Click to enlargeHype and buzz have played a big role in Panama's reputation to date as an investment hotspot, retirement haven, and travel boutique. But now, with its main foreigner-focused industries facing the realities of the world economy, a new type is noise is drawing people near. It's the relocation bug, based around the allure that you can still today live, work, and invest in an environment that, well...doesn't suck. Amidst all this hype, we decided to demystify several of the main concerns people tend to mull over when considering a new place to live during times of crisis. In the time of the Great Depression, escaping the hard times wasn't as easy as a $300 flight to the tropics...
The economy seems to be the talk of the town almost everywhere in the world, but not for the sunniest of reasons. In tropical Panama, with the start of 2009 (its summer season), everything is on the bright side: the economy grew enormously, tourism numbers are through the roof, the real estate market is still active, unemployment is low, and government works projects are in full swing. I can't really think of a more anomaly-like destination in today's stormy seas than sunny Panama. As you might imagine, the sturdy economy injects positivity into all facets of life, just as unstable economies have opposite effects.
According to NationMaster.com, Panama's terrorism indicator is a 1 (with the likes of Sweden and Canada), considered of relatively little risk. It's not a subject you hear about too often in Panama, though the prospects in today's world of ubiquitous threats, Panama does seem to have a number vulnerable points, among them it's offshore banking laws (and Colon Free Zone) which act as a magnets for money launderers and illicit financiers. Panama's infamous coast with Colombia occasionally reports FARC guerillas but the incidents are isolated. And while the Canal Authority does practice counter-terrorism exercises (the intelligence here is top secret), I can tell you that gaining un-obstructed access (as I have done, not for malicious purposes of course) to the locks, Gatun Lake, and physical tugboats that transit the Canal is relatively open. A report by the UN Refugee Agency, said Panama worked "closely with the U.S. Department of Homeland Security to sign a Container Security Initiative agreement and to launch its activities, beginning with two operational scanners at two ports."
Energy in Panama is relatively expensive compared to the United States, a stat that can be exacerbated by the need of foreigners to use things like air conditioning year-round (though tourists recognize this less, as they are rarely faced with electricity bills). There is very little initiative for alternate energy sources in Panama and some of the only businesses that run on solar panels install the technology at their own expense.
According to the Nations Encyclopedia, "In 1992-93, new legislation created Petroleum Free Zones (PFZs) to take advantage of Panama's location as a transshipment location for crude oil and petroleum products. The PFZs allow crude oil to be imported tax-free and then stored, pumped, transferred, distributed, sold, and refined for subsequent export." As a result, several oil refineries have sprouted on Panama's coasts. In contrast to the global Green Movement, very few projects have been initiated by Panama's Ministry of Health and Education: the government provides little subsidies for green technology (wind, hydro, solar...etc) nor does it alleviate taxes on the importation of such equipment. This will pose problems for foreigners looking to help out the environment, not ignore it.
Medical services in Panama are significantly cheaper than in the US, with one of the most convenient features being the ability to show up at a clinic and get treated by a practiced doctor on the spot (few waiting lines, appointments...etc). There are both impressive and not-so-impressive hospitals available to foreigners, though English is not widely spoken at many of them, which can bring up communication issues uncomfortable to medical procedures. Panama City is home to a Johns Hopkins affiliate hospital (the only of its kind outside the USA), a great comfort and resource to foreigners. The medical tourism industry in Panama is also said to be expanding with a number of companies linking up with hospitals to offer package deals that capitalize on reasonably priced quality procedures.
Both poverty and crime are rising in Panama, with petty theft and more significant offenses branching out from ghetto areas into main street. Tourists are increasingly targets, however the numbers are still comparatively low next to that of neighboring Costa Rica. Experts believe that a rise in tourism will mirror a rise in crime, though the widening income gap is another serious cause for concern. Much of Panama's crime is also attributed to Colombian immigrants, who enter the country more freely than most other foreign nationals. Panama, as an increasingly primary transshipment point for drugs, has seen a number of drug-related murders and seizures: its coastlines are frequented by Colombian drug runners and abandoned drug shipments show up regularly on Panama's shores. That being said, Panama's crime numbers still pale in comparison to many of its neighbors and even compared to most major capitals in the USA.
The few times I've been in the States over the past months, moral seems to be at an all time low. People talk of losing jobs and savings with more doubt and concern than I can ever remember: the bleak outlook has a way of weighing on people. In Panama, there's almost the opposite vibe: one of optimism and excitement and innovation. The majority of people in Panama realize the country is in a period of widespread growth, which equates to prosperous times, which means happy people (not that Panamanians have ever been unhappy).
In addition to the already patriotic and content nationals here, foreigners still seem to be on the up and up and there's very little buzz of job loss or economic woes. Some are relocating to Panama to escape the recession; others are just visiting in an effort to pass the downtime. Much of the world's population is on the ropes right now, but Panama's moral, no matter who you ask, is strong.
That being said, while the isthmus is blessed with one of the most remarkable and biologically diverse environments in the region, there is little government protection to keep it that way. Most developed areas exhibit little to no enforced environmental laws, nor are many of Panama's national park areas manned with guides, visitor centers, or properly-marked trails. Still, Panama's rainforests, beaches, islands, and rivers flourish due to the fact that they're largely untouched; with inexpensive eco-experiences, a giant allure for recession travelers. The Smithsonian Institute has several strategic offices in Panama, including one located in the middle of the Panama Canal - a virtual biological wonderland as the junction of the Pacific and the Atlantic Oceans. Outside of the Republic's tourism marketing efforts, whether its government will back up their eco-hype with true legal ramifications remains to be seen.
Immigration laws in Panama seem to change with the wind, an unreliable thorn for visiting foreigners looking to relocate. Tourist visas, which are quite simple and inexpensive to obtain, change requirements so often it's hard to keep track. Investor visas too, as well as work visas have changed considerably in the past few years: from a once-straightforward and easy process to a more complicated one. Immigration offices in Panama City are a nightmare to visit, though offices outside the City, like in David for example, offer shorter lines and less of an overall animal house atmosphere. Many foreigners hire lawyers to do the bulk of their immigration paperwork, the services of whom are significantly less expensive than abroad. Similarly, for smaller paperwork, messengers in Panama City can be hired for as little as $8-$10/hour.
Trade has always been Panama's bread and butter and continues to be the foundation of its large-scale growth. The Panama Canal, although some ships are now opting to bypass its hefty fares choosing instead to navigate around the Cape, is expanding to accommodate more traffic. And while trade throughout the world is down significantly, most economists believe the Canal's revenue is still profound enough to sustain its country: some critics have their doubts.
It's a phrase you hear a lot, the "cosmopolitan" capital of Panama City, and in relative terms, Panama City is arguably the most developed capital in Central America. Travelers and relocators love the fact that it acts as a strategic jumping-off point to much of South America, Central America and the Caribbean. Yet the overwhelming feeling to many world travelers is that Panama's still eons behind most of the world's great globalized capitals.
That the country as a whole is still termed a developing nation gives credence to high corruption levels, wide income gap, and high poverty rate. However, certain opposite facets like banking, government works projects, trade sector, and natural resources would suggest otherwise. By definition, the country of Panama does in fact operate at an international level, however it's social institutions have not quite become adopted on a global scale. That being said, most visitors find this flaw tolerable.
Panama may not be the perfect relocation destination people flag it to be, but it certainly offers a number of refreshing breathers from an otherwise bleak and dreary outlook abroad. There are a lot of attractive qualities paired with some less-than-glamorous ones: pros and cons that exist in any city, but that seem to work out for the best in Panama. In the end, if good year-round weather, happy people, and a reasonable cost of living (if you so choose to seek it out) isn't enough to cure your recession woes, then the financial crisis may be the last of your worries.
