Panama still a great Opportunity

The Panama real estate market still has a number of outstanding bargains for the wise investor. Although long-term indicators predict an economic recovery by next year there is still property in Panama selling at well below its current and future potential value. This is especially true of water front condos in Panama City and ocean front tracts of land along Panama's beautiful coastlines.

Any rumor of the demise of Panama’s real estate boom is premature and incorrect. The current investment opportunity is just that, an opportunity caused by a slow down in North Americans buying homes in Panama. Investors are buying and can expect to enjoy a healthy appreciation on their homes or commercial real estate investments in the next couple of years. This does not include the likely, long term, continuing appreciation in the value of property in Panama due to the continued growth and investment in Panama’s healthy economy.
Panama's economy is projected to grow between 3% and 6% in 2009. Last year when the USA, China, Japan, and all of Europe were seeing a contraction of their economies Panama's economy grew 9.2% with a decrease in unemployment.

The recent opening of the new toll road from Panama City to Colon City has created even more interest in the regions of Costa Arriba and Costa Abajo. This has reduced the travel time from 2 hours or more to approximately 35 minutes. These areas offer crystal clear, picturesque Caribbean waters and settings with numerous hilltops offering dramatic ocean, reef and jungle views. We have numerous opportunities from ocean front and ocean view lots to parcels with tremendous development and profit potential. Please see below.

With a new president promising more investment in job-creating projects such as a subway system, not to mention the continued Panama Canal Expansion, employment, business and the need for real estate development will continue here for years to come. Panama bypassed the two major parties that had won every election since the removal of Manuel Noriega and elected Ricardo Martinelli, a graduate of Staunton Military Academy and the University of Arkansas. Martinelli’s Democratic Change Party also seems to have gained a majority in the national assembly so a shared power gridlock seems to have been averted. Martinelli was previously best known in Panama as the owner of Super 99, the largest grocery store chain in Panama.

Regarding mega projects, the Panama Canal Authority has finished reviewing bids this month for the construction of the locks for the “third lane” of the $5.25 Billion Panama Canal Expansion. After months of rigorous technical review, the Panama Canal Authority (ACP) determined the "best value" proposal for the new set of locks expansion contract. Consortium Grupo Unidos por el Canal composed of Sacyr Vallehermoso S.A., Impregilo S.p.A., Jan De Nul n.v. and Constructora Urbana, S.A. garnered the highest total points for its combined technical and price scores. Three world-renowned consortia competed to win the largest and most important contract under the Canal's Expansion Program. We expect to see a flood of engineers, administrators, and more moving to Panama City to work on this project over the next five years.
 

New President Ricardo Martinelli

Inaugurated on July 1st

 New President Elected - Ricardo Martinelli

After being sworn in, Ricardo Martinelli addressed the nation for the first time as President of the Republic of Panama (you can read the address here).

Martinellli highlighted each one of his campaign promises in the speech, emphasizing security and transportation systems. He also challenged his government to get prepared to work for this country.

The new President has an ambitious social agenda as well, offering free books and supplies to school children, and scholarships for those unable to afford school.  A social security program, offering $100 dollars per month to all qualified elderly citizens is in the works also.

Martinelli stressed his goal to make Panama a better place for business and to attract foreign investment. He also confirmed the agreement between Panama, Colombia and Mexico to fight against narco-terrorism.

The Cinta Costera-  Ready at Last!!

Mega-Project was Criticized by Environmentalists and Architects Alike
The Cinta Costera, Panama City
After months of discussion and planning, years of construction, and weeks of announcements leading up to the grand-opening of the coastal beltway (along with constant discussions between politician and pudit of whether it was a waste of money or a boon to the city, whether it should be concrete surrounded by grass, or grass surrounded by concrete), Panama's Cinta Costera (Coastal Strip) was opened to the public on Sunday.

The project widens the transit lanes in each direction to four, which has already made a noticable difference to Panama City's traffic patterns, and made it much easier to get between Casco Viejo (on the western side of the city) and Punta Paitilla (on the eastern side). Since the very first day of its public opening, Panama's citizens have been turning out in droves to walk the 3.5 km urban oasis. As strange as it seems to build a park around a high-traffic speed-way, the 35 hectare park offers dozens of basketball courts, kilometers of walking paths, several pedestrain overpasses, plenty of public restrooms and lots of green-space to enjoy year-round.

Prior to the official opening on Saturday, June 27th, there was one last 24 hour delay, with workmen scurrying to put the finishing touches to the $189 million project, erecting signs, painting parking spots for the disabled, and removing fences.

The project has been in progress for 20 months, an called for tens of thousands of tons of landfill, over 18,000 giant concrete crosses to form a breakwater, and the construction of several new roads and viaducts. The project ultimately gave employment to thousands of workers, none of whom seemed to get any official acknowledgment as the results of their labors were unveiled hastily and with little ceremony. However, their contributions will continued to be enjoyed by thousands of Panama City's residents daily for years to come.
 

8 Tips for an Affordable Retirement Abroad
 

Living on $18,000 to $25,000 a year? It's possible
By Emily Brandon
Posted April 19, 2009
Most Americans don’t have a big enough nest egg to permanently become expatriates in Paris or kick back with a daily glass of Chianti in Tuscany. But surprisingly, your current 401(k) balance could be more than enough to retire in a low-cost country with a favorable exchange rate.
Many foreign cities boast consistently beautiful weather and allow you to stretch your dollars further than would ever be possible in the United States. “In Nicaragua or Ecuador, you can live on somewhere between $18,000 and $25,000 a year,” says Barry Golson, author of Retirement Without Borders: How to Retire Abroad—in Mexico, France, Italy, Spain, Costa Rica, Panama, and Other Sunny, Foreign Places (And the Secret to Making It Happen Without Stress). But lifestyle is a key factor, he says: “That’s probably [on] tacos, not steak.” On the other hand, some countries that seem affordable require at least a little more than Social Security payments to get by. “If you’re going to go to Costa Rica or Panama, you’re not going to be happy with much less than $30,000 a year,” says Golson. Still, it's essential to look beyond cost when it comes to choosing a retirement destination.
 

Valle Escondido begins construction of lakeside cottages

The units, just 30 minutes from Valle Escondido near Lago Barrigón, will be ready in two years.
Eight years after developing the Valle Escondido residential and tourism project in Boquete, in the western province of Chiriquí, the developers are adding new cottages at nearby Lago Barrigón to entice fishing enthusiasts.

The 25 new cottages will be built just 30 minutes from Valle Escondido at a cost of $5 million. Sam Taliaferro, owner of Valle Escondido, said that each unit will sell for about $200,000.

The cottages will be built from imported Canadian lumber, which is well suited for the climate in Boquete, located 515 kilometers (320 miles) west of Panama City. Taliaferro considers this type of residence to be primarily suited for fresh water fishing enthusiasts.

"It's expected to be complete within two years from the start of construction, which will be very soon," he told The Panama Post.

Eighty million dollars was invested to build the initial phase of the Valle Escondido Residential Community, where 130 families now live.

Record turnout at Boquete’s Flower and Coffee Fair

Despite severe flooding that wiped out nearly all of the fair’s gardens, Boquete’s residents triumphed through courage and cooperation.
Things did not look good for Boquete’s Flower and Coffee Fair last November. All of the gardens had been planted for the fair's January 8 opening, when heavy rains caused the Caldera River to overflow, wiping out nearly everything. It was a traumatic experience for all concerned, explained Mario Serrano, vice president of the Flower and Coffee Fair's board.

But the community pulled together to rebuild and this year's event was a resounding success. According to the ticket office, the record crowds of 100,514 beat last year’s attendance by over 20 percent.

edition61_pag12_escape01_b_828325742.jpgSerrano noted that many of the visitors, especially the retirees, were determined to visit all their old haunts, even though they appeared to be devastated just a couple of months prior.

The fair was started in 1950 to showcase Boquete’s specialty flowers and coffee cultivation, which, according to Serrano, is still essential to the country.

A few years ago, the board's member groups bought the fairgrounds for the event without a hitch.

This year, the fair faced its biggest challenge to date: surviving November’s disaster. They succeeded through a combination of donations, loans and volunteer work. The government also did its part by repairing the local bridge, restoring access to the fairgrounds.

“We all had to work really hard to keep things on schedule for this January”, explained Serrano.

He added that, given all they had to go through to put on the event, this year’s theme, “Flowers and coffee, much more than a fair,” became unexpectedly relevant.

Everyone in the community, from businessmen to visitors, came together to restore the fairgrounds.

TRAVELERS NEED VACCINE AGAINST YELLOW FEVER

30/09/2008

The Ministry of Health reminded the Panamanian citizens and foreigners there are three places available and approved for the purposes of vaccination against yellow fever in the Republic of Panama where you get an international vaccination card.

The centers enabled are the vaccination international office of the Metropolitan Region of Health, located at Los Rios (reverted areas), Main Street next to the Institutional Protection System, Building 237; the office of the International Maritime Health in the port of Cristobal, Province of Colon, and the office of the Regional Coordination of Epidemiology in the district of David, Chiriquí.

The hours of operation are from Monday to Friday from 7:30 a.m. 3:00 p.m. and the cost is five dollars. Passengers in transit and those from countries not included in the list of 45 countries with risk of yellow fever, according to the classification of the World Health Organization (WHO), are not required to have the vaccination card against the disease.

For a vaccine to be effective it must be applied 10 days before the fixed date of travel and duration of dosage (effective protection) is 10 years.


The health measure announced by the Ministry of Health, requesting, as of November 1 any domestic or foreign travelers entering Panama from countries at risk of transmission of yellow fever, seeks to prevent the resurgence of the disease in the country.

We must remember that the last cases of jungle yellow fever were registered in Panama in 1974 and the Ministry of Health attempts to fulfill the terms of the 2005 International Health Regulations (IHR), to prevent the spread of epidemics and improve cooperation among the countries with that same goal.

His adaptation is directed to the challenges of today's world in the light of the resurgence of infectious diseases, increasing their risk of international spread and the emergence of new health warnings with global repercussions.

According to WHO are 111 countries (including Panama) that require yellow fever vaccination to those who enter its territory from countries with risk of transmission of this disease.

Panama has set up epidemiological surveillance of yellow fever, timely care of suspected cases, continuing education of the health team in prevention and disease control, information, education and communication to the community in prevention and control of yellow fever, a viral disease, transmitted, highly infectious and preventable, rapidly evolving and varying severity that is transmitted by the bite of a mosquito.

Expanding the Panama Canal - One Year After Groundbreaking

Maritime Global Net - PANAMA CITY, Panama, September 3, 2008 – On September 3, 2007, Panamanian President Martín Torrijos, the Panama Canal Authority (ACP) and several former and current heads of state witnessed and celebrated the historic groundbreaking of the Canal Expansion Program. Expansion, which will build a new lane of traffic along the waterway through the construction of a new set of locks, will double capacity and allow more traffic and longer, wider ships. In addition, it will significantly augment the Canal’s revenue stream while maintaining the viability of the route. That September morning, joined by more than 30,000 Panamanians, the ACP kicked off its first major construction project of expansion – the dry excavation of Paraiso Hill. The project will ultimately help create the new Pacific locks access channel that will connect the Gaillard Cut (the narrowest stretch in the Panama Canal) and the area where the new Pacific locks will be built. Today, one year later, the ACP celebrates the achievements of all those who have contributed to the Expansion Program and looks forward to the future with optimism and great anticipation.

Resident and tourism Laws Changing

Panama’s new resident and tourism laws are due to come in to effect this month and if the current proposal remains intact, far fewer foreigners will be eligible for the pensioners visa. Currently to apply for a pensionado visa one must have a retirement income of $500 (plus $100 for every dependant) per month but the new law states that every person applying must have an income of at least $1000 per month. The proposed law will exclude many foreigners who were once considering Panama as a retirement destination.
 

The New Beach Front in Panama

The United States and Panama signed a free trade agreement on Thursday with only a few days to spare before key U.S. legislation expires. The U.S. and Panama signed a free- trade accord  that includes new labor and environment provisions demanded by congressional Democrats.

The United States and Panama have enjoyed long-standing, strong economic ties and a mutual commitment to deepening the trade relationship through a free trade agreement. A free trade agreement with Panama is an important link in the Administration's strategy of opening markets in the Hemisphere through competitive liberalization.

``This is an historic agreement,'' U.S. Trade Representative Susan Schwab said at a ceremony in Washington. The accord includes ``ground-breaking labor and environment provisions, a result of the bipartisan agreement between the Bush administration and congressional leadership,'' she said.

Panama, whose economy is anchored by the Panama Canal, is a mostly services-based economy and one of the few countries in the world that runs a trade deficit with the U.S. American companies shipped $2.7 billion in goods and agriculture items to Panama last year and imported less than $400 million.

 In 2003, bilateral trade between the United States and Panama totaled $2.1 billion, with U.S. exports accounting for $1.8 billion of that amount. Between 2002 and 2003, U.S. exports to Panama grew over 30%. Nearly half of Panama's total imports come from the United States. U.S. foreign direct investment in Panama totals roughly $25 billion. Panama currently enjoys broad access to the U.S. market. In 2002, over 90% of Panama's goods exports to the United States came in duty free under unilateral benefits programs like the Caribbean Basin Initiative (CBI) and the Generalized System of Preferences (GSP) or under 0% MFN tariffs.

The Panama pact tears down tariffs and other trade barriers between the two countries in manufacturing, services and other sectors. Over 88 percent of U.S. exports of consumer and industrial goods to Panama will become duty-free immediately, with remaining tariffs to be phased out over 10 years. The free-trade agreement will also open the way for U.S. companies to participate in the $5.25 billion expansion project for the canal, the U.S. trade office said.

Kuna Indians aim to strike tourist balance

By Jane Monahan

In the San Blas region, Panama

With its narrow stretch of rainforest on the Caribbean coast and its almost 400, mainly uninhabited, coral islands, it is no surprise that tourist operators have long sought the development of resorts in the autonomous region of Panama's Kuna Indians. Age-old ceremonies still take place on the islands. There is no doubting the appeal of this region, where on the 50 or so islands where the Kuna live, in densely-inhabited villages of bamboo huts near the quays, age-old customs are still an integral part of their life. A girl's passage to puberty, for example, is still marked by a ceremony in which men play reed flutes and women dance. They wear gold nose rings, bands of beads round their arms and legs, sarongs, necklaces and blouses covered in what are now considered Panama's most famous traditional handicraft - "moles" or Kuna textiles. But while the Kuna - who fought off the Spanish conquistadores 500 years ago and who have managed to preserve a great degree of political autonomy - have so far resisted proposals to build resorts in the archipelago, there are signs that the influx of tourists is having an effect on the Kuna way of life.

Turbulent history

Relations between the Kuna and the tourist industry have not always been easy. Outsiders are not allowed to own Kuna land A few decades ago, after small planes started flying between Panama City and the San Blas region, the Kuna let outsiders, including Panama's official tourist institute (Ipat), build hotels on the islands. However, when these tourist operators failed to consult the tribe's highest authority about their projects, and did not let local groups share in the revenue - in accordance with Kuna egalitarian principles - violent incidents broke out. By the 1990s all outside tourist ventures in the Comarca had closed or been expelled. Next, the Kuna started owning and running small hotels on their own. Some tourists complain that the Kuna took too much for granted, expecting tourists to adapt immediately and live in bamboo huts without bathrooms. But most tourists recognize, however, that the Kuna have become deft in other tourist practices, such as guided tours, boat trips to other islands, snorkeling excursions and tasty meals.

Souvenirs

Now, according to Ipat, tourists number about 160,000 a year, a figure which does not include the passengers on the increasing number of private yachts and cruise ships that pass through the area. Kuna women sell souvenirs for tourists This, locals say, has already led to a greater acceptance of "Western" values by Kuna youth. A member of the tribe's tourism commission says that many young Kuna men now prefer to work for tourists for cash rather than in the tribe's traditional, collectively-owned, agriculture.

And many of them also wear baseball caps, trainers and T-shirts, and have started shunning the making and tasting of chicha, an alcoholic beverage made from sugar cane, during ceremonies.

The developments have prompted a Kuna guide, to ask, pessimistically: "Will all the work of our chiefs to preserve our culture for so many years be supported by Kuna youth or will it be destroyed?" Meanwhile "moles" - brightly colored squares of fabric sewn together and decorated with Kuna landscapes, fish and birds - made by Kuna women are now sold exclusively to tourists. As a result, designs are changing to suit tourist tastes. There are now "mola" can holders and "mola" mobile phone holders. Some women are reportedly also losing their knowledge of the old designs and their meanings.

Restrictions

Kuna leaders realize they cannot completely control the impact of tourism on their culture. However, to minimize tourism's negative effects, they have recently drawn up a set of rules. These establish that the only forms of tourism allowed in the autonomous region are eco-tourism and cultural heritage tourism. All tourist ventures, the rules establish, must first be approved by the Kuna leaders and contribute a share of the revenues to the Kuna General Congress as well as to island councils. Tourists are not allowed to engage in certain activities - they cannot photograph Kuna without permission, nor can they water-ski or do deep-sea diving. "The Kuna are not against the influence of other cultures. But what's important is they also maintain their own cultural values, language, history and a sense of belonging," says Dialys Ehrmann, the only woman Kuna lawyer in Panama, who runs the Coordinadora de Pueblos Indigenas de Panama, a non-government organization for indigenous groups. Meanwhile, to avoid misunderstandings between Kuna and tourist operators in future, Ipat is also helping the Kuna draw up rules on outside investment to the region. These rules, Ms Ehrmann says, will probably be published later this year.

Outsiders will still not be allowed to own Kuna land, however. Indeed, such transactions would be extremely complicated as currently the Kuna have no individual land titles. The entire region is collectively-owned.

Pensioners seek paradise in Panama mountain idyll

Wed May 31, 2006 8:15 AM EDT

By Mike Power

BOQUETE, Panama (Reuters) - Perched on a volcanic plain in the highlands of western Panama, Casey Koehler's luxury mansion looks like a slice of prime Florida real-estate beamed down to Central America.

Diamonds flaring in his Rolex watch, the Michigan-born retiree sits on his porch in the resort of Los Molinos and lists reasons for retiring to a country most Americans his age remember best as the scene of a 1989 U.S. invasion.

"It's 77 to 82 degrees every day, and it's spectacularly beautiful," said Koehler, 65, who moved to Panama last year. "This house cost me $230,000. In Florida it would be $1.5 million." 

Politically and economically stable, its turbulent history all but forgotten by visitors, Panama is luring U.S. and European retiree baby-boomers dreaming of a millionaire lifestyle on the cheap.

Eager to follow neighboring Costa Rica as a magnet for wealthy U.S. and European pensioners fleeing high real estate prices at home, Panama, which uses the U.S. dollar as its currency, is offering perks to retirees ranging from tax breaks to discounts on travel, cinema tickets and fast food.

Much of rural Panama is still dirt-poor with a very basic infrastructure, and while the gleaming skyscrapers of the cosmopolitan capital Panama City are only a short flight from Miami, the city is too hot for most newcomers.

Retirees are instead flocking to the area around Boquete, a cool mountain town famous for growing coffee and oranges, where small wooden houses are decked with tropical fruit and flowers year-round and old men play dominoes in the shade.

U.S. and European retirees are transforming it into a chic enclave with bistros, a 24-hour supermarket and delicatessens.

CHEAP AND CHEERFUL

Boquete is a world away from the image of a typical "banana republic" that stuck in the minds of many baby-boomer Americans who watched television images of the 1989 U.S. invasion to remove dictator Manuel Noriega and the rioting that followed.

Gleaming SUVs jostle for parking space in Boquete's narrow streets. Foreign pensioners scour bistro menus for low-cholesterol dinners while pouring over maps in search of land to buy. With prices rocketing from $10 to $300 per square meter (yard), there's a gold-rush whiff in the air. 

Anybody Want to Buy an Airport?    

Sunday, May 28 2006 @ 10:45 PM EDT

Panama's Tourism Minister Rubén Blades said that the airport at Rio Hato in the province of Coclé might be sold to promote tourism. "There are some who say that the value of the area has greatly increased thanks to the success of the hotels in the area, and that the development of the airfield would promote the development of tourism, hotel projects, and real estate" indicated Blades. He explained that no specific offers have been made, that this is only his opinion, and that if the lands around Rio Hato were sold then the proceeds should be used to build a new airport in the region. He said a new international airport is required in the area. "Panama urgently needs a new international airport in the interior" he said. He added that it does not matter if the new facility is constructed by a private company, the government, or with mixed capital. (Editor's Comment: There have been persistant rumors of Disney's interest in land around the Rio Hato airport which have been frequently denied on all sides and are probably all just talk. But, a theme park in Panama near the Pacific beaches would make a fortune. You can't get a good roller-coaster ride in this country, anywhere, and people are starved for this kind of entertainment.)

From sea to sea: PANAMA CANAL

MITCHELL SMYTH - One hundred years ago, a colossal project was begun to lift ships over mountains. Eight years later, a canal linked the Atlantic and Pacific Oceans and saved a 12,500-kilometre trip around South America. They said it couldn't be done. And it couldn't. "It" meant a ditch, at sea level, across the Isthmus of Panama, connecting the Atlantic and Pacific at the place where only 80 kilometres of land separates the two oceans. A century ago debate was swirling here in the newly created country of Panama - which until 1903 had been a province of Colombia - over how to build the canal. The advantages were obvious: it would slice 12,500 kilometres off the sea journey between the U.S. east and west coasts, a tremendous saving in time and money for an emerging industrial country. The French had tried it, between 1881 and 1898, but heat, rain and disease (especially yellow fever and malaria) defeated them. And their engineering was suspect. Having built the Suez Canal, they thought they could do the same in Panama. But Suez was a sea-level canal, through sandy desert; in Panama the mountains of the Continental Divide ran down the spine of the country.

Still, the French insisted they could build a sea-level canal. And the U.S. company, which took over the job in 1904, said the same.

The first thing the Americans did upon taking over was deal with the disease problem, which had killed an estimated 20,000 French workers. They sprayed the swamps and ponds with kerosene to stop mosquitoes breeding. (By that time, it had been discovered that the insects spread malaria and yellow fever, something the French had not known.) And the Americans built better housing and established hospitals and clinics. By 1906 they were ready to get down to the real work. That, it was thought, meant literally moving mountains.

"But John Stevens, the chief engineer, was horrified when he examined the terrain," said Mike Millwood, a history professor from England and a guest lecturer on the cruise ship Zaandam. "He said, 'We can't go through the mountains. We have to go over them. We must have a lock canal.' "

The U.S. advisory board was still keen on the sea-level idea, but Stevens convinced U.S. President Teddy Roosevelt that the best approach would be "to lift ships up and over the mountains." It all came to a head 100 years ago this summer when, after much lobbying by Roosevelt, U.S. legislators voted for a lock canal. That was on June 21.

The word was telegraphed to Panama and the next day, June 22, huge steam shovels - which could gobble eight tonnes of earth in one "bite" - began work building a dam on the Chagres River to form a lake that would feed the locks' demand for water. That was the real beginning of the project.

The story is told by lecturers like Millwood aboard the dozens of cruise ships that transit the canal every year, and in an excellent visitor centre at the Miraflores Locks, on the Pacific side of the mountains. Here pictures, dioramas, artifacts and a video fill in a lot of the background on one of the most thrilling engineering and human dramas in history.

There's also the real drama of standing in the bow of a cruise ship as it enters the locks, ready to be lifted 26 metres to the next level of the canal. Only then do you realize the scope and complexity of the vision of Stevens. The figures have very little meaning - each lock 305 metres long by 33.5 metres wide - until you realize that if you stood any one of the 12 locks on end, it would be more than half the height of the CN Tower in Toronto and just 76 metres shorter than New York's Empire State Building.

The canal experience - assuming you're going from the Atlantic to the Pacific - begins a little before your arrival at the Gatun Locks. As your ship approaches the locks, passengers can see a waterway off the starboard decks; this is the remnants of the French effort. Farther away they glimpse the Gatun Dam, built to create the huge lake that feeds the locks.

Most people have a mental picture of the canal as something like a river wending its way through the Panama jungle. In fact, half its length is through Gatun Lake. Ships weave their way among the islands - mountain peaks in pre-canal days - on a set course, for much of the lake is too shallow for ships. Guides on the intercom point out such landmarks as the island of Barro Colorado, now a facility of the Smithsonian Tropical Research Institute.

Just past the port of Gamboa the lake narrows and the waterway becomes the Gaillard Cut. The excavated banks are now covered by jungle, so that sailing through the cut is much like river cruising.

Off to port can be seen, through breaks in the jungle here and there, the Panama Railway, which goes from ocean to ocean in just under an hour (cruise ships take about eight hours). A lock at Pedro Miguel takes ships down one "step" to Miraflores Lake; then another two locks take them to sea level on the Pacific side of the isthmus.

There's one more sight for the cruisers: the magnificent 1,654-metre Bridge of the Americas, built in 1962 as part of the Pan American Highway connecting North and South America. After that, the high-rise buildings of Panama City come into view.

And all the time the cruise ship guides are telling the story. They explain that when engineer Stevens said he'd lift ships up and over the mountains, he wasn't being strictly accurate.

Even at eight storeys above sea level - the level of Gatun Lake - the engineers still had to carve a channel through the narrowest part of the San Blas Mountains to get to the Pacific.

So gangs of men and steam shovels (and a lot of dynamite) got to work and removed 80 million cubic metres of rock, shale, mud and sand, creating a 12.6- kilometre-long channel. (How much "spoil" is that? Well, if it were loaded on railway flatcars they would circle the globe four times!). Sailing through this 192-metre-wide cut, with the hills and the rain forest rising on either side, is almost as thrilling as transiting the locks.

Of a workforce of 100,000, some 5,600 died, mostly of disease, during the eight years the Americans took to build the canal. Combined with the French total, it meant one death for every three metres of canal.

The canal has been widened and deepened in parts, but the locks are pretty much as they were when the first ship sailed through in January 1914. There are three sets of double locks (meaning ships can pass in the locks) at each end, making 12 locks in all.

It comes as a surprise to many people transiting the canal that, going from the Atlantic to the Pacific, you're sailing southeast, for Balboa, on the Pacific coast, is 42 kilometres east of Colon, on the Atlantic. So if you're on the canal, you'll find that the sun rises over the Pacific and sets over the Atlantic.

Amazingly, for the biggest engineering job in history, the canal was finished six months ahead of schedule and $23 million U.S. under its $375-million U.S. budget. Counting what the French spent - and some of their work was incorporated in the U.S. effort - the total cost came to $639 million U.S.

By the summer of 1914 everything had been tested, ready for the official opening on Aug. 15. It was the culmination of, as one writer observed, "the greatest liberty that man has taken with nature."

But the world didn't notice. On Aug. 3, Germany declared war on France, and on Aug. 4, Britain went to war with Germany. With Europe tearing itself apart in the First World War, the words on the Great Seal of the Panama Canal Zone seemed ironic: "The land divided. The world united."



SORRY, CARLOS, KING WAS TOLD, CAN'T BE DONE:

The first person to want to build a canal across the Isthmus of Panama was King Carlos I of Spain in 1534. He was told it couldn't be done.

American investors built a railway across the Isthmus of Panama between 1850 and 1855. Its existence was one reason in favour of the route later chosen for the canal.

Panama had been a province of Colombia. The United States tried in 1902 to negotiate with Colombia for rights to build a canal but got nowhere. A year later, Washington solved the problem by supporting Panama's rebellion against Colombia, stationing a warship off the coast. The new country agreed to let the United States build a canal and also gave it sovereignty over a 16-kilometre-wide Canal Zone.

On Oct. 1, 1979, Panama regained jurisdiction over the Canal Zone. On Dec. 31, 1999, the United States handed over the canal itself to Panama.

The first ship to travel the full length of the canal was the French crane boat Alexandre La Valley on Jan. 7, 1914, but the "official opening" took place only on Aug. 15, 1914, when the USS Ancon made the passage in nine hours and 40 minutes. (Even today, the trip takes eight to 10 hours.)

The Panama Canal was called one of the Seven Wonders of the Industrial World.

World travel by world leaders is old hat now, but when U.S. President Theodore Roosevelt inspected the canal site in November 1906, it was the first time a sitting U.S. president had visited another country. Ever the politician, he had his picture taken at the controls of a giant steam shovel.

Before he left, he spoke to the American workers: "... As I have looked at you, and seen you work, seen what you have done and are doing, I have felt just exactly as I would feel to see the big men of our country carrying on a great war. ... This is one of the great works of the world. It is a greater work than you yourselves at the moment realize."

Americans who worked for at least two years on the canal were given a medal with Roosevelt's face on it. Machinery left behind by the French was melted down to make the medals.

Roosevelt was not the only visitor. Between 1910 and 1913, up to 68,000 people went to Panama to see how the work was coming along.

The Panama Hat was and still is made in Ecuador, but got the name because it was worn in Panama by the construction workers building the canal. Roosevelt was photographed wearing one during his visit, too, which helped make it popular in the United States.

More than 922,000 ships have passed through the canal since 1914.

According to the Panama Canal Authority, the highest toll so far was the $226,194.25 paid by the cruise ship Coral Princess Sept. 25, 2003.

On the other hand, when U.S. author/adventurer Richard Halliburton swam the canal in August 1928, he paid a toll of 36 cents. (He made his swim over an eight-day period.)

Central American leaders planning large oil refinery
Central American leaders will meet to discuss plans for a new oil refinery, the region's biggest endeavor since the Panama Canal.
BY JULIE WATSON
Associated Press

MEXICO CITY - The site for the largest Central American project since the Panama Canal could be designated this weekend when regional leaders meet to discuss plans for a $6.5 billion multinational oil refinery, Mexico's energy secretary said Thursday.
Central America nations, along with Mexico, Colombia and the Dominican Republic, will weigh two proposed Pacific coast sites: Puerto Quetzal in Guatemala and Puerto Armuelles in Panama, Mexican Energy Secretary Fernando Canales told a news conference.
The refinery, with a capacity of 360,000 barrels a day, will be able to meet the energy needs of Central America's seven nations at $8 less a barrel than the open-market prices, Canales said.
The refinery is the crux of the region's most sweeping energy project to date. It aims to reduce the region's dependence on foreign oil and keep skyrocketing gasoline prices in check.
Supported by the Inter-American Development Bank and the U.N. Economic Commission on Latin America and the Caribbean, the plan also includes a regional power grid and natural gas pipeline, although details of those projects are still being decided.
Mexican Deputy Energy Secretary Hector Moreira estimated this week that the overall project could cost about $10 billion.
Canales said Mexico's state oil monopoly Petróleos Mexicanos, or Pemex, will provide 230,000 barrels a day of crude to the refinery. Guatemala will provide 17,000 barrels a day and Belize 8,000.
Whoever builds it would buy the other 105,000 barrels a day in the market, with options including Mexico, Ecuador, Peru, Venezuela, or Trinidad and Tobago, Canales added.
The refinery would supply fuel to Central America and southern Mexico at a discount of $8 a barrel for up to 255,000 barrels of crude a day, while the rest would be sold in the region or exported elsewhere at market prices.
Despite being the world's third-biggest crude producer, with average daily output of 3.35 million barrels this year, Pemex lacks the refining capacity to meet growing domestic demand for gasoline.
Pemex is a major supplier of crude to the U.S. market, and most of the 1.8 million barrels a day it exports heads to refineries along the U.S. Gulf Coast.
The need to diversify its customer base became clear for Pemex after hurricanes Katrina and Rita knocked most of the state firm's overseas clients off-line for several weeks.

The Panama Canal expansion project could generate between 150,000 and 250,000 new jobs

PANAMA CITY, May 2 (Xinhua) -- The Panama Canal expansion project could generate between 150,000 and 250,000 new jobs in the two decades to come, the Panama Canal Authority (ACP) said on Tuesday. Panamanian President Martin Torrijos announced in late April a 5.25-billion-U.S. dollar plan for widening the canal by adding a third system of locks to handle larger ships.

The construction work will generate between 35,000 and 40,000 jobs by itself, according to ACP studies, with 7,000 workers taking part in the most active period of construction work, which runs from 2009 to 2011.  Rodolfo Sabonge, ACP head of planning and marketing, said the work would create between 10 percent and 15 percent more employment in the Panamanian economy.

 It was estimated that about 1.5 million Panamanians would have jobs in 2025 if the canal is not expanded, while between 1.65 and 1.75 million would be employed that same year if the canal work goes ahead. The greatest increase in employment in the medium and long term will depend on the growth of economic activity in Panama, boosted by services -- the sector of the economy that is most immediately affected by Canal traffic. Enditem

Editor: Ling Zhu 

Retirees feeding "Panama fever"

Rob Zaleski: Retirees feeding "Panama fever"
By Rob Zaleski
PANAMA CITY, Panama - Some call it the most seductive place on the planet, and Luis Nieves isn't about to argue.


A Panamanian native, the suave and articulate 58-year-old engineer spent three decades living in various spots in the United States. But as he explained to me last week in his air-conditioned office at the Amador Country Inn & Suites - just a stone's throw from the western mouth of the Panama Canal - he returned here for good some 15 years ago, realizing there's no other place that quite compares with this small tropical paradise of 3.1 million people wedged between Costa Rica and Colombia.

And that's especially true today, Nieves muses, what with despised dictator Manuel Noriega just a distant memory - thanks to the U.S. invasion of 1989 - and the country in the midst of an economic boom that locals refer to as "Panama fever" and which has transformed it into a favorite retirement spot for U.S. and European seniors.

Those retirees, Nieves notes, are lured not just by the balmy climate and the fact that, because of its location, Panama has few hurricanes, but by a low cost of living - housing, food and health care costs are among the cheapest in the world - and a long list of tax breaks and other economic incentives.


Tabasite.com
Panama City, Panama
(A fascinating side note: Panama, of all places, has ratified the World Health Organization's anti-smoking treaty, which, among other things, restricts smoking in all indoor workplaces - including bars and restaurants.)

And, of course, they're lured by the spectacular ecology - miles of unspoiled beaches and a vast array of islands, mountain ranges and exotic rain forests.

All of which explains, locals say, why Mick Jagger occasionally docks his mega-yacht here and why Donald Trump has invested in a 65-story waterfront casino-condo project that will border Panama City's fast-growing banking district.

But then, my brother Rich - who, along with Nieves and several others, is planning a multimillion-dollar marina project - has been telling me this for years, ever since he closed his south side Milwaukee tavern and moved here in the late 1980s.

To be sure, he's hardly the only ex-Wisconsinite who has discovered Panama.

During my visit, I chatted with Russ Bennett, a 66-year-old Wausau native and former decorated U.S. fighter pilot I'd met during my first visit here nine years ago. There are dozens of others, I was told, including Tony Rajer, a highly acclaimed art conservator from Madison who recently completed a three-year restoration of the National Theatre of Panama in downtown Panama City.

Unfortunately, I was unable to hook up with Rajer, whom I wrote about in this space 17 years ago, after he'd restored some long-neglected artworks in the State Capitol. But in an e-mail this week he cited many of the same reasons as Nieves as to why tens of thousands of U.S. and European retirees are relocating here.

"Great golf, two oceans, good seafood, cheap domestic help," wrote Rajer, who still maintains a home in Madison, but escapes to Panama City whenever possible. "Why live in the states when you can have a maid and a cook? You've got it made down here."

Plus, he added, Panama City Mayor Juan Carlos Navarro "has really cleaned up the city and garbage pickup is now good. The electricity is always on and you can drink the water, as we (Americans) built the system."

In fact, most Panamanians seem to welcome the explosive growth, conveniently ignoring the fact that similar booms have ruined countless other nirvanas over the last few decades.

Nieves, however, did acknowledge one potential downside: the very real possibility that, because it's happening so fast, Panama may not be equipped to handle it.

He noted that President Martin Torrijos - the most progressive leader in the country's history, in Nieves' opinion - is urging Panamanians to support a $6 billion expansion of the Panama Canal, the biggest expansion of the waterway since it opened in 1914. (It was Torrijos' father, dictator Omar Torrijos, who negotiated the 1977 treaty with Jimmy Carter that allowed Panama to gain control of the canal in 1999.)

But while Nieves fully supports the idea, he worries about two things: whether Panama has enough workers to support a project of such magnitude, and whether it would create a labor shortage for other businesses.

"Are we really prepared for this? That is the question," he says.

Interestingly, when I was here nine years ago, several U.S. military people I talked to predicted gloom and doom for Panama once the United States relinquished control of the canal - largely because, they insisted, Panamanians as a whole are lazy and inept.

But Bennett, the ex-U.S. fighter pilot, scoffed at the notion.

"There are a lot of smart folks down here," he told me. "There are guys who are M.I.T. graduates, and they're out trying to develop a big tourist trade and, I'll tell you, the potential is incredible. If they make it work, this could be the new tourist mecca of the world."

Well, maybe not the world. But nine years later, Panama is fast becoming the tourist mecca of Latin America - the new Costa Rica, if you will. Donald Trump, I'm sure, would say that's a wonderful thing.

My own view? "Ten cuidado con lo que deseas."

Be careful what you wish for.

E-mail: rzaleski@madison.com
Published: May 3, 2006

COURT-ORDERED SALE

Retirees in Panama can choose to actively take part in the real estate auctions that are carried out daily in the courts of justice. The law stipulates that the day of the auction must be announced to the public. These announcements will be made through notices posted in a public place of the premises where the auction will be held, in the district where the goods are located. They will also indicate the date of the auction, the goods to be sold, the appraisal and the amount that will be used as a basis for auctioning each one.

Immovable property will be judged by their location, boundaries and other circumstances identifying them with precision and, where recorded at the Public Registry, the pertinent data relating thereto will be given as well.

Movable assets will be detailed in the announcements and they will be described as clearly and precisely as possible.

Announcements will be published three (3) times consecutively in a daily or newspaper circulating in the place where the auction will be effectively held.

Real estate auctions are held between eight o’clock in the morning and five o’ clock in the afternoon. The announcement will always indicate that bids will be accepted from the opening of the bidding until four o’clock in the afternoon. After such time and until five o’ clock, bids and counter bids will be accepted, and the auctioneer will temporarily award the auction when he/she deems it appropriate within the last hour of the auction, by previously announcing that he/she will award it, with the purpose of making it clear that at the time of the award, no better offer was made to outbid the last one.

At any auction the person who desires to participate as a bidder will need to deposit, in order for his/her bid to be admitted, ten (10%) of the amount indicated as a basis for auctioning the good or goods that the court purports to auction. The sum deposited by each losing bidder will be returned to him/her.

When auctioning an apartment for which the auction’s base price was US$38.571.00, six (6) persons participated as bidders and the apartment was finally awarded to an American citizen who tendered the sum of 30,501.00. The property is located in El Cangrejo and its current value exceeds by three times the sum paid at the auction.

Any person who decides to participate can do so individually or on behalf of a corporation. Once awarded, the assets will be registered directly at the Public Registry in the name of the corporation or the person who participated and was awarded the auction. The judge will then order the pertinent registration at the Public Registry.

Panama Announces Expansion

Monday April 24, 7:30 pm ET 

Recommends State-of-the-Art Solution to Growing Traffic Demand, New Lane Will Double Capacity

Final Decision by the Panamanian People Through a Referendum

PANAMA CITY, Panama, April 24 /PRNewswire/ -- In an historic move, the Chairman of the Panama Canal Authority's (ACP) Board of Directors announced today its recommendation to build a new lane along the Panama Canal that will double capacity and allow more traffic. This is the result of comprehensive analyses and studies by the ACP. The project is estimated to cost $5.25 billion and will be paid entirely by users of the Canal through a graduated toll system. Dr. Ricaurte Vasquez M., Chairman of the ACP's Board of Directors, submitted the recommendation to President Martin Torrijos at a Town Hall meeting in Panama today. The president will discuss the recommendation with his Cabinet, make a recommendation to the National Assembly, and the process will culminate with the Panamanian people voting in a national referendum.

"Today is an historic moment for the Panamanian people and the global shipping and maritime industry. After several years of analyzing and reviewing hundreds of studies and projections, we are recommending the expansion of the Panama Canal," said Dr. Vasquez. "Our vision is clear -- this project will be for the benefit of the people of Panama and world trade. Panama's geographic location is its destiny -- we aim to be at the center of global trade and become a great maritime hub. The time is right and the time is now." 

ACP Administrator/CEO Alberto Aleman Zubieta added: "Panama has been successful in managing and operating the Canal since the U.S. handover in 1999. We have broken several records and have set the bar high for efficiency, safety and reliability, while at the same time bringing more benefits to our country. At this juncture, we are up to the task to take on Canal expansion, to add more capacity and to ensure reliable service for our customers for decades to come."

The Economic Benefits

An expanded Canal will benefit the people of Panama and world trade. The expansion will help maximize Panama's strategic, geographic location by enabling it to become an international maritime hub at the center of global trade. Expansion will also improve the flow of international commerce and facilitate the movement of goods through several important markets. It will increase capacity at one of the world's critical trade arteries; allow the vital "All-Water Route" to continue to grow; create more efficient service at the Canal, which would tighten the global supply chain and help goods get to market faster, thus saving time and money for both producers and consumers.

 The Expansion Project

 Expansion would entail the creation of a new lane of traffic along the Canal through the construction of a new set of locks. Environmentally sound water-saving basins will be built alongside the new locks, which will reuse 60 percent of the water in each transit. This technology eliminates the need for constructing dams, flooding and displacing communities along the Canal's Watershed. This was also in keeping with ACP's adherence to sustainable development and environmental management best practices.

 Financing for the Project

 This project will be paid for by Canal customers through a graduated system of tolls. As always, the ACP will consult with customers on the new tolls pricing system and will take into account their specific needs. Potential construction is slated for completion by 2014. All creative means will be employed by the ACP to stretch capacity until the construction is completed. The ACP forecasts that the Canal will reach full capacity by the time the expanded Canal is operational.

 Since the handover of the Canal from the United States to Panama on December 31, 1999, the ACP has shifted its operations from a not-for-profit utility to a market-oriented business model -- one that is focused on customer service and reliability. Under ACP management, there has been a significant reduction in the time it takes to transit the Canal, an increase in tonnage transiting the waterway and a spike in transits of Panamax-size vessels.

The Decision Process

 The ACP's Board of Directors has now presented its recommendation to expand the Canal to the President and the Cabinet Council of Panama. If approved by the Cabinet Council, the matter is referred to the National Assembly for approval. The National Assembly will then create a law mandating a referendum, in which the people of Panama will vote on expansion.

 About the Panama Canal Authority

 The Panama Canal Authority is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the Panama Canal Authority is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the Panama Canal Authority's Web site: http://www.pancanal.com.

 The Authority's responsibility to the Panamanian people is paramount. The Canal belongs to the people and benefits from the Canal should accrue to as many Panamanians as possible. The Authority will plan its future so that it will continually contribute to the economic development and welfare of the citizens of Panama.

 This material is distributed by DJE, Inc. on behalf of the Panama Canal Authority. Additional information is available at the Department of Justice, Washington, D.C.

 --------------------------------------------------------------------------------

Source: Panama Canal Authority

Moving On

Content to Watch Bananas Grow, More Retirees Relocate to Panama
By BOB TEDESCHI
Published: April 11, 2006
MIGRATORY retirees have lent more than a touch of gray to Florida, Arizona and Southern California. Next stop on the aging boomer bandwagon: Panama.

Panama Today With low housing and living costs, a stable political environment, relatively safe streets and that tropical climate, people in their 50's and early 60's are flocking to the Central American nation, rather than working for a few more years to scrape together enough money for a condo on the Florida coast.

"We're seeing a significant number of Americans coming here to retire," said William Ostick, a spokesman for the United States Embassy in Panama City. "Panama as a nation is trying to attract people who want to build second homes here, but a lot of them are selling their homes in the U.S. and just buying here."

Mr. Ostick said the embassy did not keep statistics on Americans who have moved to Panama to retire, but he said there were 25,000 to 30,000 Americans living there. According to the Panamanian government, four times as many American retirees applied for visas last year as in 2004.

Although Panama, a country of 3.2 million people, can present challenges to those unaccustomed to living in a developing nation, its quirks are, for many, part of its charm.

"This is a place for people who don't need outside stimulus, unless it's looking at the sunrise or watching the bananas grow," said Honey Dodge, who moved to the mountain town of Altos del María with her husband, Larry, a retired sociologist, in 2004.

Ms. Dodge, 58, was the national chairwoman of the Libertarian Party and ran a furniture business with her brother in Dallas just before moving to Panama. She said that she and her husband considered moving to countries in nearly every part of the world before settling on Panama.

"We found charts on various aspects of life around the world — like what percentage of a country's population is in prison, how much corruption there is — and Panama never came out the best on any one chart, but it was always in the Top 10," Ms. Dodge said. "By the time we flew down here, I said if it's half as good as it's supposed to be, it'll be great. Well, it was more like 90 percent as advertised."

Like many retirees, Ms. Dodge said that a chief concern about moving to another country was the quality of its health care and medical insurance. Mr. Dodge, who is 62, "has had a lot of heart trouble," Ms. Dodge said, "and we're to the point where we can't afford health insurance."

While that may be a major problem in the United States, Ms. Dodge said that medical procedures in Panama are inexpensive "and very good." She said that Mr. Dodge has required two heart stents to open clogged arteries: one in Houston cost $52,000, and one in Panama cost $11,000, with good results.

Ms. Dodge added that if either she or her husband ever had a debilitating disease like Alzheimer's, she could hire someone to be there full time "to make food, feed and bathe you for $10 a day."

"If you need someone 24 hours, it'd be $30 a day," she said. "That's where this place really kicked in."

Kevin Bradley, an insurance agent in Panama City who was born in the country and spent summers in Darien, Conn., while growing up, said that health-insurance companies that cover retirees in Panama do not deny coverage to those with existing illnesses, but any problems associated with those conditions are not covered. A client of his with leukemia, for example, was not covered for any disorders stemming from the disease, he said.

Otherwise, Mr. Bradley said that retirees can qualify for insurance covering "any doctor at any hospital, anywhere in the world, including the U.S., at a pretty reasonable cost."

"Reasonable," in Mr. Bradley's case, is a $300 monthly payment, but with a $5,000 deductible.

Overseas retirement specialists said that while Panama is among the hottest foreign destinations, others are growing in popularity, too. Roger Gallo, publisher of EscapeArtist.com, a Web site about international relocation, said that Belize and Argentina have also attracted many American retirees in recent years.

As for Panama, most of the recent American retirees gravitate to one of three regions — coastal areas near the Costa Rican border, like the Bocas del Toro archipelago; the cooler mountain regions of the Chiriquí Province or Altos del María; and, to a lesser extent, Panama City.

According to Bob Adams, who runs RetirementWave.com, a Web site for Americans looking to retire in foreign countries, "For $200,000 to $250,000 you can get a very nice condo or home with a beautiful ocean or mountain view."

The cost of living, too, can be significantly lower than in the United States, Mr. Adams and others said. Restaurant meals are typically inexpensive, as is supermarket fare. Gas tops $3 a gallon. And, yes, the dollar is the Panamanian currency.

Some migrant retirees are surprised to hear that they must still pay United States income taxes even if they live abroad, said Karen A. Brodsky, a senior manager for Deloitte Tax, a division of the consulting firm Deloitte & Touche. "Their tax situation can be slightly complicated," she said. Panama collects no income taxes on money earned outside the country, though, so American retirees living on Social Security checks don't lose a chunk of those earnings.

For many weighing foreign retirement, the political stability of a country is a central consideration. It has been 16 years since the removal of Gen. Manuel Antonio Noriega, Panama's former dictator, and the country's lone area of political instability is in Darien Province, which is isolated from the rest of the country — no road connects it to Panama City and the more populated western provinces.

Now that Ms. Dodge has spent nearly two years in her new home — which she and her husband also operate as a bed-and-breakfast — she said she feels completely assimilated to her adopted country. "I'm not fluent in Spanish, but I can converse enough to get almost everything done," she said. "Everything is so familiar by now, it doesn't seem very foreign to me anymore."
 

Oxy Mulls Over a Move Into Refining

It may build a $6-billion facility in Panama to boost the value of the region's heavy-grade oil.

By Chris Kraul and Elizabeth Douglass, Times Staff Writers

March 31, 2006

Seeing opportunity in a former banana plantation near the Panama Canal, Occidental Petroleum Corp. may do something it has never done in its storied, 86-year history: build a refinery.

The $6-billion potential project, which Panamanian officials unveiled Wednesday, would represent a departure for Occidental, an oil and natural gas driller that has found most of its revenue below the ground.

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For eager officials in Panama, the project would encourage foreign investment, create thousands of jobs and boost the economy in Puerto Armuelles, a deep-water port near the Costa Rican border on the Pacific side of the isthmus.

On both ends of the transaction, location represents opportunity.

The refining business in general has become more profitable now that production can't keep up with worldwide fuel demand. The plant could prove especially advantageous for Occidental because it would convert cheap, heavy-grade crude oil from elsewhere in Latin America into valuable gasoline, diesel and jet fuel. The location makes it a simple matter to export those fuels to California and other lucrative markets.

Analyst Jacques Rousseau, who follows Occidental for Friedman Billings Ramsey, said the project could provide a guaranteed market for the hard-to-process crude that Oxy produces in Ecuador, Colombia and Peru. Because few refineries can handle it, that oil typically sells for $10 to $20 a barrel less than the so-called light, sweet variety that's in greater demand.

"They're not going to get into refining for refining's sake," Rousseau said. Given its fields in South America, he said, "they're thinking maybe instead of selling that oil at a big discount, they should make it into gasoline or diesel, and then that sells at better prices."

Still, a day after the announcement, Occidental cautioned that it hadn't committed itself to proceed with the project.

"It's potentially a strategic business opportunity that we are investigating further," spokeswoman Jan Sieving said, adding that "it's purely conceptual at this point."

In Panama, officials are already counting on the refinery moving well beyond concept.

"This project will be for Puerto Armuelles what the canal has become for Panama City, creating thousands of jobs and generating substantial commercial and industrial activity in a zone largely depressed," Alejandro Ferrer, Panama's commerce and industry minister, said Thursday.

The government of President Martin Torrijos plans to introduce a law Monday that sets aside the proposed site — a former Chiquita plantation 3,000 acres in size — for construction of the Occidental plant.

Ferrer anticipates that a project of the refinery's magnitude would transform the economy of an area now dedicated to cattle and farming.

The government estimates that the project would employ 15,000 people to build the refinery and supporting infrastructure. The completed facility would create 6,000 direct and indirect jobs.

In the project's favor are the isolation of the site, which is 30 miles from the nearest sizable town, and its proximity to both the port at Armuelles and a pipeline through which crude oil could be transported.

The pipeline currently pumps Occidental's Ecuadorean crude from the Pacific side to tankers on the Caribbean, but its direction could easily be reversed, Panamanian officials say.

The United States is particularly thirsty for fresh sources of fuel because the nation's last new refinery opened in 1976 and expansions at existing plants have not kept pace with growing demand. The West Coast, in particular, is short of capacity. California accounts for 12% of the nation's gasoline consumption, and supplies in the state are so tight that any glitch in production triggers sharp price increases at the pump.

For Occidental, the decision to move ahead with the project depends on the outcomes of studies by oil industry consultant Purvin & Gertz of Houston and Jacobs Engineering Group and Fluor Corp., both California-based engineering firms. A determination is expected by the end of the year.

Oxy said the project would require at least one partner. Panamanian officials said the project could be operational as early as 2011.

"It all comes down to economics," analyst Rousseau said. "But the strategy makes sense."

Panama to build tallest tower in Latin America
 

 PANAMA CITY, March 17 (Xinhuanet) -- Panama plans to build a 97-storey, 350-meter high tower which would outdo Mexico City's Torre Mayor, currently the tallest in Latin America, the tower's developers said on Friday.
The planned tower, called the Bay Palace (Palacio de la Bahia), in Panama City, would have a heliport, a rotating restaurant, a hotel, offices and shops, said Adolfo Olloki, spokesperson for the Spanish-owned Olloki Group, the developers of the tower. It would take 10 years to build the tower, he said.
The Panama City mayor's office had approved the project, designed by Olloki architect Jesus Diaz, and the construction would begin within two months, he added.
The tower was estimated to cost 130 million U.S. dollars, and would be built on the site where the Maria Auxiliadora college once stood.
The developers said that they were pleased with pre-construction sales for the tower at the Madrid and Barcelona trade fairs, and that up to 50 percent of the tower had been sold already.
According to Panama City's Construction and Public Works Department, the construction sector contributed 814 million dollars to the national economy last year.
www.chinaview.cn 2006-03-18 11:21:07
 

Global Real Estate Isn't So Global

Given the potential impact of higher interest rates on U.S. real estate, investors are increasingly searching for opportunities in other countries. In fact, the current real estate boom has gripped
investors from Sao Paulo to Shanghai, but they need to be aware of the pitfalls, such as lack of transparency and the inability to secure property rights, that are still common in emerging markets. In order to identify good opportunities, experts from Wharton and The Citigroup
Private Bank note, investors need to develop a solid understanding of local economies.

In the fall 2004 edition of the Wharton Real Estate Review, Jacques Gordon, global strategist at Chicago-based LaSalle Investment Management, cautioned against using the word "global" too broadly for real estate. "There is little that is 'global' about the world of international real estate," he says. "This is not a world that treats all 197 countries tracked by economists at the United Nations, the World Bank, the OECD and the IMF as equally eligible investment targets." Gordon says the capital willing to flow into real estate comes mostly from eight to 10 countries and is headed for no more than 20 or 25 countries. Research by LaSalle Investment Management's parent, Jones Lang LaSalle, identified the principal origin countries for real estate capital in 2002 to 2004 as Australia, Canada, Germany, countries in the Middle East (including Israel and oil-exporting Arab states), the Netherlands, Singapore, the U.K. and the U.S. The target countries, however, represented 80% of the world's gross domestic product.

What are the obstacles? First, the trend toward legally enforceable titles has only just begun. Indeed, lack of transparency and the inability to secure property rights still get in the way of real estate capital going to many emerging markets, Gordon says. Also, many local real estate practices show relatively few signs of "convergence" despite the pressures of globalization. "Lease contracts, mortgage instruments, and regulatory and tax regimes remain deeply rooted in country-specific traditions, notwithstanding the growing trend of cross-border investing and the advent of multi-country trade blocs," he says.

Gordon acknowledges that transparency regarding the nature of these differences is rising, but country-specific real estate practices remain closely tied to long-held institutional frameworks. Gordon lists some of these: the Civil Law versus Common Law approach to property rights; tenant-friendly versus landlord-friendly approaches to lease contracts; and local standards applied to building and zoning regulations.

Wharton real estate professor Grace Wong, who has studied the housing market in Hong Kong, particularly the bubble during the mid-1990s, emphasizes the difficulty of unraveling the elements that affect real estate pricing in the global market. Wong's analysis of the Hong Kong bubble -- which saw a 50% increase in housing prices between 1995 and 1997, and then a 57% decrease between 1997 and 2002 -- shows that even the usual suspect -- interest rates -- had little to do with the initial rise in home prices. It also wasn't a simple supply-side story, according  to her analysis. "The literature of speculation has been limited by the difficulty of measuring fundamental values of assets," she writes in a working paper titled, "The Anatomy of a Housing Bubble." "This difficulty is exacerbated in housing studies because of the structural heterogeneity of the housing stock, low transaction frequency, and the importance of geographical location and local institutions (e.g., zoning laws) in determining housing values."

Sweet Spots amid Uncertainty

Stephen Coyle, chief investment strategist at Citigroup Property Investors, sees some "sweet spots" amid all this uncertainty. For instance, he finds the western German residential market to be "interesting" and says Citigroup is active there. "Properties are being sold for 80 cents on the dollar at today's values, which is up from 70 cents on the dollar six months to a year ago and 50 cents on the dollar three years ago," he says. "The problem is, if you buy a portfolio, you are going to have some eastern German exposure, and you want to limit that." He also sees openings where others see problems: "The lack of transparency in Europe creates a lot of opportunity, especially as corporations and governments sell off non-strategic real estate as part of the 'Great Exchange' from users to investors." And he warns investors to stay away from markets that lack a clear financial infrastructure.

Coyle says his team is spending a lot of time scouting for opportunities in China, India and Japan.  He's upbeat on Japan, especially with the recent recovery in its economy. He also expects  "a ton of assets" heading for sale after February 2006, when a new law will take effect requiring corporations to price their assets at fair market value. "You are going to see more and more assets brought to market on behalf of corporations, not just government-owned stuff," he
says.

Earlier this year, India enacted laws that make it easier for foreigners to invest in construction and real estate, and the country has worked on streamlining master planning and zoning. "We're
particularly excited about the Indian market, especially with the recent policy changes and the general growth we expect to see happening there in the office and retail space," says Todd Thomson, chairman and CEO of Citigroup Global Wealth Management. Other markets on his  radar include the Ukraine, where he expects a turnaround, as well as Poland and Hungary.

Bulls in China

Another China bull is Quek Kwang Meng, who heads real estate investment for the Asia-Pacific region at The Citigroup Private Bank for clients in Hong Kong, China, Singapore, Thailand, Malaysia, the Philippines, India and the Middle East. "Asian investors are wary of interest rates, but the dynamics are different in this region because of the huge growth in demand, and there is  a shortage of supply," he says. He points to Shanghai, for example, a city of about 18 million people where the annual supply of 200,000 housing units is equivalent to the whole of Australia. China's rapid growth is fueling a large migration to cities from rural and suburban areas. Wages in China are rising 15% to 20% annually, and people need housing.

In the June 15, 2005, edition of The View, the monthly investment publication from The Citigroup  Private Bank, chief global investment strategist Winter wrote: "China's needs are so great -- 400 newairports, according to the nation's state planners, more than 500 large power stations, dozens of new port facilities, thousands of miles of railroads and highways -- that the bill could easily run into hundreds of billions of dollars." He noted that dollar flows into the country would accelerate, also because of the need for oil, cement, steel and food "in the increasingly well-fed nation."

Quek says real estate developers in China are raking in returns of more than 20% on their investments, and Hong Kong's property prices are up 120% from 2003. He now feels emboldened to launch a few real estate funds. Several large developers have floated their own funds in an attempt to distribute risks and enhance their ability to take on large projects.

Quek isn't worried about the market risks should interest rates rise, mainly because of the Chinese government's clampdown on speculative activity. Banks avoid giving loans to people buying their third or fourth house, which also has cooled the market for luxury homes. Elsewhere  in Asia, Quek says loan-to-value (LTV) ratios are conservative at 60% to 70%, and governments and banks discourage excessive borrowing. Hong Kong doesn't tolerate LTVs beyond 70%, and Singapore's 90% threshold also keeps debts in check. In addition, Hong
Kong and Singapore have no capital-gains taxes, something Quek sees as a big plus for his investors.

Real Assets in Latin America

The real estate investing market is also strong in Brazil, where Jan Karsten is the Latin America head of Investment Counseling for The Citigroup Private Bank. His high net worth clients hold an average of 50% of their portfolio in real estate. Brazilians hold a high portion of their investments  in real estate chiefly because it has been viewed as the surest way to protect their net worth against inflation.

Karsten says that despite high exposures to real estate, Brazilian investors hold the rest of their investments in liquid, fixed income instruments, besides private equity and hedge funds. A significant portion of Brazilian investments traditionally has been in Argentina, and that continues with Argentina's robust economy. Karsten says attractive exchange rates also entice U.S. and European investors, especially in agribusinesses and wineries.

Karsten is not worried about interest rates; they are now around 17.25% in Brazil, and "there isn't much room for them to go any higher." Also, 2006 is an election year and Karsten expects interest rates will be lowered given the political mileage such a move would offer.

Real estate is gaining an increasingly larger share of high net worth portfolios in Mexico and elsewhere in Central America, according to Eduardo Dosal, global market manager for The Citigroup Private Bank in Mexico. He says credit is more easily available for real estate owners than it was four years ago, and interest rates have been steadily lowered (about 10% currently compared with the punitive 80% a decade ago). Also, the political and economic stability of the region is improving, which has contributed to investor returns of 20% or more in real estate.

A rise in U.S. interest rates would affect Dosal's markets significantly, especially the dollar- denominated bonds issued by many Latin American governments. He says his investors "have already started asking a lot of questions about private equity deals, and are investing in them." Much of this investment is destined for the U.S.; he says most local Latin American markets don't offer the liquidity or depth in stocks and bonds, let alone options in leveraged buyouts or hedge funds.

Against this backdrop of beckoning offshore markets and changing fundamentals at home, Citigroup executives expect many of their high net worth clients to gravitate toward opportunistic plays in search of higher returns. The Citigroup Private Bank CEO Damian Kozlowski says that as large capital inflows have lifted U.S. property values to uncomfortably high levels, "investors are going down the food chain" to look for other situations they may not have necessarily considered in the past. But with such investing where they don't understand the terrain so well, Kozlowski finds them "less confident that they can make it work like they did the last time." Clearly, while  they are searching for the next pocket of opportunity, they are treading cautiously.

Piece of paradise.......

 Day to Day, March 9, 2006 · It's a good bet that most people at one time or another have thought about running away to a tropical paradise. For most, it remains just a fantasy. But booming housing prices in the United States and a rising cost of living for retiring Baby Boomers is prompting more Americans to look to retiring abroad.

Of course, that's not a new idea. But as traditional spots in Mexico and Costa Rica become more expensive, an increasing number of Americans are now buying their own piece of paradise in parts of Central America that were once considered dangerous backwaters -- places such as Honduras, Nicaragua and Panama, previously off-limits because of volatile political climates. 

Panama, in particular, is experiencing a real estate boom due largely to American retirees looking to settle down. In the archipelago called Bocas del Toro, the boom is more like a feeding frenzy.

The tourist businesses lining the quaint, unpaved streets of the main town until recently were geared toward the surfing crowd, who have been coming here for years. Now there are dozens of hotels, a gourmet supermarket and spa facilities. There are new faces in the crowd every day.

A large percentage of the people are going to be Baby Boomers -- people in their 50s who have a lot of equity in their home in the United States, people who don't have much in the way of retirement programs.......

To read the whole article go to Day to Day's web site at: http://www.npr.org/templates/story/story.php?storyId=5251669

Panama, Chile reach free trade pact

PANAMA CITY, Feb. 4 (Xinhua) Panama and Chile signed a free trade deal here on Saturday, ending their 15th round of Free Trade Agreement (FTA) talks.

Chile has accepted Panama`s proposals on financial service, professional service as well as market access for agricultural and industrial products, said Alejandro Ferrer, Panama`s Minister of Commerce and Industry.

He said Chile has also acknowledged the important role Panama`s Colon Free Zone has played in the regional and world trade.

It is the fourth FTA Panama has reached as the country has signed free trade deals earlier with El Salvador, China`s Taiwan and Singapore.

Ferrer emphasized that most of the Panamanian products will enjoy a zero tariff when entering Chile`s market. And tariff reduction for 8 percent of Panama`s exports to Chile will be completed within 10 years.

The two sides excluded some sensitive issues from the agreement such as market access for agricultural products.

Free trade negotiations between the two countries failed in 1998 due to big differences on financial services. The talks resumed in July 2004.

National and foreign retiree pensions continue to be income tax free

Since the enactment of Public Law 6 of 2005 (Whereby a Fiscal Equity is Implemented) there have been some publications, specially on the internet, that in a vicious and distorted way have been spreading misinformation regarding the effects of Law 6. This information could affect negatively our national economy and the legal security environment for foreign investors in the Republic of Panama. Hence, the Economy and Finance Ministry clarifies the subject as follows:

FIRST: The pensions and/or retirement benefits that foreign residents of Panama receive from abroad, DO NOT PAY Income Tax in our country, neither are obliged to declare such income.

SECOND: Law 9 of 1987, “Whereby exemptions are granted to Retirees, Pensioners and persons retired from active live”, is still in force.

THIRD: The interests generated by savings accounts (i.e. Time Deposits, Regular Savings Accounts) DO NOT PAY Income Tax in Panama.

FOURTH: The Republic of Panama only taxes income that is generated within the territory of the Republic of Panama. Therefore, foreign source income is not taxable in Panama.