“Spanish? Start learning Chinese?”

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As I struggle with learning Spanish, some are suggesting I should be learning Chinese instead.  While in Seattle I visited a contact at Holland America’s corporate offices: he was learning Chinese.  Why? China is emerging as one of the hottest markets for cruise passengers going!  On my last contract on a cruise ship for three Med cruises in a row we had groups of over 250 from China.  And what is generating a lot of discussion is the approval of Nicaragua to grant a canal concession to a Chinese businessman.

There was this, for example, at Newsroom Panama:

The delivery of a 100 year concession award for an Inter-oceanic Canal to a company without the capital or experience to carry out a project of this magnitude could be the result of a brilliant long-term operation by the Chinese government.

Jorge Cobas, writing in CentralAmericanData says:

As a commercial project, the Inter-Oceanic Canal in Nicaragua is economically unfeasible, in particular because the uncertainty over the return on investment to be made is so large. But for a country destined to be a world leader, as is China, for whom finance of $40 billion is no small thing, possession of a dominion over a waterway in the backyard of its greatest commercial competitor makes this investment a bargain.

President Obama conducted a routine visit to Central America in his second presidential term, and the most important thing he left behind was stories about the menus at the formal dinners. In contrast, Chinese President Xi Jinping left hundreds of millions of dollars in loans for projects, which are, of course, well tied to the convenience of Chinese companies.

Xi Jinping did not visit Nicaragua. However, it could become the most important country for China on the American continent, in this century and the next.

Nicaragua is, under its current institutional conditions, with a Sandinista government which rules with the factual and dubiously democratic style of leftist Latin American governments – often going above the heads of opposing minorities – the Central American country where it is possible to develop this brilliant geopolitical Chinese operation.

Clearly, franchising the Inter-oceanic Canal directly to the Chinese state would have been much resisted and even unfeasible in political terms, both inside and outside of Nicaragua. As we have seen, the government of President Ortega found no obstacle to giving ownership of this concession to a nearly non-existent company. However, given the style of Chinese developmental policy, it is highly unlikely that the company will not be dependent on a government that has a clear need to ensure mastery of global sea routes, not only in terms of trade but also of military strategy.

It is clear that the construction of the Inter-oceanic Canal – if realized – would revolutionize and boost the economy of Nicaragua, to the well deserved benefit of its inhabitants, but it could also convert the country – and region – into a focus for geopolitical tensions, with unpredictable consequences.

What is absolutely certain is that we should hurry up and learn Chinese …

And just the other day the LAS VEGAS SUN ran this Associate Press article.  And what I find particularly interesting about this article is the references to the boom in Panama attributed largely to the Panama Canal.  Now frankly I don’t think Panama’s success is just due to the Canal, although it certainly is a major factor.  Fortunately the US built the Canal and ran it as a service generally breaking even.  When the Canal was turned over to Panama many naysayers in the  US predicted either that Panama would be unable to run the Canal independently, or that it would run it into the ground.  Panama decided to run the Canal as a business and it has become a hugely profitable business.  Although run by an independent, mostly non-political, authority, each year the Canal contributes huge amounts directly to the government in addition to all the residual contributions of the country’s major industry.  Even with the downturn in the economy and fewer containers from China bound for Wal-Mart, the Canal has continued to make money.

Panama’s boom helps drive Nicaragua canal dreams

Curundu used to be a warren of ramshackle wooden houses and reeking open sewers, one of Panama City’s most notorious refuges for street gangs and drug dealers.Then, three years ago, the government tore down the shacks and built a bustling new neighborhood of concrete apartment buildings, freshly paved streets, basketball courts and fields with artificial turf.

“We live more decently here now. People see a prettier neighborhood, kids playing soccer,” said Ronny Murillo, a 45-year-old ex-convict who helped build one of the billions of dollars in projects made possible by an economic boom driven largely by the $5.25 billion expansion of the Panama Canal. Behind him, enormous cranes loomed over a skyline that has been transformed by dozens of new skyscrapers, many filled with luxury apartments, high-end stores and fashionable boutiques.

In a little more than five years, Panama has slashed its unemployment rate by two-thirds and nearly tripled the rate of government spending as the double-digit growth of the canal-fueled boom has made it the hemisphere’s hottest economy. Just to the north, Nicaragua has watched years of slower growth fail to move it out of its position as the hemisphere’s second-poorest nation, after Haiti.

The deep discrepancy between the fortunes of two Central American neighbors goes a long way toward explaining the Nicaraguan government’s fervent promotion of a Chinese company’s vague proposal to build the hemisphere’s second trans-ocean canal across Nicaragua. Despite deep reservations among opposition lawmakers, environmentalists and independent shipping experts, the country’s leftist-controlled National Assembly voted overwhelmingly Thursday to grant Hong Kong-based HK Nicaragua Canal Development Investment Co. an exclusive, renewable 50-year concession to measure the feasibility of a new canal, then build it and take the lion’s share of the profits.

Underlying much of the enthusiasm in Nicaragua is the hope that the massive new canal could bring a bit of Panama-style prosperity.

“I don’t think we’re going to be just like Panama, because they’re already 100 years ahead of us. But yes, I think this is going to help Nicaragua put poverty behind it and generate jobs,” said Roberto Pasquier, an electric appliance salesman in a market in the Nicaraguan capital, Managua.

Panama’s prosperity has drawn tens of thousands of job-seekers, mostly from Nicaragua and nearby Colombia, Venezuela and the Dominican Republic. Almost 40,000 such workers have been granted legal status in Panama since 2010 under a government program meant to feed the roaring demand for labor to build projects that include Central America’s first subway, a $1.452 billion investment.

Panama has the highest level of human development in Central America according to the United Nations Development Program, which measures factors including life expectancy, health care access and education.

“You can make money here in Panama, buddy,” said Mauricio Hernandez, a 29-year-old Colombian who sells food in the streets of Panama City. “We’re all coming for dollars.”

Panamanian Abel Aparicio, a 49-year-old hotel chef, earns $1,000 a month, twice what he made when he started 20 years ago, and has bought two small apartments that he rents out to supplement his income.

“Nobody’s that worried about losing their job,” he said. “If you leave one job, other opportunities open up, and there are ways to make money besides hotels, which there are a lot of these days,” he said.

Panama’s economy started booming around the time that authorities began the Panama Canal expansion in 2007. By 2010, the annual growth rate rose to around 10 percent, where it’s stayed.

The canal expansion generated 30,000 direct jobs and the administration of populist right-leaning President Ricardo Martinelli estimates that the government will have put $16 billion into public works between 2009 and 2014. That amount was $4.4 billion between 2000 and 2004. A 13.5 percent unemployment rate in 2004 dropped to 4.6 percent in 2012, in a workforce of 1.6 million. The poverty rate dropped from 36 percent in 2002 to 26 percent today.

Wealthy investors, many from Colombia and Venezuela, have built real-estate and tourism projects, restaurants, clothing stores, car dealerships and computer businesses around Panama City.

Nicaragua, meanwhile, doesn’t have any obvious means, besides the possibility of the canal, of rapidly accelerating its growth.

The government says it has created 700,000 jobs since President Daniel Ortega took office in 2007 and poverty has dropped from 50 percent in 2006 to 42 percent last year. But 1 million people remain out of work in a country of 6 million. If the canal is built, the Nicaraguan government says, within five years GDP would go from $11 billion a year to $25 billion, generating hundreds of thousands of new jobs.

“Those who oppose the canal want this country to keep suffering from underdevelopment and poverty,” said Edwin Castro, congressional leader of Ortega’s Sandinista Front.

Nicaragua is betting on businessman Wang Jing, who first appeared in Nicaragua last year as the head of the Xinwei Telecom Enterprise Group, which signed a contract with the government to improve the country’s telecommunications system and promised to invest as much as $700 million dollars. So far, there’s virtually no sign of any spending yet.

“We can’t believe that they’re going to build an inter-ocean canal, when from here it looks like they haven’t even built a single telephone line, or done anything else since they made the announcement. It’s all a lie,” said opposition congressman Eliseo Nunez.

The head of Nicaragua’s state telecommunications institute told reporters last week that the first new telecommunications antennas would be installed by Xinwei in late July or early August, and the delay had been caused by Xinwei’s high manufacturing standards. Still, such problems have fueled widespread doubts inside Nicaragua, where many are skeptical about dreams of Panama-style riches.

“It’s all a grand illusion that they’re selling us, it’s untrue that we’re going to turn into another Panama,” taxi driver Francisco Siles said as he picked up fares outside a Managua hospital. “We’re going to keep being the same poor Nicaragua.”

Weissenstein reported from Mexico City. Luis Manuel Galeano contributed from Managua, Nicaragua, and Kathia Martinez contributed from Panama City.

A couple of additional comments about the points I’ve highlighted.  If you are thinking about retiring abroad, about an expat life style, about escaping your home land for one reason or another, wouldn’t you choose a country with an established democratic government [albeit at times just as raucous, screwed up and maybe corrupt as the government in your homeland]?  Wouldn’t you choose a country not at war with anything except poverty?  Wouldn’t you choose a country that didn’t need a military? [The second US-Panama Canal Treaty promised that the US would protect the neutrality of the Canal in perpetuity - than you very much! - so who needs an army when the US spends so generously on its industrial/military complex?]  Wouldn’t you choose a country that is building its infrastructure and is in the midst of an economic boom?

And a second point usually just a by-the-way in this discussion, but one which has enormous world-wide implications: no one has done any environmental impact study.  It is said that had de Lesspes been successful in his original plan to create a sea level canal across Panama that the result would have been an ecological disaster.  A sea level canal across Nicaragua using Lake Nicaragua might well create environmental chaos.

For more about the fascinating history of Panama and the Panama Canal read my book Cruising The Panama Canal: Centennial Edition. 

I’m very pleased that one private university in Panama which specializes in teaching students American-style English is using Cruising The Panama Canal: Centennial Edition as a text in their history classes.  They like my presentation of Panamanian history, a wow to me as a guest in their country, and it forces the students to read and discuss in English, and not in a formal, rigid, boring style.

Canal Expansion Unearthing Fantastic Paleontological Findings

Although the Canal is all about business and getting the job completed, the Panama Canal Authority (ACP) recognizes that this is a once in a lifetime opportunity for scientific exploration and discovery.  Working closely with the Smithsonian Tropical Research Institute, which has had a presence in the Canal almost from its inception, scientists are making amazing discoveries about the bridge between the continents.  This video, although in Spanish – not English or Chinese! – is fairly easy to follow even if you don’t know a lot of Spanish.

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Bay Area Serendipities

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Sonoma CountyOne of the great things about travel is stumbling on things you didn’t necessarily expect, good things you didn’t necessarily expect.  And it’s one of the surprises of returning to an area you thought you knew.  I’ve spent some time in the Bay Area, in San Francisco and surrounds, and wine tasting in Sonoma and Napa.  My youngest daughter now lives in Sonoma County and was busy with her new job so let me use her car to explore.

Wild Flour BakeryWild Flour Bakery

My daughter told me I had to visit this place since it was featured on CNN, is only open four days a week, and people come form all over the Bay Area just for . . . bread!  And by design, since the owner and staff have “lives” away from work, is only open four days a week.

Wild Flour Bakery . . .

Wild Flour Bakery 2“Features brick oven baked sourdough breads, scones, biscotti and coffee drinks. Working with a wood fired brick oven we produce beautiful hard crust breads that our customers come from miles around to taste. At 8:30AM we open with 4 breads only, our sticky bun, cheese fougasse, goat flat bread and either the Bohemian (apricot, orange and pecan) or the Egyptian (pear, fig and candied ginger) and 1 or 2 out of 4 or 5 daily kinds of our whipping cream scones which have become a daily sellout with flavors like apricot, white chocolate, ginger or double chocolate, espresso, hazelnut.

By 10:30 AM we usually have the remaining breads arrive by the hundreds (we make up to 900 loaves daily and sell only in our bakery!) and the remaining kinds of scones. Generally we have 10 to 12 kinds of bread daily. Each day the variety of breads changes. Like wine tasting we sample all of our breads so that you can experience a huge variety of tastes, and it’s fun!

Wild Flour Bakery 3Adjoining the bakery are owner Jed Wallach’s beautiful and functional gardens with chairs scattered about so you can enjoy your bread or scone and the garden as well. I spotted Jed in the garden and asked if I could take a picture of “the celebrity chef>” He answered, “Celebrity chef? That’s the kiss of death! No picture, but enjoy the garden.” And I did. But you should be forewarned, the sticky cinnamon buns here are ONE POUND EACH!

015Fort Point

Tucked underneath – directly underneath! – the Golden Gate Bridge is an almost forgotten piece of US history, Fort Point.  Now part of the Golden Gate National Recreation Area  and a National Historical Monument.

People have always been drawn to the land around San Francisco, because of its sheltered harbor and its rich natural resources. Overtime, as different communities settled here, they would defend their stake in the land against other potential invaders. The Spanish established the Presidio of San Francisco in 1776 to protect their interests in the bay. In 1822, Mexico took over this land from Spain, but later they abandoned the Presidio fort and moved their central government up to Sonoma County. After the United States took control of California in 1848, the U.S. Army began to construct permanent posts and seacoast fortification.

Fort Point has stood guard at the narrows of the Golden Gate for over 150 years.

The Fort has been called “the pride of the Pacific,” “the Gibraltar of the West Coast,” and “one of the most perfect models of masonry in America.” When construction began during the height of the California Gold Rush, Fort Point was planned as the most formidable deterrence America could offer to a naval attack on California. Although its guns never fired a shot in anger, the “Fort at Fort Point” as it was originally named has witnessed Civil War, obsolescence, earthquake, bridge construction, reuse for World War II, and preservation as a National Historic Site.

Fort Point was built between 1853 and 1861 by the U.S. Army Engineers as part of a defense system of forts planned for the protection of San Francisco Bay. Designed at the height of the Gold Rush, the fort and its companion fortifications would protect the Bay’s important commercial and military installations against foreign attack.

Marin Headlands

All those incredible shots of the Golden Gate Bridge you see in commercials and tourists visiting San Francisco are hoping to capture . . . all are taken from Marin Headlands.

024Granted a spectacular atypical San Francisco day helps!  My daughter, Rebecca, locally known as “Bec”, lived and worked in the Marin Headlands for six years and took me on a tour, including the “hidden” Coast Guard bar at Fort Baker where when it’s open you can kick back, have a beer, and get a spectacular view of the Golden Gate.  And, extra special, the Prada and Oracle World Cup boats were practicing for the race in October.

Tidepool LabThis is an amazing part of the Golden Gate National Recreation Area with incredible natural history, 61 archeological sites many dating back to the Spanish and Mexican period, and the country’s largest collection of military installations and fortifications, dating from 1776 through the Cold War. You can actually tour the remaining Nike missile installation

064So I was able to visit my daughter, explore my old haunts in San Francisco (in my 24 Hour Fitness days our corporate headquarters was in downtown San Francisco), go wine tasting in Sonoma, Marin, and Anderson Valleys, and celebrate our mutual June birthdays with Rebecca.  Today she flies off to Borneo where she will continue her Master’s degree studies looking at conservation efforts for orangutans. Did you know orangutans laugh when tickled? Who knew!

San Francisco, Panama & The Canal

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Much as I love San Francisco, I’ve decided I am not a city boy any more.  Yesterday was a beautiful day in San Francisco, a little fog, certainly not beach weather, but warm enough since San Francisco in the summer can be the coldest place in California.  I spent most of the day, actually all of the day, negotiating traffic to and from the city, and mostly unsuccessfully looking for a place to park.  If by some miracle you do find a place to park you can only park for 2 hours so forget the idea of parking and going off to explore.  And parking lots, even at $25 a day, are rarer than genuine gold nuggets.  And the drivers are almost as rude as in New York, laying on their horns if you don’t jack rabbit start when the light turns green: not what I remembered about San Francisco.  Maybe their are all just transplanted New Yorkers.  It was all I could do not to give one woman in a brand new, black SUV the size of a motor home a Bronx-style hand salute.

008The Panama San Francisco Connection

Of course San Francisco owes it’s prominence to Panama since man of the gold seekers during California’s famed Gold Rush came to California by way of Panama.  There were three routes to the Gold Rush, the long trek across the Continental US, the passage around the southern tip of South America, or the shortest and quickest route across the Isthmus of Panama.

And the Golden Gate Bridge, the symbol of San Francisco, was made from steel fabricated by the Bethlehem Steel Company and shipped to San Francisco via the Panama Canal.

The Panama–Pacific International Exposition in 1915 was held to celebrate the completion of the Panama Canal the previous year and to showcase San Francisco’s recovery from the 1906 earthquake.  The beautiful landmark Fine Arts Pravillion and the Bill Graham Civic Auditorium at Civic Center Plaza are remaining structures from the 1915 Exposition. [San Diego held a similar exposition and celebration of the Canal and a number of those structures remain in Balboa Park.]

SWOT Panama Canal

Like any business, the Panama Canal today has strengths, weaknesses, opportunities, and threats.  The massive expansion of the Canal now underway and originally scheduled for completion next year is in direct response to the Canal’s opportunity as well as the threat that post-panamax ships would use other routes.

When the US decided to build a canal there was major disagreement as to where the canal should be built.  Panama and Nicaragua were the two competitors and each side had its proponents generally, in true US-style, depending on the proponents financial interests.  Panama won out by a slim margin but there has always been the possibility and talk of someone coming along and building a competing canal across Nicaragua.  The possibility of a Nicaragua Canal loomed again a few years ago when Nicaragua officially proposed the project.  Panama Canal planners were convinced that even if there were a Nicaraguan canal, a useable Northwest Passage, or some other “land canal” that expansion of the current Panama Canal was viable and that in today’s interconnected world there was enough business for all potential players.

Interestingly as the world financial crisis has started to impact China production of goods, Panama Canal traffic has started to decline.  Now comes word that Nicaragua has awarded a Chinese company a 100-year concession to build an alternative to the Panama Canal.

The Guardian reports that president of the country’s national assembly, Rene Nuñez, announced the $40bn (£26bn) project, which will reinforce Beijing’s growing influence on global trade and weaken US dominance over the key shipping route between the Pacific and Atlantic oceans.

The name of the company and other details have yet to be released, but the opposition congressman Luis Callejas said the government planned to grant a 100-year lease to the Chinese operator.

The national assembly will debate two bills on the project, including an outline for an environmental impact assessment.

Nicaragua’s president, Daniel Ortega, said recently that the new channel would be built in the north of the country, through the waters of Lake Nicaragua.

The new route will be a higher-capacity alternative to the 99-year-old Panama Canal, which is currently being widened at the cost of $5.2bn.

Last year, the Nicaraguan government noted that the new canal should be able to allow passage for mega-container ships with a dead weight of up to 250,000 tonnes. This is more than double the size of the vessels that will be able to pass through the Panama Canal after its expansion, it said.

According to a bill submitted to congress last year, Nicaragua’s canal will be 22 metres deep, 20 metres wide and 286 km (178 miles) long – bigger than Panama and Suez in all dimensions.

Under the initial plans for the project, the government was expected to be the majority shareholder, with construction taking 10 years and the first ship passing through the canal within six years. It is unclear if this is still the case.

Two former Colombian officials recently accused China of influencing the international court of justice to secure the territorial waters that Nicaragua needs for the project.

In an op-ed piece for the magazine Semana, Noemí Sanín, a former Colombian foreign secretary, and Miguel Ceballos, a former vice-minister of justice, said a Chinese judge had settled in Nicaragua’s favour on a 13-year-old dispute over 75,000 square kilometres of sea.

They said this took place soon after Nicaraguan officials signed a memorandum of understanding last September with Wang Jing, the chairman of Xinwei Telecom and president of the newly established Hong Kong firm HK Nicaragua Canal Development Investment Company, to build and operate the canal.

Nicaragua has accused Colombia and Costa Rica, which also has a claim on territory likely to be used by the new canal, of trying to prevent the project going ahead. [Newsroom Panama]

Rough Seas for The Cruise Industry?

When the COSTA CONCORDIA ran aground I expected our stock in Carnival, RCL, and the Carnivalized Princess successor PLC to all tank. They didn’t. They took a hit, but rebounded given the public’s fascination with cruising as an ideal and cost-effective vacation and way to explore. But a recent study indicates that the CARNIVAL TRIUMPH fire may have had a bigger long range impact on the people’s opinion of cruising. According to a Harris Interactive poll taken between May 14 and 16th (before the GRANDEUR OF THE SEAS fire) and reported by the industry magazine SEATRADE,

“US consumer attitudes about cruising have not bounced back following the Carnival Triumph incident but have continued to decline, with lower scores on trust, quality and intent to purchase . . . While Carnival Cruises Lines’ quality score showed the steepest declines (down 28% versus pre and 12% versus post), all the other brands tested ranged individually from 8%-11% below pre levels.”

Interestingly Harris noted that “Holland America Line’s purchase intent score has largely weathered this perceptual storm, holding at just 2% below its pre level”

I find this interesting because if a major airliner crashes [or maybe even COSTA CONCORDIA goes aground] people lament the tragedy but intuitively understand that people and machines are imperfect, and so continue to fly [or cruise] knowing that accidents happen. Of course one hopes the accident never happens to them, but we understand the odds so continue to fly. Or buckle up and get back on the freeway. But let an aircraft be stuck on the ground for a few hours with passengers unable to leave the aircraft, get up or (God forbid!) be unable to use their cell phones and holy hell erupts! So the fires, although efficiently extinguished with all emergency operations working according to plan, but with passengers inconvenienced because no nearby island happened to have an 3,000 empty hotel rooms and charter aircraft standing by, people get all upset.

I predict that public fascination with cruise travel will continue in two directions. First there are folks who like the mega-resort cruise ships where ports are an incidental inconvenience and the main focus, like a land-based resort, is spending money. Although many of these folks would be happy with a “cruise to nowhere” (as long as the bars and casino remained open) a few hours in a shopping mall port (like St Maarten, St Thomas, or Nassau) or a visit to a cruise line controlled Disneyesque stereotypical “port” are all that’s wanted. Second, there are folks to whom ports are still important and see a cruise as a special opportunity to explore new lands, experience new cultures, and expand their knowledge. Most of these folks prefer ships that actually float, and rock and roll sometimes and aren’t just resorts floating just outside the 12 mile limits.

So I see the “dip” as a kind of “market correction” and think cruise lines need to focus more on clearly defining their philosophies, products, and target audiences.

Those of you who are interested in the final report regarding the COSTA CLASSICA which is the basis of the official charges now against the captain can read the full report.

And for those of you interested in the future direction of cruising, or who like me, are Carnival stockholders and fans of Carnivals family of brands . . . here’s the best news ever!

Bob Dickinson is back! Nobody knows more about cruising that Bob Dickinson, formerly CEO of Carnival. Dickinson, who like me is 70, is being pulled out of retirement to act as a consultant to Carnival Corp CEO Howard Frank. Dickinson, known for telling it like it is, is charged with making recommendations. This should be fun! When Dickinson was captain of the Carnival he warned about the cruise business becoming commoditized where the competition is based on price and brands are not clearly differentiated. [The act of making a process, good or service easy to obtain by making it as uniform, plentiful and affordable as possible.] Well that’s exactly what cruising has become. Each of the Carnival companies is competing with everyone else, including sister companies, basically going after anyone and everyone with disposable dollars. Many cruise lines have embraced the idea that a CEO is a CEO and it doesn’t make any difference if he or she knows anything about the particular product as long as they can hit the numbers. Clearly Micky Arison and Howard Frank realize that the problem is larger than just a horrible accident and a string of unfortunate situations.

“Because I’m not tied to any one brand, I have sort of a 30,000-foot look at it; I can be very, very objective,” said Dickinson, 70. “It may be difficult for a brand to say ‘Gee, I made a mistake’ or ‘Gosh, I should have seen that and I didn’t,’ or ‘Gosh, maybe this strategy was the wrong one.’”

While he acknowledged that “there will be egos involved, obviously,” Dickinson said his job will be simply to present solid facts and leave the action up to managers. “It’s not meant to be an adversarial effort, it’s meant to be a collaborative effort,” he said.

Retired Carnival Cruise Lines CEO back as consultant

The View from San Francisco

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Much as I love Panama, if I could afford it . . . California is California! Spectacular day on the Sonoma coast!

Much as I love Panama, if I could afford it . . . California is California! Spectacular day on the Sonoma coast!

Amazing! Here I am in the Bay Area visiting my daughter in Sonoma County coming face-to-face with the cost-of-living facts as a “typical” day of driving the coast in my daughter’s car with my only expense being gas and food running me $100! The SFGATE had an article from Kiplinger showing San Francisco as the 3rd most expensive city in the US. [#1 of course is NYC and #2 Honolulu] According to the article . . .

San Francisco

Cost of Living: 63.4% above average

City Population: 812,826

Median Household Income: $72,947

Median Home Value: $767,300

Living expenses in San Francisco can be as steep as the city’s famed hills. Housing costs, at nearly three times the national average, are the main culprit. The median value of a home in San Francisco is by far the highest on our list of expensive cities, beating out runner-up San Jose by a whopping $161,900. A typical apartment rents for $2,630 a month, triple the national average. One of the few bargains to be had in San Francisco: wine, which sells for 18% below the national average. Napa is just an hour north of the city. [And so, I might add is Occidental where my daughter lives.]

So here I am, hoping the fog lifts, reading SFGATE and what do I find? An article about Boquete!!

Latin America a hot spot for American retirees
By JUAN ZAMORANO, Associated Press

PANAMA CITY (AP) — With its miles of beaches, lush rainforests and welcoming colonial towns, Panama — like much of Latin America — has become a hot spot for American retirees. They come for the scenery, the weather and, perhaps more important, the low cost of living.

“We were looking for a simple, cheap life,” said Linda McKee, 61, of Bonita Springs, Fla., while enjoying a glass of wine with her husband, Eric Carlson, on the porch of their home in Boquete, a mountain town in western Panama where many U.S. retirees live. The couple moved to Panama six years ago after first trying Costa Rica.

International Living magazine, which for 30 years has published a ranking of the top 10 “havens” for retirees, included six Latin American countries in its most recent ranking, in December. Ecuador was No. 1, followed by Panama. Mexico was in fourth place, Costa Rica fifth, Uruguay sixth and Colombia seventh.

“Panama is safe, stable, and friendly,” the magazine said. “It boasts the best health care and infrastructure in Central America … Its wildlife is abundant, with most of the bird species in North America, and its pristine natural setting is an eco-tourist’s dream.”

U.S. retirees began arriving in droves to Latin America in the early 2000s, and the numbers have picked up since the U.S. economic crisis in 2008, tourism authorities said. As many as a million U.S. retirees live in Mexico, they said, and thousands in Ecuador, Costa Rica and Panama.

Panama’s government has worked to attract them, making it simpler to qualify for permanent residency. The only requirement is that foreign retirees receive a pension of at least $1,000 a month.

“With this, I can live here for an indefinite period. The process is very easy,” said Robert Braun, 67, of Lincoln, N.H. He said he came to Panama for the fishing, the weather and safety.

The U.S. dollar has been the local currency in Panama since it became an independent country in 1903, and there are dozens of banks that let foreigners manage their home accounts from here. Foreign retirees can bring in items valued at $10,000 or less tax free, and can bring in a car without having to pay taxes. Benefits include discounts of 25 percent on utility bills, and lower medical costs.

“U.S. retirees come because they see Panama as a place where they can have good quality of life and low living costs, a place that has everything,” said Ernesto Orillac, deputy administrator of the Panama Tourism Authority.

In Boquete, a high-end development project called Hidden Valley includes residences, a small hotel and a golf course. The town of about 20,000, in a region where a popular Panamanian coffee is grown, has a cool climate, with frequent light rain. When the skies clear, there are breathtaking views of green and blue mountains.

Town authorities estimate that about 3,000 retirees live in Boquete, mostly American. There are other communities of American retirees elsewhere in Panama, including near beaches.

McKee and Carlson, a 57-year-old former contractor, say they have never considered going back to the United States, although they do miss friends and family in Florida.

Between their pension and what they make working on a jungle conservation project in Rambala, about two hours from their home, they have enough to live comfortably.

“We like that people are very quiet and security is not a problem,” said McKee, whose son Daniel, 27, visits twice a year to surf on Panamanian beaches. “This is our new country, our new life.”

Renting their two-bedroom house in Boquete costs $550 per month. Dinner in a nice restaurant, with wine, usually costs about $30 for the two of them.

“It’s fun,” said Carlson with a wide smile.

As for medical care, there are several hospitals in David, a city about 45 minutes away by car. Panama City is less than an hour from there by plane.

Braun, who had an Internet business until he retired 14 years ago, first traveled to Nicaragua, where he lived for five years before heading to Panama. He lived for several years in the seaside resort of Pedasi, then in a village near the Panama Canal, and finally to Boquete, where he enjoys photography, hiking and bird watching.

“Here we can live with less than $1,500 a month and go at least once a week to dinner at nice restaurants, something that cannot be done in America,” he said.

Retirees also have easy access to healthy, organic food grown by local farmers. Every Tuesday, there is a farmers market, and McKee makes and sells soaps and creams made with coconut oil and lemon grass. Retirees cannot work in Panama, but they can have their own businesses.

“Everything is possible in Panama,” she said. [SF Gate]

10 Reasons to Retire in Panama

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I’ve had the pleasure to lunch with Bob Adams several times in Panama City along with the Panama Relocation Tour. Bob loves his life in the hustle and bustle of Panama City. He writes a great blog called Retirement Wave. Adams says,

Call it the “Baby Boom” or a “demographic explosion”, every day a wave of tens of millions of Americans and Europeans move one day closer to retirement. Retirement should be a stress-free period in our lives, but it has become stress-ridden. We worry that we won’t have enough money to take care of ourselves. We worry that we will be a burden on others in our society if there is not enough money to support our government’s social programs for retirees. We worry that if the social programs fail, we will be a burden to our children. We worry about being old in a world of terrorism, unable to protect ourselves. These are all fears that weigh heavily on us as we plan for retirement. Worse yet, they are fears we know we will continue to face once we are actually retired. This is much too negative for what should be a positive period in our lives. It could be positive if only there was a practical way to protect ourselves, avoid being a burden to others, and perhaps even make a small contribution to reducing global tensions. There is.

Bob, I, and many others have found a way to do that by retiring in Panama. Here’s Bob Adams “10 Reasons to Retire in Panama” . . .

Why retire in Panama? Here’s the short version based on my observations and experience following forty-five years of living and working all over the world.

1) It’s a democracy with freedom.

Freedom of the press, assembly, speech, and religion are all found here. Panamanians are not shy about sharing their feelings and their concerns. Elections are free, honest, and competitive.

2) There’s no military.

Following the dramatic end of General Noriega’s regime in 1989, Panamanians decided they would never again fear that a military general would become a dictator. They closed down the military. The national police force is just that, a police force, and the territorial integrity of Panama is guaranteed by the United States. They don’t need a military and they have the good sense to know it.

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3) They have the Panama Canal…and more.

The Panama Canal does far more than provide 10% of Panama’s GDP (Gross Domestic Product – the total economy). Unlike many small nations that depend on tourism or some natural resource whose price varies depending on the market, the Panama Canal provides Panama with a large, steady, dependable income and will continue to for years to come. It also provides thousands of well-paid jobs for Panamanians. A multi-year, $5.2 billion expansion of the Panama Canal currently underway will add thousands more jobs. These are jobs that pay a great deal more than picking coffee beans or waiting on tourists. And the money from Panama Canal fees reaches out to touch people and businesses everywhere in the country. But there is more than the Canal to Panama. Unlike many other Latin American nations, agriculture plays an important, but relatively small role in the economy. International banking, maritime services, manufacturing, and shipping combine to provide more jobs and tax revenue than the Panama Canal. Panama is also home to the second-largest free trade zone in the world (Hong Kong is the largest) which has had a dramatic impact on the economy, employing twice as many people as the Canal. Panama’s economy is far more modern and service-oriented than you might expect. This means stability not only for Panamanians, but for those of us who retire there.

4) Panama has a thriving middle class.

With the Panama Canal and a number of other established sources of income as mentioned above, Panama’s middle class is growing. As Americans and Europeans know from their own experience, a healthy middle class is the foundation for a stable economy and a secure democracy. You don’t have to search for the middle class in Panama, you can find them everywhere.

0145) Americans and Europeans are welcome.

I am struck by the fact that Americans and Europeans are not looked at with awe nor are they disliked. Another contribution of the Panama Canal has been the introduction of hundreds of thousands of people from all over the world to Panama over the years, including tens of thousands of Americans assigned to support the Canal before its turn-over to Panama in 1999. Panamanians are perfectly comfortable with people from other nations. They’ve lived with them for decades and many of their “visitors” remained to become residents. English is widely-understood and also spoken by many of those who deal regularly with expatriates, although many Panamanians are hesitant to speak it at first, for fear of embarrassment, as is so often the case in reverse! In that regard, Spanish language instruction is readily and inexpensively available.

6) The currency is the US dollar.

There are two benefits to this. For Americans and others with dollars, there is no need for currency exchange or to worry about exchange rates. The Panamanian Constitution forbids the government from printing paper currency. Thus a second benefit is that, unlike most nations, the Panamanian government cannot just turn on the printing presses when it wants more money. Panamanians have to earn their currency from the world market through hard work and intelligence. There is none of the wild inflation that has plagued so many Latin American nations.

OLYMPUS DIGITAL CAMERA7) The climate and surroundings are beautiful.

Panama is basically a mountain range bordered by beautiful Panama beaches. However, these are not cold, barren mountains. They are “soft”, rounded volcanic Panamanian mountains and the volcanic soil provides an excellent base for lush vegetation. If you prefer a tropical climate, you won’t be disappointed on either the Atlantic or Pacific coasts. If, like me, you prefer a more temperate climate with easy access to the Panama beaches (it’s almost impossible to be more than an hour’s drive from a Panama beach; 30 minutes is more common), move up the mountainside and you’ll find it. The flowers, trees, birds and other animal life are varied and many are strikingly beautiful. It’s what you would expect in that part of the world and Panamanians are doing a decent job of protecting their environment, far more so than many nearby nations. Eco-tourism is a growing industry in Panama and for good reason.

8) The cost of living in Panama can be much less than in the US or Europe.

How much you will save by living in Panama will be determined both by the amount you spend in your home nation and the lifestyle you choose in Panama. There’s such a great variety among expatriates that it’s impossible to tell you how much you’ll save, but if you have any desire to spend less, you will find it far easier in Panama than in North America or Europe. Folks from low-cost rural areas express astonishment at how much cheaper it is to live comfortably in Panama. Those from higher-cost urban areas will save less, but they seem to have one thing in common: they live comfortably, cut their expenses, and save money. It’s always been a reason to relocate to Panama and it remains a big one today, but the final result for you will depend on your lifestyle. Panama has room for a very wide range of tastes and lifestyles.

9) The people of Panama are just plain friendly and a pleasure to know.

The factors above and others unmentioned in this “short” description leave Panamanians among the most pleasant, relaxed people I’ve ever met. They are more cosmopolitan and sophisticated than many who live in wealthier nations as a result of their long-term exposure to a wide variety of international visitors and Canal users. There are poor people in Panama, but there is none of the grinding, desperate poverty that is so common in much of the world. I have worked in poorer nations all over the globe for more than four decades. There are poor people here, but nothing to compare to the grinding poverty found elsewhere. International financial institutions rank Panama in the “upper-middle income” category and that sums it up well.

Back Porch Palmira B10) If you want to retire, Panama wants you.

All of the above makes retiring in Panama an excellent choice for retirement, but here are some very direct incentives. As a pensionado [retiree] in Panama, you receive:

  • 50% discount at most recreational, movie, and sporting events
  • 30% discount off public transportation (including buses and ships)
  • 25% discount off Copa airline flights
  • 50% discount off hotel stays on weekdays (30% on weekends)
  • 25% discount at selected restaurants
  • 15% discount at fast food restaurants
  • 10% discount off prescription drugs
  • 20% discount on doctor’s visits
  • 15% discount on dental work
  • 25% discount on your electric bill (if less than $50)
  • 25% discount on your telephone and water bills.
  • In addition, you can bring in all your household goods free of taxes and import a new car every two years for private use.

All that is required to qualify as a pensionado is that you must be in good health, AIDS-free, have an up-to-date passport from your country of citizenship and a verifiable monthly pension income of at least $1000 per month for an individual, $1250 for a couple, plus $250 for each additional dependent, if any. Foreigners who become pensionados can buy and own Panama property and enjoy exactly the same rights and protections as Panamanians, not always the case in many nations and an important point people often forget to consider. As for income taxes, you will be pleased to know that in Panama you pay no taxes on income earned outside of Panama.

Panama is not paradise, no nation is. Panama is still a relatively young nation and has its growing pains, but it’s made a great deal of progress already and it’s headed in the right direction. For the rest of us who are not Panamanians, it is a nation where we can live comfortably for much less money and far less stress than we have come to expect in our own societies. Best of all, we are “good” immigrants. We save money living in Panama, but we also bring with us the money that creates jobs and opens possibilities for Panamanians they would not have otherwise. They know that and so we are genuinely welcome.

Many would say “beautiful”, but if I had to choose one word to describe Panama, it would be “comfortable”. In this crazy world full of fear of terrorism and fear of not having enough money to pay the bills, that’s a description of a good place to retire.

Boca Chica, Panama

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Casita Boca ChicaWhen I get back home to Panama (now finishing up a visit to the US), I will get back to work on converting the tiny casita on our property in Boca Chica into the “Greek Cottage” my wife dreams of . . . think Oia cottage in the tropics.  Although we’ve had this property for several years, this is the first opportunity I’ve had to actually get to work on things.

I like Boca Chica because it is on the water but for the most part undiscovered and undeveloped.  This of course will change, and is changing, but it remains a delightful, tropical slice of Panama.  And, unlike Pedasi which is a good 4-5 hours from Boquete, Boca Chica is just a 1.5 hour drive from our home in Boquete.

Two interesting hotels have recently opened in Boca Chica and another property has been renovated and upgraded.  All three hotels are aimed at different markets and are decidedly different from one another, and all are getting excellent reviews on-line.

Panama Big Game Fishing on Boca Brava island is right across the channel from our property. This fishing club has been around Boca Chica since we’ve been in Panama and was for sale for years.  Recently it was purchased by an English fellow who lives in Dubai and obviously has the deep pockets necessary to develop this property.  I am told by locals who know that he initially spent $5 million to upgrade the property and is planning to put another $3 million into improvements this year.  This is serious fishing!  The Chiriqui waters off Boca Chica have produced more world fishing records than any other place on earth!  This is serious fishing!  And serious luxury . . . A 7 night all-inclusive package at this time of year at Big Game Fishing, depending on the number of anglers, runs from $5,000 to $13,000 plus, of course, transportation to Panama.

 

Isla Palenque is an island just across from our property.  Although they call it an island, locals assure me that it is part of Boca Brava Island and that at low tide you can walk between Palenque and Boca Brava, but, at high tide it appears as an island.  This is a very high-end, very ecologically sensitive attempt by Amble Resorts and its owner, architect/developer Ben Loomis, to keep his 400 acres of the island wild and more or less in its natural state while creating 200 luxury homes and 80 luxury hotel rooms.  The hotel resort has just had a soft opening and is already getting rave reviews. A 7-night all inclusive package for two at this time of year (“Green Season” May-November) $3,000-4,300 per couple.

Loomis believes that . . .

“Isla Palenque is an unusual island with respect to its underlying aquifer: this natural water reserve is so large that our engineers estimate that we could actually meet all of our resort’s needs even without using any of the aforementioned conservation techniques. Our use of the techniques come more from wanting to save the energy associated with pumping the water out of the ground than from a dearth of on-site water.

Think of the island as one large 400-acre rainwater-harvesting system itself. Because of our low-density development, large nature preserve, and method of treating wastewater, we help to keep our aquifer clean and protected. And as long as we preserve and protect this aquifer, our needs for man-made water harvesting solutions will remain minimal.” [Read more . . .]

This is interesting to me because I’m currently drilling a well into that same (?) aquifer, and talking with other resort owners on Boca Brava about their problems in running out of water this season, to the extent that some have had to turn away guests because they had no water.  I hope Loomis is right!

I applaud Loomis’ decision to preserve the natural environment as much as possible.  From the water you can hardly see the hotel because they have preserved every tree possible.  In contrast to that is Bocas del Mar Resort in Boca Chica.

Bocas del Mar is a beautiful resort that’s getting rave reviews and is located right around the bend from my property with a similar view, almost as nice as mine, but without my beachfront.  Their white cottages actually give the area a Greek-island-look which works well with my design theme, however, it seems that their chain saws run constantly cutting down as many trees as possible to improve views.  Locals tell me they paid $15,000 to ANAM, the Panama national environmental protection agency, to cut down trees.  Locals disparagingly say that the ANAM folks are just in it for the money and really don’t care about the trees.  I don’t know, but I do know that the chain saws always seem to be cutting when I’m working on my casita.  At any rate, it IS a beautiful resort.  Although I haven’t had opportunity to try the restaurant, it gets great reviews on Trip Advisor and the off-season rate of $139 a night is hard to beat..

One of the great things about Boca Chica is it’s proximity to the Chiriqui Pacific islands and the Gulf of Chiriqui Marine National Park.  I found this great map on ExploreBocaChica.com.