Panama State of Affairs - 2009
(thepanamareport.com) 2008 for Panama was a record-setting year: real estate sales skyrocketed, tourism soared, the economy grew by unparalleled levels. Oppositely, 2008 brought some negative press such as a heightened corruption rating, increased poverty, and a near-busting real estate boom in the City. However, many experts were surprised to see most of Panama's industries with their nose above water in a time elsewhere in the world that many sectors had drowned with the surrounding crises.
As mentioned in several earlier pieces, I predict 2009 to be the ultimate breaking point for Panama in many ways. It will be a year Panama's resources, wit, tact, and vision will be tested from all angles. With the upcoming election throwing an additional wrench into the mix, 2009 will be Panama's make or break year: here are my predictions as to what side of the fence several important success indicators will fall.
1. Until now, the focus of Panama has been a myriad of things: the Canal, real estate, tourism, off shore laws. But in 2009, there will be no bigger spotlight hog than the banks whose funding, or perhaps more accurately lack of funding, will take center stage. Banks will become extremely tight on loans and thus drastically reduce the amount of available credit in Panama: a change that will have serious consequences considering previously, the ease of working with banks in Panama was one of the Republic's biggest draws.
2. Panama will attract more laundered money to temper its impending credit storm. There have been a number of steps in the direction of abolishing money laundering in Panama and many have shown success. However, with the imminent credit and real estate crisis, Panama's lawmakers, movers and shakers may find themselves in a bind and open the window for illegitimate funds once again as accepting dirty money may be the only way to keep some projects afloat.
3. So you think traffic is bad now? In 2009, traffic in Panama City will become intolerable. For the first time in its history, traffic in the nation's capital will surpass the annoying and border on suffocating. Because of infrastructure projects, the government will be forced to temporarily shut down major traffic points such as Avenida Balboa in front of Multi Centro and key intersections like Via Brazil/Transcismica causing deadlock scenarios. This will create such congestion in the City that, for the first time, it will surface as a true cause for concern and not just "something you deal with."
4. Thanks in no part to government assistance, Panama will make environmental strides in 2009. From local entrepreneurs incurring extra costs to "go green" to foreigners who realize the importance of cleanliness and nature, Panama's interior will be dotted with preservation efforts in 2009, including a movement South of those who have been priced out of already eco-proven Costa Rica.
5. Panama made the headlines in 2008 with it's poverty level equalling somewhere around 30% which furthered the large income gap already alive in this developing nation. In 2009, the schooling and education of Panama's youth will emerge as an extremely important tropic for the nation's growth. Teachers and school systems will need to extend their learning about kids with special needs and exceptionalities in order to truly become a world investment and travel hotspot.
6. In an effort to cater to the economic crisis, Panama's real estate players will adopt the motto less is more; meaning less square footage and less expensive price tags means more sales. Buyers the world over, and especially in Panama, will be looking for quality over quantity. Amenities like five star kitchens and in-home spas will take the place of once-revered magnitude, and craftsmanship and energy efficiency will take center stage in continuing to draw buyers to Panama as opposed to other burgeoning destinations.
7. Competition for travelers, specifically high-end travelers, will heighten in 2009 and Panama's tourism board will realize that both value and comparison shopping has gone the way of the internet: meaning that instead of just blindly buying media spots, a budget for internet marketing will be designated in an attempt to capture the now-highly-competitive market sector. Similarly, a handful of new eco tour companies will arrive on the scene and do well in 2009 tapping into Panama's wondrous natural resources, until this point, unexposed.
8. Many sellers don't realize it yet and still exhibit greed in their demands (asking far too much for their property). But 2009 will present a "reality check" phase in which distressed real estate will be the name of the game, with sellers not only happy to sell for the amount they first bought at, but even willing to take a hit, to cut their loses so to say, and just pull out all together. Vulture funds will also arrive to the scene in 2009, snatching up lumps of real estate for desperately low figures. Growing too big, too fast will become Panama's top concern and the nation's "fear of failure" will emerge as its biggest flaw.
9. The rental market in Panama City will see serious re-adjustments. No one really knows where it came from, but renting an economic (or reasonably priced) apartment in Panama City became really difficult in 2008. Due to a number of factors, 2009 will see hoards of new apartments added to the mix and once again, not unlike the scenario before 2007, great apartments in Panama's best neighborhoods will be available for reasonable monthly rates. This will attract young professionals who are dealing with unemployment/economic issues elsewhere in the world, as a less expensive option for relocation as well as bolster Panama's place on the retirement map.
Note: The majority of these predictions revolve around Panama City as that is where most of the nation's big news is made. But if you happen to live in an outlying region, perhaps Bocas or Boquete or somewhere in the Azuero Peninsula, please use the comment section below to contribute your predictions for 2009 - how will Panama handle the pressure?
