DAVID STUBBS ECONOMIC & BUSINESS UPDATE

Transcription

1 DAVID STUBBS ECONOMIC & BUSINESS UPDATE Panama July 2012

2 Why should I care? Economic health of a country impacts everyone living or investing there. Infrastructure investment Job creation Future real estate values Foreign direct investment

3 Size: 75,517 km 2 29,157 sq mi Population May 2010: 3,322,576 Density: 44.5/km /sq mi GDP 2008: $26 billion GDP (PPP) 2008 Est: $ billion GDP (PPP) Per Capita: $12,503 Capital--Panama City 1.7 million, metropolitan area Legal System Civil Law Napoleonic Code Panama -- Basic Country Data

4 Legal System Tip #1 Find yourself a trusted Attorney Tip #2 Know the law as it applies to you Panama_laws_for_expats@yahoogroups.com

5 Size: 75,517 km 2 29,157 sq mi Population May 2010: 3,322,576 Density: 44.5/km /sq mi GDP 2008: $26 billion GDP (PPP) 2008 Est: $ billion GDP (PPP) Per Capita: $12,503 Capital--Panama City 1.7 million, metropolitan area Legal System Napoleonic Panama -- Basic Country Data

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7 Panama Location Location Location Strategic aspiration à Singapore

8 Growth Rate Percentages Panama USA GDP Growth %

9 Growth Rate Percentages Panama Latam World GDP Growth %

10 Lower debt à improved credit rating Central government debt Percent of GDP Public debt ratings Standard & Poor s

11 Making the grade in 2010 Brazil Peru Panama Mexico Chile Fitch Ratings BBBpositive BBBpositive BBB stable BBB stable A+ stable Standard & Poor s BBBpositive BBBpositive BBB positive BBB stable A+ stable Moody s Baa3 positive Baa3 stable Baa3 positive Baa1 stable Aa3 stable

12 President Martinelli Strategic Plan for Development Economic & Social strategy Five Year investment plan Financial Programming

13 Strategic Government Plan Focusing on Our Competitive Advantages to Drive Sustainable Growth Alberto Vallarino Minister of Economy and Finance

14 Investment Plan by Sector Transportation Education & Culture 10% 5% 12% 13% 17% 32% Health Administration & General Services Labor & Social Welfare Agriculture Justice and Public Protection Housing Industry, Commerce & Tourism Energy Environment

15 Panama City Priorities

16 Integrated Transportation System Modern buses and a new system

17 Integrated Transportation System

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19 Government City

20 Panama Metropolitan Area Metro Bus $270M Metro $1,500M Government City $360M Cinta Costera n Phase One $190M n Phase Two $52M n Phase Three $777M Bridge of the Americas $50M Panama City and Bay cleanup $140M Panama Pacifico $ 700M

21 Companies who have made the move Maersk Line Political stability and quality of life Halliburton Inexpensive real estate P&G Telecommunication infrastructure Dell Connectivity with region Caterpillar Advantages of Law 41 Sinpopec Safety, immigration flexibility Total of 68 so far

22 Key Growth Drivers Logistics Tourism Agriculture Financial Services

23 Logistics Panama can leverage the success of the Canal and be the value added logistics power of the hemisphere The Opportunity: Ensure that the canal remains a competitive logistics backbone and leverage traffic to generate income by providing value added services to products passing through

24 Panama Canal years of success 3 major milestones: Dramatically increased revenue Tonnage increase Price increases Decreased transit time from 33 hours to 23 hours Returned $4.5 Billion to the Treasury.

25 Ripple effect of Canal #1 Maritime Registrations Major business in Maritime Insurance Major business in Trade Finance Employment Direct 5,000 Colon Free Zone Port } 2009 billed $10.6 billion Key location for undersea marine cables for internet access

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27 Tourism Panama is positioned to become a world hub for high-end Sun & Beach, Business & Shopping and Eco-tourism The opportunity: Leverage Panama s unique geographical and infrastructural advantages to attract luxury sun & beach, and ecologic tourists, and become the business hub of the Americas Tourism is growing but. Panama still lacks a distinctive brand Lack of qualified staff for top destinations

28 Agriculture Panama has a unique opportunity to focus on highmargin crops where a comparative advantage exists The opportunity Maximize land-use around highmargin export oriented crops (e.g., tropical fruit)

29 Financial Services Financial Services sector will remain an important driver of growth without significant government investment requirements The opportunity: To ensure that Panama becomes the financial sector hub for Latin America and the Caribbean

30 More Investments Canal Expansion $5.2B Panama City to Colon highway $267M Highways project in Chiriquí $180M 5 new and renovated hospitals $386M Expansion of Int l Airport in David $25M New International Airport in Rio Hato $60M Fourth bridge over the canal Metro Line 2 tender in 2013 South Terminal at Tocumen $400M National Internet Network 600 hotspots in 22 cities Partial list of new infrastructure projects already announced

31 $13B investment plan Up to 7% of expected GDP Triple spend of previous Government Public Spending Apparently someone forgot to tell Panama about the world economic crisis $ Investment Plan

32 Panama The Hub of the Americas Better Infrastructure Lower cost of living Faster growth 8 to 9% p.a. Achieve reforms in education, health and security Aggressive goals for tourism, hotels, international airports Double GDP over 10 years Create 500,000 to 800,000 new jobs A new Sovereign Wealth Fund

33 DAVID STUBBS ECONOMIC & BUSINESS UPDATE Panama July 2012