher
In the past, I have devoted a couple pages to discussing the rest of the world and its situation. After all, Panama is part of the greater global community of nations, so it is also concerned with what is going on globally. But frankly, it is not worth the time. Much of the world today is going through difficult times and they have been for years now. The lack of consensus in the US and Europe is especially obvious. Things are not too good in much of Latin America as well. No one knows what path these nations are going to take and they have no consensus on where they should go anyhow. So until they finally determine their future direction and have general long-term support among their peoples to move forward, we have to get on with our lives down here. And we are doing just that. After all, there is nothing we can do to help them make up their minds. Every nation has to do this itself.
My one comment this time is one I have made before. If you are coming from a nation that is severely divided and in search of direction, we sympathize, but please do not let your problems "back home" interfere with your life in Panama. Remember that it is not where you are "coming from" that is important; it is where you are "going to" that counts. It takes time to adjust. It certainly took me time, although I have done it before. It always takes time, but it happens if you truly want it to happen. A simple word for it is "transition". When we make that transition, wherever we go, we can still love our old home nation, but focus on our new lives in our new home nation. That must be your goal. You cannot predict how long it will take for you. You have to live it. But if it is the goal that guides your new life, you will get there.

Meanwhile, down here in Panama...

"True stability results when presumed order and presumed disorder are balanced. A truly stable system expects the unexpected, is prepared to be disrupted, waits to be transformed." -- Tom Robbins, American author - 1968-present

Readers of past Reports from Panama know that I also use a simple statistic to measure economic progress. It is called the Index of Monthly Economic Activity (IMAE in the Spanish version). This figure is faster to put together, so it is more up-to-date than GDP. Although it is not a complete picture of the economy, it includes all the major sectors and it follows the same path as GDP, so we can now take a look at that. This takes us from January of 2010 through September of 2015. The pink line shows the bouncing back and forth on a monthly basis that is common for this statistic. The blue line combines the monthly results and shows the trend over time.
Monthly Economic Activity Panama 2010 – 2015 – Best Places In The World To Retire – International Living
You will notice that there is a slight dip in the trend line in late 2014 and early 2015. Growth was not negative. It simply slowed down and it did that for a reason. The current government, elected last year, was disturbed to find that government expenses over income were running at 4.6% of GDP. I will not bother explaining that, except to note that this is not unusual in the world, but it is very unusual for Panama. In a rapidly growing nation with a rapidly growing economy, a deficit is common and acceptable if it is being used for productive reasons (as is true here) because income is growing even more rapidly. But there is a limit beyond which you can have serious problems.
This administration did not cancel the major infrastructure projects that the nation needs, but they renegotiated some contracts where possible and generally slowed down large-scale projects. As a result, the percentage dropped to 1.8% and that is an excellent result from the viewpoint of financial responsibility. Panamanians have proven to be very conservative on this topic. As a result, our "investment grade" status is solid and we continue to be able to borrow money at far better interest rates than our neighbors who are not as conservative with their money. Now the projects that were delayed are moving forward, but in a financially responsible manner. Some people were upset to see things slow down, but I never complain when nations take action to live within their means. I wish they all did.
So how do we compare with other Latin American nations? For this graph, I chose to include the two largest Latin American economies, Brazil and Mexico. In terms of purchasing power, Brazil is the 7th largest in the world and Mexico is the 11th largest. I included Peru which has done well in the last couple decades in pulling itself out of poverty, and Colombia, our neighbor of which Panama was part before it separated and set up its own republic. In addition, I included Costa Rica and Ecuador, two nations often of interest to RW members.
The economic growth of each nation is divided by its population so we get a "per capita" (per person) comparison and the statistics are corrected for inflation and for purchasing power which takes into account that a dollar can buy more (or maybe less) in some nations than others. It makes it possible to compare nations that are very different. So Let us take a look at the results.
GDP Panama Comparison 1990 - 2014 – Best Places In The World To Retire – International Living
I think the graph speaks for itself. But Bob, how does Panama do so much better than the big economies that everyone talks about? The answer is simple. Panama has a smaller population than any of these nations. You see, it is not simply a question of "How much money do you make". It is a double question, "How much money do you make and how many mouths do you have to feed?" That is a much more practical way to look at it and the results are obvious.
Expats often ask me, what difference does Panama's growth make for me? It is very simple. Life in Panama whose economy is rising steadily as it has for the last 25 years, especially the last 10, is a lot more comfortable for expats than living in a nation whose economy is stagnant or failing. Panama is a democracy and Panamanians are not shy to express their opinions, but one thing has especially impressed me.
I have lived here for two complete administrations and now am living with a third. The Presidents come from different parties (no party has won two elections in a row since 1989), have different styles, and different viewpoints on various topics, but they all have had one thing in common that continues today - dedication to expanding the Panamanian economy and taking it to new heights. As I have said many times, Panama is a growing tourist attraction, but Panama is not a "tourist country". It is a "business country" and has been since the Republic was proclaimed a little over a century ago. This focus on economic growth, especially over the last couple decades, has benefited everyone. It is hard to argue with success.
In past reports, I have had a couple pages or more on various news details on Panama's development, but that added a great deal to the text, so I am going to go a little more gently now. There is always so much, it is easy to get carried away! Here are a few of the main points and then we will move along.
Starting in February, Turkish Airlines will have three direct flights from Istanbul to Panama City. Initially, they were going to stop in Bogota, Colombia on the way, but all flights are now direct. Also in February, El Al Airlines is scheduled to provide direct air service from Tel Aviv and Emirates Airlines will provide direct service from Dubai (the longest flight in the world at that point, 17 hours and 35 minutes). Each of these airports serves as a "hub" for people of many nations, especially businesspeople who will now be able to fly directly to Panama without passing through Europe or the US. Air Europa is now operating charter flights from Madrid, Spain. Lufthansa has begun its direct flights from Frankfurt, Germany. Alitalia is considering direct flights from Rome which makes sense given the thousands of Italians coming our way these days. The one thing we lack is a direct flight to Asia, but given that Panama and Singapore have signed an air services agreement, that will change, although they will likely wait for the opening of the second terminal at Tocumen International and reduced congestion.
The latest gasoline price data in this region through 7 December show the following by nation. The price is per gallon, so divide by 4 to get a rough estimate of per-litre cost. The first figure is for diesel fuel, second is regular gasoline (91 in Panama), and third is high-octane gasoline (95 in Panama). These statistics are put together by the government of El Salvador for Central America. Panama is added for comparison.
Guatemala - $ 2.17 - $ 2.44 - $ 2.63
El Salvador - $ 2.26 - $ 2.49 - $ 2.66
Nicaragua - $ 2.73 - $ 3.17 - $ 3.34
Honduras - $ 2.82 - $ 3.17 - $ 3.46
Costa Rica - $ 3.15 - $ 3.77 - $ 3.93
Panama - $ 2.10 - $ 2.34 - $ 2.50
Now that the budget process is back on track, the large infrastructure projects are underway. The second Metro line is under construction. The first has been very successful. The planning of the third line continues. The Canal expansion is well over 95% complete and still scheduled for opening this April. Between unions and contractors, something could slow it down again, but it is definitely on its way. A fourth bridge over the Canal is on its way too. Work continues on the second terminal at the international airport and it should be available in early 2017. Planning for a third terminal has begun. Air traffic sets new records every year and is expected to continue for some years to come. Panama already has a better transportation infrastructure than most Latin American nations and it continues to grow and improve. The new Panama City metro area sewage system is proceeding and expanding. There is more from road construction throughout the nation to a new convention center in Panama City, but you get the point.
This year's GDP growth rate will be around 6%, a leader in the western hemisphere, and next year's is expected to be around the same or a little more, again leading the hemisphere, US and Canada included.
Foreign Direct Investment (FDI) keeps setting records and was up nearly 18% in the first half of the year from the year before. Final figures for 2015 will be impressive. This continues to be a clear sign of Panama's stability in the eyes of major investors. The 2007 incentives that convinced so many global businesses to relocate their regional offices and operations to Panama (well over 100) are planned for modification to encourage manufacturing as well. That will be another boost to FDI.
And if anyone is concerned with how the Canal is doing, it finished its fiscal year at end-September with a 4.3% increase in total tonnage moved from last year and set a new record. The Canal is doing just fine.

A brief note on Latin America as a whole

I know some of you have read that Latin America is going through tough times economically. A few members write me and ask if Panama faces the same problems. The answer is simple. No. The most important economic problem for other Latin American nations is their dependency on the sale of natural resources like oil, natural gas, tin, copper, gold and so forth. Their budgets depend on high prices.
That was not a problem for many years, but things have changed. I am sure most of you are aware of the dramatic fall in the price of oil. That is only a small part of the total picture. Standard & Poor's provides the internationally-used indices (indexes) of commodities. The chart below shows what has happened in 2015 through 30 November and how this year ranks among the "worst years" for each commodity. Some, like oil as I write today, have fallen even further since this summary was produced.
Worldwide Commodity Prices 2015 – Best Places In The World To Retire – International Living
Mexico, Brazil, Bolivia, Ecuador, Peru, Venezuela, Argentina, Chile and others need high commodity prices to fund their budgets. Panama does not depend on any of those items above for its revenue. We sell a tiny amount of coffee, cocoa, and other agricultural products, but so tiny that it has no significance to our economy or to world markets. In simple terms, we do not sell these commodities, we buy them.
We do not enjoy the suffering of others, even when we benefit from it. After all, in recent years when commodity prices were much higher, we still had the best economic growth rate in the region and still do. But we do not complain when prices are low. It means more money in everyone's pocket here.

And a cheerful Bienvenido! to the "Third Wave"!

Following full return of the Panama Canal to Panamanian sovereignty in 2000 and after the first northern "bubble", the stock market crash, Panama's development took a dramatic turn and has never looked back. You might say modern Panamanian history begins with the 21st century. Since then, expats from many nations have arrived. I think of them as centered on three "waves", each having a noteworthy financial impact.
The First Wave was made up of Americans and Canadians in the early part of the century. Through roughly 2007, they were responsible for a boom market in real estate. They still come in rising numbers, but with less money on average due to the financial crisis up north or are simply more conservative in their purchasing. This would have been a major hit on Panama's upper-end real estate market if it were not for the Second Wave.
The Second Wave was led by Venezuelans who have been coming for years to escape the economic disaster in their homeland and their numbers have increased steadily. They frequently sold everything they could back home and moved an entire family here, often bringing considerably more money than the average North American. But it was not just them. The incentives that led so many global businesses to move regional offices and operations here brought many management staff with them from all over Latin America, so the Second Wave is Latin American, not just Venezuelan. They continue to grow in number and that Wave is not finished yet, but a Third Wave is showing up that could have a dramatic effect in coming years.
The Third Wave is arriving from Europe. I and my firm here have been following this for some time now as it is what we had forecast a decade ago. We have done a lot of statistical analysis and I will share one small example here - the number of Italian citizens arriving to visit Panama. The table shows the average number arriving each month since 2009. I show monthly figures for the sake of comparison since the full 2015 total is not yet available. But if I did, you would see that the number of Italians arriving in 2015 through September already is more than all twelve months of 2014.
Average monthly levels of Italians arriving in Panama – Best Places In The World To Retire – International Living
As you can see, the rate of increase is itself increasing. Here is a little something extra I will share with you. Although eleven times as many Americans visited Panama during this nine-month period in 2015, many more Italians received permanent residency visas than Americans during the same period. They are not coming just for the warm weather. In any event, perhaps instead of "Bienvenido!", I should be saying "Benvenuto!"
It is not just Italy. France is very impressive too, among others. I suspect new records are likely for 2016 as well. In any case, I welcome the Third Wave and hope they will make a useful contribution to Panama and its people!

In Conclusion

"Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him."-- Dwight D. Eisenhower, American President, (1890 – 1969)

The 20th century is over and never coming back. It is history. I celebrated my 55th birthday in 2000 and my 70th earlier this year. I have spent the great majority of my life in the 20th century and sometimes it can still "seem like yesterday". Today, the average Panamanian is 28 years old. He or she has already spent the majority of his or her life in the 21st century. It is probably safe to guess that 90% of their real memories are from the 21st century. Three and a half years from now in 2019, Panama will hold its next national elections and among the voters will be some who were born in the 21st century. The same will be true in many nations. This is their century.
It is our century too, we share it with them. We all need to make this our best century. Any goal less than that is a mistake. Do not lie down on the tracks of history, waiting for the train of the future to run over you. Be on the train where you belong!
If you are someone who has read my past Reports from Panama, you know exactly what comes next. The final words are always the same from the very first report I wrote many years ago. So let us all read this together, once again.
No one knows the future. Free markets go up and free markets go down. The future is not a simple extrapolation of the present. Anything can happen. Everyone has an opinion and those words above are just opinions.
Jeff Barton of Punta Pacifica Realty – Best Places In The World To Retire User Account
Copper – Best Places In The World To Retire – International LivingThe economy in Panama is very strong. Over the past 7 years, the GDP in Panama has the highest average rate of any country in all of Latin America. This year, although it is less than past years, when it had been as high as 11% plus GDP growth, they’re expecting around 5% growth.  For Panama, 5% growth in GDP is lower than the past, but comparatively, it’s one of the fastest growing countries in the world.
The projected date for the completion of the expansion of the Panama Canal is 2016, at which time, they’re expecting that tolls generated from the Canal will double. There are a lot of workers and there is a lot of investment in the Canal expansion, but apart from the Canal there are several other billion dollar plus projects in Panama.
There’s a third bridge that’s being built over the Atlantic side of the country, which is the largest bridge of its type anywhere in the world. The metro opened about two years ago, and now there are two more phases being built.  There’s a fourth bridge that is on the way.  There’s a $6 billion copper mine project underway, which is equal to or possibly a little bit larger of an investment than the Canal expansion, and which may hold as $1 trillion worth of copper. With large megaprojects like these, continued investments from the government in infrastructure—bridges, roads, general construction—I believe that Panama will continue to prosper many, many years into the future.
(Copper, pictured.)
David Btesh of Pacific Realty / Pacific Developers – Best Places In The World To Retire User Account
Cobre_Panama_Mine_project.j – Best Places In The World To Retire – International LivingThe newspaper recently reported that Panama would finish this year with 6.3% growth, which is the highest in Latin America, and above, for example, Brazil, Argentina, and Colombia. In addition, inflation is significant in other countries. Colombia went from 100 to 3,000 and Brazil is over 4 reals to the dollar, while the exchange rate used to be 1 real to the dollar. In contrast, here in Panama, we don’t have exchange rate or inflation issues because we are a US dollar-based economy.
The current administration in Panama is only one year old. They are starting a new train subway system, which will run from the airport all throughout the city, connecting with the first railroad system. The widened Canal will be in operation in 2016, which will bump the economy another $1.2 billion net profit above what the Canal used to provide us every year. There are companies coming into Panama to do mining. We have one of the biggest copper deposits. We have silver and gold. We haven’t looked for oil yet but there are people who are looking for everything here and large companies are coming in. Two big mining companies from Chile and Peru are already here and working.  The future looks bright.
(Cobre Mine, outside of Panama City, Panama, pictured.)
Robert Adams of Retirement Wave – Best Places In The World To Retire User Account
Reprinted with permission from Bob Adams of Retirement Wave
Report from Panama - June 2013

What in the World is going on?

"In the final analysis, the questions of why bad things happen to good people transmutes itself into some very different questions, no longer asking why something happened, but asking how we will respond, what we intend to do now that it happened."-  Pierre Teilhard de Chardin, French Philosopher (1881-1955)
I like to begin each report with a discussion of the global situation because Panama is a globalized country. The Panama Canal and the world's second-largest free trade zone guarantee that, but Panama’s growing significance as a financial, commercial, transportation, communications, and logistics hub for the Americas just emphasizes that even more strongly.
In other words, we are concerned with what is happening everywhere around the world as it does reflect on our economies. However, as we just discovered in the global financial crisis of 2009, Panama is not dependent on any one nation or group of nations. As long as people are trading, Panama is making money. Panama is, as it always has been, a country focused on trade. It is a business country first and only recently has it become a tourist country as well.
For me, trying to provide an overview of the global situation is just getting more and more complicated. In analysis, there are many different perspectives that can be taken. When I talk about analysis to groups I often start with two basic perspectives. I call one "hummingbird" and the other "eagle".
The difference is very simple. In any country, at any time, you can look at the newspapers and see that there is some sort of dispute, scandal, political controversy, or other major event. It may be critical at that moment in time, but it is what I would call a hummingbird issue. In a month, two months, a year, sometimes only a day, it will be forgotten.
The eagle perspective is different. It looks at the whole situation and considers all the important factors that, together, demonstrate the direction of current affairs without over-emphasizing a single factor.
This section of my report is typically concerned with the eagle perspective. My problem right now is that it looks as if the world is full of hummingbirds. There are so many issues facing people today and they come and go so very quickly that it is difficult to pull them all together and summarize them globally.
Worse yet, this state of affairs has been going for years, at the very least since 2009 when the global financial crisis hit so many nations hard. Six years later and we still have a global financial crisis.
When nations in North America, Europe, Asia, and nearly all of Latin America were sinking in 2009 with negative growth rates, Panama continued to grow at a very substantial rate (4%) that many nations of the north have yet to reach, six years later. And that was a "bad year" for Panama whose average annual growth rate has been around 8% over the last decade, including that "bad year".

So the conclusion of this section is going to be fairly simple. Much of the world is in the middle of one long-term crisis or another. Panama is not. As Mr. Teilhard de Chardin said at the beginning of this section, the rest of the world waits for them to stop "... asking why something happened, but asking how we will respond, what we intend to do now that it happened."
The problems of the rest of the world may eventually become Panama’s problems too. After all, we all live on one planet. But given the past performance of Panama, I am not losing sleep over this. What will be, will be. However, like those smaller nations that have enjoyed above-average growth in recent years, Panama is doing the right thing. Instead of waiting for the so-called "advanced" nations to get their act together, Panama continues to follow the path that it has followed successfully for the last decade and which still looks good today. It is tending to its own business, staying out of other people's problems, and continuing to stress economic growth. That works. 
Meanwhile, down here in Panama...
"There is a special sensation in getting good wood on the ball and driving a double down the left-field line as the crowd in the ballpark rises to its feet and cheers. But, I also remember how much fun I had as a skinny barefoot kid hitting a tennis ball with a broomstick on a quiet, dusty street in Panama."-  Rod Carew - Panamanian Baseball Player, Member - Baseball Hall of Fame.  Elected to 18 consecutive All-Star game appearances (1945 - present)

Rod Carew and I have one thing in common. We were both born in 1945. I like to think I have seen a lot of change in my 70 years, but it is not much compared to a little boy with a broomstick and a tennis ball who went on to be elected to the Baseball Hall of Fame.
Indeed, things have changed in Panama. Yes, I am completely confident that there are skinny barefoot kids on dusty streets in Panama playing baseball with whatever is handy, but not as many as 60 years ago. They are much more likely to be on regulation baseball fields, playing their hearts out, hoping to be one of the Little League teams that make it to the qualifying rounds for the World Championship, as Panamanian teams did in 2001, 2004, 2010, 2012, and 2013, and that is just the 21st century.
But it is more than baseball that attracts Panama’s young people. As I write, in a few days there will be the RoboCup (Junior division) championship competition. Young Panamanians between 9 and 19 years-old, the winners of seven regional competitions, have created their own robots to compete in the categories of dance, rescue, and football. Those who win the national RoboCup will represent Panama in the Junior League International RoboCup Competition to be held in July in Hefei, China. Very unfortunately, I will miss the one in Panama, but I hope to be here when the Senior division has its championship.
Yes, Panama has changed, is changing, and will continue to change. For people arriving from older societies, it can all seem almost too rapid, but that is at least partially because they are literally from "older" societies. Citizens of the US, Canada, and EU are, on average, about 40 years old. The average Panamanian is 28 years old. That is one way of saying that the majority of Panamanians have spent the majority of their lifetimes in the 21st century, not the 20th. It is no wonder that their level of energy and enthusiasm often surpasses those of expats, especially retirees, and that is a good thing!
Readers of past Reports from Panama know that I also use a simple statistic to measure economic progress. It is called the Index of Monthly Economic Activity (IMAE in the Spanish version). This figure is faster to put together, so it is more up-to-date than GDP. Although it is not a complete picture of the economy, it includes all the major sectors and it follows the same path as GDP, so we can now take a look at that. This takes us through March of 2015 from January of 2010. The pink line shows the bouncing back and forth on a monthly basis that is common for this statistic. The blue line combines the monthly results and shows the trend over time.
Monthly Economic Activity for Panama Through Q1 2015 – Best Places In The World To Retire – International Living
You will note that the last quarter is "flat". That is a little misleading. It is not that the economy was not growing, just that the rate of growth was relatively flat in comparison to the quarters immediately preceding it. IMAE growth for this year’s first quarter is about 20% higher than the same period in 2014.
The current administration that came into office last July has taken its time to put together and implement its economic program. It also took a critical look at some major contracts awarded under the prior administration, cancelling some and putting others out to re-bid which slowed economic growth. That is coming to an end. In addition, the construction of the second line of our new Metro will begin very soon and that will have a positive impact.
For those who follow GDP (Gross Domestic Product), the more complete indicator, last year’s rate was a very positive 6.2%. This year’s rate will probably begin a little slower, but end up in the 6 to 6.5% range, very likely the highest in the western hemisphere from Canada to Argentina again, but if not, very close.
The arrival of a new administration following last year’s election has received a great deal of attention. The new administration has brought charges against many in the prior administration, accusing them of receiving "kick-backs" and various other illegal payments. I do not waste my time getting personally involved in Panama’s politics. I have been through periods like this one in several nations in the past during my professional work in economic development. This kind of situation goes on in every democracy, sometimes about money, sometimes not. I watch to see how it unfolds.
On the whole, I am impressed. The debate is heated and the issues are important, but Panamanian society has not stopped to demonstrate or riot or anything like that. I have experienced physical conflict in many nations, including some fairly "wealthy" societies in Europe for example. Every Panamanian I know of every economic background is well aware of the issues and, although opinions may differ in detail, every one of them realizes this debate is essential to the society’s development. The charges are in the hands of the appropriate legal authorities and the courts. It is all being done in full public view and in a manner that is appropriate to a growing democracy. That is enough for me.
However, there is another kind of "judgment" involved. Panama has a reputation for stability. That is why it is such a "haven" for people from all over Latin America (and elsewhere). So it is always important to see how foreign investors respond to situations like this. If they are really concerned that the society is in trouble, they tend to step back quickly and wait to see the results. After all, they have big money at stake and they do not appreciate risk. Since this political situation has been going on for almost a full year, have they stepped back from Panama?
No. A good indicator is Foreign Direct Investment (FDI). Every nation, the US very much included, wants FDI. That is when foreigners invest substantial sums of money in a nation. It is always nice to sell products or services to foreigners, but it is even better when the foreigners invest their money directly into growing your economy. The benefits of a sale are not anywhere near as great as the benefits of an investment that will pay back both the investor and Panama over and over again.
FDI hit a new record in 2013, far greater than ever before. Did it fall in 2014? No, it rose again to a new record. The increase was only 1%, but that was no surprise given the huge increase in 2013. In all of Latin America from Mexico to Argentina, total FDI dropped over 16%. A 1% increase looks really good compared to that. More to the point, Panama did better than other small Latin American nations. Panama’s FDI in 2014 almost equaled the combined FDI of Central America (Costa Rica, Guatemala, Nicaragua, El Salvador, Honduras, and Belize).
Another way to look at it is FDI’s percentage of the total GDP of the nation. That way you can compare among all nations in the region, regardless of the size of their population or economy. In 2014, Panama’s FDI equaled a little more than 10% of its GDP, the highest of all of Latin America. The regional average was only a little over 2%. Costa Rica was a little over 4%, less than half of Panama’s. Ecuador was less than 1 percent. Brazil was less than 3% and Mexico less than 2%. Panama was the leader, nearly 2% ahead of second-place Chile. That, folks, is call a "vote of confidence" in Panama from the global investment community and they are not in the business of charity!
Panama is doing better than some expected, given the new administration’s initial "go slow" approach, but I think a point is being made that has been made before. Some sectors will do well, others not so well, but the economy as a whole just keeps moving along in a more positive and steady manner than most others of any size, anywhere, as it has been doing for more than a decade. Very few nations can claim that, including the nations from which Retirement Wave members come. Do not worry about Panama. If you are going to worry, worry about the world. 
Bits and Pieces
As readers from the past know, I typically list a few of the many things happening in Panama’s economy that also will have an impact on all of us who live here. I just choose among the many pieces of information that flow past regularly. It is not intended to be an analysis, only a taste of what is happening.
  • The work underway to complete the first phase of the reconstruction of the metropolitan area’s sewage system is now nearing an end, so the second phase will be put out for bids shortly. A $340 million project, it will not only focus on cleaning up the city’s bay, but also will bring a second sewage treatment plant to work alongside the first one, both very modern facilities. This is a multi-year effort, but we are really making progress toward cleaning up the bay and providing everyone with proper sewage facilities. No small task in a major urban center first established as a European-style city in 1519 (the first on the Pacific coast of the western hemisphere) and which is growing very rapidly.
  • The second line of the Metro system will begin construction in coming days, as mentioned earlier here, and the bidding for the construction of the third line is likely to happen very soon. The leading candidate for the third line is a Japanese firm, Hitachi, very skilled at this sort of construction and Japan will offer financing on very good terms as an incentive. The second line, as the first, is being built by Odebrecht, a Brazilian firm, who has done fine work as well. The first line was a huge success and a “proof of concept”, so Panama can move forward on both other lines quickly. The sooner, the better!
  • International arrivals at Tocumen airport were up about 5% in 2014, compared to 2013. As usual, South Americans were the biggest group, almost half the total. North Americans (US, Canada, Mexico) were about a quarter of the total. But the big increase was in Europeans, up 20% and representing more than one of eight arrivals. The first three months of 2015 show even more dramatic results compared to the same period in 2014, up over 20%. Again, the leader in growth is Europe, up more than 35%! These visitors are primarily from Spain, France, Italy, Germany, the Netherlands, and the UK, in that order by number.
  • Air flights to cities in North America and Europe continue to increase with a couple new ones soon to open. There are so many more now than there were when I first came in 2004. Here are the destinations currently serviced. In the US, Fort Lauderdale, Atlanta, Boston, Chicago, Las Vegas, Los Angeles, Miami, New Orleans (beginning this month), New York, Orlando, San Francisco (beginning in September), Tampa, Washington DC, Denver, and Dallas/Fort Worth. In Canada, Montreal and Toronto. In Europe, Paris, Frankfurt (Condor now, Lufthansa beginning in November), Madrid, Amsterdam, and Lisbon.
  • Beyond the above flights, I am particularly interested in the opening of the new South Terminal at Tocumen, now scheduled for completion in 2017. That will be able to service the large Boeing and Airbus planes. Once that is in place, I expect the announcement of the first direct flight to Asia, most likely Singapore. That will be a major step forward. Currently, there are just a couple direct flights to Asia from Latin America, Mexico City to Tokyo and Sao Paulo, Brazil to Singapore. For passengers not from those two cities, travel to Asia is very time-consuming, expensive, and just plain uncomfortable, and the same is true in reverse. With this addition, Panama will become the “portal” welcoming Asian travelers to all of Central America and the Pacific coast of South America, but especially Panama. I very much look forward to that.
  • Tocumen International Airport is preparing to seek bids on the construction of a new city to be built around the airport with hotels, casinos, shopping, a convention center and a hospital, as well as business and residential areas. This is a huge project that is expected to require about $400 million for the infrastructure. Since our airport is now one of the most active “hubs” in Latin America where people make connections, this will be an incentive for people en route to another location to stop and spend some time (and some money) with us. This project has been discussed for years and I am pleased to see it finally move forward.
  • You might wonder, why would people stop by in Panama and visit on their way to somewhere else? Well, they already do. Our huge shopping malls include everything from very modest shops to the most expensive brands. The folks who currently take time to visit the malls and shop while on a trip elsewhere do it for a simple reason. They save money. I am specifically speaking of Latin Americans, the majority of our visitors, who have to pay either a sales or VAT tax in their nation. Here is a list of nations and the sales or VAT taxes they charge. I think the numbers speak for themselves. 
    • Uruguay - 22%
    • Argentina - 21%
    • Chile - 19%
    • Peru - 18%
    • Dominican Rep - 18%
    • Brazil  variable - 17 to 25%
    • Colombia - 16%
    • Mexico - 16%
    • Bolivia - 13%
    • Costa Rica - 13%
    • El Salvador - 13%
    • Ecuador - 12%
    • Guatemala - 12%
    • Venezuela - variable - 8 to 12% (if you can find something to buy)
    • Panama - 7%
  • The fall in oil prices has been felt here as well as in other nations and the public is enjoying much lower gasoline prices as a result. The government has taken this opportunity to reduce some of its subsidies for electricity. Not the discounts for retirees, those are not a focus, but there have been subsidies for households and businesses of all financial classes. Now those subsidies are being reduced for higher-income people and businesses that use much more energy than low-income people and small businesses. The rationale is that it is appropriate to reduce subsidies on one source of energy when prices are falling for another source substantially. I have no problem with reducing subsidies.
  • Having mentioned gasoline prices, the latest data in this region through 9 June show the following by nation. The price is per gallon. The first figure is for diesel fuel, second is regular gasoline (91 in Panama), and third is high-octane gasoline (95 in Panama). These statistics are put together by the government of El Salvador and may be a little out-of-date by the time you read them, but Panama is always at the low end.
  • El Salvador - $ 2.96 - $ 3.27 - $ 3.58
  • Guatemala - $ 2.80 - $ 3.22 - $ 3.41
  • Honduras - $ 3.33 - $ 3.77 - $ 4.08
  • Nicaragua - $ 3.38 - $ 3.92 - $ 4.15
  • Costa Rica - $ 3.36 - $ 4.04 - $ 4.22
  • Panama - $ 2.71 - $ 3.17 - $ 3.44
  • The delays in the construction of the new convention center have had a negative impact on the many new hotels built in anticipation of its availability and in response to government incentives in the past. This is a problem for the hotels now and will continue for the next year or two. Pushing tourism will help and the new convention center will eventually open, allowing Panama to compete with Miami, Las Vegas and other major northern convention sites. In the meantime, it means low prices for hotel rooms in the city and this is a benefit to RW members headed this way. In the long run, we have to get the center open and the hotels receiving more convention guests for the health of the economy, but while the prices are low, it is not a bad time to visit!
  • Within the next couple months, the request for bids should go out for the construction of the fourth bridge over the Canal, the third one on the Pacific side. Along with six auto lanes, there will be tracks for the third line of the Metro. A little over a half-mile long (850 meters), this will be a billion dollar project and a significant addition to economic development.
So what could go wrong in Panama?
"The man who can smile when things go wrong has thought of someone else he can blame it on."-  Robert Bloch, American writer (1917-1994)

Since the global financial crisis began 6 years ago, I am asked the same question by people coming from nations where "things went wrong". Can things go wrong in Panama? Of course they can. Once in awhile, I am asked, "What is the greatest disappointment you found when you moved to Panama?" I always say the same thing. I was shocked to find that every single person living in Panama was a human being! No Martians to be found!
What I am saying is that Panama is a human society, just like your society and every other society on planet Earth. There are good people, bad people, and people somewhere in between. The good people can be expats and so can the bad people. If you are looking for Paradise, you will have to die first and, even then, there are no guarantees!
No, Panama is a human society and humans everywhere are quite capable of making mistakes. I am sure if we all take a moment to consider it, we can think of many examples of that in our home nations.
In considering this question, I look at the global financial debacle of six years ago and I ask, did Panama fall off a cliff like so many nations in the north? No, it did not. It came through that in good condition, much to the surprise of many "predictions" of that day.
Right now, as I mentioned earlier, there is a great debate going on about corruption in politics in Panama. The charges made have been very powerful. In many nations where I have worked in the past, this would be enough to make the nation’s political and economic progress come to a complete halt while angry citizens raged in the streets. That has not happened in Panama. The debate may be hot, but the economy moves along and we all go about our business each day without worrying about angry mobs or violence. Panama is dealing with this debate seriously, but in a fashion more mature and intelligent than many nations who claim to be "advanced".
Our current President was elected in effectively a three-way race with a little less than 40% of the votes. But his political party only received 20% of the votes for members of the National Assembly. His party is not the largest in the National Assembly, it is not the second-largest, it is the third-largest! Again, that would bring many other societies to a dead stop. But in Panama, we work things out. There are controversies and the President has to make his case to the Assembly, but legislation continues to be passed and the nation moves on.
My point is very simple. Panama has been through two "shocks". First, the global financial disaster of the north and, second, a major shift in power politically. Yet the nation does not stop growing. Every major infrastructure project (Canal expansion, new sewage system for Panama City, new terminal for the international airport, new convention center, two additional Metro lines, and others) begun by an earlier administration, often the last one, continues. Yes, a couple were temporarily "paused" while contracts were renegotiated, but the incomplete projects of the past are being completed.
I look around the region. Now, I do not waste my time or yours criticizing other nations in Latin America, but I do keep track of their economies and their politics. None of them show the stability of Panama. That is why so many Central and South Americans have arrived to invest, to do business, and often to live, bringing their families with them. They are no strangers to political and economic problems in their home nations. They do not need to come to Panama to find that kind of problem! They come looking for the stability and maturity of a society that can have its powerful disagreements, but still tend to business. They vote with their feet and Panama is the clear winner.
There are many example of this, but let me take a moment to mention one that is not usually mentioned... Brazil. Many expats forget (or do not know) that Brazil is not a Spanish-speaking society with a Spanish colonial cultural background. They are a former Portuguese colony and are Portuguese-speaking. Although the two languages are similar, neither Panamanians nor Brazilians can hold a conversation and understand each other without some training in the other’s language. In addition, Brazil’s population is 50 times greater than Panama’s and, as a result, their total economy is larger (although they are poorer on a per-capita basis). Why should a nation that large, the 5th most populous nation on the planet, give much attention to a nation so small and seemingly unimportant as Panama with whom they have little or nothing in common?
And yet, they do. Beyond the fact that Brazilian businesses are very active here and are playing an important role, especially in construction, Brazilians simply as people are also voting with their feet. Let us take a look at the numbers of Brazilians arriving in Panama.
In 2013, an average of 5,600 Brazilians arrived at Tocumen airport each month, a new record and quite a surprise to many people here. Due to language difficulties, it led to many schools offering Portuguese lessons to Panamanians looking to work with these visitors. In fact, Portuguese became the second most important foreign language for study in Panama, after English which is by far the largest.
In 2014, the number of arrivals rose to more than 6,800 a month, a 21.4% increase in one year and another new record. And this year, 2015? The statistics for the first three months are available and the average monthly number of Brazilian arrivals is over 9,100, a 33.2% increase compared to the first three months of last year. 
Brazil is only one example. People arrive from all over the world every day to this tiny nation to start a new life. And they all are not from Latin America. In the first three months of this year, nearly 3,000 Italians arrived each month, a 61.8% increase over last year and 4,400 monthly from France, a 56.1% increase from last year.
All the above, from the way Panama deals with its internal debates to the enthusiasm shown by people who travel thousands of miles or kilometers to join us, is based on simple facts that are now known. A decade ago, you would have had trouble finding anyone who predicted any of this.
So, once again, can things go wrong in Panama? Of course they can. But Panamanians have already passed more than one "test" of their national stability and their determination to build a better future for themselves and their families. They are human and there are problems, but they deserve respect for what they have done and are doing. If you come to stay, you will see the problems, as well as the accomplishments. But do not be too quick to criticize. We all live in glass houses, wherever that may be.
Panama is my home and I am proud to say so. Whether that is or will be true for you is yours to decide. But if you do choose to come our way to take a look, you will not be alone.

In Conclusion
"When all is said and done, more is said than done."--  Lou Holtz, American football coach, (1938 – present)

Thank you, Mr. Holtz, for reminding me and all of us of an important truth. Sometimes I feel there is too much talking (and texting) and too little doing, too much preaching and too little practicing, too much anger and too little understanding in the world today. Wherever you and I find ourselves in the days and years to come, in Panama or any other nation, let us be sure we focus more on doing, practicing, and understanding. I think that is as good a conclusion as I can offer.
If you are someone who has read my past Reports from Panama, you know exactly what comes next. The final words are always the same from the very first report I wrote seven years ago. So let us all read this together, once again.
No one knows the future. Free markets go up and free markets go down. The future is not a simple extrapolation of the present. Anything can happen. Everyone has an opinion and those words above are just opinions.
Lourdes Townshend of Multimodal  & Logistic Transports Magazine – Best Places In The World To Retire User Account
Panama Pacifico conference  – Best Places In The World To Retire – International Living​Panamá has basically been the "HUB" of the economy in the North American and South American continents, since way back the 15th century, when all the commerce came through this country on their way to Europe and other continents at that time.  That, along with the extraordinary foundation of excellent weather and other positive things, created the conditions for the construction of the Panama Canal, one of the Eight Wonders of the World.
Panamá is often called "Center of the World, Heart of the Universe", and today, the Canal is proudly administrated 100% by Panamanians, and leads commerce worldwide.  With the current and future expansion of the Canal, Panamá will provide even better service, creating opportunities to countries and increasing prosperity around the world.  Is also worth of mention also, that Panamá is situated as the logistic HUB as well, and has made enormous progress in this regard, expanding international and local airports, ports and other major mega-projects.
The economy in Panamá decreased tremendously in the military era, from 1968 to 1989, setting the country back many years.  But fortunately, the Panamá government, in partnership with private businesses have both worked hand-on-hand, creating an envious rate of economic growth, while other countries has seen less growth, or even gone through economic crisis.  Panamá was named by several worldwide very recognized organizations as the #1 investment and retirement destination, and why not? In addition to what I mentioned, Panamá is a very happy country in which to live, according to international articles.
Unfortunately, Panamá is facing a slow time since the new government took office last July 2014.  Things are not moving as fast as the country deserves, and time has been wasted on unimportant things. The cost for housing and other basic things have increased.  Of course, this is natural, as always progress and immigration brings inflation. But still, as of today, Panamá is considered an excellent "bridge” for investment, with one of the oldest and strongest banking systems, no money exchange (as the US dollar is the currency used in Panamá), and many other important issues to consider.
Expats in Panamá feel very safe, especially if they have chosen to live in the "interior", taking advantage of little towns with much better cool weather than the city, and having an excellent time with friends, going on a daily basis to the beach or mountains and enjoying the beautiful environmental and natural resources that Panamá has to offer.
(Panamá Pacifico work conference, pictured.)
Michael A. Martinez of B & B Real Estate Nicaragua / Panama Real Estate Information – Best Places In The World To Retire User Account
Panama City from across the bay – Best Places In The World To Retire – International Living
Panamanians are very smart business people. There are lots of cash businesses as opposed to transactions on credit, so people make wiser decisions and there are fewer bankruptcies.
The difference that I just came up with is that in Panama and in Central America, people understand the value of money. They say that it’s easy to make money and the hardest thing is to hold on to it. I think the business community here never loses sight of that.
I see that the economy in Panama is very strong and I see an emerging middle class here. To have a business here, you must have a market. Panama was a Third World country and they wanted the best phones, good clothes, and delicious food and imported items. I think foreigners are on a strong path for good business in Panama for the next 20 to 30 years. I see a lot of very level headed people doing business in Panama. 
(From across the Gulf of Panama, the city of Panama, pictured.)
Charles Conn of The Visitor – Best Places In The World To Retire User Account
Panama skyscraper under construction – Best Places In The World To Retire – International LivingThe economy of Panama is easily one of the best in the region. We did not experience an economic crisis that the world went through around 2008.  It hit the States hard, but here in Panama, we did not feel a crunch at all. There was a drop in cargo coming through the Panama Canal and toll revenues shrank as a result, but due to a construction boom, the economy chugged away. Real estate has been booming and it still has not stopped.
When our GDP was at 10% growth and when it dropped to 7.5%, people were complaining because even though 7.5% is actually great, it is not 10%. So the economy is really booming everywhere you look, whether it be in the real estate, tourism, or shipping sectors. A lot of folks appear to be prospering here. 
Frank Kehanu – Best Places In The World To Retire User Account
My dear Newcomer,
Plaza de Francia, a square in honor of the workers and French engineers who participated in the construction of the Panama Canal – Best Places In The World To Retire – International LivingIf you would like a pretty picture of the Panamanian economy, ask a local economist seeking foreign investments.
The Panamanian economy is based on US dollar, as the preferred exchange currency with the Balboa on an even value.  Panama has lower than mainland US labor cost, so it appeals to or lures foreign investors seeking English-speaking employees.
But where the rubber meets the road, Panama has to import more than what it exports, so Panamanians have to pay absurd prices for quality durable goods and they don't get even US minimum wage with a college engineering degree.  The above creates and fuels poverty and despair.
With all that said, it all depends on which side of the tracks your are standing financially, like anywhere else.  The Isthmus of Panama has cities rated in the top 10 places to live in the world, which is based on cost of living, quality products & services, friendly people, closeness to  medical centers and an overall quality of life that surpasses anywhere else.
(Plaza de Francia, in honor of the workers and the French engineers who participated in the building of the Panama Canal, pictured.)
Bill Hamilton of Bill Hamilton – Best Places In The World To Retire User Account
Panama Economy booming – Best Places In The World To Retire – International LivingThe economy in Panama is booming. It’s very, very good. The development and construction has been tremendous over the last couple of years. They even have a metro in the city.
They have a subway now which is completely modern. They have excellent bus service here, which is very, very cheap. They are building new roads everywhere, flyovers, roundabouts. They’ve done that in the last couple of years.
They’re giving housing assistance to poor people, so that they can buy a house for around US $30,000. They’re all on top of each other, but they’re modern houses.  In Panama, they use the money from the Canal to subsidize everything.
They’re building new hospitals everywhere. Shopping malls are coming out like mushrooms.
Lucia Haines of Panama Realtor Inc. – Best Places In The World To Retire User Account
Panama and the economy have been doing remarkably well for the last ten years or so. I think some of it has to do with Panama being a small country.  In the last census, we came out with 3.4 million people for the entire country.  It also has to do with Panama’s great geographic location. Recently, we have had the Canal expansion, which is huge and has been affecting ports all up and down the coast of the United States, as they prepare for the expansion of this canal.
Some of Panama’s economic success seems to be a combination of Panama being so small and other countries not doing so well, like Venezuela or France, that help Panama’s economy. A lot of Venezuelans have left their country and brought their business over here and opened up job opportunities for other people here in Panama. The go-getters leaving those countries and coming to Panama made a huge impact on Panama and have really helped the economy in Panama over the last few years. And of course, other things that have helped include all the infrastructure projects, the Canal, the mining projects, all the road amplifications, the Metro, and Copa Airlines being an international hub now with more than 70 flights per day; the list just goes on and on.  
Jose Broce of Broce-Pinilla & Asociados – Best Places In The World To Retire User Account
The economy in Panama is growing, so your return on investment is faster than it is in other parts of the world, North America included.
It is not unusual to start a company in Panama and for it to be profitable within one to one and a half years.  This is because there is less competition in Panama and the costs of doing business are lower.
On a personal level, from a business perspective, the things I’ve been able to accomplish in Panama, I don’t think I would be able to accomplish in any other place.
Sieg Pedde of Helix Courier Limited – Best Places In The World To Retire User Account
The economy in Panama is very good. Panama’s annual GDP growth rate has typically been in the range of 5-11% a year for the last 10 years or so. Many sectors have contributed to the boom of the economy. It’s not just the Panama Canal (although it’s obviously a big part of it) but there’s also the Colon Free Trade Zone, the agriculture sector and the country’s tourism industry.
Compared to Costa Rica, tourism in Panama is just starting, but every year, there are more and more foreign tourists going there. This is because Panama is right next door to Costa Rica. I’ve never been to Costa Rica but from photographs I’ve seen, Panama looks exactly the same. It has all the same things to offer. Friends of mine who have been to both countries told me that on average, the infrastructure is better in Panama than in Costa Rica. In fact, in many places within Panama, it’s not only better but much, much better compared to Costa Rica. 
David Whittington of Tucan Golf Club and Resort – Best Places In The World To Retire User Account
Panama City, Panama skyline – Best Places In The World To Retire – International LivingWhen the Americans turned over the Panama Canal to the Panamanians in 1999, the Panamanian economy lost the revenue from many thousands of American paychecks.  In order to make up for this loss the government in Panama created many programs for retirees coming to live in Panama from any country, called the pensionado program.  This made Panama one of the best places in the world to retire.
During this time, one of the reasons why the Panamanians were very happy to have Americans and other expats was that Americans and other expats provided jobs. Now, the local Panamanians don’t have to rely on expats for jobs any longer because there’s so much building of infrastructure that the unemployment rate is very low.  Any Panamanians who want a job have one out there for them.  This infrastructure includes the widening of the Panama Canal, buildings, roads, the metro, etc.
When you’ve got a population of only three and a half million people with all this infrastructure building going on, the Panamanians have had to import labor. Just the other week, I was at the immigration office and saw a group of Portuguese workers coming in as laborers.   
Robert Adams of Retirement Wave – Best Places In The World To Retire User Account
Presented with permission from Bob Adams of Retirement Wave
Report from Panama - March 2014
Note to readers: you may wonder why, whenever I mention the word "billion" as a statistic, that I immediately follow that with the same number, expressed differently. For example, I may write "$2 billion ($2,000 million)". The simple fact is that there are two different definitions of "billion", each used by many nations. By presenting "billions" in this manner, I am simply clarifying exactly what I mean to both groups. For similar reasons, I try to avoid English contractions like "don't", "isn't", "it's" and so forth. These can be annoying to some readers for whom English is a second language.
It is time for a "Report from Panama", so here it is! I hope you find it useful.
First, the World
I tend to begin my reports with a look at the global situation. In this day and age, we are truly all in this together. There really is no place to hide and that is okay. We might as well accept it and deal with it as best we can. It is a transition. It is global. It is our present. It is our future. I typically offer some single piece of information to emphasize that the transition underway did not begin a year or five ago, but has been unfolding over a much longer period.
Throughout most of our lifetimes, basically the last half of the 20th century, the so-called "advanced nations" were in charge of global affairs. We called it the Cold War and, difficult and dangerous though it was, this "war" provided a global structure. Once it was over, a new structure had to be built and that is what is happening. I have spent nearly all my adult life working in "developing nations", the larger of which are referred to as "emerging markets" these days.
One of the primary problems facing the "advanced economies" is a huge debt burden. This graph from an International Monetary Fund study demonstrates the problem. Rightfully in my mind, this includes both private and public debt. We are not only responsible as taxpayers, but as consumers too. In any case, it is debt owed by the people of a nation and their government. It must either be paid off (lowering their standard of living in the process), not paid at all (default, a nasty word), or paid in inflated currencies (not a good idea, at least for the people owed the money).
Debt as a Percentage of GDP Emerging and Advanced Economies 1970 - 2011 – Best Places In The World To Retire – International Living
You can see that two groups of nations followed very similar paths up until the 1980’s when a series of debt crises affected many of the emerging market economies. The details are unimportant. The point is that once they had their crises, they changed their behavior and took a very different path from their "advanced" counterparts who continued on the same path until they finally ran out of money. Their debt is slowly declining now, but they have a long ways to go to "catch up" with their emerging cousins.
I will not spend much time on this topic as there is much to mention here in Panama (its debt burden is similar to the "Emerging Markets" shown above), but I do like to remind myself and all of us that there is good reason for us to show a little humility when we visit what used to be called the "Third World". Frankly, our performance in this century has been far less than impressive. We cannot live on the reputations of our parents and grandparents. We have work to do if we are to once again justify the word, "advanced". And when we do, we will not be alone. We will have company, among whom will be those who once were referred to as "backward".
But there is good news for us too. In the 21st century, there is no need to stay in a high-debt nation. You can pack up your bags and move to a wide variety of low-debt nations. I often say the Communications Revolution was critical to middle-class emigration, providing the Web, email, phone service, and various other services freely or cheaply, thus allowing us to remain in contact with our friends and families, wherever we live.
The other revolution, equally important in my mind, was the Transportation Revolution resulting from the end of the Cold War. It is not the speed at which you can travel, but the number of places to which you can travel that really counts! During the Cold War, we were all limited in where we could go and, if we got there, what we could do and how long we could stay. There are still a few major restrictions left (I would not bother planning a vacation in North Korea anytime soon), but those are the exceptions to the rule.
With communications and transportation in place, we live in a global community, even though some of the neighbors do not get along with each other very well. These "revolutions" and more form the foundation on which the global transition is built, and you and I are part of that. There are risks involved in any transition, but there are also great opportunities!
Your goal is to find that right opportunity and benefit from it. Whether that is in Panama or somewhere entirely different is not significant. All that is significant is that you find and make good use of your opportunity. 
Meanwhile down here in Panama
The data continues to indicate a very steady upward growth in economic activity in Panama, far beyond that being experienced in North American or European nations as has been the case for a number of years.
In terms of GDP (Gross Domestic Product – an indication of total wealth created in a year), the third quarter’s annualized growth rate in Panama was 8.9%, higher than the first two quarters and indicating a 7.8% increase for those three quarters taken together. Since GDP growth in the final fourth quarter is expected to exceed 8%, the total for all of 2012 should be between 8 and 8.5%, six times the rate of population growth and one of the world’s highest GDP growth rates. Nothing new there. That has been true for years.
But the GDP figures are slow to be reported as they include the entire economy and it takes time to collect the information. So to get a more recent picture of economic growth, I typically share the Monthly Index of Economic Activity (IMAE is the Spanish acronym). The IMAE includes much of the same information as the GDP figure, but it focuses on statistics that are faster to collect, not all economic activity, so it is different. Nonetheless, the IMAE closely tracks the GDP. In almost all instances, the quarterly GDP numbers will be higher than the monthly IMAE numbers, so it typically under-estimates the GDP results that will come later. Let’s take a look at the IMAE over the last six years, including October and November of 2013 which are not yet included in the GDP estimate.
Monthly Index of Economic Activity Panama January 2008 – November 2013 – Best Places In The World To Retire – International Living
As has been true in earlier reports here at RW, the IMAE "says it all". The pink dots are the monthly figures. Those last two pink dots on the right are October and November of last year. The blue line shows the trend averaged out over time. Growth continues and it remains on an upward trajectory.
Indeed, the only "bad" period is late 2008 and early 2009 when the IMAE effectively went flat as North American and European economies sank into negative territory and the full impact of their self-inflicted financial crisis was felt. Many people predicted that Panama’s growth would sink right along with the north, but that was clearly not the case. Once that brief period was over, Panama went back to its high growth rate. Meanwhile, North America and Europe continued to struggle to recover, as remains the case as I write.
Now, I know that many of my readers enjoy a list of a few of the many things happening in Panama that are small, but indicative. Here are a few, literally. The list this time was ridiculously long, so I had to cut even more than I usually do. 
  • Direct flights to Panama City continue to increase in number. We now have COPA flights to Fort Lauderdale in the US, Montreal in Canada, and Georgetown in Guyana. COPA now has flights to and from twelve major cities in North America, double the number a few years ago. Air France has three weekly direct flights from Paris. TAP begins direct flights from Lisbon in Portugal this year. British Air is interested in direct flights from London in the UK. We now have nineteen international airlines operating in Panama to 73 destinations in the Americas and Europe. What we lack (as does all of Latin America) is a direct flight to Asia, perhaps Hong Kong or Singapore. That would be nice. Give us time.
  • During 2013 foreign investment amounted to $4 billion ($4,000 million), $980 million more than in 2012, according to the Ministry of Economy and Finance. That is an increase of a third and reflects the huge amount of infrastructure development already underway in Panama. Another way of putting it is to say that foreign investors invested more than $1,000 for every man, woman, and child in the Republic of Panama in 2013 alone. Pretty impressive.
  • Mining continues to grow as a factor in Panama’s GDP. Minera Panama operates Cobre Panama, the largest new copper mine currently under construction in the world. Their investment is now set at $6.4 billion ($6,400 million) and is expected to be fully operational in 2017. It is the largest private sector investment in Panama in all its history. This is taking place in one of the least-populated and traditionally most-neglected areas of the nation.
  • Tourist arrivals in 2013 reached 2,270,000, a new record, and more are expected this year. All the new air flights and increased cruise ship visits will help accomplish that. An additional 238,000 arrived this January, 3.4% more than last January, and they spent about $290 million dollars, 8.2% more than last January.
  • Within a month, more or less, the first line of Panama City’s new Metro system will be operational and is expected to handle 30,000 passengers every hour. Work will then begin on the second line. Once that is finished, the third line’s construction will begin. Although everyone here is quite capable of understanding that the Metro will have a major impact on the city’s people and economy, no one will really be able to appreciate its impact until after it is operational. I saw the same thing happen before, during, and after the construction of the Metro in Washington DC. The city will not change overnight, but it will change substantially. Predictions as to where, when, how much, and so forth are all well and good, but it is like everything else in the future. Its impact cannot be predicted with accuracy. Time and practice will determine that, but it is a major milestone in urban development and one that I, as a Panama City resident, definitely look forward to with great expectations!
  • In addition to the Metro, there are a number of infrastructure projects recently completed or underway and near completion in Panama City, too many to list here. They include the construction of new roads, expansion of others, and many busy intersections now have tunnels and overpasses. The positive impact in areas where construction is finished is obvious and most will be finished in the next couple months. There is nothing quite as effective in getting a government to complete major projects in a timely fashion than an upcoming national election. I am less concerned with what the reasons may be or their political consequences and more concerned with the results on the ground. Panama City is being remade, quite literally, and while the process has been underway for some years, there is much more to come.
  • A special law was passed and signed in 2007 to provide incentives to international corporations to set up operations in Panama. It has been an outstanding success. 105 such global corporations now have operations here and more are expected. They have already invested $600 million in Panama in the process.
As always in these reports, the above is a very simple overview of just a few of the events that have occurred since the last report. Is there any bad news? Of course there is! One truly major problem is the catastrophe unfolding as I write in Venezuela. Venezuelans make great use of our Free Trade Zone on the Caribbean side, the second-largest such zone in the world, surpassed only by Singapore Venezuela traditionally represents 30% of activity in the zone. Unfortunately, they owe more than $1 billion ($1,000 million) for their operations and they just cannot pay it. This has led to a drop of more than 9% in the zone’s revenue for 2013 and no one knows when the Venezuelans will be able to pay their debts.
In addition, several airlines have ceased operations in Venezuela, including our own COPA, due to more than $3 billon ($3,000 million) of debt. Despite the size of those numbers, Panama continues to grow dramatically, but if they ever pay, the statistics will rise to even higher levels. In addition, we have continuing disagreements with our neighbors in Colombia and some of the taxes they have applied that negatively impact our trade, but that is par for the course on this planet and, while disturbing to those directly affected, have had little effect on the total economy.
We continue to have a deficit in skilled craftspeople and higher-level professionals which requires us to depend on immigrants from other Latin American nations to fill the gaps. Although serious efforts have been taken by the Panamanian government to address the great need for an improved education system, this takes time and the results will not be felt for some years, so this is a continuing problem. On the other hand, it is a problem because of our economic success and that is the kind of problem that is easier to deal with then when facing economic failure. If you doubt that, just talk to the governments of many North American and European nations.
Yes, Panama has its problems and its challenges that are directly related to its rapid growth, but none of us are interested in seeing that growth reduced. It is the reason why we are beginning to seriously deal with these needs. Nothing moves human beings to deal with problems faster than the realization that they are losing money if they do not.
Beyond the "bits and pieces" I mention above, there are a couple other items to add that are of my own creation. People often complain that "there are no statistics in Panama". Nonsense. People are simply ignorant of the mass of statistics available. Although the national census of 2010 was certainly well-known, I am one of the few people who pulled some of those statistics together to demonstrate that Panama was not a predominantly rural nation based on agriculture, as some said.
Very few people seem to be aware that there are three censuses, not one, conducted every ten years in Panama. The first in years that end in a "0" (2010 recently) covers population, housing, and other social aspects. The second in years that end in a "1" (2011 recently) covers the agricultural sector. Finally, the third is the National Economic Census that covers the entire economy, other than agriculture, in years ending in "2" (2012 recently). The results of all three censuses are freely available to anyone. One note – the reason that agriculture is dealt with separately is that the economy was far more dependent on agriculture decades ago when this practice began. I think it is great that they continue that census, despite the fact that agriculture, which once represented more than 25% of GDP, now represents roughly 3% of GDP and falling. It is still important to have that information, so continuing that census is useful.
I have read the results of all three censuses in doing my analytical research for professional purposes. Although all the results of the huge National Economic Census are not available, many are, so let me share something from that census, as well as something from the Agricultural census.
Let us start with agriculture. I have found that many people in Panama, both Panamanians and expats, assume that the bulk of agricultural land under cultivation is found in the west of Panama. The Provinces of Chiriqui and Bocas del Toro are frequently mentioned as being leaders in this regard. Okay, we can take a look at the total number of hectares (a hectare is roughly 2.5 acres) under cultivation by province and comarca (provincial-sized areas set aside for our indigenous people).
Total agricultural land by province in Panama – Best Places In The World To Retire – International Living

 You have no idea how many people are truly surprised to know that there is more land under cultivation in the Province of Panama, home to the greater Panama City metropolitan area, than in Chiriqui. There is a reason for that. The eastern half of the province is very lightly populated, usually ignored, and almost totally devoted to agriculture. It is a small note, but an interesting one. It can make a good comment for casual conversations! But it is a good example of how people make an incorrect assumption, despite the availability of statistics demonstrating the reality.
[Note: Panama Province has been divided into two provinces. The new province is called Panama West. This is currently underway, but I will stick with one Panama Province until the process is over and new maps are available and more widely-known to the expat public.]
Now, something from the National Economic Census. There are many ways to demonstrate results from a huge census like this. I will choose one, the total amount of business revenue collected in each province. The comarcas have too little business activity to be included. As I have pointed out in the past, just over 50% of Panama’s population lives in Panama Province. I often add that the percentage of economic activity is even higher. Okay, so what does the economic census tell us?
Revenue by Province Panama 2012 – Best Places In The World To Retire – International Living

The impact of the Panama Canal on Panama Province and the Free Trade Zone located in Colon Province are obvious, but it is far more than those two items alone when you take a good look at the statistics. In any case, the two leading provinces represent well over 90% of economic activity in Panama.
Many Panamanians complain that the rural provinces are neglected in the national budget. Many expats who live in those provinces agree. But it is quite understandable. You spend the money where you are making the money. I encourage provincial leaders to focus on finding activities they can promote in their provinces to create jobs and income for their residents. If they can develop a project that has economic potential, they are much more likely to get attention than if they appear to be asking for "charity". This is much, much easier to say than to do, but it is critical.
Some factors - increased tourism eventually on the Caribbean coast, the extraction of natural resources including copper, gold, oil, and natural gas, the potential for a refinery in the far west of Panama, etc. – will eventually help create the jobs and incomes necessary to keep young people working there, instead of moving to the Panama City area. Some people object to these types of project. I tell them to spend less time objecting and more time helping identify and encourage alternatives more to their liking. Talk is cheap. As Panamanians like to say, hechos, no palabras - deeds, not words. Provincial Panamanians need serious help in developing their own provincial economic plans. This will come eventually, but sooner is much better than later.

The Panama Canal Expansion

I suspect that most of you, perhaps all, have been aware of a controversy regarding the expansion of the Panama Canal. A consortium of companies (48% a Spanish firm, 48% an Italian firm, 3% a Belgian firm and 1% a Panamanian firm, the latter two have stayed out of all this) has caused quite a disturbance by stopping their critical work on the expansion to demand more money. To be a bit more precise, it is the Spanish firm (Sacyr) that has been especially difficult in this regard.
I could write paragraphs and paragraphs on this little Spanish melodrama. If you follow the many detailed reports in the Panamanian press, the Spanish press, the Italian press, and comments from other Latin American nations who have experience with Sacyr, you begin to understand what happened.
In a nutshell, Sacyr apparently decided to drop its little bomb just after the new year when our election campaign got fully underway here in Panama. Apparently they gambled that the ACP and the government would panic and give them an additional $1,600,000,000. Forget it. The whole affair stunk of the old 20th century "Third World" attitude toward smaller nations outside the North Atlantic region, but this is the 21st century and it did not work.
As far as I concerned, the Panama Canal Authority (ACP is the Spanish acronym) has acted in a very professional, adult manner throughout this controversy. The ACP has done an excellent job of explaining every step of the process years ago that led to the contract’s award and to their current response.
Above all, they have insisted throughout that any complaints or demands must follow the measures proscribed by the contract. This is a contractual dispute and going outside the contract’s provisions, dragging politics into it, is totally inappropriate and unprofessional. Spain and Europe have problems, but they are not our problems. When the European Union "offered" to mediate/arbitrate the disagreement, they were politely and firmly refused. They had no business interfering. They were not a party to the contract.
I am not going to waste more time on this. As I write, the GUPC (the foreign consortium) and the ACP have reached a tentative agreement which puts people back to work, but within the contract’s provisions. Claims for money will settled by arbitration later. If this falls apart, then the ACP will have no choice but to move ahead with another partner. Whatever, the Canal continues its current very profitable activity and the expansion will be completed. It may cost far more than we like and take longer than we like, but it will happen. It is not a catastrophe. But now it appears an agreement has been reached and that is good news for everyone.
There was one mildly amusing note. Among those expats who immediately decided that this was a great disaster were a few who argued that global businesses would "flee" Panama because business hates uncertainty. Indeed business does. I am very familiar with that kind of situation from the past few decades of my professional work. But the "uncertainty" referred to is a matter of the government unexpectedly changing the terms of a contract, canceling a contract without justification, or even nationalizing a foreign-owned business. That naturally drives business away from that nation. But in this case it was the contractor that was the source of the uncertainty and the ACP and the Panamanian governments were the ones who insisted on adhering to the contract. No, this will not frighten business away from Panama, quite the contrary.
Enough. On to another topic of interest.

It is an Election Year
I mentioned this briefly in my last report and I will do so again in this one. Every five years on the first Sunday in May (May 4th this year), the people of Panama elect all their officials in one national election. The campaign is underway at full strength as I write. There are three major candidates for the Presidency. One of them will win. No matter who wins and no matter how "different" they may be in some respects from each other, they are all intelligent, educated people with leadership skills. No one of them is far to the Left or far to the Right. They have more in common than they are likely to admit during a campaign. Whichever one is elected will not turn the nation upside-down or reverse the last decade of economic growth. I do not mean to say that there are no differences among the three of them, only that those differences are not so great that you or I have anything to worry about. This is not Venezuela, this is not Argentina, or anywhere else other than Panama.
However, this is a nation that is growing very rapidly. When you think of all the people willing to fight to be their nation’s leader when their nation is in serious financial trouble, you can only imagine how much more attractive it must be when the nation is growing! The stakes are high, politically, so the charges and counter-charges will fly back and forth. Some of them are likely to be extreme as tempers flare and poll numbers shift.
My advice is simple. Relax and let the voters of Panama take care of this. This is my third election in Panama and I have been very impressed with the way the elections are handled. This is a nation that saw great damage done to its democracy in past decades and people have not forgotten. I have great confidence in the Panamanian people to choose the person they think best fit for the job. You should too.

The Real Estate Sector

If there is one word I would use to describe the residential real estate sector in general in Panama, it is "stable". Prices are not rising dramatically nor are they falling dramatically. There remains a very wide range of prices for a very wide range of houses and condos. There is a home for you at whatever price level you can afford, but it is not that simple.
The challenge is to find the home you can afford in the area where you want to live. That is not only your challenge. Everyone faces it, even the folks with plenty of money. It is the "area where you want to live" that is as important as the money you have to spend. Only you can determine that.
People often ask me, "Where is the best place to live in Panama?" or "Where is the cheapest housing?" or "What is a reasonable price for a house?" These are questions I cannot really answer those questions, just like a lot of other people in Panama. We do not know what is truly important to you and you do not yet have a clear idea of what it is you want since 95% or more of you have never visited, so the only reasonable solution is simple. You have to come and look for yourself.
But do keep a few things in mind.
  • Do not sign any contract for a property without first having your lawyer (not the seller’s lawyer) review the contract’s provisions and tell you exactly what they require in a language you understand. Nothing is more frustrating to me than to hear that someone is planning to legally obligate themselves to a purchase without having first consulted a lawyer. They tell me they do not want to "waste" the money. Then later, they discover there is a section or clause of the contract that hurts them, but they knew nothing about it. When that happens, that is when they really waste money.
  • Do not buy a vacation home, buy a home to live in. You are not buying a view of the mountains, a view of the ocean, or a tropical paradise, you are buying the home you will live in every day. First, find the home that works for you in an area that provides whatever amenities you need to be comfortable. Consider the view or setting to be an extra bonus, but do not let them be the deciding factors. Remember, no matter where you live in Panama, it is almost impossible to be so far from the ocean or the mountains that you cannot visit easily when you want to.
  • There is no such thing as a "gringo price", but there is an "ignorance price". No seller cares what passport you carry, what your native language is, or what your native culture is. They simply want to sell at the highest possible price.
Look, I was born and raised in a small village (less than 1,000 residents) in rural New York State in the US. We were surrounded by beautiful countryside. If someone who looked rich rolled in from New York City, fell in love with land we owned, appeared to be an otherwise ignorant "foreigner", and asked us how much we wanted for our land, we would very likely have doubled or tripled the normal price. Why not? It was worth an effort. Our attitude was simple. If you were stupid enough to give us three times the value of our land, we were smart enough to take your money.
In Panama (and everywhere), do not be ashamed to be ignorant. The property you love may fit your budget, but that does not mean you have to pay more than it is worth. Here is a suggestion, if you ever feel like "jumping on" a property you think is beautiful and affordable. Once you hear the price, just say, "Thank you. I will consider that. I do not know the price of (land/homes/condos, etc.) here, so I have more research to do. After that, if this seems like a good deal, I will get back to you." If the seller has quoted you a ridiculously high price, he or she is now aware that you are very likely going to discover that quickly and they will lose a sale. Who knows? The offering price may fall…quickly. Fine, but you still do not make an agreement. You got out and see other properties and talk to other people who live in the area. But in any case, you are far, far less likely to buy at a ridiculously high price. Forget "gringo price". Think "ignorance price". Protect yourself. Use common sense.
  • Be prepared to adapt to a new human and physical environment. I am always a little surprised how many foreigners arrive thinking that Panama is really no different than their nation. It is different. You will not change Panama, so you will have to adapt to Panama. Everyone goes through this, whether it is a matter of getting used to the heat and humidity for those from a drier part of the world or understanding how to find professional assistance, negotiate a deal, and see it through. And no, your embassy is not here to take your "side" when you face a problem in adapting. You are responsible for you own life, not the taxpayers of your original home nation.
The list could go on for a couple pages or more, but these are some very fundamental points that I like to repeat when I have the chance. They are what they are because of the experience of thousands of RW members over the years.
In Summary
It is not true that people stop pursuing dreams because they grow old, they grow old because they stop pursuing dreams.

Gabriel Garcia Marquez - Colombian novelist, 1927 - ??

We all have dreams of what we would like our future to be. It is part of being human. Turning those dreams into reality is always a challenge for everyone, everywhere, Panama and Panamanians very much included. It does not always work out the way we want it to be, but if we are smart, we learn to adapt to what we have and do our best to make it as close to our "dream" as we can. Your willingness to look outside your current home nation for a chance to pursue your dream puts you ahead of everyone else. There is nothing better than "options" at a time when we are considering a major life change. The more options, the better.
However, there is always a point when we have to choose an option. As I have often said here at the site and as I say when I make public presentations to people like yourselves, I am not the least bit interested in whether you choose to come to Panama or not. This is entirely your decision. All I can do is share my thoughts and my observations, then hope that they are useful to you. If you choose to join us here in Panama, fine! If you choose to go elsewhere or nowhere at all, fine! My only concern is that you choose the option that is best for you.
And so another commentary is finished. If you have read any of the others, you know exactly what will happen now. It is my own way of expressing the humility that I recommend to others. So let us read it together again.
No one knows the future. Free markets go up and free markets go down. The future is not a simple extrapolation of the present. Anything can happen. Everyone has an opinion and those words above are just opinions.
Lourdes Townshend of Multimodal  & Logistic Transports Magazine – Best Places In The World To Retire User Account


Probably I am not the person to answer this question, nor pretend to go over Mr. Adams complete economic report, as I am not an expert in economics.  But being a Panamanian, and based on experience (having lived in different countries, and holding tourism positions abroad), I think I can contribute with some insights on the Panamanian economy.

First of all, Panama has a tradition of being a democratic country.

Unfortunately, in her very young republican years, since 1903, the country has gone through several experiences, like the "military era" that devastated the country for 21 years, from 1968 ending in 1989.

After that period, when hundreds on Panamanians called the "civilistas" fought in the streets for their freedom in very special ways, Panama recovered and has since begun a new era of restoration in which Panama has bloomed ever since step by step.

This has not been easy, though, but Panamanians are strong minded, hard workers, and very proud of their country. Persistence has been the key for that success, working hand-in-hand, government with private industry.

Working with the few tools Panama had in 1990 after a total bankruptcy, Panama started several strategies, including globalization, to become a great and strong country.  Strategies include the expansion of the Panama Canal, which is causing the world to look closely at this small country that is taking the steps to become one of the largest maritime hubs, along with other exceptional ways of leading the modern world.  On a recent visit, Mr. Biden, the Vice President of the US, praised the efforts of Panamanians and the tremendous economic success, praise that has been given in a similar way by many other worldwide leaders.   As a matter of fact, due to the great impact of the canal expansion, ports in other countries will be modernized to accommodate the larger ships that will go through the Panama Canal.

Mega projects in Panama like the new metro (the first in Central America), highways, international airports, roads, bridges, social programs, poverty reduction, international trade treaties, great improvements in technology, and large local and international investments, attractive benefits for retirees, among others, makes Panama  today the #1 destination, and a very strong economy.

Howard Jones of The Haven Hotel and Health Spa, Boquete, Chiriqui, Panama – Best Places In The World To Retire User Account
There is only one answer to this question.  Panama's economy is going great. Here in Boquete we have the new international airport built and soon to be taking international flights. Views from the Haven in Boquete out to the mountains – Best Places In The World To Retire – International Living Then we have the new 4 lane highway and some huge construction projects that started recently. Boquete is an excellent option for those wishing to invest in Panama.
Robert Adams of Retirement Wave – Best Places In The World To Retire User Account
Reprinted with permission from Bob Adams of Retirement Wave

Report from Panama - June 2013

[Note to readers: you may wonder why, whenever I mention the word "billion" as a statistic, that I immediately follow that with the same number, expressed differently. For example, I will write "$2 billion ($2,000 million)". The simple fact is that there are two different definitions of "billion", each used by many nations. By presenting "billions" in this manner, I am simply clarifying exactly what I mean to both groups. For similar reasons, I try to avoid English contractions like "don't", "isn't", "it's" and so forth. These can be annoying to some readers for whom English is a second language.]
[Posted 23 June 2013] This report has been slow to come, but it has finally been finished! I hope you will find it useful.

The global context, whether we like it or not

"Innumerable confusions and a feeling of despair invariably emerge in periods of great technological and cultural transition."--  Marshall McLuhan (1911-1980) - Canadian sociologist and philosopher
As many of you know, I spent almost all of my adult life working in the so-called "Third World". They were called that because so many became independent during a relatively short period during the Cold War (what I call, "World War Three in slow motion" a war that went on for nearly fifty years). These nations appeared so rapidly that maps had to be constantly reprinted. Every few months, it seemed, National Geographic would send out a new World Map folded inside its magazine. From 1956 through 1966, the following nations gained their independence - Morocco, Sudan, Tunisia, Ghana, Malaya (now Malaysia), Guinea, Burkina Faso, Cameroon, Central African Republic, Chad, Democratic Republic of the Congo, Republic of the Congo, Cyprus, Gabon, Ivory Coast, Madagascar, Mali, Niger, Nigeria, Senegal, Somalia, Togo, Kuwait, Sierra Leone, Tanzania, Algeria, Burundi, Jamaica, Rwanda, Samoa, Trinidad and Tobago, Kenya, North Borneo, Sarawak, Malawi, Malta, Zambia, Gambia, The Maldives, Singapore, Barbados, Botswana, Guyana, and Lesotho. Those in italic type all became independent in a single year, 1960. Since no one was really sure how these new nations would fit into the two Cold War alliances headed by the US and the Soviet Union (the First and Second Worlds), the term "Third World" was used for the new kids on the block.
I would sit across the table as an advisor, consultant, program director or any of a number of titles from folks from many of those nations and others. I was there to help them understand how to survive and eventually prosper in a system designed in Europe and North America from a very different cultural and historical perspective. I had to be very sensitive. On the one hand, they were very proud of their nations and grateful that people like me were willing to help. On the other hand, they were embarrassed by the problems that face any nation in its early decades and frustrated that they had to depend on a foreigner for help. Understanding both was critical.
Once in a great while, the embarrassment and frustration would boil over into anger. I understood. I could handle it without responding in kind. I sympathized. I always reminded myself that my home nation was young once too and was equally sensitive to the opinions of foreigners. And we already "knew the rules of the game", most of our citizens having their family roots in the dominant global empire of that day. In so many ways, these folks across the table from me faced a far greater challenge than my people had faced when they got their independence.
If you think that I was the "adult" and they were the "children", think again. They were most certainly adult humans, just like me. But when the meeting was over, I went back to my hotel room that cost more for a single day than most of them were paid for a month. And that assumed their government had paid them for that month. Sometimes in the past, they waited for as long as six months to get paid. If I had a lot of work to do, I would sit quietly at my hotel room desk with piles of paper and order dinner from room service. They went home to families with all the challenges that families face, with hardly a quiet moment to think, and ate whatever they could afford to eat. Trust me on this. They were not children. They were adults and I had nothing but admiration for the many of them who, somehow or another, managed to pull themselves together and keep up the good work. So many of them were to pass away before they could taste the fruits of their labor, but I am happy that so many of their children have been able to taste that for them...and because of them.
They needed more than advice from me though. They needed a shot of inspiration. They needed to believe that I believed in them, and I did. I hope I inspired a few of them. I know they inspire me today.
Do not misunderstand me. I was (I had to be) a very practical person. I knew some of them were useless, others corrupt, still others uncaring. All the more reason to appreciate those who carried their burden well. Whether they lived in Ghana or Singapore, they had burdens to carry that I did not and, truth be said, that I might not have carried half as well, if at all, had I sat on their side of the table. I say all this as a reminder to myself and to you that we are all human beings, nothing more, and we are all capable of choosing to do the right thing, or choosing to do the wrong thing. Some of us may have been lucky enough to be born into well-established, successful societies, tasting the fruits of our ancestor's labor, but none of us, wherever we live, have reason to consider ourselves "superior". We are simply human.
Things have changed at the "table". America's CIA provides a useful Factbook, a public listing of many statistics for every nation. They do a good job of keeping their statistics up-to-date, although sometimes they get behind. For example, they still list Panama's "Amerindians" (our indigenous people) as 6% of the population, a statistic from an old census. The 2010 census which provided much improved coverage of the most distant rural areas found that roughly 12.3% of Panamanians are indigenous people. But the stats considered most important to decision-making are up-to-date.
Take a moment to look at the list of the 220 nations and semi-independent territories listed by their economic (GDP) growth rate for 2012. I will provide the link below. Notice which are the leaders. Many are categorized by international agencies as "low income" nations, thus their growth rates can be higher since they are starting from a lower base. But Panama is part of the "upper middle income" category which makes its performance that much more impressive. Look for your own home nation. It may take you a moment to find it, but it is there. Keep in mind that what you find there has been the case for several years now. Over time, the differences in economic growth add up. Note - there is an "est" (estimated) after almost all the stats. This is normal. Final figures are not announced until well into the next year, but most of these, including Panama's, are already revised and any changes will be tiny, if there are any at all.
Now you might think this is bad news. Well, it is for some nations, but not for many others. I often remind people that for every one of us from the North Atlantic region, both sides, who think the world is "going to hell in a hand basket", as we say in English, there are two, three or more in other nations who see the future not with fear, but with hope, with positive expectations, and with good cheer. Our attitude toward our future has a huge impact on what actually happens in our future. This is a simple lesson all of us already should have learned in our lives, probably on many occasions. I will say this without hesitation. It is much nicer to be living with people who have a positive attitude toward their future than with people who have a negative attitude. When I see what is going on up north, if I had not relocated already, I would certainly be packing my bags now.
But I will also add this, again without hesitation. I believe this is the most exciting period ever in human history and I am blessed to have lived long enough to experience it. That may surprise some of you. But the old "system", if you could call it that, of the 20th century simply is not relevant to the reality of the 21st century. It has already changed, it is changing now, and it will continue to change.
I cannot see you from my desk in Panama City, but I know you are seeing my words right now. Let me "look you in the eye" and share a thought. You know what I mean above. That is one reason you are reading these words at a website on relocation. The critical factor for all of us is to have the right attitude. We are like drivers on the road, everywhere in the world. When we see an accident, we slow down to take a look, even when the scene is unpleasant. But we also know that it is important to take our eyes off the accident and get on with our trip. The sooner we do that, the sooner we get where we want to go.
Seven or eight years ago, I was with a group of expats in Panama. I talked about the expats I had met over the years in nations all over the planet. One of the expats looked at me with disappointment on his face. He asked me, "You mean we are not pioneers?" I laughed and said, no, we are not. We follow in the footsteps of others. There are simply far more of us.
I look back on that and realize I was wrong. Yes, we are pioneers, all of us, including our Panamanian friends and neighbors. We are pioneering a new century and a new world. That is the wonderful thing about human beings, one of the factors that separate us from other species. We can take what we have that is old and make it new again, if we want to. We can reinvent our lives, if we want to. We can have more than one "beginning", if we want to. Do you want to? If you do, the opportunities are all around you and, if you do relocate, you should definitely do it as a pioneer.
My birth nation is known for its pioneers of the past. When they got in that "covered wagon" and started out on their long, long journey west, they learned one lesson quickly enough. If they were to be successful, they had to focus on the trail in front of them, not on the trail behind them.
A good thing to remember for today's pioneers.

Meanwhile, here in Panama...

"The only function of economic forecasting is to make astrology look respectable."--
John Kenneth Galbraith (1908-2006) - American economist
  • Typically in these reports, I list a series of individual statistics or facts regarding Panama’s economy. I have another list today, but I am going to make it very brief so I can concentrate on broader topics.
  • Companies like Wal-Mart, Walgreens, JC Penney and others are interested in opening operations in Panama. We are told that Wal-Mart is furthest along that path and most the likely the first we will see.
  • Once again, Panama received more Foreign Direct Investment (this is large-scale investment) than its neighbors, over $3 billion ($3,000 million) in 2012, $265 million more than 2011.
  • Car sales continue to rise rapidly, up 16% in 2013’s first quarter compared to the same period in 2012. This kind of growth has been going on for years and residents of Panama City will groan, but it is one indicator of economic growth.
  • The government announced that the Development Bank of Latin America and the Inter-American Development Bank will provide funding for the construction of the second line of our new Metro system in Panama City. The first line will be completed and the construction of the second line will begin over the course of the next 12 months.
  • Panama continues to be seen as a safe haven for people in other nations, but contrary to popular opinion, the US and Canada only represent 6% of the money held here. 59% is Panamanian money, simply domestic deposits. 26% of the remaining 35% is from elsewhere in Latin America with 9% from everywhere else. Remember, it is not always to avoid taxes that people keep their money here. It is because our banking system is known to be well-run and the government does not interfere with legal transactions, much less confiscate foreign deposits.
  • One interesting note. Ecuador has a variety of social, economic, and political problems which has led to Ecuadorians moving their money (and sometimes themselves) to other nations. Traditionally, that would be the US, but the Ecuadorian government reports that 47% of that money went to Panama. Another example of why North Americans should not consider themselves to be the major foreign factor in the local economy.
  • If a nation has a good credit rating, the global market will accept lower interest rates and longer durations. So it was pleasing to note that a bond issue of $750 million was over-subscribed by buyers who accepted 40-year bonds at an interest rate of 4.30%. This compares to another issue of a few years ago before our credit rating rose sharply and we had to pay 6.70%. Or you can compare this bond issue with another done at the same time by Costa Rica who had to pay 5.625% for 30-year bonds, and Costa Rica is better off than many of our neighbors. This is the lowest rate ever paid by the Republic of Panama. Interest was strong and there were bids for $4.5 billion ($4,500 million) worth of bonds, 5.8 times as many as were available. This is real money, folks, managed by people who are very conservative in a crazy global economy. We consider these results to be a genuine compliment, far more important in the long run than articles with pretty pictures in the travel sections of foreign newspapers.
  • In the last three years, the government has placed a great deal of emphasis on providing computers to school children and free Wi-Fi service in public places all over the country. As a result, the percentage of Panamanians able to access the Internet has risen from 25% to 48% and continues to rise. In the 2013 Global Report on Information Technology published by the World Economic Forum, Panama rose 11 places in the rankings, first in relation to the Central American nations to our west and north, third among all nations in Latin America, behind only tiny French Guiana, still part of France, and Chile.
  • A few years ago, it took a Panamanian five days to establish a corporation, much slower than the US, but faster than most nations. Today, he or she can do it on-line at a special site for that purpose in an average of 45 minutes, but as little as 15 minutes. The result has been a great increase in entrepreneurial activity in recent years and the first quarter of this year saw a 21.2% increase from 2012. Tens of thousands of businesses have been set up in this manner, more than 28,000 in 2012. We could set a new record this year as the first quarter of 2013 saw an additional 8,359 businesses incorporated. Businesses can also "cancel" their incorporation, if they fail, as is always the case in a free market. However, it is interesting to note that new businesses last year reported hiring 95,443 employees, while "canceled" businesses released only 11,689 employees.
  • If there is one thing that gets a great deal of attention everywhere in the world, but especially in North America and Europe at the moment, it is a job. Panama’s unemployment rate remains very low at 4%. But if we were to use the statistic used in the US and many other nations and dropped those people who had given up looking for work out of frustration (“discouraged workers”), it would be 3%. That is as close to zero unemployment as any free society is likely to enjoy. Of course, some of the jobs are simple or “informal”, but they provide income and a sense of personal worth, as well as provide a foundation for a move up later. And what is the outlook in Panama in that regard. The Manpower Group recently completed its global survey of expected hiring and here are some of the results.
Employment Outlook in 42 Countries 2013 – Best Places In The World To Retire – International Living
We are in good shape.
There are any number of other details. Two of interest to some of you may be the new COPA direct daily flight from Boston beginning in July and the new Air France-KLM direct flight from Paris three days a week beginning in November to compliment its current daily flights from Amsterdam. I have probably missed a couple others!
I know many readers love these bits and pieces of differing significance as they do provide one view of the overall economy. But let us now focus on the broad indicators. The preliminary GDP growth estimate for the first three months of 2013 is at a 7% rate. This stands in contrast to 10.7% for 2012 as a whole, or a drop of about a third. Is this a disaster based on a collapsing global economy? No. Let me share three thoughts.
  • Two major factors in this "slow-down" are our neighbors to the east and south - Colombia and Venezuela. Without going into the mountain of detail necessary to explain, Colombia has been charging a special tax against those using our Free Trade Zone for shipping. It is clearly unfair and we have complained to the World Trade Organization, of which both nations are part, and we will likely win that argument, but that is no guarantee that Colombia will do the right thing. It is a big pain in the neck and it has hurt our trade with Colombia, a major trading partner, but it is not likely to be "forever".
As for Venezuela, its economy is a disaster and one of the first things Mr. Maduro, the man who replaced Hugo Chavez, did was to devalue their grossly over-valued local currency. This has made imports to Venezuela much more expensive and that has hit at our exports and re-exports through the Zone to Venezuela. Heaven alone knows what is going to happen in Venezuela in coming months and years, but this also is a pain in the neck. So the drop is not as associated with China, the US, or Europe as some might imagine.
  • Let me share with you how I look at GDP growth rates in simple terms. I start with the nation's population growth rate. In Panama, that is 1.4%. I like the GDP (total national wealth created in a year) growth rate to be at least three times the population growth rate. No matter what the ideology or economic approach of the nation may be officially, I have never been in one where economic growth is equally distributed. Tripling the population rate means, outside of genuine dictatorships, that the majority of the people are likely to be better off now than the year before.
In Panama, that means 4.2%. Although it is not common, I prefer that the GDP grow four times faster as that all but guarantees that the great majority benefit, directly and indirectly. In Panama, that means 5.6%. Delightful though it may be, there is no need for Panama's GDP to grow six, seven, or eight times faster, as it often has in recent years. 7% is five times faster and this is great, far higher than most nations and probably all or nearly all our birth nations. It is nothing to lose sleep over. Most of our nations would be very, very happy to come close to that figure. Some would be happy just to get rid of the ”minus” sign in front of their rate. And let us also not forget that this is only one quarter of a year.
  • Now, we should take a look at the trend. That is where the real action is over time. For this, it is easier to use the IMAE statistics. IMAE is the Spanish acronym for Monthly Index of Economic Activity. It is very similar to GDP, but does not include all the detail, thus it is published on a monthly basis. It typically understates economic growth as it does not include all the many items in GDP, but it follows the same path. In case anyone wonders, it has also been lower than average in recent months, so we already knew the quarterly GDP rate was going to be slower. Here is a graph of the IMAE from January of 2008 through the first three months of 2013, the first quarter that we are talking about. The red line shows the month-to-month movement which tends to be "choppy". The black line shows the statistical trend, so it uses averages to smooth out the monthly bounces. Yes, the figures are corrected for inflation.
Panama Production 2013 – Best Places In The World To Retire – International LivingOkay, now look at the two "spikes" that are far above the trend line on the right. Ignore the first one and begin with the next one which is below the trend line and the others to its right. That covers 12 months, one year. You will see that three of the monthly stats were above the trend line, three were on or very nearly on the trend line, and six were below the trend line. That is the foundation for the "slow-down". It is nice to note that the final month pops up rather impressively, but that is only one month and not the focus of attention. However, overall, you may see something to get upset about, but I do not.
Finally, let me finish by quickly pointing out three things that will have substantial impact in the next two or three years or earlier. First, the Panama Canal expansion will be completed in early 2015 and will immediately be put to use. This will have a huge impact on revenue for the Canal and for the nation. Second, the Minera Panama copper mine will come on-line and that will add a great deal more to our wealth. Third, the natural gas and oil reserves in eastern Panama when I am focused in terms of investment will begin to be developed as bids for "blocks" come in later this year. This not only will increase national income, but whatever the final results, it is going to bring a great deal of attention to a beautiful region of Panama that has gone ignored for far too many years. So there are three new sources of income that very few people seem to take in to account when "predicting" Panama's economic future. Big mistake.
I will now turn to two subjects that I would be perfectly happy to ignore, but are appropriate for this report

Elections come to Panama

"My brother Bob doesn't want to be in government - he promised Dad he'd go straight."--John F. Kennedy (1917-1963) - American President
Well, it turned out that Bob did want to be in government later on, but JFK's comment is still enjoyable today. Panama has elections every five years for all elected positions from the most basic up to the Presidency. Our next election is scheduled for May 4 of 2014. All the primaries are not yet finished, but we do know our Presidential candidates and some of the others, but it will be the end of September before the political primaries are completely finished. The President cannot run for re-election, although other office-holders can. Here is a quick summary of what will happen at a high probability level.
The primaries will finish and all candidates will be known. The various party campaigns, already beginning, will go into hyper-drive. Candidate A will insist that the future will be glorious if he is elected and disastrous if he is not. Candidates B and C (we will have at least three) will say exactly the same thing. There will be much finger-waving and finger-pointing, hooting, hollering, accusations, angry responses, and so forth. However, Panamanians are very used to all this and will not panic. Debates between Presidential candidates will be held and a high percentage of the nation's voters will be listening. The debates are taken very seriously here. Polls will be constantly reported and the results published to the joy or dismay of one party or another. As we near Election Day, the rhetoric will reach new heights and a visitor from another planet will think the Fate of the Universe depends on the outcome. Election Day will dawn, Panamanians will quietly line up to vote, chat cheerfully with each other, complain about how long the line is, and vote peacefully. Results will be announced that evening as they come in and a Presidential winner will be announced. His supporters will drive all over town, blowing their horns and celebrating, while the losers sit at home and sulk. The next morning will dawn and we will all get up and go back to work. Despite earlier comments by the candidates, the Universe will survive without difficulty.
In other words, it will be like elections in every other democracy I have visited or in which I have lived or worked. Recently, I have been asked by some Members if I am concerned about who is elected President. No, I am not. First, none of the major party candidates would be considered "extremist", either right or left, in North America or Europe. They are all dedicated to maintaining the economic growth of the last decade and have no desire to be the "President who sank the economy". Second, this is a small nation with only slightly more than one percent of the population of the US, for example. Voters typically know their candidates well and if they want to hear every candidate for major office in person, shake his or her hand, and ask a question, they will have plenty of opportunities to do that. If a candidate says or does something really foolish, everyone will know about it by the next day. If you ever have any worries about freedom of speech and press here in Panama, you will not if you follow the elections. Third, I have honestly been very impressed, despite all the inevitable craziness that can occur in democracies, by the seriousness with which Panamanians take their elections. They lost their democracy for a time in the past. They do not want to lose it again and they will not. The worst thing I expect to happen is that I (and I suspect, most Panamanians) will have to put up with all the noise and will be delighted when it is all over and we can be left in peace again for at least a few years!

A Canal in Nicaragua?

I do not have an appropriate quotation for this section, but it will be short anyhow. If you have not heard, President Daniel Ortega in Nicaragua has announced an agreement with a firm in Hong Kong to prepare a feasibility study for a canal (two years, $400 million), then another ten years ($40 billion or $40,000 million) to build it. This has caused a great deal of comment. There is a long list of reasons why this effort can fall apart and I am not going to waste my time with them. Although I must admit, I am impressed with President Ortega's ability to what would have been once considered impossible - unite the right of center in Nicaragua with the environmentalists.
Nicaragua is a very poor country compared to Panama. Their per capita GDP (PPP) is $4,500 for 2012, Panama's is $15,900. Panama is rapidly diversifying its economy beyond our canal and has no intentions of stopping. In 12 years, if the feasibility study and the canal construction all happen on schedule, we will have been running the expanded Panama Canal for a decade. I have worked with shippers for years. Nicaragua's canal is going to have to do two things as an absolute minimum, 1) be cheaper than our canal and 2) be as efficiently and competently operated as our canal has been for 99 years already, 111 years when their canal is supposed to be ready.
There are all sorts of problems they will encounter, including opposition from the indigenous people and the environmentalists, constitutional challenges, etc. If they can pass all these tests and more, and successfully open and operate a canal, we will compete. I am not holding my breath. I will probably be dead by then anyhow. I will use the same polite adjective that the Panama Canal Authority chose in its statement. This project is "ambitious".
There are so many practical problems associated with this that it is not worth my time or yours going through them all. I wish Nicaragua good luck and will get on with my life. However, in answer to the question, "Is Panama shaking in its boots, sweat pouring down its fevered brow, fearing a canal in Nicaragua?", the answer We will leave that for a time when it is truly justified. And I will leave the subject at that for now.

So, what about me, Bob? Is Panama still a good place to live?

"The only thing worse than being blind is having sight, but no vision."--Helen Keller (1880-1968) - American author who happened to be blind
In one respect, this is the most "boring" portion of my reports in recent years. Basically, the Panamanian economy continues to grow faster than most others. Real estate prices are relatively stable in most parts of the nation. They rise in some areas, stagnate in others, and fall in others, very much like "normal" real estate markets throughout history. There is something here in just about everyone's price range, but you have to look for it, as you would anywhere. This is not a market like the crazy one in the US and many European nations in the past decade. This market is not based on mountains of debt resulting from ridiculous mortgage contracts and poor lending practices in general. Downpayments are high here and the banking system is conservative. They did not take part in the northern "bubble" that collapsed so terribly and we are very thankful for that.
I cannot tell you how many "investment groups" of small investors with a couple million dollars or so that I met in past years who came down with stars in their eyes, money in their pockets, expecting to "flip" properties in a year and double their money, or who set up small real estate developments in areas that were not ready for them. In other words, I saw too many arrive, on fire with dreams, only to see them flame out later. They simply could not accept their own ignorance when they most needed the beginning. I hope never to have to go through that again.
But there is some indication that some people in North America are beginning to do well financially again, even suggestions of a real estate “mini-bubble”, heaven forbid, as some of the old practices are still present. So to those Members who may be thinking in terms of the small investor group approach, do yourselves and all of us a big favor. Do not come here for a couple weeks or so, rush around looking at various properties, than go home to combine that short trip with “research” done on English-language websites, including this one, and think you know what you are doing with your million or two million or whatever dollars. You do not. You are in the hands of Lady Luck and she has been known to drop people frequently.
Come, by all means, but settle down and stay as long as you can, get up every morning six days a week, and hit the road. See as many properties as you can, but above all, speak to as many people as you can. If you do not speak Spanish, hire someone to go with you and interpret. If you have a car with a truly bi-lingual driver, that can help. If you have no professional experience dealing with Latin American real estate, find someone who does and hire them. If you want to be treated as professional investors and seek the rewards of professional investors, act like professional investors.
You might think this is necessary for everyone coming down, but that is neither practical nor as critical. Why? 99% of RW members come looking for their home and/or their little business they want to set up. Sure, a few buy quickly and with little thought, but they are a tiny minority and smaller than ever. The troubles up north have had their effect. I find Members to be far more demanding and conservative than was true six or seven or eight years ago. Basically, you do the same here that you would do if moving to a completely new area of your home nation. It is your household’s money and no one else’s, and you know it. But taking as much time as you can, even two trips to Panama if that is financially possible, finding and making use of a good lawyer, and using common sense can help keep you from doing something foolish. And if you are wise, you will ignore the “investment” potential of what you buy and just focus on where you want to live.
Otherwise, as in the past, Americans and Canadians are a small portion of the expatriates arriving to relocate. In my experience, Europeans have increased in number over the last year or two. I have met more than a few Members from Italy, France, Spain and so forth, especially Italy, but I am sure other European nations are well-represented too. However, although those I meet frequently come with more money than North Americans, they are still small in number.
The majority of buyers, especially at the high end, are either from Panama or from other Latin American nations. We have plenty of Venezuelans and Colombians already here, but they are being joined, again in my experience and from what I hear from others, by increasing numbers from Ecuador, Argentina and other nations with socio-economic and political "problems". These expats tend to bring more money to the table than many North Americans and Europeans as they are often moving their families too, along with as much of their assets as possible. This is especially challenging for Members from Venezuela and Argentina whose governments are not happy about this. Ecuador is not too happy with this either. The more recent Latin American arrivals tend to end up in Panama City where the jobs are, the business possibilities are best for them, and our primary international airport is nearby. They are welcome. Panama has a long history of living and working with foreigners.
As far as you, the person reading this right now, are concerned, this is ultimately a personal decision, whether of an individual, a couple, or a family. As I have said many times before, I do not care if you relocate to Panama or even set foot in Panama. You need to go where you need to go and nobody can tell you where that is. I think Panama is an excellent choice, flawed like every one of the nations I have visited (remember, no Martians here, just humans), but a good place to live and grow.
You cannot sit in front of a computer monitor 500, 5000, or 15000 miles/kilometers from here and make a final decision. The best you can hope to do is to choose a nation you think fits you best from what you have read and heard. Whatever you decide, there is one critical element that is absolutely essential. You have to sit down at that monitor and make arrangements for transport. Then the day will come when you walk out the door on your way to see everything for yourself. There is no website on Planet Earth that can do a better job for you than your eyes, your ears, and your brain.
And wherever you go, take note of Helen Keller’s words that began this section, “The only thing worse than being blind is having sight, but no vision.” That vision is inside you, not outside. You know yourself (or yourselves) better than anyone else, anywhere. Do not be afraid to use that self-knowledge to build a vision of your future. A new home really does give you a new chance to grow. Bob Adams cannot do that for you and neither can anyone else. It is nothing to fear. You can do it.
That ends this report. And every one of you who has ever read one of these reports knows exactly what comes next and how important it is to read it, so let us do that together.
No one knows the future. Free markets go up and free markets go down. The future is not a simple extrapolation of the present. Anything can happen. Everyone has an opinion and those words above are just opinions.
RICH Novak of RE/MAX Beaches & City! INC. – Best Places In The World To Retire User Account
Panama's Economy is absolutely booming!  This info is as of December 2012:

$5.25 Billion is being invested to make the existing Panama Canal deeper & wider.   Container ships that are currently able to transit THE Canal are known as PanamaMax ships & they can carry up to about 4,500 containers... a Post PanamaMax ship is about three times the size and can carry about 12,000 containers.  When the Panama Canal expansion is completed Panama will charge $72.00 per container - Do the math 12,000 containers times $72 = $864,000.00 - for just one giant ship - WOW!  A number of seaports on the east coast of the United States are currently being improved so that they can handle the gigantic Post PanamaMax ships when they arrive.  I have read reports that in the United States 100,000 port jobs are expected to be transferred from the west coast to the east coast.

A brand new public mass transportation - part elevated & part subway - is under construction.

Just about every where you look there is activity... new roads, wider roads, under passes & over passes... sanitation systems & sewers being improved... infrastructure upgrades...  many construction cranes with new office skyscrapers sprouting up out of the ground & new large hotels - Hilton, Waldorf Astoria, Westin & many many more...

On the Amador Causeway the construction of a $200,000,000.00 Convention Center is underway... a Biodiversity Museum is nearing completion and a Mega Cruise port is also coming to Panama's Amador Causeway.  

The Republic of Panama just keeps getting better & Better & BETTER!

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