Panama Business News — Panama City Skyline

Panama enjoyed remarkable growth in both tourism and foreign real estate investment in 2007 . This boom established that Panama, previously known only for its Canal, could be a viable threat to Costa Rica’s position as market leader in those sectors. 2007 saw many of ups and downs for Panama, but mostly ups (real estate prices, pollution in the Bay of Panama, costs of living, Noriega’s middle finger). Here is a recap of what I believe to be the most significant stories ‘07:

THE WORST

1. 90 to 30 day Tourist Visa Change
Just when tourists were getting the gumption to come to Panama, the government managed to find a way to screw it up. Please tell me WHY it was a good idea to suddenly change U.S. tourism visas from the standard 90 to 30 days? This caused a furor among the expat community and tourism operators. Fortunately, despite their best efforts, tourists and investors from the U.S. seem to still be coming anyway–no matter what the current tourist visa status may be.

2. Misleading Tourism Stats
Panama has plenty to brag about, but inflating its meager tourism stats isn’t the right way to win friends. Various government entities in Panama have been touting tourism statistics that simply don’t add up to many who work in the industry. Whether the aim is to foster investment, win political favor for those in power or for national pride, it just plain stinks.

3. Real Estate Bubble
While the real estate boom was good for many in Panama, it has also been bad for others. Real estate prices went from reasonable to wacky in an astonishingly short period, pre-construction projects often fell far short of promises, the costs of living rose and a new breed of criminals and scam artists arrived to participate in the feeding frenzy. Before the year even had a chance to conclude, many speculators, developers and realtors began to feel the pinch caused by the U.S. housing crisis, rising construction costs and an oversupply of city condos. Worries of a bubble condo market abound.

4. Terrorism Attempt?
Possibly the most under-reported story of the year in Panama was the unplanned landing of a Copa Airlines flight which departed from Havana Cuba in late 2007. The flight made an unplanned landing in Panama City after several passengers of middle eastern descent “had confused” the cockpit for the men’s room. The story was immediately proclaimed “not a terrorist attempt” and vanished from the headlines within days. Hmmm.

5. Pedro Miguel Gonzales Voted National Assembly Leader
In a controversial move that nearly iced the pending free trade agreement with the U.S., Panama elected Pedro Miguel Gonzales as President of the National Assembly. Gonzalez, a vocal critic of U.S. policies in Panama, is wanted in the U.S. on charges of first-degree murder in the 1992 killing of U.S. Army Sgt. Zak Hernandez-Laporte.

THE BEST

1. Canal Expansion & Free Trade Agreement Approved
Most folks would agree, whether they loved or hated it, that the Canal Expansion approval was the biggest event in Panama News in 2007. Panama made international headlines worldwide before, during, and after the approval process. Along with the approval came promises of new jobs, political favors of unprecedented sums and the beginning of a new era of international trade in Panama. The second biggest political vote was probably the Free Trade Agreement. Both these events secured Panama’s place at the table of world trade for decades to come.

2. Real Estate Boom
Panama benefited from a “perfect storm” of economic, political and intangible factors that led to a mind blowing real estate boom in 2007. Thanks in part to a lot of hype, the Canal Expansion and free trade agreements, an overpriced neighbor (Costa Rica) a fizzling U.S. housing market and wealthy Venezuelan exiles, Panama’s real estate prices went from geek to chic in 24 months.

3. Noriega Extradited
Among the many potential party poopers of Panama’s economic boom, none loomed so large as the threat of Noriega’s return. One could almost hear the collective sigh of relief among the investment community when Noriega’s triumphant return was thwarted thanks to a U.S. ruling that sentenced him to a lifetime of stale baguettes in France.

4. Costa Rica: Expensive & Less Safe
Many media references in 2007 reported (true or otherwise) the increasing costs of Real estate in Costa Rica, along with the increase in crime in 2007. This was just one of the many factors that have assisted in permitting Panama to sneak onto the short list of offshore investment and retirement destinations in Latin America.

5. Panama’s (almost) Famous
First Brad Pitt and Angelina dropped in for a visit, then Mel Gibson. This was followed by rumors of other one-name superstars like Arnold, Mel and Mick scouting for beach property. The topper was an end-of-year announcement that the new installment of 007 was to be filmed suddenly gave Panama star power. I’ll keep my eyes peeled for Don Cheadle in ‘08.
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Casey Halloran is co-owner of a tourism and real estate business that serves Panama and Costa Rica. He has resided in Costa Rica since 1998 and divides his time between both Costa Rica and Panama. Don’t ask him which he prefers! Visit: http://www.vacationtopanama.com

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Filed under: Business on January 16th, 2008