Anatomy Of A Former Retirement Haven
At last week’s Live & Invest in Panama Conference, longtime friend and British expat David Stubbs, five years resident in Costa Rica, compared that country to Panama. David is partnered with my husband, Lief Simon, in their Los Islotes development on Panama’s Azuero Sunset Coast, meaning David travels back and forth between the two countries regularly. And he can’t help but make comparisons…
“One of the biggest differences, Panama to Costa Rica,” David began last week, “is to do with infrastructure. It’s better in Panama. When it comes to roads, bridges, telecommunications, Internet, really, there’s no comparison.
“Looking at the numbers, it’s easy to understand why. In 2008, the most recent year for which I was able to find complete data, Panama invested 77% more in infrastructure than did Costa Rica. That’s a 77% greater investment per capita.
“Of course, it helps that Panama has the money to spend. Where does it come from? One important source of revenues is the Panama Canal. Since Panama took over operations a decade ago, both annual tonnage and transit rates have increased steadily. Transit time through the canal has been reduced from 33 to 23 hours. And canal revenues have returned US$4.5 billion to the Panamanian Treasury. The Panama Canal is today the most active port in the world (followed by the Suez Canal and the port at Shanghai).
“Panama boasts more maritime registrations than any other jurisdiction and has made a major business of maritime insurance.”
This country’s mega-investment in infrastructure continues. Currently under way are the US$5.2 billion Canal Expansion Project, and recently completed were the US$267 million expansion of the highway between Panama City and Colon and the US$190 million development of the Cinta Costera through downtown Panama City.
The former U.S. military base at Howard is being redeveloped into a new city. That’s the only way to describe what’s going on here. This is no ordinary development project. This is the construction of a new city that will be as big again as the country’s current capital. Seven-hundred-million dollars are going into the undertaking that is Panama Pacifico.
About US$140 million has been committed to the clean-up of the Panama City bayfront. In addition, President Martinelli has committed:
- US$430 million to the construction of a new Liquid Natural Gas (LNG) terminal…
- US$1 billion to the development of a Panama City metro…
- US$180 million to a new highway in Chiriqui…
- US$52 million to extend the Cinta Costera into Casco Viejo…
- US$2 billion to 31 new hydro-electric projects…
- US$386 million to build new and to renovate existing hospitals…
- US$25 million to the expansion of the international airport at David…
Martinelli has also begun implementation of a national Internet network that eventually will provide 600 hotspots in 22 cities around the country.
Panama’s economy, which continued to expand through 2009 despite the global recession, is expected to grow by a further 3.5% to 5% this year, by 6.1% in 2011, and by 7% in 2012.
Bottom line, David concluded, what’s the difference between Panama and Costa Rica?
Significantly better infrastructure in Panama, first and foremost.
In addition, the cost of living is lower in Panama, meaning that, living in Panama, you enjoy a higher level of services and support at a lower cost.
In Panama, it’s possible for anyone to walk into any electronics store and buy a cell phone for US$20 or less. In Costa Rica, the only place a non-resident can obtain a cell phone is in the arrivals hall of Juan Santa Maria airport. If you don’t know to do this when you’re collecting your bags upon arrival in the country, you’re outta luck And even a resident must jump through hoops for the privilege of investing in a cell phone.
Costa Rica’s government is a basket-case, while Panama’s recently installed administration seems focused laser-sharp on growth and development.
While Costa Rica continues mired in typical Banana Republic confusion and disorder, Panama is moving quickly toward an “investment grade” rating and First World status.
What’s David still doing living in Costa Rica? He’s beginning to wonder…
Kathleen Peddicord
