Panama: More Than Just the Canal
What can foreigners do in Panama? “Live. Do Business. Retire.” That was the message of Karla Gonzalez, deputy chief of mission at the Embassy of Panama in the United States, to an audience at the McDonough School of Business on February 27. The event was part of the Global Embassy Series.
A Place For Economic Opportunities—And Retirees
Panama is best known for the Panama Canal, the 77 kilometer (48 mile) waterway connecting the Atlantic and Pacific Oceans, and serving as one of the major players in international maritime trade. But Panama offers more than just its global trading ties. The dollarized economy and level of English spoken by the locals contribute to its success in the region, which may be why it is the third most popular retirement destination for Americans after Florida and North Carolina. According to the World Economic Forum, the country has the best infrastructure of any nation in Latin America; Panama was also the first Latin American country to introduce a metropolitan railway system. For these reasons, it is easy to see why retirees and business people alike flock to Panama.
Panama As The Next Great South American Business Hub
Multinational companies have already started to show a great interest in Panama. Firms like Procter & Gamble, 3M, and BMW are among the 120 global corporations with corporate management offices located in Panama. Foreign direct investment grew 17 percent between 2014 and 2015, highlighting extensive business expansion within the country.
Georgetown recognizes the value of maintaining a presence in Panama as well. For example, the Global Competitive Leadership Program has implemented several projects and initiatives in Panama. Additionally, Georgetown alumnus Samuel Lewis Navarro, former first vice president and foreign minister of Panama, chairs the university's Latin American Board (LAB). The LAB advises university leadership and develops key initiatives across the region, including the Global Competitiveness Leadership Program, which supports young Latin American leaders. Georgetown also funded a social entrepreneurship project based on the strengths and needs of the Panama community focused on providing additional income to community partners.
Maintaining Its Foothold On Investments And Trade
Panama works to ensure the economic diversification of sectors. While there are massive investments in certain fields such as renewable energy, the government intentionally keeps investment below 20 percent for any one sector. This sound business strategy has sustained the country’s investment grade. Not only that, but the government is keen to maintain its position as a global trade giant.
According to Gonzalez, Panama’s trade agreements give the country access to over 60 markets and 1.3 billion consumers worldwide. Nestled in the middle of Central America between Costa Rica and Colombia, Panama also benefits from its geographical connection to both North and South America.
During the event, an attendee asked whether Panama felt threatened by the imminent infrastructure projects of Venezuela, but given Panama’s location, Gonzalez believed that it will be a long time before Venezuela’s efforts could allow them to catch up.
The Challenges Ahead
When asked about the challenges Panama faces, Gonzalez’s answers were primarily centered around security. The Tocumen Airport in Panama City shuttles 13.4 million passengers per year despite the country’s population of four million people. In response to global concerns, Panama equipped its airports with state-of-the-art technologies such as facial recognition, a tool that Gonzalez said the country expects to expand in the future. She also shared that the recent Panama Papers scandal may have marred Panama’s reputation throughout the global arena. However, she was confident that this scandal prompted Panama to lead the discussion around financial transparency of governments—a point of pride for the country.
The Significance For Future Leaders
Kelly Bies (MBA’18), attended the event as part of the MBA Certificate in Non-Market Strategy Program. “I learned about the complexity of how legislation, particularly Panama's investment stability law, can either promote or hinder business, and how intertwined market and non-market forces truly are.” Bies acknowledged that Panama's non-market forces have fueled Panama as a great connection for the world and incentivized significant foreign investment and spurred great economic and infrastructure growth. Bies felt that the event was invaluable to her learning and growth at Georgetown: “We as future leaders should learn and reflect on these important issues as we enter global businesses."