TUESDAY, FEBRUARY 21, 2012 - Pinellas Realtor Organization

¡ PANAMA !
TUESDAY, FEBRUARY 21, 2012
Prepared by Dr. Robert H. Hughes
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Born in Ancon, Canal Zone, Panama (dual national)
Attended school through Balboa High School
Graduated college in the US
Returned to Canal Zone to seek employment
Hired as Police Officer
Purchased property in Panama
Transferred to Department of Defense
Surveyed/worked in most of Latin America
Taught GIS/Remote Sensing at Fort Clayton
Director of Office of the Americas
Mapped Canal Area for Treaty Turn-over in 1999
Returned to Panama many times for pleasure/research/business
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Provide an historical perspective to Panama‟s overall
development as a nation (Major events and characters)
Provide a brief introduction to Panama (Geography, People,
Government, Economy, etc.)
Present an overview of Panama, with respect to its business
climate (real estate)
 key regions (Canal Area; hot spots; cold spots)
 Real estate values, historical and current
 Doing business and establishing a residence in Panama
 Trade Mission 2011
 Free Trade Agreement
Highlight the major geographic areas of interest, especially for
development and investment by foreign nationals
Answer questions…I‟ll just talk for awhile…feel free to ask
questions at any time!
NOTE: I‟m not an authority on real estate, but I know a little
about Panama…the following are my personal observations
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General Comments
Introduction to Panama*
Geography*
People and Society*
Government*
Economy*
Communications*
Transportation*
Military*
Transnational Issues*
REAL ESTATE IN PANAMA!
*https://www.cia.gov/library/publications/the-world-factbook/geos/pm.html
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You can speak English in the Canal Area and Panama City and expect
to be understood, especially in the business community (less so in the
Interior provinces)
You may use your US currency, paper and coins, anywhere in
Panama (Panama „s currency, the Balboa, is based on the dollar)
The water is safe to drink in the Canal Area, and probably anywhere
in the Republic (US technology and former facilities)
The food is great, and safe to eat; terrific restaurants, local and
international flavor, prices can‟t be beat (hard to spend $20 for dinner)
The „Cedula‟ and „Jubilado‟ national ID cards offer advantages
Retirement benefits are generous; many foreign nationals, including
Americans and even former Zonians, are moving to Panama
Panama is safe for the most part…but be alert, especially at night in
the City
John McCain is a Panamanian
Few countries in the Americas offer more beauty and diversity…You
WILL have a great visit to Panama!
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Columbus visits Panama, 4th voyage 1503 (Belen; Navy Bay; Gold)
Balboa discovers the Pacific Ocean 1513
Buccaneers attack Panama
 Roots of „Buccaneer‟
 Henry Morgan, pirate, sacks Porto Bello
 Pistol
 Morgan sacks Fort San Lorenzo and Panama City (Panama Viejo)
 Shoes for dinner
 Cattle for dinner
 Church of the Golden Altar, Casco Viejo
 Sawkins attacks gold fleet at Panama: “flames of our muskets”
Panama Rail Road and the California Gold Rush (1850‟s)
 “Ahorca Lagarto”
 Real Estate Boom and Bust
Teddy Roosevelt and The Panama Canal Zone (1903-1999)
 “I stole it fair and square”
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Explored and settled by the Spanish in the 16th century
Panama broke with Spain in 1821 and joined a union of Colombia,
Ecuador, and Venezuela - named the Republic of Gran Colombia.
When the latter dissolved in 1830, Panama remained part of Colombia.
With US backing, Panama seceded from Colombia in 1903 and promptly
signed a treaty with the US allowing for the construction of a canal and
US sovereignty over a strip of land on either side of the structure (the
Panama Canal Zone).
The Panama Canal was built by the US Army Corps of Engineers between
1904 and 1914.
In 1977, an agreement was signed for the complete transfer of the Canal
from the US to Panama by the end of the century.
With US help, dictator Manuel NORIEGA was deposed in 1989.
The entire Panama Canal, the area supporting the Canal, and remaining
US military bases were transferred to Panama by the end of 1999.
In October 2006, Panamanians approved an ambitious plan (estimated to
cost $5.3 billion) to expand the Canal. The project, which began in 2007
and could double the Canal's capacity, is expected to be completed in
2014-15
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Located in Central America, bordering both the Caribbean Sea
and the North Pacific Ocean, between Colombia and Costa Rica
Geographic Coordinates: 9 00 N, 80 00 W
Area total: 75,420 sq km
country comparison to the world: 118
land: 74,340 sq km
Water: 1,080 sq km
Comparative Area: Slightly smaller than South Carolina
Border Countries: Colombia 225 km, Costa Rica 330 km
Climate: tropical maritime; hot, humid, cloudy; prolonged rainy
season (May to January), short dry season (January to May)
Terrain: interior mostly steep, rugged mountains and dissected,
upland plains; coastal areas largely plains and rolling hills
Elevation extremes: lowest point: Pacific Ocean 0 m; highest
point: Volcan Baru 3,475 m
Natural Resources: copper, mahogany forests, shrimp,
hydropower
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Environment Current Issues: water pollution from agricultural
runoff threatens fishery resources; deforestation of tropical rain
forest; land degradation and soil erosion threatens siltation of
Panama Canal; air pollution in urban areas; mining threatens
natural resources
Geography Note: Strategic location on eastern end of isthmus
forming land bridge connecting North and South America;
controls Panama Canal that links North Atlantic Ocean via
Caribbean Sea with North Pacific Ocean
As strategically important today as in the past; global influence
politically and economically; REGIONAL HUB FOR THE
AMERICAS
“Pathway to the Seas” “The Land Divided, the World United”
“Crossroad to the World”
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Nationality: noun: Panamanian(s); adjective: Panamanian
Ethnic Groups: mestizo (mixed Amerindian and white) 70%,
Amerindian and mixed (West Indian) 14%, white 10%,
Amerindian 6%
Languages: Spanish (official), English 14%; note: many
Panamanians are bilingual
Religions: Roman Catholic 85%, Protestant 15%
Population: 3,510,045 (July 2012 est.); country comparison to the
world: 132 ; PANAMA CITY (capital) 1.346 million (2009)
Age structure: 0-14 years: 28.6% (male 504,726/female 484,291);
15-64 years: 64.2% (male 1,123,777/female 1,098,661); 65 years and
over: 7.2% (male 115,425/female 133,582) (2011 est.)
Median age: total: 27.5 years; male: 27.1 years; female: 27.9 years
(2011 est.) NOTE: US median age: 40
Urbanization: urban population: 75% of total population (2010);
rate of urbanization: 2.3% annual rate of change (2010-15 est.)
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Unemployment, youth ages 15-24: total: 14.9%; country
comparison to the world: 75; male: 11.7% female: 21.1% (2008)
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Major infectious diseases: food or waterborne diseases: bacterial
diarrhea; vectorborne disease: dengue fever and malaria (2009)
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Literacy: definition: age 15 and over can read and write
 total population: 91.9%
 male: 92.5%
 female: 91.2% (2000 census)
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Government type: constitutional democracy
Capital: Panama City
Administrative divisions: 9 provinces (provincias, singular provincia) and 3 indigenous territories* (comarcas); Bocas del
Toro, Chiriqui, Cocle, Colon, Darien, Embera-Wounaan*, Herrera,
Kuna Yala*, Los Santos, Ngobe-Bugle*, Panama, Veraguas
Independence: 3 November 1903 (from Colombia; became
independent from Spain on 28 November 1821)
Constitution: 11 October 1972; revised several times
Legal System: civil law system; judicial review of legislative acts
in the Supreme Court of Justice
Suffrage: 18 years of age; universal and compulsory
Executive Branch: chief of state: President Ricardo MARTINELLI
Berrocal (since 1 July 2009); Vice President Juan Carlos VARELA
(since 1 July 2009); note - the president is both the chief of state
and head of government
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Head of government: President Ricardo MARTINELLI Berrocal
(since 1 July 2009); Vice President Juan Carlos VARELA (since 1
July 2009)
Cabinet: Cabinet appointed by the president
Judicial Branch: Supreme Court of Justice or Corte Suprema de
Justicia (nine judges appointed for staggered 10-year terms); five
superior courts; three courts of appeal
Political Parties and Leaders: Democratic Change or CD [Ricardo
MARTINELLI]; Democratic Revolutionary Party or PRD
[Francisco SANCHEZ Cardenas]; Nationalist Republican Liberal
Movement or MOLIRENA [Sergio GONZALEZ-Ruiz];
Panamenista Party [Juan Carlos VARELA Rodriguez] (formerly
the Arnulfista Party); Patriotic Union Party or UP (combination of
the Liberal National Party or PLN and the Solidarity Party or
PS)[Anibal GALINDO]; Popular Party or PP [Milton
HENRIQUEZ] (formerly Christian Democratic Party or PDC)
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Flag description: divided into four, equal rectangles; the top
quadrants are white (hoist side) with a blue five-pointed star in
the center and plain red; the bottom quadrants are plain blue
(hoist side) and white with a red five-pointed star in the center;
the blue and red colors are those of the main political parties
(Conservatives and Liberals respectively) and the white denotes
peace between them; the blue star stands for the civic virtues of
purity and honesty, the red star signifies authority and law
National Symbol: Harpy Eagle
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Panama's dollar-based economy rests primarily on a welldeveloped services sector that accounts for three-quarters of GDP
Services include operating the Panama Canal, logistics, banking,
the Colon Free Zone, insurance, container ports, flagship registry,
and tourism.
Economic growth will be bolstered by the Panama Canal
expansion project that began in 2007 and is scheduled to be
completed by 2014 at a cost of $5.3 billion - about 10% of current
GDP. The expansion project will more than double the Canal's
capacity
The United States and China are the top users of the Canal
Panama also plans to construct a metro system in Panama City,
valued at $1.2 billion and scheduled to be completed by 2014
Panama's booming transportation and logistics services sectors,
along with aggressive infrastructure development projects, have
lead the economy to continued growth in 2011
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Strong economic performance has not translated into broadly
shared prosperity, as Panama has the second worst income
distribution in Latin America
About 30% of the population lives in poverty; however, from 2006
to 2010 poverty was reduced by 10 percentage points, while
unemployment dropped from 12% to less than 3% of the labor
force in 2011
A US-Panama Trade Promotion Agreement was approved by
Congress and signed into law in October 2011. Seeking removal
from the Organization of Economic Development's gray-list of tax
havens, Panama has also recently signed various double taxation
treaties with other nations.
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GDP (purchasing power parity): $48.76 billion (2011 est.);
country comparison to the world: 93; $45.39 billion (2010 est.);
$42.23 billion (2009 est.); note: data are in 2011 US dollars
Labor force: 1.525 million; country comparison to the world:
127; note: shortage of skilled labor, but an oversupply of
unskilled labor (2011 est.)
Budget deficit: -2.2% of GDP (2011 est.); country comparison to
the world: 85
Agriculture products: bananas, rice, corn, coffee, sugarcane,
vegetables; livestock; shrimp
Industries: construction, brewing, cement and other construction
materials, sugar milling
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Telephone system: general assessment: domestic and international
facilities well developed
Domestic: mobile-cellular telephone subscribership has increased
rapidly
International: country code – 507
Landing point for the Americas Region Caribbean Ring System
(ARCOS-1), the MAYA-1, and PAN-AM submarine cable systems that
together provide links to the US and parts of the Caribbean, Central
America, and South America
Satellite earth stations - 2 Intelsat (Atlantic Ocean)
Connected to the Central American Microwave System (2008)
Broadcast media: multiple privately-owned television networks and
a government-owned educational TV station; multi-channel cable and
satellite TV subscription services are available; more than 100
commercial radio stations (2007)
Internet country code: .pa
Internet hosts: 9,585 (2010); country comparison to the world: 123
Internet users: 959,800 (2009); country comparison to the world: 104
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Airports: 118 (2010); country comparison to the world: 51
Airports with paved runways: 54
over 3,047 m: 1
2,438 to 3,047 m: 1
1,524 to 2,437 m: 5
914 to 1,523 m: 17
under 914 m: 30 (2010)
Railways: total: 76 km; country comparison to the world: 127
Roadways: total: 11,978 km; country comparison to the world:
130
paved: 4,300 km
unpaved: 7,678 km (2002)
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Waterways: 800 km (includes the 82-km Panama Canal that is
being widened) (2010); country comparison to the world: 73
Merchant Marine: total: 6,379; country comparison to the world: 1
note: Panama allows large numbers of ships owned by
foreign entities to be registered in its national shipping registry
and to fly its flag; these ships operate under the laws of the flag
state registered in other countries
Ports and Terminals: Balboa, Colon, Cristobal
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No regular military forces; Panamanian public forces include:
Panamanian National Police (PNP), National Air-Naval Service
(SENAN), National Border Service (SENAFRONT) (2010)
Manpower available for military service: males age 16-49: 890,006
(2010 est.)
Military expenditures: 1% of GDP (2006); country comparison to
the world: 128
Military Note: on 10 February 1990, the government of then
President ENDARA abolished Panama's military and reformed
the security apparatus by creating the Panamanian Public Forces;
in October 1994, Panama's Legislative Assembly approved a
constitutional amendment prohibiting the creation of a standing
military force but allowing the temporary establishment of special
police units to counter acts of "external aggression"
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Organized illegal narcotics operations in Colombia operate within the remote
border region with Panama
Trafficking in persons (current situation): Panama is a source, transit, and
destination country for women and children subjected to sex trafficking and
forced labor
Although some Panamanian women and girls are subjected to sex trafficking
in other countries in Latin America and in Europe, most Panamanian
trafficking victims are exploited within the country
Commercial sexual exploitation of children was greater in rural areas
Panamanian children, mostly young girls, are subjected to domestic servitude;
Most foreign trafficking victims are adult women from Colombia, neighboring
Central American countries, and the Dominican Republic
Some victims migrate voluntarily to Panama to work but are subsequently
forced into prostitution or domestic servitude
Illicit drugs: major cocaine transshipment point and primary moneylaundering center for narcotics revenue; money-laundering activity is
especially heavy in the Colon Free Zone
Negligible signs of coca cultivation
Monitoring of financial transactions is improving
Official corruption remains a major problem
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First things first: Let‟s talk about the country itself…maps will help…
 Panama is shaped like an „S‟, and lies in a primarily East-West
Direction
 The Panama Canal divides the country into two approximately equal
parts
 The Canal is about 50 miles long
 The Caribbean entrance (Atlantic) lies west and north of the Pacific
entrance !
 At Panama City, located on the Pacific Coast , you may watch a
beautiful sunrise over the Pacific Ocean, followed by a beautiful
sunset over the Pacific Ocean….
 Panama City lies about 300 miles east of the Costa Rica border, and
you can make the drive in about 7 hours
 Panama City lies about 300 miles west of the Colombian border, but
you can‟t drive there (you can get to Yaviza, a little jungle town)
 The Darien east of Panama City is essentially undeveloped or offlimits
 The Caribbean coast from Colon to Bocas del Toro is undeveloped, but
a road is planned
The
Panama Canal
The American Era
Americans
in the
Panama Canal Zone
The
Cayuco Race
Indigenous Peoples
Of
Panama
The Rainforest
of the
Panama Canal
The Interior
Beaches
Islands
Savannas
Mountains
Panama City
Hotels
Resorts
Restaurants and Food
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Foreigners are permitted to hold legal title to property in Panama
To my knowledge, real property has never been confiscated from
foreign owners
Real Estate Agents do not require certification
My experience as of 1981
 Sold beach property for $6K; worth $1M? now
My experience as of 2011
 the market in former Canal Zone areas remains solid (Cardenas
example: duplex sold for $50K in 2000; now $400K)
 City condos, beach properties, and mountain properties have
cooled a little
Pro-business legal system in Panama
Pro-foreign resident benefit system (imports, discounts, health)
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Trade Mission 2011
 DOC Sandra Campbell in Florida
[[email protected]]
 DOC Dan Crocker, Senior Commercial Officer, U.S. Embassy
Panama
 Mr. Maurice Belanger, Executive Director, American
Chamber of Commerce of Panama
[[email protected]]
 Mr. Mizrachi, Panamanian U.S. trained lawyer
 Honorable Phyllis M. Powers, U.S. Ambassador to Panama
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Use an attorney in Panama
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Panama has cultural, geographic, economic, and
lifestyle diversity to offer a broad range of real estate
choices
Ease of language, monetary exchange, and social
benefits facilitate the process
Cost of living is relatively low
Agencies and government trying to address serious
challenges facing ever-expanding development and
population
Panama property is like an oil well in Texas: “If you
ain‟t got one, get one”
Thank you for inviting me to speak to your group!