Boom Town Panamá A Market PerspectivePanamá -- Basic Country Data Size: 75,517 km2 29,157 sq mi...
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Boom Town Panamá A Market Perspective ❖ Panama Feb. 2017 ❖ CHARLES CONN
Transcript of Boom Town Panamá A Market PerspectivePanamá -- Basic Country Data Size: 75,517 km2 29,157 sq mi...
Boom Town PanamáA Market Perspective
❖ Panama Feb. 2017
❖CHARLES CONN
Why should I care?
❖ Infrastructure investment
❖ Safety & Job creation
❖ Future real estate values
❖ Foreign direct investment
The economic health of a
country impacts
everyone living or investing
there.
Panamá -- Basic Country Data
Size: 75,517 km2 29,157 sq mi
Population: 3.86 Million
Density: 47/km2
Capital--Panama City 1.7 million, metropolitan area
Legal System Civil Law – Napoleonic Code
Legal System
❖ Tip #1 Find yourself a trusted Attorney
❖ Tip #2 For business people, find an
Attorney / Firm committed to Rule of Law
and willing to fight vested interests
❖ Tip #3 Know the law as it applies to you
Where is Waldo?
Panamá?
Panamá?
Panamá?
Panamá
Location
Location
Location
Strategic aspiration Singapore
Central America Comparison
Industry Profile – very different
14.721.2
4.3
12.45.7
17.9
18.8
17.826.9
13.418.6
7.911.0 9.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Panama Central America
Other
Transportation
Financial
Wholesale
Manufacturing
Agriculture
Govt
80%
Ser
vic
es
Size of the economies - GDP (current US$)
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Bill
ion
s
Guatemala
Costa Rica
Panama
El Salvador
Honduras
Nicaragua
Data from database: World Development Indicators
Size of the economy – GDP per capita
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Panama
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Data from database: World Development Indicators
Growth of economy - GDP growth (annual %)
7.19
8.53
12.11
9.15
3.97
5.85
10.7710.25
8.35
-4
-2
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010 2011 2012 2013
Panama
Nicaragua
Guatemala
Costa Rica
Honduras
El Salvador
Data from database: World Development Indicators
Panama grew an average of 8.5% p.a. 2005 to 2013
6.20 5.80
WEF Global Competitiveness Index
© 2014 World Economic Forum | www.weforum.org/gcr Sample size = 148
4.61 4.504.35
4.043.84 3.84
3.70
Chile Panama Costa Rica Guatemala El Slvador Nicaragua Honduras
#34 #40 #54 #86 #97 #99 #111
Panamá was #58 in 2009
Foreign direct investment, net inflows (BoP, current US$)
Data from database: World Development Indicators
-$1,000
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Mill
ion
s
Panama
Costa Rica
Guatemala
Honduras
Nicaragua
El Salvador
Foreign direct investment, net inflows (BoP, current US$)
FDI contributes 9% to GDP in Panama Overall investment at 30% of GDP ne
arly double the Latin America average
Data from database: World Development Indicators
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2000 2005 2010 2015
Mill
ion
s
Income Inequality – GINI
0
10
20
30
40
50
60
70
Lower debt improved credit rating
7066
6154
45 4339 38 36 37 38
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Cen
tral
go
vern
men
t d
eb
tP
erc
en
t o
f G
DP
Public debt ratingsStandard & Poor’s
Making the grade
Panamá
Fitch RatingsBBB
stable
Standard &
Poor’s
BBB
positive
Moody’sBaa2
positive
President Martinelli
Strategic Plan for Development
Economic & Social strategy
Five Year investment plan
Financial Programming
Strategic Government Plan
“Focusing on Our Competitive
Advantages to Drive Sustainable
Growth”
Alberto VallarinoMinister of Economy and
Finance
President Juan Carlos Varela
President Juan Carlos Varela
Strategic Plan 2015 to 2019 US$19.5B
55% for social programs
Continued Infrastructure
US$6.37B• Expanding Metro line 1,
• Metro line 2. • Fourth bridge over the canal
Panamá City
42% of Population
??% of the vehicles
# Vehicles on the road
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
60,000 + new vehicles per year
Source: Transit & Transportation Authority (ATTT)
Panamá City Priorities
❖ Modern buses and a new system
Integrated Transportation System
Integrated Transportation System
$2.6B Funding for Metro Line 3
Huge Investments
Panama Canal
Total = $5.3B
Metro
❖ Line 1 = $1.5B
❖ Line 2 = $1.9B
❖ Line 3 = $2.6B
Total = $6.0B
Key Growth Drivers
Tourism Logistics
AgricultureFinancial Services
Tourism
The opportunity: Leverage Panama’s unique geographical and infrastructural advantages to attract luxury sun & beach, and ecologic tourists, and become the business hub of the Americas
❖ Tourism is growing
❖ New airports, new flight routes including Europe Iberia, KLM, Air France, Lufthansa
❖ Copa continues to expand
❖ New Hotels
❖ But ….
❖ Hotel room capacity doubled, while tourism up 5% annually
❖ Rate dropped from 52% to 48% between 2015 and 2016
Logistics
The Opportunity:
❖ Ensure that the canal remains a competitive logistics backbone and leverage traffic to generate income by providing value added services to products passing through
❖ Panama can leverage the success of the Canal and be the value added logistics power of the hemisphere
Panamá Canal -- 15 years of success
3 major milestones:
❖ Dramatically increased revenue
❖ Decreased transit time from 33 hours to 23 hours
❖ Returns ~$500M + to the Treasury each year.
Panamá Canal
Canal represents around 10% of GDP of Panamá
Ripple effect of Canal
❖ #1 Maritime Registrations
❖ Major business in Maritime Insurance & Trade Finance
❖ Colon Free Zone – second largest duty free area after HK
❖ Ports at both entrances to the canal
❖ New ports announced to match expanded demand
❖ Key location for undersea marine cables – for internet access
New canal will be able to handle ~92% of all ships
Investment
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
US
$ M
illio
ns
$
“Apparently someone forgot to tell
Panama about the world economic crisis”
$13B $19,5B
Panamá – country of contrasts
Panama City compared to Dubai, Singapore or Miami
Poverty levels in parts of the countryside can reach 90%
Panamá – country of contrasts
Top 10 WW
❖ FDI
❖ Mobile phone subscriptions
❖ Quality of air transportation
❖ Quality of port infrastructure
❖ Soundness of banking system and accessibility of financial services
Among 50 Worst
❖ Independence of Judiciary
❖ Quality of education in math & science
❖ Rate of secondary school enrollment
❖ Wages and productivity
❖ Costs of crime
Panamá – The Hub of the Americas
❖ Better Infrastructure, lower cost of living, US$ based economy
❖ Reforms in education, health and security
❖ Investment for tourism, hotels, international airports
❖ #1 fastest-growing country in Latin America 1
❖ #2 second-richest country in Latin America after Chile 2
❖ The new Canal opened in 2016
Source: 1 = IMF, 2= IMF PPP per capita GDP
The future ?
“Panama has had the highest average growth in the region over the past decade and has made significant
progress in improving its economic and financial institutions and policies.
The economic outlook remains favorable.”
IMF – March 2016
The future ?
“Expect an average of 6.5% annual growth over the next five
years.”
Strategic Plan 2015 to 2019
Boom Town PanamáA Market Perspective
❖ Panama Feb. 2017
❖CHARLES CONN
