Nov. 27, 2009
Panama City, Panama
PLUS:
- "Couldn't The Same Thing That Has Happened In Costa Rica Happen In Panama Some Time Down The Line?"...
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Warts and All
No marketing hype, no rose-colored glasses.
That's the promise we make today with the launch of the new
Panama Letter.
To get the most out of Panama and to determine which opportunities might be right for you, you need to know the full story. You need to understand all the facts, straight, complete, and current.
You need to see Panama for what she really is. You need to open your eyes to the good, the bad, and the ugly of living, investing, banking, and doing business in this much-talked-about little country.
Only then can you set yourself up for success here.
Announcing: the
Panama Letter.
This is Panama without the sugar coating. From a team of expats, investors, and businesspeople with, together, decades of experience spending time and making money in the Hub of the Americas.
Go Here Now For The Full Details
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Dear Live and Invest Overseas Reader,
Since taking office July 1, 2009, Panama's new President Martinelli has made ground-breaking changes propelling Panama quickly forward along her path of progress and political and economic stability.
His first week in office, the new President, in work shirt and blue jeans, appeared, unannounced, at the waterfront site where a wealthy local businessman who owed the state of Panama US$11 million in unpaid rent was building a new marina for himself, without approval, on land he didn't own but was leasing from the government. President Martinelli, with his own hands, tore down the wall surrounding the marina construction site. Then Martinelli posted a police guard, who was instructed to arrest anyone who attempted to continue construction efforts on the leased land.
Other business owners who owe back taxes and back rent are now scrambling to pay up.
Panama already boasts the best infrastructure in the region. But The Martinelli Plan calls for Panama to compete not regionally, but globally. President Martinelli is committed to building a First World Panama, a country to take its position on the world stage. Watching him at work is like watching time-lapse photography.
Recently, the President showed up late to a meeting of investors, bankers, and businessmen, again in his work clothes. He offered his apologies, explaining that he'd been delayed handing out checks for his new "US$100 for 70's" program. Thanks to this new pension plan, the 11,000 of Panama's elderly population 70 years old or older, who had not been eligible for any state pension previously, are now receiving monthly checks for US$100.
Meantime, since taking office, Martinelli has donated all but US$1 of his own US$11,000 salary each month to local charities.
Martinelli is a showman, no question. But he's making his point. He's not only putting on a show and making speeches; he's taking action. And the good people of Panama are taking notice. Their new President has taken a zero-tolerance position against fraud, corruption, and theft in government, and his constituents are cheering him on. President Martinelli right now enjoys a better than 90% approval rating.
Martinelli's government recently issued US$1 billion in 10-year notes yielding 5.224%. The issuance coincided with S&P's upgrade of Panama's credit rating, which is now one level below investment grade. US$1 billion is a lot of money for a country this size, and Martinelli is keen to make sure it is well-spent.
Panama is a country loaded with potential. I've been making this point for years. The trouble in this part of the world is that potential is more often squandered than realized. Funds are misappropriated or misplaced. Money ear-marked for public services and infrastructure projects--everything from transportation to education and health care--often disappears before it can be spent. People look the other way, and usually no one is held accountable. President Martinelli is not interested in doing business that way.
Panama continues to hold out as a jurisdiction that respects banking secrecy, refusing to buckle to OECD threats. More important, this country's banking system is more developed than that of any other jurisdiction in this part of the world. It's also well capitalized and has been largely unaffected by what's gone on in the banking trade elsewhere worldwide.
Furthermore, as I remind you often, it's possible, as a foreigner, to borrow from banks in Panama for the purchase of a home, an apartment, even land and construction. This is a significant advantage for both the real estate investor and the second-home owner--not only because it's not possible for a foreign property buyer to borrow locally in most anywhere else in the region, but also becuase Panamanian property is right now one of the smartest buys on the planet.
Kathleen Peddicord
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"I'm wondering if you think it could be possible sometime down the line for the same thing that has happened in Costa Rica to happen in Panama? Having lived in South America all my life, I'm wary when countries go all out to attract foreigners, because the love affair usually doesn't last.
"Your recent
comments on Costa Rica were no surprise at all. Do you have any reasons to believe this would not be the situation with Panama 10 years down the road? Not that we expect you to be a soothsayer, but is there a reason you have a different feeling about Panama?
"I'm curious to know because your judgment is usually right on target as far as I can see."
-- Charis B., South America
Panama and Costa Rica are very different places. Since the days of the corsairs, Panama, thanks to her geographic position, has been a melting pot. In the 16th and 17th centuries, during the heyday of the Spanish colonizers, Panama was a primary counting house for the treasure being gathered throughout the New World and the launch point for its journey back to Spain. It's estimated that, at the time, one-third of the world's gold and silver passed through Panama's customs houses.
In other words, Panama is well accustomed to outsiders in her midst, and she's used to doing business on the world stage. It seems unlikely that, at some point down the road, she'd suddenly decide she didn't want any more foreigners within her borders. In some ways, Panama is an entire country of foreigners.
It's also unlikely that Panama would ever allow her infrastructure to deteriorate in the way the Costa Ricans have allowed their roads and bridges to crumble. The whole world depends on the Panama Canal and the infrastructure that supports it.
By the same token, thanks to the Panama Canal, it's hard to imagine Panama going broke. And, in addition to the Canal industry, there are the banking and financial services industries, the tourism industry, and, yes, right now, the foreign retiree industry.
One thing to note on this last point is that the in-country benefits that the retiree enjoys living in Panama are not intended for foreign retirees only. That is, they're not bribes to encourage foreigners to seek out these shores in retirement. The many discounts that retirees in Panama are eligible for are available to all retirees in Panama...even the Panamanian ones. It would be difficult, therefore, for the government to decide to do away with them at some point.
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