By Dr Ian Collard, British Ambassador to Panama
In recent years, while Europe has been struggling with the impact of an economic downturn, the economies of Latin America have bucked global trends and exceeded expectations.
High rates of economic growth, substantial infrastructure development and the emergence of the Pacific Alliance are evidence of Latin America’s new role in a changing world economy.
Panama – tagged by many as the Central American Tiger – has led the region’s economic performance for the last decade, with an extraordinary annual growth rate averaging around 8%.
Panama is the region’s emerging logistics hub with an unrivalled distribution network and connectivity, representing an easy and business-friendly entry point into wider regional markets.
With World Economic Forum indicators ranking Panama fourth in the world for the quality of its port facilities, first in Latin America for its air transport facilities, and first in the western hemisphere for the availability of its financial services, it is difficult to argue against its self-declared moniker as a gateway to the Americas.
Panama also has the largest public infrastructure programme in Central America. Mega projects include the expansion of the Panama Canal, development of Panama City’s Metro system, and development over several years of new logistics and port facilities.
Construction of an additional container port on the Pacific coast, a logistics park at the Pacific end of the Canal, container-on-barge services across the Canal, and a LNG bunkering station are some of the additional projects mooted.
It is little wonder that UKTI has added such projects to its list of global High Value Opportunities for British businesses.
Many of these endeavours will strengthen Panama’s logistics capacity, reinforcing its important geostrategic position in world trade and regional distribution, and enhancing its offer as a one-stop location for value-adding services.
Panama has a key role facilitating trade across the region, connecting north and south, providing a natural hub for commerce, and acting as a magnet for investment. Panama’s banking centre is home to 65 Latin American institutions, competing with Miami to be the regional financial centre of the Americas.
More than 100 multinational companies have established their regional and logistical headquarters in Panama, taking advantage of its communications, maritime and air links, and the tax incentives on offer.
In Colon, Panama has the second largest free trade zone in the world after Hong Kong, providing a home to more than 2,500 companies and handling more than $30bn in imports and re-exports from all corners of the world each year. As an increasingly popular regional distribution base, Panama has also become the shopping capital of the region for tourists and business visitors. In its highly diversified economy, retail accounted for as much as 14% of GDP in 2012.
The indicators are already positive. With Panama’s ambition to join forces with the other Pacific
Alliance countries, Panama’s economic and commercial future looks even brighter.
The signing of a Free Trade Agreement with Mexico earlier this year was the last technical hurdle to Alliance membership. As a bloc, Alliance countries represent the second largest user of the Panama Canal, reinforcing the importance of Panama at the centre of the group’s trade strategy with Europe, the Caribbean and the eastern seaboard of the United States.
Panama is booming and it is open for business. I am confident that this country and the wider region will continue to grow, and will provide exciting new opportunities for UK businesses. I encourage you to read on and discover more about this fascinating and vibrant region. [GlobalTrader]