Sparks flew in our office yesterday as the assembled staff and friends returned to a long-standing internal debate: What makes for good infrastructure…and which countries boast it?
We were reminded of these questions by a reader who wrote in to say, “Kathleen, you repeatedly refer to Panama’s good infrastructure. Compared to what? Haiti? It is improving, but the average person will be gravely disappointed upon actually moving around this beautiful country…”
“I have to agree,” replied Panama Letter Editor Rebecca Tyre. “The infrastructure in this country is probably not what people expect.
“Look at the pot-holed roads and the broken sidewalks, for example…and the banking industry! Sure, there are lots of international banks operating here, but service is terrible, fees are high, and only some banks offer online banking and debit cards. It’s no easy thing to open an account in the first place. Then, when you do, you’re plagued by questions about any transactions that don’t fit your typical pattern.”
“None of that is untrue, Rebecca,” I replied, “and, in fact, you’ve gotten to the heart of this issue when you say you worry that the infrastructure in this country probably isn’t what people expect. Quality of infrastructure is relative, and your perception of it depends where you’re coming from and where else you’ve spent time. It depends on the expectations you bring with you.”
“Right,” Lief continued. “We could debate the quality of roads in Panama all day long, but that’s not the point. How does the road system in Panama compare with that in Costa Rica, say, or Nicaragua or Honduras or Guatemala or Belize? That’s the starting point. You’ve got to consider this question first within the context of the region.
“Panama’s infrastructure is light years ahead of that in Nicaragua and Costa Rica, for example. The one highway in Nicaragua from Managua to Granada was widened and improved recently, but this is the only improved highway in the entire country. The Pan-American Highway is only two lanes through Nicaragua. Fortunately, it doesn’t see much traffic. The Nicaragua airport was upgraded as well in recent years, but the access to and from the main part of the city is on surface roads that are easy to get lost on. Signage is non-existent. And most of the roads in the country are dirt or in bad repair.
“Panama’s infrastructure includes local airports so that getting from one part of the country to another is relatively easy and cheap. In Nicaragua, you don’t have that option. On the other hand, the country isn’t as stretched out as Panama, so it isn’t as big a deal.
“Costa Rica hadn’t built a new road in 40 years until this past year. Getting around San Jose and the surrounding suburbs requires a guide dog, a GPS, and fluent Spanish, lest you end up on the wrong side of town after having driven around for an hour. City and suburb roads both are too narrow for the traffic load (more so than in Panama City). And a friend living just outside San Jose has entertained us for years with stories of the elaborate workarounds he’s had to resort to to get Internet in his house.
“It’s no more difficult for a foreigner, especially an American, especially a non-resident American, to open a bank account in Panama than in any other country in the world. We had a painful time trying to open our first account in Ireland more than a dozen years ago, and it’s only become more difficult every year since. The online system for our account in that country is no better than that for Scotiabank, where we have an account in Panama. So, sure, banks in Panama operate like Nazis, but most other banks in most other countries operate the same way in this Know Your Client age.
“The problem is limited perspective. Even if you’ve traveled in other countries, you don’t have any real experience of what it would be like to live there. Spend a few months in Nicaragua (as I’ve done) or try to run a business in that country (as I have), and it becomes clear that that country’s infrastructure is barely there.
“Coming off our experience spending extended periods of time living and doing business not only in Nicaragua, but in Honduras, Mexico, Belize, and Costa Rica, for example, as well, yep, we sing Panama’s praises. All infrastructure aspects considered (telecommunications, Internet, in-country transportation, access for international travel, banking, doing business, etc.), no other country in the region comes close to what Panama has to offer.”
How does Panama’s infrastructure stack up thinking bigger picture? I come from Baltimore, Maryland, and this is the U.S. city we travel to most often. We spent two weeks there over Christmas. As my expectations of U.S. infrastructure are based on my experiences in Baltimore, I’d say the infrastructure in Panama rates as good or better.
A friend of ours, who shares an office with us in Panama City, hails from San Diego. In other words, his frame of reference is quite different. “I’d have to say that Rebecca and the reader are right,” he chimed in yesterday, “when they say that things don’t work as well in Panama as they do in the States or Canada.”
That said, when he decided to move part of his practice offshore, our friend chose Panama as his part-time base.
Looking south and comparing Panama’s infrastructure with that in countries in that part of the world you might be thinking about, here’s what you’ll find: Ecuador’s infrastructure is reminiscent of that in Nicaragua. Brazil is a difficult place to navigate, to establish residency, and to do business. Don’t put any money into a bank in Argentina that you aren’t prepared to have disappear overnight (it happens). The infrastructure in both Chile and Uruguay, on the other hand, is as good or better than that in Panama.
The world’s best infrastructure? For that, look to Switzerland or France. After two-and-a-half decades of living and doing business all over the world, I’d say that, generally speaking, things work better in those two countries than anywhere else on earth.