Panama is a healthy, growing economic phenomenon following a carefully orchestrated plan.
BY JON HANNA
In a guest column in Latin Business Chronicle, September 26, Walter Molano claimed that “the real estate boom in Panama City may be a bubble”. He also argued that Panama’s infrastructure is inadequate to meet the newly built apartment boom in Panama City. “Although the newly built towers are beautiful, the roads are atrocious, the hospitals are inadequate, and the pollution is rampant.”
I interviewed attorneys, real estate brokers, property developers, and even an economist from the law firm Panama Offshore Legal Services, Panama Real Estate Group and Panama Living/Panama Real Estate Developers.
No one disagrees that Panama is booming. Major international companies, retiree’s world wide, Expats looking for second homes and investments are discovering the numerous advantages of Panama.
Even the columnist agrees, “Panama is booming”. He also wrote, “The economy is growing more than 6 percent y/y, with the possibility of exceeding 7 percent this year.”
The Latin Business Chronicle in its September 19, 2006 edition agrees. “Panama is set to grow more than any other country in Latin America next year, the [IMF] fund predicts.”
On October 22nd, the citizens of Panama will vote on whether to expand the Panama Canal to allow the new, modern large ships to pass through. The “Yes” votes are leading the latest polls by a 20 percent margin. With the passing of the referendum comes an additional 50,000 jobs further boosting the economic growth of this 3 million-person nation.
The government has a well-thought-out plan working hand in hand with private enterprise for the development of the infrastructure. That includes repairing the city streets of Panama City as well as the major highway systems. Examples include the newly built Centenario Bridge, expansion of Corredor Sur (Panama City’s freeway), and new busses. Well-financed plans are being developed for waste disposal and pollution control.
Dozens of technical schools and universities provide Panamanians with an excellent opportunity for advanced degrees and technical training. These will soon become Panama’s elite affording the higher priced apartments.
Panama has two major housing markets: one upscale for internationals and another moderately priced for the local market. Panamanian citizens can apply for government assisted, 5 percent down, low-interest loans. Consequently, the moderately priced local housing market is booming along with the international higher priced market.
The construction market and price increases will slow and level off from time to time as they would in any rising market. However, the trend is firmly established. Panama continues to offer attractive prices compared to North America and Europe.
The final claim made by the column which I would like to rebut is, “the hospitals are inadequate”.
Panama has some of the most modern health care facilities in all of Latin America with many doctors earning their medical degrees in the U.S. and speaks English.
Panama’s hospitals are excellent. USA’s number 1 ranked hospital, Johns Hopkins Medical Center, affiliates itself with the new Punta Pacifica Hospital in Panama City. Johns Hopkins publication The Dome boasts that Punta Pacifica Hospital “offers state-of-the-art diagnostic and clinical care”.
Panama City hosts other renowned hospitals. Centro Medico Paitilla, catered to the ex-Shah of Iran. Hospital Nacional is an affiliate of Family Hospital Group of Boston, Massachusetts. Many consider Hospital Santo Tomas the best public hospital in Latin America.
Standard medical care, surgery, hospitalization, and dental care in Panama are less than half the cost in the U.S. or Europe. For example, a MRI costs $900 in Panama and $2,000 in the U.S.
The bottom line is simple. The real factor to consider is the oldest law of economics: supply and demand. For a whole host of reasons, people around the world are interested in moving to, vacationing in and investing in Panama. The demand is there and steadily growing separately from economic conditions in other places around the world. Because of a well-thought-out plan, Panama will continue to prosper and grow for many years in the future.
Jon Hanna is an attorney at law in Panama.