Zurich, Switzerland
Published on 13/12/2009 in the newspaper Tages Anzeiger
The financial and economic crisis caused great damages around the world. But this was not the case in Panama. We owe that to the Canal that exactly 10 years ago was returned to Panama.
While thousands of jobs are lost and poverty levels and social tensions grow in Central America, Panama has kept its domestic economy shielded from the crisis.
The main reason is the strategic geographical position of the country as the narrowest part of the American continent. The Canal, built over 100 years ago between the Pacific and Atlantic Oceans, is the driving force and principal source of Panama’s economic wonder, providing the State even in times of crisis, continuous revenue.
Hundreds of skyscrapers
On December 31, 1999, the United States of America transferred to Panama, in agreement with a treaty, the administration of the Panama Canal; the last American soldiers and administrative staff abandoned Panamanian soil. Until then, the Canal Zone, administrated by the Americans, kept the country divided in two.
Since the transferred of the Canal, Panama’s luck has been going up. Panama City is experiencing an almost uninterrupted boom. “The economic crisis has left here only a small dent”, a foreign expert says.
Meanwhile, hundreds of skyscrapers rise above the city located on the shores of the Pacific. Many buildings are home to banks – Panama has suffered the bankruptcy of no financial institution. Followed by a short halt at the beginning of the year, the construction industry has restarted with new force, and is back to the levels before the crisis.
Global logistics center
The best way to measure recovery is also the Canal through which 300,000 million tons of cargo is moved every year. According to the Head of the Canal Authority Alberto Aleman Zubieta, by mid-year Canal transits had increased again. Cargo volumes increased noticeably too.
“Panama has become a logistics center for the world through which 400 million containers are moved annually”, says Aleman, who has been the Head of the Canal Authority since its transfer by the Americans. In 1995, there were only 200 million containers. In the years to come, it is expected that volumes will continue to grow.
And this is so because the expansion of this important waterway 81.6 km long, the product of an investment in the billions of dollars, is in full gear. At present, the decision is being made on the concession of the last large bid within this singular project of 5.200 million dollars. Just on the Pacific side, 27 million cubic meters of land are being moved with machines that to perform this task require 6 million liters of diesel fuel.
By 2015, cargo ships with 12,000 containers on board may transit the 80 km from Panama City to Colon City on the Atlantic. Until now, ships could carry close to 4,000 containers. Before as now, dozens of ships sit on both entrances to the Canal, sometimes having to wait several days to make the expensive transit.
Martinelli guarantees economic liberalism
Warrantor of the neo-liberal economic course in Panama is the conservative Administration under the leadership of businessman Ricardo Martinelli, who was once a member of the administration council of the Canal. Martinelli took over a government with a leftist inclination at the beginning of the year from Martin Torrijos, also putting a stop to a leftist trend in Latin America.
Martinelli, the founder and owner of the largest supermarket chain in Panama, has not hidden either his position, critical of the XXI century socialist posture of Venezuelan President Hugo Chavez. He has even caused diplomatic frictions when the Panamanian government forbade Venezuelans from advertising the leftist policies of Chavez.
Right wing social policy
Even during the electoral campaign, Martinelli had already declared the recipe of the Venezuelan man for Latin America as the “wrong path” and characterized Chavez as the “opposite model” of a “right wing social policy”.
There are in Panama also, large segments of the population living under the poverty line. However, while in other countries of the region social disturbances have to be dealt with regularly, in Panama, thanks to economic success and social policy, the country has remain peaceful.
An investment program that as promised by Martinelli will reach twelve billion dollars, exceeding the more than five billion destined to the Canal expansion, promises an environment of continuous economic growth. This investment is intended to finance the construction of houses, streets and other infrastructure projects.