A Man With A Plan
Yesterday, I recommended Panama as the best place in the world to base an international business. I offered many reasons to support this position, including this country’s top-notch infrastructure, especially in Panama City.
It’s safe to say that the infrastructure in Panama is better than anywhere else in Central America. The transportation infrastructure, the telecommunications infrastructure, the banking infrastructure…anyway you consider it, the infrastructure in this country exists to a higher level and works on a more reliable basis than anywhere else in this part of the world.
That reality begs a question:
Why?
Why is the infrastructure better in Panama than anywhere else in this entire region?
In part it’s because of the extended American presence last century. However, looking ahead, the reason why the infrastructure in this country is continually expanding and improving is because of current President Ricardo Martinelli and his Five-Year Plan.
In this part of the world, having a plan isn’t such a big deal. Everybody down here in the lands of bananas and mañanas has a plan.
Martinelli’s Five-Year Plan is notable because Martinelli is actually implementing it. Immediately upon taking office in 2009, he published his 122-page plan (drafted with the help of McKinsey and Company) in English…and then he set about making it happen. He hasn’t stopped to take a breath in the three-and-a-half years since. Frankly, what Martinelli has accomplished already in his term as Panama’s president is nothing short of extraordinary. And he’s got a year-and-a-half still to go.
Highlights of Martinelli’s Five-Year Plan include:
- Replacing the old Diablo rojo buses that clog the Panama City roadways with new Metro Buses (this was accomplished officially, completely, with the last old Diablo rojos taken off the roads just last month)…
- Building a new 13.7-kilometer-long Metro across the capital (the roads across the city are torn up as this work continues, gaping holes at key intersections…it’s the daily commuter’s current nightmare but an important investment in the viability of this city long term)…
- Developing a new Government City where the 200 government offices will be consolidated (saving the city millions of dollars a year in rent)…
- The extension of the Cinta Costera; this three-phase highway expansion project is in phase three…
- The cleanup of the Bay of Panama (the French engineer father of one of our son’s friends, in Panama to manage this project, reports that it’s proceeding on schedule…and, frankly, none too soon)…
- The development of Panama Pacifico, a new city across the Bridge of the Americas where business development is being further incentivized by tax breaks and other perks (and where many of the 40-plus international companies operating in this country are choosing to base themselves)…
- The construction of additional highways to connect key strategic points across the country (a new highway from Tocumen Airport to Colon, for example)…
- Establishing a new international airport at Rio Hato (we’ve been watching the progress of this project with particular interest, as, when this new international airport is operating, landing here will reduce the drive time out to our emerging community at Los Islotes by two hours)…
- Expanding the international airports at Tocumen and David…
That’s a total investment of about US$4 billion.
Where has Martinelli been getting all the capital for all these improvements? The Panama Canal!
In the dozen years they’ve been running this show, the Panamanians have generated for themselves more than US$6 billion in surplus Canal revenues.
Over the past dozen years, Panama has increased annual tonnage figures and prices at the same time…and it has decreased Canal transit time from 33 to 23 hours. The world’s big shipping outfits are happy to pay more to get where they’re going quicker.
Not ones to leave great enough alone, the Panamanians are in the process of expanding the Canal, pushing ahead in typically aggressive Panamanian style with a US$5.25 billion expansion of their greatest asset. This will result in even greater annual Canal revenues, both direct (more transit fees) and indirect (more maritime registrations, more maritime insurance fees, etc.).
It will also mean ever-increasing employment. Unemployment has fallen from as high as 12% about a decade ago to about 6% today.
Three-and-a-half years ago when Martinelli took office, his Five Year Plan seemed super-ambitious. Today, it seems more like a to-do list that Martinelli is systematically working his way through.
Martinelli took office with unprecedented approval ratings. Today, he has his share of detractors and, sure, he’s rubbed some folks the wrong way. He’s a no-holds-barred, take-no-prisoners kind of a guy. But, down here in the land of bananas and mañanas, I know from experience, sometimes you’ve got to push hard to get things done. And Martinelli is getting things done.
Kathleen Peddicord
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