what surprises does 2010 hold for Panama?
I asked a few friends and fellow bloggers for their predictions for Panama in 2010. Here’s a compilation of their opinions, which are as varied and colorful as my uncle Doc’s 8 kids.
Sam Taliferro, Real Estate Developer & Blogger
I foresee relatively strong employment, political stability and higher International profile. I see light at the end of the tunnel regarding the state of corruption in Panama. Recent legal actions against past administration will send a clear message to all levels of current and future government officials. Canal traffic will continue to slow due to the world economy placing additional risk and higher costs to Panama borrowings to pay for the expansion.
Panama will see significantly higher costs of goods and services due to recent minimum wage increases and inflation of the U.S. dollar. Hotel occupancy levels will continue to deteriorate in the city as more product come on line and the world economy continues to slow.
The U.S. government will continue to apply pressure to Panama regarding the FTA agreement by demanding more bank transparency. Panama will be forced to compromise, but will maintain a strong IBC structure through their S.A. (Society Anonymous). Multinationals companies will still look to expand into Latin America and Panama will lead the way due to infrastructure and location.
Apartment prices will continue to experience downward pressure as more product comes on line. Many speculators will walk as long term credit is not available for high price per square meter apartments. Bottom feeders will have a field day.
Most of the residential communities marketing to foreign nationals will see continued slow sales due to the housing bubble bust in the first world along with the poor economy. Only those with no bank burdens will survive. Project success in this climate will depend on creative marketing.
Although Panama tourism in general will slow due to the deteriorating world economy, Chiriqui province will see increased visitors (real tourism) due to new flights making the connection from Tocumen International to David. Nowhere to go but up!
Evan Forbes, Blogger
Casco Viejo overtakes Calle Uruguay as Panama’s best nightlife district. Calle Uruguay is overpriced and tough to get laid, for free that is. Everyone wants to pretend like they are in Miami, and it is getting old. Prive, Guru, and Gallery are always dead. Casco Viejo on the other hand, is gaining steam with places like Relic, Mojitos and Havana Panama Salsa Bar (bad-ass by the way). If you throw in a solid electronic venue you’re set.
The smart phone “App” craze hits Panama. Digicel has made Blackberry’s ubiquitous in Panama. Not just in Multi-plaza, but Albrook Mall. Expect smart phones to BOOM in 2010, just wait until Panamanians get their hands on the affordable IPhone plan.
Rental Marketing continuing to soften – Casey, you predicted this in your 2008 article, but rental prices will continue to soften. It will take some time to reach the rental market equilibrium due to zero property taxes on new construction, dirty money in the property market, and no creditable statistics to balance the market. But expect to see those $1,100 apartments I showed you to rent be listed for $850 by the end of 2010.
The rise of Panama’s middle class — Wages have gone up considerable over the last couple of years. My canopy tour operator friend in Colon says there has been a noticeable increase from people living in Panama (locals, other Latinos, and Westerners). In addition, Doug, a guy who lives in Pedasi, says he rents his beach house out to Panamanian young surfers guys. 2010 will see the continued rise of Panama’s emerging middle class and the tourism is starting to notice.
Public Transportation – Martinelli is making the improvement of Panama City public transportation a central issue to his presidency. He has already create more one way streets and traffic lights. This should make a minor impact. However, 2010 will see new and improve public buses and the start of the Metro line. Prediction: traffic will be just as bad in 2010, but the foundation for an mass transit overhaul is being laid.
Rise of Protectionism — Panama has more and more companies moving to the Isthmus. However, these multi-nationals are hiring cleaning ladies and security guards to meet their local hiring quota. Expect 2010 to see a rise in nationalistic protectionism because the economic prosperity will not be tangibly felt by many locals.
Matt Landau, Blogger & Small Hotelier
The Panama Report
Distinctions between legit and illegit real estate projects will become evident. The majority of the country’s projects will either come to fruition or fade into oblivion and those that do materialize will see their true construction quality exposed in 2010. One building in Panama City will falter structurally in 2010 and result in major catastrophe leading to a complete retrospection of safety and construction codes. This will be bad for investment progress and drive prices down further than they are already set to fall in 2010. Of all neighborhoods in the capital, Punta Paitilla will be see the biggest drop in price/m2 and Casco Viejo will remain the most stable.
Ricardo Martinelli will continue on the warpath eradicating corruption and the amount of public figures exposed in 2010 will be stifling. His team (most particularly the tourism institute and commerce ministry) will enlist the insight of in-country expatriates in an effort to make Panama a more attractive place to foreigners. While both crime and unemployment will go up in 2010, the income gap will go slightly down, which is to say, the rich will stay rich while the poor becomes slightly less poor. That and Bosco Vallerino will not finish out his term as Panama mayor.
Panama’s soccer starlet Nelson Barahona – recently transferred to Medellin, Colombia – will have a breakout season and receive an offer from a second-tier team in Europe, becoming the country’s best futbol export since Jorge Dely Valdés. 2010’s rainy season will be unusually dry and Tiger Woods will invest in a large chunk of coastal land in the Azuero Peninsula.
Panama will experience a new (albeit small) natural disaster in 2010 – such as earthquake, hurricane, or tsunami – prior thought to be impossible. The effects won’t be drastic but it will change people’s perceptions about the country as a safe haven from Mother Nature. Panama’s new anti-drug naval air stations will prove immensely successful and the amount of drugs seized in 2010 will nearly double the (already insane) number detained in 2009. Panama will continue positive growth and the city of Colon will experience some kind of revolutionary event in 2010 that forces the government to give it some serious tender love and affection. Shopping and gambling will become two of the newest, most stable industries and of all name brands, Panama’s Trump Tower will prove itself the nicest completed project in the country.
Rob Riviera, Blogger
I’ve been asked to make a prediction on what twenty-ten will bring for Panama and its interests. To tell you the truth, I’m not quite sure what will happen, but I can tell you what might happen: President Martinelli will continue to be the (space) cowboy he’s proved to be, and eventually will piss off someone with as much power as he. I will watch the fireworks from the sidelines of my LCD TV which costs half now than when I bought it a year ago (the thought still stings). The local news will become my new favorite TV show, since “Lost” is almost over and I’m a sucker for reality TV. We will see more and more foreigners checking out the country and (Mc)lovin’ it, while Casco continues its metamorphosis into a beautiful touristy butterfly, pooping out the “evil vermin” and relocating them in the process, smelly cocoon and all. I know this because the kind ghetto lady who cooks plantains in the corner of Plaza Herrera told me so.
I won’t be able to recognize Bocas del Toro because it’ll look like an episode of “Wild On” with gringos who can’t dance included, and Pedasi will be in 2010 what Bocas was back in 2004: newly-discovered and at the peak of its underground status before it starts morphing too (mind you, I did not say “go to hell” because I like what’s happening there. Shout-out to Casita Margarita!). Come to think of it, all of the touristy areas in Panama (Bocas, Casco, Boquete, Pedasi, Colon) will or already are morphing. The Mighty Morphin’ Panarangers. Watch out for the Cholozord!
I can’t predict this, but I want to think that things will continue to get better. I hope people continue to be open to the possibility of having open minds. Things are different now than they were four years ago and that, dear reader, is progress I can get behind on and make sweet lovin’ to. Just when I start losing faith in my fellow Panamanians something happens that recharges my nationality battery and I predict I will keep feeling like the fight is worth it.
Oh, and Bosco gets the boot in 12 months or less unless he stops a terrorist attack, Jack Bauer style. In which case, better for me and my reality TV.
Carlos Berguido, Attorney
KBK Law Firm
I think Panama’s economy should benefit from a moderate expansion due mostly to the canal expansion and other public works. Tourism will also keep on being a very important factor, though I doubt we will see any significant growth there. Port activity will remain so, while the airport will continue to grow. Banking will definitely get more conservative, as was last year’s case, but in general, I agree the economy should grow.
Politically, I see some turbulence ahead, as the new government has proven very capable at creating enemies, and fronts. They seem to be acting in haste, and as a result, they are making many mistakes that will (or should) be capitalized by a smart opposition. The government’s popularity stands to drop, and it seems they are very keen on fixing that front with populist measures that will have a cost, both economic and socially, when those measures are withdrawn, as fiscal situation deteriorates after the spectacular improvement brought on by the real estate and investment boom.
Okke Ornstein, Blogger & Journalist
Rising Crime and Violence
There’s no comprehensive policy or strategy to fight crime or its causes and the police efforts are a total joke (checkpoints, “war on drugs” and other such nonsense). Government takes populist approach of mano dura, which is counterproductive. Look for gangs to professionalize, i.e. learn from their counterparts in El Salvador and Guatemala or even Brazil, and stay ahead of the police. As crime offers bigger rewards, police will cross over, like in Mexico. Turf wars between rivaling gangs and cartels, and Panama as the back office of black globalization. This process is already ongoing.
New Leftist Party
With the PRD in shambles and with it its fake progressiveness, there’s ample space on the left to start a new political group, and I think FRENADESO will do that this year. If member organization SUNTRACS throws its weight behind it, it will quickly have enough members to become a viable political force. There’ll be lots of infighting though, because the Panamanian left is disorganized, some groups may not want to include the “leftists” coming from a dysfunctional PRD, and unlike in Venezuela and Bolivia for example, there has been little ideological development in Panama (SUNTRACS only a few years ago featured Lenin and Comandante Castro prominently on its website). This thing should be fun to watch, if only for the rabiblancos shitting their pants.
Forget all the hype about 5% economic growth and investment grade and other such crap dished out by Capital Financiero and the Latin American Business Chronicle. They said the same about Peru and of course it didn’t happen. The screwed up bond issue of last month is a sign of what’s coming in Panama; Martinelli promised a myriad of very expensive infrastructure projects while the state is mired in debt, can’t raise more money and isn’t even able to provide acceptable levels of public service (migración, judicial system, road maintenance, seguro social, etc.). Increasing taxes and fees and such will help a bit but not enough. Good luck with the MetroBus and the extension of the Cinta Coimera and the cleaning of the bay and the highway along the Atlantic coast and the Canal expansion and other such grandiose schemes that will, as the hype has it, solve all our problems once and for all.
The common denominator in all the above is Lack Of Vision. Like Matt wrote in a recent piece about tourism, it’s a little bit of everything resulting in mediocrity, but this goes for almost every sector of society all the way up to our President99 who doesn’t get much further than “we’re open for business”. Duh. This won’t change in 2010, no matter how much we write about it, because ruling elites (be they dictatorships or oligarchies) do not tolerate real talent near them that might threaten their rule, and SuperMartinelli is no exception.
Consequently, if there is any economic progress (or any other progress for that matter) to report it will come from global trends that Martinelli & Co have no control over, such as corporations from the north offshoring operations to jurisdictions where it’s more economical for them to operate. Some of that will come to Panama, despite our government’s inability to make up its mind if we should compete on quality workforce, infrastructure, cheap labor, easy immigration etc. (true to form, they’ll try to have a little bit of everything and end up with nothing, or, as the Russians say, “chase two rabbits and catch none”. The BIG challenge of 2010 will be for individuals and small businesses to hedge against economic downturn and government bungling/reduced legitimacy of the State.
On a more positive note, I also predict that after the majestic failure of the “Biggest Christmas Party of the World”, Bosco the Clown will launch a new initiative to create the “Biggest Easter Bunny of the World” on the Cinta Coimera and, during the live televised inauguration ceremony, will be hit by one of the parachuted giant easter eggs when that shute, made by his family company under a highly controversial contract, failed to open. There was nothing they could do any more at the Santo Tomas Hospital when he arrived there.
|Written by Casey Halloran|
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