Why multinationals are increasingly choosing Panama as a regional hub for their operations.
BY JOACHIM BAMRUD
Brazil and Mexico may be getting most of the foreign investor attention in Latin America these days and Chile continues to be seen as the regions free-market champion, but Panama isnt doing so badly, either.
In the past few months, Panama has topped several key regional rankings. In addition to being named the most globalized country in Latin America last week by Latin Business Chronicle, Panama recently was ranked the best country for exporting and importing containerized goods in Latin America by the World Bank, the fastest-growing tourism market in Latin America by the World Tourism Organization and last, but not least, the fastest-growing economy in Latin America by the International Monetary Fund and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). That comes in addition to being ranked third in Latin America (after Chile and Mexico) when it comes to competitiveness, according to the latest annual index from the World Economic Forum released this month.
And Panama can also boast of having Latin Americas largest number of international bank offices, the worlds largest shipping registry and the second-larges free trade zone in the world after Hong Kong. Now, it may also become a major regional energy hub. Spain-based Tecnicas Reunidas and Singapore-based Jurong Consultants are planning to create a $40 billion oil refinery, petrochemical production facility and liquified natural gas import terminal aimed at serving the U.S. and Asian markets, Reuters reported last week. That comes on top of U.S.-based oil giant Occiental’s plans to build a $8 billion refinery.
SKYSCRAPERS AND BANKS
"Panama is amazing," says Antonio Arranz, vice president of operations at the Latin America division of DHL. The express delivery services giant just expanded its Panama hub, which already played a key role in its Latin American distribution thanks to the countrys central location between Central and South America. "We are seeing double-digit growth."
Added to that is the continued strong growth in foreign investment in financial services and real estate. "You are seeing investments in the financial sector, a lot of investments in real estate [and] you can see a lot of skyscrapers being built every day," Arranz points out.
DHL isnt the only company using Panama as a regional hub. Dell operates its Latin American financial, marketing and human resources administration out of Panama. That comes on top of having its largest contact center in the region based in Panama. And other companies are joining the club. Both Hewlett-Packard and Caterpillar have recently announced the opening of regional offices in Panama. "Panama is working hard at attracting new companies and new investment," says David Hunt, the executive director of the American Chamber of Commerce in Panama.
He points to new Law 41, enacted in August, which provides new...
Keywords: Caterpillar, Copa, Dell, economy, Global Insight, Hewlett-Packard, inflation, Panama Canal