On the Panama Papers, the World Economy, and the Panamanian People

 

Here is a rough transcript:

 

Good morning, good afternoon, good evening, wherever you are. I would like to take a few minutes today to talk about the so called “Panama Papers.” Now I know there’s been a delay in my talking about it and people must have wondered why, and great part is because I have learned a long time ago that it’s best to spend time listening before speaking on matters of this seriousness.
 
I’d hope that I could be able to have a professionally produced video; something a little bit fancier than the one I’m doing myself at home, but time and circumstances simply didn’t allow for that. So forgive me if I just sit down here and talk to you as I usually do in very conversational style without the script about a subject that is of great concern to me but also to a number of other people.
 
Now, let’s take a look first at Panama Papers themselves now. I’ll give you probably the shortest description of what the whole confusion is about that you are likely to see or hear. Basically, a law firm headquartered in Panama but with offices in 34 nations around the world had clients who were ex-patriots from these other countries. They asked for the creation of corporations predominantly set up in the Caribbean, not here in Panama, and this activity over a period of almost four decades (39 years to be precise), the world has changed a lot and certainly Panama has changed a lot during that period of time. So what happened in the last century, it happened in the last century, we are much more concerned of what’s happening in this century. That could be forgotten sometimes in the process.
 
Now, to the fundamental issue at hand. Foreingers wanted service, the law firm shuffles the papers, basically prepares them, the paperwork, to meet that need. Caribbean Islands get a bunch of new corporations and sometimes in Panama in the past as well and that’s it.
 
Now, we’re being severely criticized, very severely criticized I found in much of the international press as if we were responsible for this. Well, if that firm, the things that were outside the law, if they encouraged people to break the laws of other countries then they have trouble, okay? But I’m not going to judge that for an “I don’t know” and that would have to be looked at by the authorities here which certainly is underway at this time, but that’s not my concern. My concern is that the countries that are doing much of the criticism of Panama right now are actually themselves some of the worst abusers of the system.
 
Now if you look, they have an index of the seriousness of this business of keeping things a secret that shouldn’t be a secret and they list the nations in order of their abuse of offshore banking and this kind of business and incorporation led by the United Kingdom if you include its crown principalities such as the Aleman or its overseas territories like Cayman Islands, British Virgin Islands, these are nations, independent nations, they are part of the United Kingdom become technically under the ultimate authority of the United Kingdom. They combined those and UK takes first place in abuse. The second place Switzerland then followed by Hong Kong, the United States, Singapore, Luxembourg, Lebanon, Germany, Bahrain, United Arab Emerates, Macau, Japan, and then finally Panama. We are fourteenth on the list and on this particular list, the United States if fourth.
 
So this is an indication that the people who not only came in and not only asked for the services, coming from these countries, but not all, but many from these nations, these nations are also the ones who are responsible themselves for the worst abuse of offshore banking and banking secrecy. There’s something a little hypocritical to put it gently of all people who are considered to be worst abusers coming down and criticizing us as being abusers. It doesn’t ride very well here and understandably so I think you would feel quite the same way were you in our position particularly since 99.9% of Panamanian people never got a penny of this, never saw any benefits from this, and has meant nothing to them. Really, the benefits that had been to people in Panama predominantly through lawyers working for handful of law firms that specialized in this particular activity. Otherwise, it’s hardly a mainstay of the economy or anything of that sort.
 
Now in recent years Panama has worked very hard to bring this under control and to meet the needs and the continuous request of other nations despite the fact that they may be worse abusers we have to take this thing seriously because they’re much bigger, they’re much more powerful and they’re quite capable of harming us if we don’t respond to them. And they’re not interested in having to explain why, in the same way, they are worse abusers. They just want us to do what we’re told to do. That can be very aggravating, you might imagine after a while.
 
Now, there’s a global context however though, I think its every bit is important that we tend to forget. It helps us to understand some perspective on this that’s important right now, is the human perspective. Again, if you look back over the last decade, I think you can see there have been a lot of problems in this planet and they begin with the worst period with the collapse of the real estate market that was out of sight. It was just way over extended in the United States and it turned out it’s the same problem that existed in a number of European nations, which led to a lot of problems, a lot of difficulty, a lot of debts unpaid, you know it, it was a disaster. It became very clear by 2008, it begun to appear in 2007, it became very clear in 2009, it appeared for a while as if the global financial system was going to collapse. It did not because a massive intervention by the central banks and governments around the world. And that prevented that from happening but unfortunately it hasn’t really gotten to the next stage. I mean, 2009 was the bottom but we have 2010, 2011, 2012, 2013, 2014, 2015, 2016 and there’s still no consensus on the nations that have had this problem as to what to do about it. There’s not a consensus among them to do something together. There’s no consensus within them and the political situation in nation after nation is really tricky where the people are severely divided and their opinions of what to do.
 
Quite frankly, the North Atlantic, both sides of it, both Europe and North America, they seem to be like dogs chasing their own tails or running in circles and ocassionally biting their tail, hurting themselves. It’s very sad. I will suggest to you, I’m really honest, I’m from the United States, I have to say that I think the damage done to the tens and millions of people in households in the US who were caught in that housing collapse and the tens and millions in Europe who face the same situation and the more, even hundreds of millions who have been negatively affected by the resulting collapse and crash and inability of these nations to get their acts together and do something to turn that situation around, that is an order of magnitude or two or three much more severe, much more damaging than all the offshore banking in the planet. That is what is doing the greatest damage now and if there’s abuse of power it comes from those nations that cannot get their acts together. I don’t know how else to put it. To come up with a plan and a program and really get the move forward on it, leaving everybody else in the planet a victim.  Are they going to fall apart, are they going to make it, how does this affect us and so forth and so on.
 
In the global context today of a great deal of economic distrust, offshore banking is one issue and I’m not trying to ignore it and I don’t like it’s used for criminal activity at all, I have nothing to do with it, never touched it with a ten foot pole, not the least bit interested with it. I never even talked to a lawyer who does it. I’m not interested. It’s not me. It’s not most of you, too, I suspect if not all of you. It is an issue and that’s important but seen in a broader global contect, I think we can understand that it is hardly the most important and that those who are the most critical really need to listen to three words that are 2,000 years old, just three words, I think most of you have heard it at one point or another, “physician, heal thyself.”
 
Now, given that set of circumstances, my concern is the way Panama has been pictured in the criticisms, the reports, the discussions going on all over the world in this regard. I haven’t seen it all but many people have and talked to me about it. It’s been a little irritating. Apparently, many of you have been given the impression that we pick bananas a lot down here. That’s a major business here in Panama which it most certainly isn’t. We definitely have bananas and a couple dozen other fruits and a couple dozen other vegetables and what have you, but many are organic; the bananas are great. But this, all of agriculture, livestock, everything to do with is less than 3% of the national income. This is no longer an agriculturally based economy, it’s a services economy. This is no longer a rural economy. As of 2010, 75% urban. The US 78%. Just behind the US and more urbanized than most other Latin American nations. This is an urban society. It’s continuing to get more urbanized every year. This is a services economy. The agricultural component has shrunk and it is continuing to shrink. The 2011 agricultural census here show us that we had far more farmers over the age of 65 than we do farmers under the age of 35. This business is declining and for obvious reasons, if you’re a farmer and trying to make ends meet, trying to get kids educated and everything else. It’s understandable. It’s not necessarily bad. It just is the way the economies go when they develop.
 
So the story of Panama over this last decade has been one of fantastic growth, far in excess of most other nations in the planet. And our records over more than a decade now in terms of the growth of our economy has been outstanding. If we haven’t been the number one fastest growing in the entire hemisphere from Canada to Argentina then we had been in the top 3 usually, but frequently number 1. Overall we are very steady at that top level and it hasn’t been based on offshore banking because a lot of that has been reduced.
 
Now this firm in the Panama Papers, you may have read that their business over the last 3 years has fallen off by two-thirds. One of the big areas of the incorporation that was used to evade taxes particularly got very serious and that business has dropped by 97%. They are closing far more businesses than there are opening now. The business for them is shrinking. I would suspect that it’s shrinking for the country as a whole because Panama has been bringing in regulations and laws meant to address these problems and there have had their impact and everybody who runs a business down here is well aware of it. The local banking system is well aware of it and you have to take that into account. You just don’t walk in the setup and come and just do whatever you want. You have to get to know your bank and the bank gets to know you. That can take a little time. You develop a relationship and they’re convinced you really are legitimate, no problem at all. But if there is a serious problem there, they’re going to find it. They need to because by law they’re responsible for that.
 
So we really have been working very hard on it. We haven’t gone as far as our critics who are again, the worst abusers, and who have causing their own problems that they can’t deal with. We haven’t moved this quickly to the extent that they have wanted us to. So that is likely to happen. I mean, this will speed things off so to speak, but there’s a process already underway.
 
So given that, just want to wrap this up basically, the perspective is simply this, this is not really the Panama Papers. This is the human papers. It is everything that’s going on in the world today. It is one tiny portion of it. It is important. It needs to be dealt with. It is a legitimate issue of Panama and Panamanians are not the people who should be getting the bad rep here. It’s just as simple as that.
 
Now, having talked about this. I mean, people say what is the real story of Panama. I can’t even begin to go into it. It would take an hour or hour and a half and all sorts of graphs and charts and what have you. It’s unnecessary. I’ve done a lot of that in my website. But the fact of the matter is, it has been a creation of the Panamanian people themselves. I’ve been doing this sort of work—economic-social development, consulting, and actual implementation for 49 years and next year would be my 50th anniversary in the trade—I’ve seen so much activity. So many nations grow and others decline. I’ve seen some suddenly come across a lot of money, they maybe discovered offshore oil or something of that sort and they blow it and 2 years later you wonder, “What good is all that money? We wasted it this way.” There’s so many success stories, very few of those, and a lot of failure stories as human beings attempt to deal with sudden success.
 
In Panama, this is an extension of what has been here all along. We didn’t suddenly get oil income or natural gas, or any mineral activity. It isn’t a tourist country although tourism is becoming more and more and more important here all the time. It is because it is a business nation and it has been from its very beginning centered on the Canal, but it has expanded beyond that. It’s the Canal, it’s the free-trade zone, it’s one of the world’s largest copper mines under construction at the moment, which is costing more than the Canal expansion. It’s so many different things. We become a center here for communications and for transportation, for logisitics in general, for the whole region, for the whole of the the western hemisphere. We’re sitting in the water bridge between the two great oceans of the world and the land bridge between two of the great continents of the world and around is a massive amount of activity and we serve as a logistics platform for most of that to move through. The great service is done very well by us. It’s very public.
 
If you want to know why Panama has grown so rapidly in the last 10 years, there are thousands of statistics based on real numbers that will demonstrate it to you and how it’s really most fascinating. To me, the most important thing is not because Panamanians got lucky and they were handed something they didn’t expect. They took what they had and they worked very hard to create an atmosphere here that’s open to business, open to foreigners, to bring them in, to bring their expertise and to bring their investment money into the country. I’m just so impressed that they have created this from really very modest beginnings themselves. I don’t think they have any idea of what a great job they’ve done. But I have seen so many other nations who fail at this that to be able to live in one tha this actually succeeding by dint of its own hardwork and focus is just the greatest gift I could ever receive, that’s what I did because my business was to sit down and try to help countries with issues of development and I don’t have to here. They’re sitting down themselves, have been for years working on this. They approach is far more mature, as far as I’m concerned, more intelligent and more coherent than what I see happening in my own birth nation and in other nations elsewhere in the planet.
 
So Panama’s story is there to be heard and you can hear it in other videos I give but you can also read it for yourself. You can easily find it. The facts are there. This is not a nation based on offshore banking. It’s based on hard work, dedication, and a clear focus of where they want to go, where they want to be in years to come.  I truly hope the people in my birth nation and other nations of North America and Europe and Asia, China, Russia, Brazil, I hope they all take a look at this and it can benefit from it because I think it’s the best way to go about dealing with it.
 
Now, I will say a moment here before I close up, you will hear me say as you just have, “We, us, our” and may leave the impression that I’m a Panamanian citizen, which I’m not. I’m an American citizen. I have every intention at remaining one. I am fortunate enough to have been given permanent residency here in Panama. So I’m a resident in Panama, I’m not a citizen. I can however take part in everything here at a level equal to that of a citizen except certain areas of work that are set aside, if that’s not a major problem, no problem for me. And above all, of course, for the government. I can’t run for office. I cannot vote. I don’t have a passport. I’m not a citizen of the country, but I am a resident. And people in the US have heard me on this topic, they often say “Bob, what are you getting so upset for about how Panama is viewed and so on?” As if I’m just an American living here temporarily. I’m not. I’m an American but I’m a Panamanian resident and I fully expect to be here for the rest of my life. I’ve chosen to be here voluntarily and I choose to remain and nothing that’s going on in this Panama Papers fiasco has had any impact whatsoever on my attitude towards this country or its people. Quite the contrary, this reminded me of what a terrific job that they have done and other people need to be reminded of that from time to time.
 
So if I say this, this is my home, I’ll repeat is a hundred times if need be, this is my home and this is where I get up every morning and it’s the Panamanians whom I see in the street who are my friends, my associates. I mean, there is where I live and nobody treats my home poorly without my making a comment about it. So I speak as someone who is part of the Panamanian community without being a citizen and my responsibility being given the right to be here and treated so very well is to return the favor. I consider myself not an outsider but someone right here who needs to help this nationn as much as he can make further progress. My contribution will be very, very tiny but if got it to make as I’m trying to do today, I’ll make it. It’s home.
 
Now, I have three basic messages to draw to three different groups of people. And the first group of people are those of you who typically come into this YouTube Channel. You’re expatriates who come form 40 or 45 different nations, you’re interested possibly in re-locating and living in Panama, others are interested in investing in Panama, others are interested in both yet others are more interested in vacationing and see what the country has to offer to tourists. I say to all of you, don’t let this thing, this Panama Papers business, in any way say form or manner interfere with your interest in Panama. It is not an issue that is going to be in any way of concern to you should you come here to live, to invest, and to be part of the community. It just isn’t. It is tiny in comparison to everything else that is going on in the country and the surest way to figure that out is to come on down and take a look.
 
So if you have been hesitating to do this thinking, “I don’t know now; maybe this isn’t the kind of country I want to be associated with,” I would say that really, truthfully is the opposite. It is the kind of country you want to be associated with. I am much more comfortable even on the topic of offshore banking and with Panama than I am to be in much of the rest of the world. So don’t let it get into your face. Keep interested and if Panama is for you, great. If it isn’t, that’s fine too. But don’t cross it off your list because of all this silliness. Or I shouldn’t say silliness, serious issue but exaggerated and taken out of context and made to appear as it says something to you about the people of Panama.
 
The second group I want to speak to very briefly, to those who might come in, are people like myself who are residents here. And as I’ve said earlier, I repeat, this is our chance to get back. I mean, we have chosen, voluntarily come here. We’ve received benefits for that. Becoming a permanent resident here is substantially easier than it is in a lot of nations including my birth nation. If you’re older then all sorts of benefits are provided as well. We’re fortunate. Another nation has been so open to us to allow us to come and be part of it. We need to stand up. We need to speak out for these people. They are our neighbors.  We need to let whoever we know know that Panama Papers does not represent Panama and that can be just emails you send or conversations you hold. Just make a point of doing that when you can. I can do a video, not necessarily you, I understand that. It’s not important what you do but that you do something and that you contribute alongside everyone else for trying to make this situation clear and better understood globally.
 
And finally, the third group, probably not very large but are Panamanians who come in and listen to this. I just cannot tell you how pleased I am to be here. And what I said earlier I relly meant, I managed 50 years in dealing all over the world with nations of every sort and there are attempts to make social-economic progress and I always wanted to be in one that took off for good reason and was under its own steam with its own work with making everything happen and to have this opportunity to be here in Panama when this is underway is just an amazing gift. And I want you to know, don’t let this get into your face either just like everybody else. You need to put this into perspective. It’s a problem you’re going to have to mak a decision as to how to deal with. I have great confidence in Panamanian people, I always have. Maybe more confidence than they have in themselves somedays because just as in my own home society, sometimes we deliver you in the middle of it, it gets harder to judge it.  But I’m telling you don’t let this get you down. This is a speed bump on the road. You’re on the road, you’ve done extremely well, you’re focused toward the future not toward the past, you are building a nation, you’re not tearing it apart, you are doing it despite the different personalities and politics and parties and what have you that exist here.
 
One of the astonishing things to someone of my experience from outisde is how everybody seems to have it clear in their heads that whenever they do, that it promotes the development of the nation economically and the politics can be as noisy and emotional as they are in any democracy but that clarity of the importance of economic development and benefiting as many people as possible, that is just remarkable and not common. You’re uncommon. You’re better than the average by far and I’m just delighted to be here. So I’m going to finish this off today with just a few words directly to you, my other guests who will forgive me for just 30 seconds: Muchas gracias por su hospitalidad. Muchas gracias por su amistad.  Muchismas gracias por la oportunidad de compratir desarolio su nacion a mi hogar.
 
Viva, Panama!