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Digicel Panama and Claro Panama were both awarded licenses by the government of Panama to create new cell phone networks in the country. Digicel’s $83 million bid beat out rival cellular provider Claro’s $73 million bid, which was raised at the request of Panama’s government to match Digicel’s bid for the license. The two new cell phone companies will double the options for consumers in Panama, joining the current Cable and Wireless and Movistar Panama. The new cell phone companies will increase the competitiveness of the market in Panama, and aim to fill the gap of the nearly 800,000 Panama residents without cellular phones. Digicel, which is owned by wealthy Irish businessman Denis O’Brien, is expected to have their operations running by the end of the year.

Source:

Panama sells Claro, Digicel mobile licenses (Reuters.com)

As I mentioned in a post last month, Panama City’s historic district, Casco Antiguo (also known as Casco Viejo), has become one of the hottest places to buy property in the city. I came across a nice site today that allows you to take a virtual tour of the Casco, and visit some of the landmarks of the area. The tour takes you to the magnificent Plaza Catedral, the stately Presidency, around Plaza Bolivar, and inside the Teatro Nacional. Arcos Property, a real estate brokerage that focuses on historic properties in Panama City, also has maps and photographs of the Casco on their site, including an interactive map that locates renovated properties in the area.

Casco Antiguo is a fascinating historic neighborhood, and internationally recognized by UNESCO as a world heritage site

In addition to the interactive tours and maps of Casco Antiguo, Arcos also publishes a Casco Viejo blog that discusses living in and around the Casco. The blog has interesting tidbits of information about the neighborhood, including links to some fantastic photographs. One post of particular interest to real estate investors details a few things potential buyers should consider before purchasing property in the Casco.

Casco Antiguo is a fascinating historic neighborhood, and internationally recognized by UNESCO as a world heritage site. For more information and a history of the area, be sure to check out their site.

An overhead view of Casco Antiguo (from Wikipedia)

Mr. Taliaferro’s Panama Investor Blog is one of the more established and trustworthy real estate investment blogs on Panama. The blog is updated daily with the latest news on politics, economics and business, as well as with updates on upcoming real estate development projects across the country. The author often paraphrases interesting articles from Spanish language newspapers, such as La Prensa, which can be very helpful for English speaking readers. His posts are informative, diverse, and a great resource for anyone interested in making a real estate investment in Panama.

According to his site, Sam Taliaferro is an American expatriate and real estate developer whose Valle Escondido was one of the earliest and most successful residential resort communities in Boquete, Panama. His development has attracted the likes of Sean Connery and Mel Gibson, whom he reportedly had the opportunity to play poker with.

The articles Mr. Taliaferro reviews are great resources on Panama investment news, and his site is one of the best out there for Panama real estate investors.

While many of the posts on the Panama Investor Blog are brief overviews of news articles, Mr. Taliferro’s breadth and experience tends to comes out the most in his opinion articles. Unsurprisingly (given the Mises Institute and Ayn Rand links on his site), the author has a bit of a libertarian bias in his writing style. Fortunately Mr. Taliaferro does a good job at keeping of keeping his posts relatively balanced, and the political flavor of his them often gives the blog a much more personal flavor. Regardless of your political beliefs the articles Mr. Taliaferro reviews are great resources on Panama investment news, and his site is one of the best out there for Panama real estate investors.

While meeting with Panama President Martin Torrijos on Tuesday, President Bush promised that his administration would “do everything in our capacity” to move the trade bill with Panama forward.  Bush also commended Torrijos on continuing work on the Panama Canal expansion, which he said would be mutually beneficial for both nations.  In addition to this he urged Congress to include an aid package to Central American countries such as Panama to help fight drug trafficking in the region.  President Bush has been voicing his support of several free trade agreements, the most notable being with Colombia, as well as an agreement in the works with South Korea.

The free trade agreement between Panama and the United States was drafted in 2007, and initially had more bipartisan support than the controversial trade agreement between the US and Colombia.  The bill stalled in Congress when Pedro Miguel Gonzalez, a man wanted in the US for killing an American soldier, was elected head of Panama’s National Assembly.  Fortunately for parties interested in moving the trade agreement forward, Mr. Gonzalez recently stated that he would not be seeking reelection later this year.

Despite President Bush’s comments, it is unlikely that a free trade agreement will be passed in Congress before the end of his term.  To start, the bill wouldn’t be considered until after Mr. Gonzalez has stepped down as the head of the National Assembly.  Once this happens it is unlikely that Congress would act immediately, especially as the United States presidential election nears.  Many prominent Democrats are likely to be hesitant to support free trade agreements at this time, as the weakened dollar has many Americans concerned about job security.  While President Bush may say that his administration will do everything possible to move forward on the free trade agreement with Panama, it remains doubtful that the lame duck president will have any success.

Sources:

Bush Vows To Help Panama Clinch US Free Trade Agreement (Nasdaq.com)

A Man, A Plan, A Free Trade Agreement (Politico.com)

A report yesterday showed that Panama City has the second highest hotel occupancy rate of any city outside of the United States. Panama, which had a hotel occupancy rate of 84.7 percent, was topped only by Perth, Australia. The report states that global tourism grew at a pace of 6 percent in 2007, partly due to the increase of discount and low budget airlines.

The hotel occupancy index, which is published by Deloitte, commends Panama City as being the first Latin American city to be featured on the list. The report states that tourism in Panama increased 27 percent in 2007, much higher than the expected 15 percent increase. In addition to this, Panama City showed an impressive 37.9 percent increase in revenue per available hotel room.

Even with the global economy on the rocks, it appears as though Panama is one of the strongest locations for tourism in the Americas. Tourists from Europe and Asia are likely to take advantage of the weakened dollar and visit Panama, which has been building its reputation as a safe and easily accessible destination. It is for these reasons that Panama City is likely to retain one of the highest hotel occupancy rates outside of the United States.

Read the report from Deloitte (.pdf)

Source:

Australia’s Perth Has The Highest Hotel Occupancy Outside US (Bloomberg.com)

According to a White House press release, Torrijos will be meeting with United States President George W. Bush on Tuesday, May 6th.  The two are likely to discuss free trade agreements, globalization, strengthening democracy throughout the region, and increasing security cooperation between the two nations.  Torrijos’ visit to the White House comes shortly after visiting with the President of Cuba, Raul Castro.

Read the statement from the White House here.

In a report published in February, the American Chamber of Commerce and Industry of Panama outlined ten reasons for growth in Panama in 2008. Here are a few of the driving factors for growth in Panama this year as described in the report:

  • The Panama Canal expansion has started and will ultimately bring investment dollars into the country.
  • Economic growth in Latin America will make Colon Free Zone an even more critical transfer point of goods between Asia and Central and South America.
  • This increase in trade is fueling growth in the major ports on both sides of the canal, which have seen an higher rates of port related construction.
  • The expansion of the ports will continue to provide opportunities for growth in the office and housing construction industries, which is also being helped out by the increase in North American baby boomers retirees relocating to Panama.
  • The tourism and eco-tourism industries have grown rapidly, as many high end hotels in Panama City are often at 100% capacity.
  • The telecommunications industry grew 17% in the last quarter of 2007, and has been building an infrastructure of state of the art fiber optic cable networks.

The report does outline a few negative points in the economy, including the fact that the rapid growth in 2007 and boom in the real estate and construction industry has put huge strain on Panama’s infrastructure. Yet these reasons for growth in Panama in 2008 remain compelling, despite the evidence of an economic slowdown in Panama’s GDP this year.

Visit the PanamCham website to read the entire list, or click here for a direct link to the .pdf file.

Richard Detrich’s blog provides an interesting look at the American expatriate life in Panama, specifically living in Boquete. After scouring the internet for interesting blogs on Panama, Mr. Detrich’s blog is a refreshingly honest look at life in Panama, amid a veritable wasteland of commercial and spam filled sites. According to his site, Mr. Detrich is an ordained minister and retired businessman who relocated to Panama with his wife. He often writes about his day to day experiences living in Boquete, as well as his experience owning and operating a small shade coffee plantation in the mountains. His blog is varied and eclectic, with posts on Panama politics and history, photographs of wild orchids, and stories of gruesome battles between spiders and scorpions in his laundry room.

For anyone interested in buying property, building a house in Boquete, or is looking for advice on investing in Panamanian coffee, Mr. Detrich’s Boquete Blog is a valuable resource.

Reading Mr. Detrich’s blog is especially useful for investors interested in Boquete, but also provides general insight for real estate investments elsewhere in Panama. One particularly useful page on his site is an extensive Q&A section that answers many questions people may have about buying property and living in Panama. Some of the questions addressed include “how isolated is Boquete from the rest of the world?”, “Are foreigners allowed to own property?”, and “how is banking in Panama different than in the United States?” For anyone interested in buying property, building a house in Boquete, or is looking for advice on investing in Panamanian coffee, Mr. Detrich’s Boquete Blog is a valuable resource.

Panamanian President Martin Torrijos has stated that the major expansion to the Panama Canal is currently on schedule. The President said yesterday that the Canal Authority is still looking at options for financing nearly $2.5 billion of the project, but that the contract to build the new lock system will be announced by the end of 2008. Companies currently bidding for the locks contract include Bilfinger Berger AG of Germany, Empresas ICA SAB of Mexico, Mitsubishi Corp in Japan, and the American firm Bechtel Group Inc.

The President also stated yesterday that nearly 283,000 Panamanians had applied to work on the canal expansion, accounting for nearly 12% of the nation’s workforce. It is estimated that 7,000 jobs will be created in the construction of the project, and that an additional 40,000 will be created to support related industries. Reassurance from Torrijos that the canal expansion project is on schedule is good news for Panama, especially with the current economic slowdown and problems with lending institutions in the United States.

Source:
Panama Canal Expansion Is On Schedule, Torrijos Says (Bloomberg.com)

An article in Forbes today stated that the economic losses in the United States are proving to be a major gain for Panama.  Many investors that lost out in the real estate bust in Florida are now looking to Panama as a viable investment alternative.  The article cites several reasons that Panama has become especially sought after, including a high quality of life and comparatively low crime rate.  The article states that “two maids and a driver in Panama cost you $1,000 a month,” and that many people are moving to Panama from other Latin American countries to escape the threat of being kidnapped or burglarized.  In addition to this, Panama has also become a popular tourist destination as it is significantly cheaper and easier to obtain a visa for entry to Panama than it is for the United States.  For tourists interested in spending a weekend shopping internationally, this can be a deal breaker when deciding where to go.  For these reasons Forbes claims that the economic loss in the United States is a gain for Panama.

Source:
America’s Loss, Panama’s Gain (Forbes.com)

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