Caribbean & Central America - December 2011 (ISSN 1741-4458)

During his mid-October official state visit to the UK, President Ricardo Martinelli highlighted that “Panama is one of only three countries in the world that is run by entrepreneurs, not politicians” – he identified the other two as Chile and Georgia. And in true businessman style, the President appeared to have one goal in mind: ‘sell, sell and sell’. This was clearly the purpose of the ‘Panama Invest 2011’ business summit organized by Proinvex, a new government agency ascribed to the ministry of commerce and industries (Mici) which aims to attract foreign investment and promote Panama’s exports. The agency, modelled after Britain’s UKTI (United Kingdom Trade & Investment), has announced that it will begin opening offices overseas in 2012 and the first one will be located in London.

Proinvex’s national director, Michele Sellhorn, highlighted the sectors of logistics, agricultural industries, finance and tourism as key strategic areas for foreign investors to concentrate on, particularly those from the UK who, according to official UKTI figures, were the main source of Foreign Direct Investment (FDI) in Panama during 2011. And Panama does have clear advantages compared with other countries in the sub-region. First, Panama is highly diversified and no single sector accounts for more than 15% of the economy. According to Economy & Finance Minister Frank de Lima, this means that “Panama is Singapore, New York City and Costa Rica all rolled into one”; President Martinelli described it as “the little Dubai of the Americas”.

Secondly, Panama has historically provided a link between Atlantic and Pacific shipping routes and today it serves as a global hub, connecting 144 maritime routes – in fact, 59% of all European exports entering Central America enter through Panama and are then distributed though the companies’ regional subsidiaries and partners. The expansion of the Panama Canal currently underway (and expected to be completed by 2014) will not only ease transport costs as larger ships will no longer have to unload at one end and re-load at the other, but will also free up some of the transport capabilities of the cargo railway line that connects Pacific and Atlantic ports.

Though far from being a confirmed project, some ministers mentioned the possibility of opening up a passenger transport train on this railway line to encourage tourism. The Martinelli government also intends to reduce overland travel times between the two coasts with the construction of a new highway, which is partially completed; this would serve as a link not only for Panama City, but also for Panama Pacífico, arguably its most ambitious (mixed-use) community development project.

• Panama Pacífico

Located roughly 15 minutes from Panama City, and almost equaling the latter in size, Panama Pacífico is the government’s pet project to regenerate the area taken up by the former Howard US Air Force base. The master-planned development will include purpose-built areas for logistics companies, including large warehouses, business parks, new residencies and amenities required for employees to live and work in the same place, including an international airport, schools and shopping areas. Some 110 multinational companies have already purchased their office and logistics spaces in Panama Pacífico, having opted to transfer their Panama City offices there once the project is completed.

The project is expected to create 40,000 new jobs and the companies will receive tax incentives for creating well-paid, highly-skilled posts. The development will also include a training centre for workers to acquire new skills such as learning English, undertake technology courses specific to their sector and learn how to manage their newly-acquired wealth.  A knock-on effect of the development will be to ease pressures on public transport and reduce traffic jams in the crowded capital.  – END BOX

• Noriega poised to return

A French appeals court has agreed to extradite Panama's former military ruler Manuel Noriega (1983-1989) to his native country to serve time for murder and corruption. The ruling by France – where Noriega was sentenced to seven years imprisonment for money laundering in 2010 [RC-10-07] – follows an extradition request from the Martinelli government in July. The process was rendered especially complex because, as the country that authorized Noriega's initial transfer to France, the US had to give its consent for his return.

  A former CIA informant, whose relationship with Washington deteriorated over links to drug traffickers and organised crime, Noriega had already served a 17 year prison sentence in the US for drug-trafficking, racketeering and money laundering and was held for several more years pending extradition to France.

 Accused in Panama of murdering opponents such as Moisés Giroldi, a military commander killed in 1989, and Hugo Spadafora, a former doctor killed in 1985, Noriega repeatedly indicated his interest in being repatriated, no doubt convinced of a more favourable outcome given a 2008 amendment to the country's criminal code, under the former Partido Revolucionario Democrático (PRD) government, allowing convicts over the age of 70 to serve prison time under house arrest. The amendment was widely assumed to be in preparation for Noriega's return. At the time of his extradition to France, local and international commentators had remarked on both the interest of Panama and the US in preventing his repatriation. In the case of the former, this was due to the potentially destabilising impact of his return to local politics while his possession of information could prove embarrassing for figures who served under the former Ronald Reagan (1981-1989) and George H. W. Bush (1989-1993) administrations.

  Martinelli initially suggested that if Noriega, who is 77 and suffers from a condition of partial paralysis following a stroke, did return to Panama, he would be in favour of him serving out the prison sentence under house arrest as he had been “punished enough”. However, he appears to have changed his stance, insisting that the decision would be left up to the courts.

• Air hub

According to official figures, Copa Airlines, Panama’s flagship carrier, has expanded at an average of 25% year-on-year, currently serving 56 destinations in 27 countries in the Americas, making Panama the eighth best air-connected country in the world. According to President Martinelli, this means that business leaders can easily hold meetings in other parts of the region and return to their Panamanian HQs on the same day. Panama’s air links to Europe, however, are nowhere near as numerous or convenient and President Martinelli made the point of asking British Airways (BA) to open a direct route between London and Panama City several times during his address to British business leaders.