Multi National Businesses Moving To Panama

The Panama economy is booming big time, with the government reporting rates of around 8.5 per cent growth in the economy each year. When there is such strong economic expansion happening, it comes as no surprise that there are more and more multinational companies that are moving there and opening up offices and trade in the country.

One of the things that has been attracting international investors to the country is that the banking system there is strong and has not suffered any of the collapses that have been seen in some other Latin countries in the recent past as well as in North America and European countries too.

Another reason that many companies are also coming to the country is that the canal is being expanded and the vast amount of resources and personnel that are required to make that happen and continue on schedule means that there are huge business opportunities for many global companies. In fact, the current expansions are larger than the original canal project back in the early twentieth century.

For big trading companies it is important to realize that the country has the world’s largest merchant navy and fleet and they are likely to be getting even bigger in the near future with the expansion of the canal. In addition to this, the country is the second largest free trade area behind Hong Kong. In the Americas it easily takes the region’s crown.

A further point to take into account when looking at why investment in the country is booming is that behind Hong Kong it is the largest free trade zone in the world. It also has the largest merchant navy and fleet internationally. There are also plans afoot to build five international airports in the country to facilitate the current demand and all for more flights to land and take off all the time.

On top of the infrastructure and benefits that are put into place by the government, there are other things that can attract people to the country. Some of these things are the geographic location, which is effectively a hub between North and South America and Central America and the Caribbean. As well as this it is not an earthquake danger area and it does not have hurricanes or other natural disasters that are countries in similar regions are prone to.

The economy is increasing drastically and there is more investment than ever before. There are so many compelling reasons for multinationals to be based in the country and lots of companies are only now beginning to understand the benefits to doing business there.

The economy has been growing at an impressive rate thanks to the work of the national government to take full advantage of the natural benefits the country has and the position that it can place itself on an international scale. With more and more multinational companies choosing to open up in Panama, it is likely that we will see the economy continue to grow well into the future.

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categories News | Tyler Ramos | datetime September 3, 2010 5:44 am | comments Comments (0)

A Look At The Present Outlook Of The Panama Economy

During the course of the recent global economic crisis, there have been many countries facing difficult economic challenges. Some countries, however, have managed to weather the storm. A close look at the Panama economy reveals a country that has made its way through the crisis and is primed to emerge in an excellent economic position. Fiscal discipline, massive investment projects, and solid industrial performance, has allowed Panama to keep its economy growing as countries all around it have flounder.

Panama’s economy grew a modest 2.4% in 2009, down from the 8% to 11% rates of the previous few years. But any growth at all is significant in a global economic climate where many of Panama’s neighbors, and many other countries around the globe have been experiencing negative growth. Meanwhile, government projections for growth in Panama this year remain at 5%, and forecasts from other sources range from 2.5% to 5%.

Two main contributing factors for Panama’s continued growth are its strong financial sector and its active construction industry. In other countries, these sectors have seen sharp declines. The telecommunications sector has also made a good showing in Panama. Overall, Panama’s real income and employment rates have been steadily increasing and will undoubtedly serve to re-energize consumer activity in the country. From 2003 to 2009, Panama’s unemployment rates constantly decreased. While it rose in 2009 from 5.6% to 7.1%, many of its neighbors, and many countries around the word saw double-digit employment rates at the same time.

An important piece in Panama’s economic growth story is the $5 billion dollar project to expand the Panama Canal, which has improved domestic and foreign confidence in the Panama’s economy. The project has supplied the country with jobs and contracts that have contributed directly to current growth, and in time it will become an important source of National revenue.

Another key factor in the development Panama’s recent economic confidence and strength has been the government. President Ricardo Martinelli’s center-right administration implemented sound fiscal policies and key tax reforms that have helped to increase revenues, reduce debt, and expand investment projects. President Martinelli’s popularity has slipped recently in response to rising crime rates, and a recent increase in value-added tax, but his approval ratings remain comfortably high.

The rest of the world has begun to take note of Panama’s economic successes as well. Late in 2009, Standard and Poor’s raised its credit rating outlook for Panama to positive. More recently, Fitch Ratings gave Panama its first-ever investment grade rating. These ratings will likely help boost foreign investment in Panama’s ongoing projects, thus continuing to boost the country’s growing economy.

Panama is already a primary destination for foreign investment. The impressive Canal project is part of an ambitious five-year, $12 billion investment plan launched by the government. The plan will fund projects all across the country designed to upgrade infrastructure and public works, and improve Panama’s fiscal sustainability. At the same time, while Panama’s public debt ratios are relatively high, its net debt is less than 2% of the GDP.

The economy of Panama is one of the fastest growing economies in the region and in the world. Tax reforms and impressive investment projects have kept Panama moving forward economically, even through the current global crisis. As it continues to attract foreign investment and maintain sound, disciplined fiscal policies, Panama will continue to keep its economy growing for some time.

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categories News | Tyler Ramos | datetime August 10, 2010 6:59 am | comments Comments (0)

Expansion Project For The Panama Canal

Built in the 1800s, the Panama Canal is a ship canal constructed to improve maritime trade. It bridges the Pacific and Atlantic oceans in order to shorten the distance cargo ships need travel. While this is typically a good thing for business, it may now be getting better as a new project aimed at expanding the canal has been proposed by the Panama Canal Authority.

The project goes by the name of the Third Set of Locks Project. This name is related to one of its goals, which is to construct lock complexes at both the Atlantic and Pacific ends of the canal. These lock systems are aimed at resolving the water preservation issues which have come up in the past with the canal’s continued use. The Panama Canal Authority also aims to not only construct additional access channels to the canal but widen those that already exist. These channels will all also had their depth increased when the project has finished.

This expansion is what is called a mega project. Its impact could and likely will be very widespread and felt by nearby communities. Furthermore it is estimated to cost more than one billion US dollars and will likely get a lot of public attention due to its scale. The impact on the environment will also be something that will be taken into consideration.

Work on the project commenced as of September 2007, with a completion date set sometime in the year 2015. As already mentioned there has been significant publicity and talk as a result, with a fair amount of it being positive. The project does indeed have many potential benefits not only to those who use the canal but to the country of Panama itself. For one, it is anticipated that the project will pay for itself in due time and then begin providing its investors with a substantial rate of return.

Some other benefits expected to be brought about by the canal expansion include the reduction in poverty around the country. This is due to the expected rise in demand for work being done on and in relation to the expansion project. Some figures have put this reduction in poverty at around 30%. Naturally it is also expected that with improved channels and an additional lane of traffic there will be increases in toll revenues.

The improved cargo capacity of the canal could also mean an increase in profits for those involved in maritime trade. This profit margin could very well affect the country again as well as more and larger cargo ships move through its waters. As mentioned before, however, this image of a parade of cargo ships has also spurred environmental concerns.

Those spearheading the project believe that the expansion will not do any significant or lasting damage to the environment. The areas in which the expansion is proposed to take place are currently controlled by the Panama Canal Authority itself. This means that it is their own buildings or work areas which will be affected, which suggests that no communities will need to be moved or harmed. It is also a point of the project to mitigate the expansion’s environmental impact by installing the lock system mentioned before.

As already mentioned the project is intended to have reached completion by 2015. This is expected to be a time signaling new prosperity within the country of Panama. Time will tell, and during its construction there will no doubt be many parties interested in seeing just what happens.

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categories News | Tyler Ramos | datetime May 20, 2010 1:50 pm | comments Comments (0)

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