By Patrick Connelly
Standing on my hotel roof in downtown Panama City last year I counted the number of skyscrapers being built within the tiny sliver of the skyline that I could see. The skeletal steel frames jetted skyward with huge cranes flanking, giving the appearance of some apocalyptic coral reef. I counted seventeen towers being constructed, an amazing number considering I could only see a fraction of the city.
Panama is booming, growing at a rate few Panamanians have ever experienced. At any given time, around four hundred construction projects are under way in the capital alone. Money is flowing in from all over the world in various sectors such as banking, energy, tourism, and, of course, real estate.
And at the center of this boom is the $5.5 billion canal expansion. Slated for completion in 2015, the project will double the canal’s ship traffic capacity as well as allow for the modern super-ships to pass through, which many are unable to do with the current depth and width of the locks. Panamanians are insanely proud of the massive project, and eagerly await an opportunity to discuss their canal expansion and the direction Panama as a whole is headed towards.
The banking industry has benefited greatly from these strong economic times. In 2007 Panamanian banks reported a 20% increase in profits from the year before; similarly, credit is expanding at record rates, between 15 and 20%. As North American and Europe face increasing budget deficits, economic growth hit a record high in Panama in 2007 (11.5%) and remained strong at 9.2% in 2008.
Even though it was started prior to the 2008 global economic crisis, analysts in Panama and abroad believe that the massive canal expansion project may just be the country’s antidote for economic stability during the worldwide recession. Experts predict that economic growth will continue to grow over the next five years, in the neighborhood of four to five percent a year.
While the U.S. is spending hundreds of billions on stimulus packages to jumpstart its economy, Panama already has one in place; the canal expansion project. The huge undertaking represents a fourth of the country’s entire GDP of $23 billion. Over 7,000 jobs will be created directly from the project, with thousands more indirect employment opportunities. “It’s as if we are increasing public sector spending by 35 to 40 percent,” Minister of Economy Hector Alexander said. “Today it works as a fiscal stimulus.”
“In Panama, the dominant topic isn’t the recession,” Alexander said. Indeed, the economic crisis seems a world away for this tiny Central American country, where steel buildings tower above the jungle, reaching towards the sky.
Thank you Scott for letting us use the picture