December, Panama, madness, road rage, traffic jams, inconsiderate drivers, emotional intelligence, cutting off, blocked intersections, blocking intersection

December Madness: Road Rage

Unfortunately, we are back in that time of  year when Panama’s road rage escalates and the traffic jams just seem to be crazy!  Everyone that has a car is out and about, and there does not seem to be a single day where there aren’t any traffic jams.  Obviously, Panama’s traffic in the central business district is pretty bad all year round – but December is nightmarish.

Every year, we see the government make the Corredor Norte & Corredor Sur (toll highways) free for some of the December period (often December 7 or 8 – Mother’s Day; and then again for Christmas – one year they made it free from the 19th to the 23rd!).  This is because some 2 million cars transit through Panama City every week.

It was so bad in 2016 that the Government changed the working hours of public offices so that they would leave work earlier and be able to get home before the worst of the traffic.  Hopefully this year it will be repeated, and we will see some employers offering alternative working hours to their staff to accommodate the Christmas traffic.

Road Rage

In Panama, all year round, it’s quite common to find drivers aggressively jumping queues, blocking intersections (even with the traffic cop directing the traffic), honking, flashing their lights, and speeding up to block you out as you try to change lanes or merge.  But this inconsiderate driving in bad traffic conditions seems to get worse in December.

What is essential to realise – while you cannot change or control how others respond & react in the traffic – you can control yourself! You can choose how you are going to view the problems around December traffic and stress.

Emotional Intelligence

Emotional intelligence – something that many times appears to be sorely lacking in Panama – is the capacity to perceive, access & manage yourself and understand others.  It’s quite similar to empathy – with the added bonus of being self-aware.

It’s important to note – this is not intellectual.

This is intelligence.

It refers to our ability to learn – to continually change and adapt the information we had and then choose to respond differently.  One of the biggest challenges with emotional intelligence is that there is communication between the emotional and rational centres of our brain – and they occur at different speeds.

The lymbic system, which receives and processes a stimulus (leading to an emotional response), actually receives and processes faster than the neocortex (rational brain).  So, inevitably, we react emotional BEFORE we have had a chance to think.

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So, while it’s true that Panama needs to come up with new solutions to the December madness that leads to the road rage in the first place – there’s also a place for self-regulation!

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In  my ideal world of PanUtopia, all driver’s ed courses would include the following education:

  1. Pause & count to 10 —
    1. The brain struggles to process more than one thought at a time.  So you cannot count to 10 AND be thinking about why you are so mad at the other person.
    2. This allows the anger and emotions to dissipate until you can engage the rational brain
    3. Don’t take this frustration home with you – release & let go before you walk in the door!
  2. Engage your brain – think & visualize the consecuences of how you are planning to respond
  3. Practice empathy – recognise that they are driving in their own circumstances
  4. Defensive driving – not simjply driving according to the rules, but awareness that others might not be following the rules. It’s better to be safe than to be right.
  5. General education about timeliness – if there’s always bad traffic in Panama (and we all know that there is) – always calculate your travel time to the worse possible scenario, so that you are always on time.  It’s not the traffic’s fault you are running late.

Solutions

So, let’s really talk solutions to this December madness.

More public transport

I would love to see Panama actually start planning and announcing public transport options during the peak traffic.  To know that during the December traffic, there will be buses running more often than during the rest of the year.

And I would like to see Panamanians using public transportation more during the Christmas period:

  • metro
  • buses
  • Uber/taxi
  • Pedestrian

Carpooling

I would love for Panama to simply do away with their not-so-well and not-so-brilliant carpooling legislation! Who would think that legislating carpooling would actually work?

The problem is that in other countries a police officer will not pull you over in the morning traffic to find out whether the person(s) travelling with you in the car are friends/family or an officially carpooling which is registered… they will simply be glad for less traffic on the road.  However, in Panama, the taxis and transport unions are so strong, that they have made it impossible for anyone to give a neighbour or co-worker a lift to work – because apparently that’s unfair competition with the public transport sector!

Who in their right mind thought that this was a good idea?

If we want to address the traffic nightmare, we need to accept that maybe, perhaps, a neighbour will ask you for petrol-money!  And that’s okay.  It’s one less car on the road.  It’s not an illegal taxi service!

Changed working hours

In past years, the government has changed public offices working hours in December, in order to alleviate the congestion at peak hours.  This means that public officials were getting out of work by 3.30 p.m., allowing them to be home before 5.00 when the rest of private enterprise was getting off work.

More TV time – educational videos

I would love to see the transport authorities / police spend money on educational videos!

  • how to use a roundabout (circular intersections  – rotaries – what do you call them?)
  • reminder that a passing lane is for “passing” – go back into the right lane if you are not passing
  • give me a comedy about the rudeness of queue jumping
  • pet peeve – teaching drivers NOT to block intersections – don’t move forward into an intersection until it’s clear to exit.  And give this education, especially, to the traffic cops that are directing traffic.  Yes – even if you are directing traffic, there’s still no reason to allow ANY car to block the intersection!
  • tailgating versus defensive driving
  • purpose & uses of indicators – maybe another tongue-in-cheek comedy routine

But really – be safe as you are out there driving in the December madness.

Remember – while you have no control over how others are driving – you are 100% responsible for your own responses.  How will you choose to drive this December?

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Panama, traffic jams, car, cars, transport, network, train, metro, bus, buses, quality, life, work, employment, jobs, commute, commuting, driving, riding, stuck

Traffic jams

It’s 4.44 a.m. and I am awake with my hot chocolate. This, for me, is quite a normal time to be awake and up.  But that’s just my body clock – that loves getting up hours before dawn to welcome the day!  I love the quiet morning – no interruptions – just to sit and write.

Most Panamanians, however, have a waking time similar to this – with alarm clocks and a commute that I do not envy!  One friend tells me she leaves home before 5.50 a.m., otherwise she will be stuck in traffic for 2 hours.  If she leaves before then, it only takes 30 minutes.  So, she gets to work at 6.30 a.m. every morning!  But it’s better to be at work than stuck in traffic for hours!

Another lady in my office leaves home (Chorrera) every day before 5.20, so that she has a “hope” of getting on the unlicensed buses (known here as bus pirata), because at least then she can come with air-conditioning and sitting down.   All in order to get to the office before 8.00 a.m.  Most people that live in Chorrera are awake at 4.00 a.m. to get to work by 8.00 – to me that is simply unimaginable!

It’s quite normal for a Panamanian to spend 4 to 5 hours a day stuck in traffic on their way to and from work!  Imagine the quality of life they could have if they could recover 3-4 hours a day!

While it’s true that the Metro train runs from Los Andes to Albrook Mall in 20 minutes, that’s only a partial solution to Panama’s commuting problem!  Panama has built suburbs in three directions:

  1. Los Andes / Milla 8 / San Miguelito
  2. Tocumen / Pacora / 24 de diciembre
  3. Arraijan (pop. 300,000)  / Chorrera (pop 200,00)

Of these three areas, the current metro line only services the first of these.  The second metro line – under construction but “almost finished” will cover Tocumen, 24 de diciembre & Pacora – but will not actually go to the airport!  So, for now, we can forget about the option of coming into the airport and just catching the metro home!  Once again, I see no plans for any parking at the final station.

And the third line of the metro – that will take care of commuters from Chorrera & Arraijan, is still in planning phases – with the largest part of the plan being the bridge across the Canal for the train & more traffic.  Chorrera and Arraijan used to be in the same Province as Panama City – until the populations grew so much, that the west side of the bridge was divided off into a new province: Panamá Oeste.  Chorrera is now the capital of that province!  But it doesn’t “act” like a provincial capital in many ways.  It continues in its role of sleeping & housing satellite for Panama City.

As Ursula Kiener stated earlier this year in a tweet – building 20 bridges across the Canal isn’t going to solve the problem – the issue lies with having Chorrera & Arraijan simply as dormitory cities.  We need to start developing the rest of the country and creating jobs there.

But even if I look at New Zealand – and their commuting problem for Auckland’s central business district – is it really all that different? Twelve KM from New Lynn to CBD in about an hour – which is half the distance that commutes have from Tocumen or a third from Chorrera (34km) into Panama City’s CBD.

Panama attempts to solve the commuting issue by having all of the lanes of the Interamerican highway coming INTO town from 4.00 to 8.00 a.m. – meaning that if you want to go out of Panama City, you take the Puente Centenario!

Basic culture – driving:

And that’s without even talking about the traffic in downtown Panama City!  Unfortunately, Panamanians do not appear to have learned the basics of how to handle intersections – exacerbating the traffic jams and frustration for other drivers.

What’s worse — you watch the traffic cops telling drivers to pull up over the intersection while they wait in line… doing nothing to help in the education of drivers who are respecting an intersection.

 

Pet peeve # 2 – Panamanians do not seem to have learnt the correct way to use a roundabout!  Panama would be a slice closer to Utopia, if every driver would just follow the simple etiquette and rules for using a roundabout.

Part of the solution lies in a complete education of Panamanians regarding regard to the driving rules – not driving on the shoulder and creating a third lane when there are only two, not driving down a one-way street the wrong way to avoid the queue in the other street, and respect for fellow drivers.  Everyone is heading the same direction – getting to work.

Transport solutions

Public transport

The options in Panama at the moment are limited:

  1. Buses, including metro buses & “piratas” – referring to the unlicensed buses that run daily (who when they are deemed illegal actually protest and block the roads)
  2. Metro system – line 1 – running North-South – only available at the moment from San Isidro to Albrook Mall
  3. Taxis – which used to be relatively safe and comfortable – are now often not air-conditioned and people are concerned about their safety
  4. Uber & other apps – a better option, as long as you have a credit card for payment, since they are phasing out cash payments (although in today’s headlines – this is being extended again)
  5. Walking
  6. Cycling

I don’t know anyone in Panama that would cycle to work – especially since upon arriving at work they would need somewhere to shower.  The heat & humidity of the tropics does not make this a cool morning ride to work – and the fumes from the traffic are asphyxiating!  Not to mention the complete lack of cycle-friendly cars that would push you off the road in their angst to get to work “on time”.

Uber & taxis are certainly not options for a long commute – such as from Chorrera or Pacora, because they would break a hole in your pocket if you did that daily!

And so commuters are left only with walking (fine for short distances as long as there isn’t a tropical downpour), buses or their private vehicles.

Car-pooling or ride sharing

Car-pooling would seem like one obvious solutions to Panama’s public transport crisis more than one person travels in a car, and prevents the need for others to have to drive  themselves. Ride-sharing reduces each person’s travel costs such as: fuel costs, tolls, and the stress of driving.

While to me it may seem crazy – Panama prohibits carpooling or ride-sharing to work – unless you’ve registered for it!  The taxis and public transport didn’t want people to be able to do this, because they said that the driver would charge others for the ride (i.e. gas money) and that was taking money out of the pocket of public transport.

Really?

Seriously?

Would you LOOK at the transport problem that Panama has?

And you want to legislate carpooling & ride-sharing so that it’s done properly???

While every other country simply has a rule that there are carpooling lanes (i.e. if there are two or more people in a car they get a special fast lane) – Panama is sitting here complaining about the traffic problem without really solving it!

Rant over.

Parking for at Metro Stations

One of my pet peeves is the LACK of parking at the final metro stations – I’m talking Pacora (when they finish line 2), San Isidro (out past Los Andes) and whatever the plans are for the last station in Chorrera.  I understand that there is no parking at the station on Vía España or even San Miguelito’s “La Gran Estación”.

But I don’t understand the lack of planning of not ending the final station with a car park, so people can drive to the station, leave their car and hop on the train! So you don’t want to have security looking after the cars? Put a sign up – “leave cars at your own risk”.

But the reality of Panama’s situation – especially in a country where it rains 8-10 months of the year – people need a way to get from their home to the train station.  How do we expect commuters to get from their homes (often in suburbs and gated communities) to the train station to start the commute? They are not going to pay a taxi and most likely not going to walk 3 km to the train station!

Implementing solutions

While I agree that it would be fabulous if some of the companies and jobs were available in Chorrera, rather than everyone commuting into Panama City – I don’t realistically see that happening within the short term.

Headquarters for multinationals are already “out of town” – in the sense that they are not central business district – either in Panama Pacifico, ciudad del Saber or Costa del Este. Processing zones are constantly being developed in Don Bosco, Tocumen and Transistmica – areas which are highly industrial and strategically located for logistics between Colon and the airport.

But Panama needs to find that perfect mix between investing more heavily in public transport (buses, not just the metro) and offering commuters options of how to get from their homes onto the public transport network.  They need to make sure that walking to a bus stop is actually an option, not an obstacle course.  I am constantly amazed at how sidewalks simply “end”, leaving you in the middle of an overgrown or muddy patch of mire.

There has been a lot of criticism these last two years about how the walking infrastructure (foot paths & walkways) has taken away what little parking there was in the central business district.  Not to mention the horrendous flooding that badly planned and executed works have caused!  The current river flowing down Vía Argentina each time it rains has become a sad parody of  wake-boarding!

That aside – if we really want to improve the quality of life for Panamanians – we need to accept that public transport is what will provide that.  This means more trains & a metro system that allows people to get home within 30-40 minutes, rather than 2 hours, more buses (especially shorter routes that go through neighbourhoods) and taxis or Uber.

If we are going to go with more public transport – Panama needs bus stops that actually keep the water out when it’s raining – not tiny little roofs for a spring shower!  And the public foot paths need to be walkable – rather than dangerous obstacle courses!

Building more roads (corredores or bridges across the Canal) will not solve the problem – this requires a change of culture & expectations.  And this means – the solution will take a generation to re-educate!

So – when do we start?

 

Panama politicians, politics, promises, electoral promises, needs, community, communities, identify, coach, coaching

Promises Panama needs

Last week I published a post regarding my “wish list” for Panamanian politicians – what I wanted them to demonstrate in their character – compassion, creativity & courage.

André Conte responded that while he enjoyed it, more than “what do you want” he wanted the question to address “what do we all need?”

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So, while I’m not entirely sure that I have managed to truly answer his question, here is my attempt at responding to the issues that I think our 2019 elected politicians need to seriously address.

Many of these issues will not fall upon the legislators to respond – but rather upon the President, Cabinet, individual Ministers and heads of Government Departments.

Some will require incredible courage, such as the head of the Caja de Seguro Social – a crisis which I have been hearing about the past 25 years. And yet, it’s still in crisis! The leadership required here is one of an appointee – not an elected official!

And yet, here’s hoping that they step forward with compassion – the ability to connect to all the interested parties; creativity – to be able to draw upon all the solutions from all interested parties to solve the crisis; and courage – to confront the many interests that arise and actually implement a solution after having heard all interests, identified the needs of the institution and the public, and work to a long-term solution for the institution once and for all.  I maintain my opinion that every single politician and director or Minister needs coaching & mentoring in order to truly be effective in their roles with adequate support!

What I’ve seen of politicians so far

Unfortunately, my opinion of politicians is not very favourable.

It’s my belief that they are driven by their need for “job security” – which means that they are looking solely for reelection (to the same post or a “better” one), rather than driven by the needs of their communities.

Typically, this means that they are always looking for a building or project with their name on it – it’s irrelevant whether the community really needed it or not. They want something that they can point to and say “look what I did for you”.  Most constituents will look at that and think “wow, they built something”, without actually asking whether that was the priority of the community.

Bureaucrats, similarly, are driven by promotion & job security. This means that they will not do anything risky – even if change is needed – because that could get you fired. Likewise, in a situation of cronyism, they are unlikely to oppose elected politicians, because that will get you fired.  This means that they will simply toe the line – even if the line isn’t going anywhere!

Community interests & needs

Unfortunately, this typically means that neither the elected politicians nor the bureaucrats are studying the interests of the communities that they serve. And moreover, it means that no one is thinking or evaluating the long-term needs of the community or society as a whole.

For some areas of Panama’s political plans, I am aware that there have been agreements reached between political parties & bureaucrats regarding long-term plans. But this is the exception, rather than the rule.  Unless politicians are willing to give up their aspirations for reelection – focusing instead on the long-term needs of society, instead of a building with their name on it or hams for Christmas – what will be done?

How will projects actually be completed if there is not complete “buy-in” from all interested parties? Solutions that are reached by the different interest groups – and not simply decided by politicians with a 5-year plan.  This is one of the primary reasons why I will harp on, over and over, about the need for compassion (connection), creativity (the ability to brainstorm with all interested parties solutions – outside the box), and courage (motivation to move forward and overcome obstacles that arise along the way) for the leaders in driving a solution forward!

Because – if for once – someone were able to get all of the interest parties to agree upon the solution, which takes longer than 5 years to implement – it wouldn’t matter that the government changes.  The interest groups themselves would keep the projects and solutions on track through the change of government. But I haven’t seen a government yet capable of pulling off a solution of this magnitude!

So, what do I think we need?

Where do I start?  Which of all of the needs of Panama is clamouring the most for attention?  If we solved one of the problems, would that solve all the rest?  I know that O’Neill in Alcoa found a keystone problem, which when he solved then solved by itself all the rest of the problems within the company, but I am really hesitant to take a guess which one of the areas of government might have the biggest impact on all the rest of the areas!

Presidency

For want of a better place to start, I will start at the top!  And I will admit – this being PanUtopia – the size of the issues to be addressed overwhelms me as to who the right person for this job might be.  Because, in utopia… this person would be capable of handling a Cabinet of Ministers and keeping each one of them, and their respective subordinates, focused on the goals at hand and putting each of the areas I will touch upon in order!

Qualities I want in a President:

  1. compassionate – able to connect with empathy and understanding with communities and their leaders; able to connect with each member of the Cabinet and empower them to effectively do their jobs, because it’s not the President’s job to fix each of the problems that I will identify below; diplomatic – able to command a room and speak from the heart, capturing the attention and connecting with the audience;
  2. creative – able to sit down at a table with 15 people + assistants, and brainstorm solutions – calling in all the talents & abilities of those present – to create solutions that no one person individually could possibly come up with; analytical & logical – able to look through the numbers and lists and come up with priorities and rationally decide the most efficient course of action; well-read & educated – to learn from the experiences and draw from the experience of others that are not even in the room through extrapolation;
  3. courageous – secure enough in their identity to speak their truth and present their ideas and solutions; motivated to see the solution through any obstacles, knowing from the very beginning that obstacles would arise and that they would need to create solutions for those, and being willing to do the hard work consistently to see it through to completion.  Motivated to push through the days when things appear to be going wrong, not simply waiting until “things feel right”.

Looking at that list… it’s kind of what I want in every Minister & Director of Government Agencies as well!  It’s not enough that it only be at the level of the President!

As you will see from the issues below – many of these issues are actually in the hands of bureaucrats – Ministers appointed by the President (not publicly elected officials) and heads of Departments.  While there will be necessary work with publicly elected officials (mayors, representatives and legislators), the majority of “decision making” and implementation will be effectively be within the executive branch of government!

How important is it, over the next 5 years, to legislate in theses matters (other than budget constraints) versus implementation of the decision-making?

Education

Unfortunately, earlier this year I wrote about the challenges facing Panama’s education system, and many of those challenges are still unattended.  Of the 1300+ schools without walls (just the roof held up on posts), there are more than 700 still outstanding. In a recent study of the 3rd grade education level, 1/3 can’t write, 50% can’t read and 60% don’t have requisite basic math skills expected!  That’s without even addressing the issues of modernisation of the system to meet the constantly changing global climate and advances in technology and work environments!

The biggest challenge, however, that I see — what is the vision that guides Panama’s education policies? How will the Minister of Education reach consensus with the educators and other interested parties (including even future employers and entrepreneurship opportunities) to establish the road map that will guide decision making in coming years?  What is the first and primary issue that should be dealt with in the education system that would work towards solving the myriad of issues that need to be faced: preparation of the teachers, infrastructure, participation in growth of the economy, technology?

This one area alone requires someone at its head that truly can get to the bottom of the issues within the Ministry and set a plan of action with the buy-in of the teachers & educators to achieve at least one phase of the plan by 2024!

Health

While I accept that the health issues are actually 2 separate issues, one being the Ministry of Health (and approval of imports of medication, as well as the State health network), there is the more pressing crisis of the CSS (Social Security).  This is a challenge from within as well as from the outside!  The competing interests are tearing it apart, as they have been doing for the past 30+ years!

There are issues regarding their finances & assets, issues with respect to the services (or failure) offered, the infighting and power struggles (national as well as regional and within hospitals), and the competing interests of the doctors, nurses, technicians, suppliers & patients.

This is definitely a scenario where I could see the identification of keystone habit (such as that described by O’Neill in his experience at Alcoa) would actually make a monumental difference to the whole organisation and could be the beginning of a solution!  However, O’Neill was lucky that he counted with the support of his Board – the ones responsible for bringing him on to solve the problem!  In the case of the CSS – this need for support from the Board would need to be addressed!

Housing

Panama currently faces the challenge of needing 200,000+ housing units – but the construction industry is faced with rising labour & material costs.  Construction permits dropped 50% in 2018, and while the country needs 15-16,000 additional homes each year, only some 14-15,000 a year were being built (before the drop in permits!).  Of the 100,000 homes promised by the current government during their term, some 45,000 have been built.

The head of housing will need to balance the interests & needs of the community (for housing) against those of the construction companies, infrastructure needs, and environmental concerns.

Infrastructure

Closely related to the need for housing are other infrastructure needs – even though in 2018-2019 some $2 billion of projects are underway.  This includes finishing line 2 of the Metro and starting line 3 to Arraijan & Chorrera.  But one of the questions being regularly asked is why Chorrera is merely a satellite of Panama City, rather than being designed and built as a separate center that provides employment and not merely sleeping quarters to workers for Panama City!

Two thousand km of roads were promised by the government and claimed to have been built, although it was later clarified that this was really only some 355 km that were completed.

The government also promised to eradicate latrines – but while 200,000 were promised, the results remain unknown.  Likewise, running water has not been installed to all communities in Panama, and many communities still find themselves off the electric grid and mobile phone coverage.

Energy

Closely related to the foregoing issues are the myriad of issues tied up in the energy sector.  I wrote about these issues a number of months ago.  The interest groups here are varied and with conflicting interests.  Needs include:

  • a long-term maintenance plan
  • transmission line #4
  • pricing
  • environmental policies and policing.

The sectors that are affected by energy include: construction, commerce, industry & consumers.

If Panama wants 75% renewable energy by 2050, it needs to change the legal framework and confront the investments recently made into gas-based energy projects, rather than green energy projects such as wind farms or solar power.  In 2016, 60% of the electricity produced in Panama was through hydroelectric plants (which while a renewable source, create significant environmental damage in large areas), 32% thermal, 7% wind and only 1% solar.  What is curious to note is that worldwide, countries with much less sunshine (take for example – Germany) have a much higher rate of solar power than our tropical nation!  Go figure!

Fiscal Policy

Panama’s current fiscal policy requires an overhaul – in order to:

  1. attract investment
  2. be fair on all the players in the market (including small & medium enterprises)
  3. tax monies should not be “lost” through poor management and corruption/theft
  4. in order to “balance the books” – decisions may need to be made to cut government overhead
  5. it may be necessary to down-size government offices, irrespective of how unpopular that may make government members!

Economy

Where to start?

Panama currently faces more unemployment, less investment, less loans being granted and less sales in commerce.  In 2018, the unemployment rate increased for the fifth consecutive year.

There is a serious lack of equality within the country, with many areas still in subsistence farming and well below the poverty line.  Only a few sectors are actually benefited by the current economic growth that is touted internationally.

Financing is barely available for the business sector, particularly small to medium enterprises.  Policies do not support or encourage growth, investment or expansion of companies.

Unemployment

Forty percent of the workforce is currently listed as “self-employed”, “on contract” or “part time” – with no stability.  The results in lower productivity and inability to participate in bank financing and other needs.

Special Zones

While the special zones were thriving, with global changes, they are failing to create a significant difference to the economy and generate employment. Policy changes and focus are necessary.

Tourism

While tourism generates about 10% of GDP and 130,000 jobs in the economy, hotels are currently suffering with a 46% occupancy rate. Once again, a concerted plan and creativity – from public and private sector together – is required to change the situation.

Agriculture

It would appear that the agricultural sector has been abandoned to subsistence farming – with not much technological or educational assistance to the sector.  Exceptions to this are the farms owned and operated by the major supermarkets, who basically produce exclusively for their own consumption.  But many areas of the country are abandoned, with little or no interest in exchanges of technology between countries and participation in projects for learning in the alienated communities that are relegated to subsistence.

Another concern, in the commercial enterprises of farming, is long-term sustainability and environmental accountability for farming methods – particularly long-term effects of runoff from the farms and damage to the surrounding environment.

Justice & Security

I can’t close without mentioning the concerns about the justice system and security issues in Panama.  There are many jokes and memes about “perception” – we “perceive” that there is a problem.  But let’s get real – there is a problem! Not a perception!

Security of citizens and tourists needs to be addressed not only in Panama City or Colon, but in the entire country. Gangs & drug trafficking need to be addressed, as do home invasions and robberies.

In the justice system, attention should be given to the Sistema Penal Accusatorio – which was introduced over the past few years.  It’s not that the system should be reverted to the previous system, which was full of its own flaws – but attention needs to be given to the concerns of the police force and prosecutors regarding their experience within the system. These concerns needs to be addressed across the board.

  • What needs to be fixed?
  • What simply needs to be tweaked?
  • How can members of the police force be educated and prepared better to work within the system?
  • Where are different parties frustrated by the process?

Change is never comfortable, but concerns should also be addressed.

Drawing this to a close

As I look at all of these needs, I recognise that Panama needs well-prepared teams within each area.  This is not an issue for “the President” to fix. I admit, I am sick of people saying “The President needs to come here and solve this problem”.  A country’s problems cannot depend solely on one person to solve them!

This is something that will require not just Ministers that are prepared to sit down at tables, but all interest groups that are well-versed in the myriad of issues and concerns of their specific industry and that are open to brain-storming solutions that take into account all of the interests in the matter, rather than simply being closed to “this is my position”.

Experienced negotiators and mediators – that are able to delve into the needs and interests of all parties will be required at each table – that can identify the need that lies below the stated position.  People that know how to ask questions and are willing to continue asking until truly connecting with the source of the interest, rather than accepting on face value a projected position at the negotiating table.

If any one of these problems is truly to be addressed and a solution found – all parties have to be prepared to see all sides of the issue and begin to accept that the solution may only truly be found by everyone working together to build a better country!

Communities themselves will need to start to believe that they possibly have a role to play in solving the problem, and actually in carrying the solution into effect.

This may require that everyone stops looking at their belly button and “what’s in it for me?” – and actually starts to look at

“how do we all participate in fixing these problems?”

Well, as always, this is PanUtopia!

Jesus, Panama, children, religious community, abortion, gay marriage, family values, Utopia, churches, healing, communities, love Thy neighbour, love thy neighbor, organised religion, Catholicism, politics, political parties, followers, evangelists, televangelists

Panama – Utopia – a religious community where Jesus might actually be welcome

“What if Panama had 0% corruption, no inflated government contracts and politicians were actually elected for their capacity and ability to get the job done? What if public sector officials actually did their work with heart and soul? What if private citizens and companies practiced social responsibility? What if neighbours worked together to build better neighbourhoods and participated actively in local government?

What if churches fed the poor and provided social and emotional healing to their communities?”

Panama doesn’t have Jesse Duplantis, wanting his $54M jet, but it has its fair share of “rockstar” evangelists.   Like the one that rides in a helicopter over Panama City to “bless it”.  His critics suggest that Jesus would have walked around the city to impart his blessing on everyone, not flown over in a helicopter.

These same evangelists would create a new political party, calling on all of their members to only vote for those who are sanctioned by the church.  They call on their members to protest “for family values” against gay marriage.  And then, they are strangely silent on issues like rape of minors and the 9,000+ adolescent pregnancies from last year. They are vociferous in their rejection of sex ed in schools, because it would compromise a family’s right to teach this in the home, but are silent with respect to real social solutions.

They are likewise nonvocal on corruption, the investigation of Obredecht bribes, and the slow justice system in Panama which never seems actually convict anyone other than the poor.  They say that with a new political party they want to drive change, but there are some things that they just don’t seem to want to change! If they can amass 10,000+ for a family values march, why not bring all of those members to a march against corruption?

While claiming to draw the community closer together and working together  to protest against same-sex marriage, they are separatist on so many other matters.  In 2019 Panama will be host to World Youth Day, a week long convention of youth in Panama organised by the Catholic Church.  It is expected that the Pope will attend. This event is thought to cost some $50M to organise here, and while the Baha’i, Methodist, Anglican & even Muslim communities have expressed their support, including housing the youth in their places of worship or homes, support from the evangelical community has once again been soundless, other than Salvation Army and other groups that are very youth-focused.

Would these be religious communities where Jesus might actually feel welcome?

Am I being tongue in cheek? Hell, yes!

I am so sick of watching churches say that they support “family values” and yet do nothing when there is a case of a minor having been abused for 8 years by a family member.  There were no protests when he received a sentence of community service, which isn’t allowed under the criminal code.  “That’s a problem for the justice system”. It obviously has nothing to do with “family values”.

There are likewise no “family value” issues in teen pregnancies, and God forbid that we have sex ed in schools.  Abstinence, taught in homes, is certainly the only way to stave off the rising cases of HIV, STDs and unwanted pregnancies.  What about all those youth whose families are not teaching anything at home?  Should they simply receive whatever education their families see fit?

Adolescent mothers, most of a certain social strata, aren’t provided with a staunch support network to help them through their pregnancies, stay in school, and other basic skills to help them break the poverty cycle.  Now, there are fabulous programs like “Las Claras”, run by the women’s group “Voces Vitales”.  But this is run by a group of professional women concerned to improve the opportunities for young women as single mothers.  This is not something that churches in Panama have seen as an “outreach program” or a social need to address.

There are also programs, like Asociación Luz y Vida, which runs a home for the elderly in Paraíso (and another in Metetí, Darien), most of whom were homeless.  This was started by Monseñor Rómulo Emiliani and then set up as a Nonprofit, with a group of donors.  Even so, it only has space for 50 elderly patrons.

Another program was established by the Catholic church in cooperation with the City Council: “Centro de Orientación y Atención Integral San Juan Pablo II“, in which the Catholic church undertakes to take on at least 30 people a month referred to it by the City Council social workers.  This is an attempt to work together at solving a problem of homelessness and drug addiction, but requires that the participants want to be rehabilitated.  The City Council, will, however, subsidize the program with $36,000 a year towards expenses ($3,000/month).

There is also a program under way in San Miguelito (probably the most dangerous part of Panama City, that is actually outside of the city limits), which addresses the gang wars.  In this program, some 200 evangelical groups and 60 Catholic churches joined task forces to reach 1,500 youth in a program aimed at getting them out of gangs and into “the Life University”, in which they would be taught life skills, sports & hand-crafts of various types.

But, with the exception of Las Claras (not associated with any church) and Asociación Luz y Vida (a nonprofit that I know was originally the brainchild of Monseñor Emiliani), which I already knew about, I had to search long and hard to discover the social programs that the churches in Panama were participating in! For example, when I looked up Hosanna Social Programs, the results that I got from the search engines were all about their television programs and shows!  They do, however, have a prison outreach program.

What happened to Jesus’ call to love your neighbour as yourself:

35 For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, 36 I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.’ (Matthew 25)

This makes me truly wonder if Jesus would feel at home with the churches in Panama today?

Or would he be walking through their houses of worship, overturning tables and throwing out the money changers and all of those seeking to make a business of the church?

It’s not that I don’t want to see churches in Panama, but in a Utopia, churches would be so much more than inward looking social clubs only concerned about their ratings and attendance numbers!

 

Panama, business, money, entrepreneur, business index, economy, doing business, starting a business, economic indicators, ideal business environment, import, export, fintech, incubators, assistance

Panama’s money stories – the way forward

Ranking and Index: doing business in Panama

One of the difficulties that I see on the way forward, is that Panama is not the easiest country in which to set up a business (locally) and run it.

Panama scores a low #54 in “economic freedom” according to the Heritage.org, having a score of 67.0 – because of drops in property rights and government integrity (corruption).  On the other hand, the Fraser Institute and the Economic Freedom Network place Panama for 2017 at #30 in Economic Freedom.  Forbes lists Panama as #64 in “Best Countries for Business“.  Unfortunately, economic growth has depended on debt-financed infrastructure projects, while the economy has depended heavily on transportation and logistics services.

One of the biggest problems with all the infrastructure development and spending is the burden this creates on tax payers.  General government gross debt accounted for 39% of GDP in 2017, with a fiscal deficit of 3.1% (up substantially from 2% in 2016). That said, amazingly enough the IMF estimates Panama will have the highest per capita GDP in Latin America – USD 25.712 – in 2018.

That said, Panama continues to have the fastest growing economy in the region: our well-developed services sector accounts for over 75% of GDP.   Before the crash of 2008, Panama has the highest growth rate in Latin America (close to 11%) – with real estate prices and speculation leading the rush.  Since 2013, the GDP has slowed from previous levels of 6-8%, and following on from the #PanamaPapers scandal the banking and corporate services sectors have diminished considerably.  The services which continue to contribute to GDP include logistics, banking, the Colon Free Zone, insurance, container ports, tourism and offshore services to a lesser extent.

Unfortunately, Panama dropped (2016-2017) on the global entrepreneurship index from 32.2 to 26.1, and in the innovation index ranks also #63.  In human development, Panama also ranks similarly at #61.  Likewise, in the knowledge economy index, we come in at #64.

Having looked at these indexes, it is interesting to see how well Panama is moving with respect to FinTech, blockchain and the implementation of these technologies. As Panama seeks to leave behind the shroud of “shady deals” and “Panama Papers”, the Ministry of Economy & Finance has announced an initiative to regulate FinTech, blockchain, sandboxes, crypto-currencies, and crowd-funding enterprises.

Development of the Fintech industry in Panama

Bitcoin, blockchain, fintech, crypto, currency, FinTech, disruption, innovationUnbeknownst to most people, Panama is on the list of countries that are friendliest to Bitcoin and crypto worldwide!

Panafintech is the Panamanian Association of Fintech, who so far have organised five blockchain and fintech events.  Back in 2017 they organised an event for 300 people from banking and finance, to discuss blockchain – its scope and application.  It was at this event back in 2017 that Cryptobuyer announced that it was moving to the City of Knowledge and that it would be developing Blockchain Academy Latam.

Blockchain Academy offers training not only to developers and entrepreneurs, but also for financial institutions (such as banks), organizations, schools and the government.  It also offers a bootcamp in which it is possible to learn about cryptocurrencies, industry, mining, Blockchain, opening a digital wallet and other applications of the technology.

blockchain-3212312_1280Cryptobuyer is unique in Panama, offering the “Blockchain Academy Panama“, in which it offers training and certification in programming with blockchain, and has its offices in Ciudad del Saber.  Additionally, it has installed Bitcoin ATMS in parts of Panama, such as in Banistmo (since June 2017) and has installed Cryptobuyer Pay in various local businesses (so that they can accept payments in Bitcoin and other currencies).

Cryptobuyer also set up Blockchain Embassy Panama, which opened in 2017.  In addition to offering crypto clothing and merchandise, craft beers, hardware wallets and working space, the embassy also gives cryptocurrency workshops and presentations.

The first large-scale conference on fintech & blockchain was held May 5 & 6th, at Ciudad del Saber, and called “PanamChain“, with Andreas Antonopoulos  as the Keynote Speaker (author – Mastering Bitcoin (O’Reilly Media), speaker, educator) .  This event was organised by Cryptobuyer and Panafintech.

Coming up on May 24th, Panama will host its secondDigital Business Day“, offered by CAPAtec – the Panamanian Chamber of IT, Innovation & Telecommunications.  This is a “Microsoft Experience Day” – about AI, transforming customer experiences, using ChatBots, and “intelligent billing”.

Disruption & change of the market

Fintech additionally has a role to play in Panama’s “offshore industry”. At its simplest, financial technology – or fintech – applies technological innovations to financial processes, products and services. It could easily play a large role in the lucrative business of identity verification, eKYC and fraud detection. This could also directly impact in the banking industry, if Panamanian banks could work out how to incorporate this into their account opening process.

blockchain-3019120_1280Experts in blockchain have shown that banks could easily change their account opening process to a simple 5-step process relying on this system.  Some go so far as to claim blockchain technology could transform international financial transactions in much the way the Internet transformed communications. Of course, on some levels fintech competes with the traditional financial methods of delivering financial services.

Blockchain = distributed ledger technology  – provides decentralized networks that simply record transactions.  So, for example, IBM provides “Blockchain-as-a-service” for banks.  It is interesting to see how the blockchain industry could have helped Panama avoid the #PanamaPapers, as expressed by Otonomos BCC:

Our hope is that a decentralised database, which by its very nature is secure, tamperproof by third-parties and immutable even by its very authors, can be looked at by enlightened regulators around the world. This technological architecture could ultimately become a global, cross-jurisdictional database.
At Otonomos, which represents private company shares on blockchain and makes them programmable, we have engineered a decentralised solution that performs Know-Your-Customer checks at every stage of the ownership chain of company shares, and watermarks the shares with the UBO’s identity.
In addition, Otonomos has architectured our solution with the privacy of end-users in mind. We make public only such information regulators in a specific jurisdiction require to be publicly accessible, whilst masking non-publicly disclosed information.
Finally, we future-proofed our solution by letting third-party verification agents — typically organisations such as banks who by legal mandate from their Government can perform KYC checks -“stamp” people’s KYC at the blockchain level, resulting in a layered verification process in which every check fortifies a user’s KYC.

Nonetheless, it seems that tech giants are much further ahead in disrupting banks, as these lag behind in cloud computing, AI and big data.  Fintechs define the direction of innovation in financial services, but they face a challenge in their ability to scale (something that companies like Amazon or Facebook have already dealt with).  So, for example, Amazon Web Services provides cloud computing for Capital One and Nasdaq.  That’s because of the scope of the transactions that occur on a single day, which small start up fintech companies are not ready to handle.

If what we see internationally occurs in Panama, this means that large banks are acquiring fintech companies and digital banks, as strategic acquisitions – they are simply leveraging the competition to re-establish their leadership in the market.  So, for example, in Panama we have a small crypto-currency that was recently established:  Natan Edu – created by a group of young entrepreneurs, as a payment system in education, to allow payments of online courses.  This was created by Osmar Major and Marcos Pineda (22 and 24 years old respectively).  Will this be swallowed up by bigger players in the market?  Additionally, just this week, DigitalX (the first crypto-currency fund established in Australia) indicated that it is looking at Panama to establish the Latin American financial hub.

Response from the banking sector

Panama’s banking sector, however, has been very cautious in response to fintech, indicating that until it is fully regulated, they simply see the possibilities of further scandals for money laundering.  On this note, Panama’s banking Superintendence issued a notice to banks that the activity of exchange, investment, purchasing, and commercialization of “Bitcoin” or any other crypto-currency is unregulated in Panama.

As a result, some traders were threatened with having their bank accounts closed at local banks for receiving funds from their international crypto accounts!  This seems to be completely contrary to the way it is being dealt with, for example, in the US where Goldman Sachs and Morgan Stanley both announced that they were going to get involved in crypto-currencies.

Nonetheless, we find that Australia (leading with DigitalX), the UK and other jurisdictions have all introduced regulations in order to create the market conditions for development of fintech, blockchain and financial services.  For example, back in 2015-2016 the UK introduced their regulatory framework, working closely with the operators, so that fintech firms could set up.  This involved the Innovation hub (similar to what Panama wishes to do in the City of Knowledge), in which the businesses can understand the financial regulations and how these might apply to their business model.

As with the Innovation Hub in the UK, the City of Knowledge will simply provide guidelines, from which the startup would need to apply for the regulatory approval from the respective agency (possibly the Banking Superintendence or the Securities Commission).  Also copied from the UK is the idea of the “sand box” – where fintech startups can test their financial products and their business model in the market, and then work out the details of regulation as the market develops.

So, as Panama looks to regulate “Specialized Financial Entities”, as it is calling fintech companies, setting up crowd-funding enterprises, incubators and sand boxes, I hope that it doesn’t simply protect the interests of the existing players (like banks), but rather innovates to draw into the country investors, know-how, and entrepreneurs that are looking to build something special from Panama.

 

 

 

Panama, business, money, entrepreneur, business index, economy, doing business, starting a business, economic indicators, ideal business environment, import, export, fintech, incubators, assistance

Panama’s money stories

Last month I saw this tweet regarding Panama’s money story:

In Panama, there are three types of money: old (from the grandparents), corrupt (from politicians and friends) and dirty (drugs, weapons, laundering, etc.)

Panama’s reputation as a country of carpetbaggers, “cocaine towers” (from the Tailor of Panama), the “home” of #PanamaPapers (even if most of the guilty parties were spread across the four corners of the globe), the country where Odebrecht continues to receive government and municipal contracts in spite of the scandals and admissions of guilt, and the general “juega vivo” precedes it.

But how true is this really? Is the only money in Panama really old money, corrupt money or dirty money?

In this post, I want to have a look at how Panama suffers from both a reality issue and a perception problem.  In my next post, I want to look at the opportunities that Panama offers, the free market, the incubators and technological advantages, as well as looking realistically at challenges (labour force, incentives for small & medium businesses) and close with a third post offering some suggestions for those living or moving to Panama that can make this country the land of opportunity that it really is: the “bridge of the Americas”, the “crossroads of the world”.

The strikes against Panama:

A history of #Pirates and #Carpetbaggers

Anyone in Panama can tell you the history of “Captain” Henry Morgan, the “privateer” who invaded Panama in 1671!  It is an extraordinary story in military history – the capture, sacking and burning of Panama City – especially when you consider that it wasn’t a military campaign. It was just plain piracy by an intrepid Welshman and his “men at arms”!  With 37 ships and possibly 2000 men, Henry Morgan set out for Portobelo, Panama, to pick up the gold that passed through from Peru on its way to Spain.

A few years earlier, he had asserted himself in Portobelo.  Instead of hitting the two fortresses that guarded Portobelo from the sea, where they would have been seen and expect, Morgan landed elsewhere and then marched his men through the jungle and attacked one of the forts from the landward side, in a surprise assault. They took the fortress over quickly, massacred the defenders and blew up the armaments!  The attack on the 2nd fort had many casualties, but was still effective.  Holding these two strategic points, Morgan sent a ransom demand to the Spanish governor of Panama: 100,000 pieces of eight – possibly some $12 million today.  At that time, he took his money and left.

Portobelo, Panama, ruins, pirates, Henry Morgan
Portobelo ruins

But now, set with some 48 cannons and more than 30,000 pounds of gunpowder, Morgan set out to attack Panama City itself (on the Pacific side, not the Caribbean Sea).  To do this, he had to take his men by boat up the Chagres river, so they first hit the Chagres fort. By luck, a shot from one of the pirates set fire to the Spanish magazine, with the resulting explosion devastating the fort and allowing the pirates to storm its walls.  Leaving a small garrison of men behind to guard the fort, Morgan lead some 1,200 men into the jungle to cross the isthmus on foot.

They almost starved to death, crossing the Isthmus, as the Spanish burned and stripped everything in their path, knowing they were coming. They were anticipated when they arrived finally in Panama City with a contingent of 3,600 Spanish troops, some of which were cavalry.  To Morgan’s advantage, the ground was boggy and the horses were unable to maneuver. They cut down most of the cavalry with accurate fire, and when the Spanish tried to stampede a herd of cows, they gratefully slaughtered and barbecued the beasts!  Seeing their cavalry cut down and their stampeded herd slaughtered, the Spanish infantry fled, clearing the way for Morgan’s assault on Panama City itself.  Morgan eventually returned to Portobelo with 175 pack animals laden with treasures. As history books go, the “pirate” Henry Morgan died as “Lieutenant Governor Sir Henry Morgan”, rich and respectable.

Panama City, ruins, pirates, attack, Henry Morgan
ruins of Panama Viejo

As history and geography would have it, the Camino de Cruces of Panama – the legendary trail across the Isthmus – lies between two rich colonial ports, with a history rich in gold and gold that was plundered by pirates!

Most people don’t know that the treaty “The Hay–BunauVarilla Treaty (Spanish: Tratado Hay-Bunau Varilla)”, signed on November 18, 1903, by the United States and Panama, was signed by a French-man with the United States.  This treaty established the Panama Canal Zone and the subsequent construction of the Panama Canal. History kindly refers to Philippe-Jean Bunau-Varilla as “the French diplomatic representative of Panama”, many Panamanian historians describe this treaty signing process a little differently (like how the Panamanian representatives were told to “shut up”).

Panama deals, Panama, carpetbaggers, taking advantage, pillage, raping the natural resources, scoundrels

It is said that Bunau-Varilla was an important shareholder in  Compagnie Nouvelle du Canal de Panama, which still had the concession, as well as certain valuable assets, for the building of a canal in Panama. He had not been in Panama for seventeen years at the time of representing Panama before the United States and never returned to Panama after the negotiations. For some reason, as part of the treaty negotiations, the US bought all the shares and assets of Compagnie Nouvelle du Canal de Panama for US$40 million (yeah, $40 million in 1903).  I’m not saying he was a carpetbagger: you can draw your own conclusions.

The “carpetbaggers” come down from “the north” seeking private gain in the underdeveloped “south”.  According to the Merriam-Webster Online Dictionary, a carpetbagger was an

“Epithet used during the Reconstruction period (1865-1877) to describe a Northerner in the South seeking private gain. The word referred to an unwelcome outsider arriving with nothing more than his belongings packed in a satchel or carpetbag. Many carpetbaggers were involved in corrupt financial schemes.”

Unfortunately, I have seen my fair share of foreigners coming into Panama with an idea to “get rich quick” and then making off with “the spoils”, leaving their investors (often other foreigners) high and dry.  There’s also some stories about Panamanians having done the same, such as the title dispute in Bocas over Hospital Point:

“Stephens, 75, an entomologist, came to the isthmus in 1959 to work for the fruit company. In 1970 he bought Hospital Point, two acres in area, with title dating from 1899. Later on, he bought possession rights to several acres south of the point. His neighbors are a Gnöbe Indian village and another American, Jon Nilsson, who bought possession rights to twelve acres south of Stephens and build a vacation home.”

But a guy showed up with a hand-drawn map, claiming his grandfather had left him that land. When his map was found to be faulty, “no problem”,  “My surveyors will fix that”.  The claim is going through the court-system.  For more on this story: http://laestrella.com.pa/panama/nacional/carpetbagger-hospital-point/23749723 

But most of the cases are like those of “Too Good To Be True” – foreigner on foreigner. Developments and investments where the developer has “gone bankrupt” or left the country with the purchasers money before finishing the project and delivering.  The best advice I read in that article was:

If it seems too good to be true, it most likely is. Panama has many flaws that will not be seen on a two week visit.

Due diligence is required for Panama to be right for you.

Even the late Lee Zeltzer warned in 2011 of a guy “doing the rounds” in Boquete, trying to get people to invest money in a marina project that he wasn’t the owner of!

#Corruption

Since 2016, Panama has been immersed in the “Lava Jato” scandal of Odebrecht.  So far, 43 people have been charged with corruption and related crimes and have been identified as having received money from the Brazilian giant.  News outlets world-wide have outed many politicians, and locally we read news articles that express the following:

  • “In Panama there is a feeling that many people of the current Government are involved in the Odebrecht scandal.”  “Despite of rumors and accusations against government officials involved in the Odebrecht case, no clear evidence has been laid on the matter.”  “Fernando Migliaccio da Silva, executive of the Brazilian construction company, responsible for paying the bribes of the company and close friend of Marcelo Odebrecht, said that two people associated with the company, Luiz Eduardo Soares and Rodrigo Tacla Durán, repeatedly traveled to Panama to avoid the government’s cooperation with the investigation.”   http://www.panamatoday.com/special-report/odebrecht-corruption-scandal-has-left-traces-panama-4624
  • “Odebrecht has become the largest government contractor in Panama in the past decade, with contracts totaling upwards of US$500 million, including one for the construction of a subway line in Panama City.” In these cases, there is $59 Million identified as having been paid out/received by the 43 implicated and charged.  “Although a number of defendants in the case have remained anonymous in order to preserve “the principle of presumption of innocence”, according to a statement from the Roland Rodriquez, spokesperson for the Prosecutor’s Office, some of the high profiles charged with bribery are ex-president of Panama Ricardo Martinelli and his children, among other well known officials.”  https://www.telesurtv.net/english/news/Suspects-in-Panama-Odebrecht-Corruption-Probe-Rise-to-43-20170727-0010.html
  • “Third witness says Varela {current President of Panama} took money from Odebrecht”  “Now the specific allegation is that his party’s 2009 campaign — which was dropped after an alliance with Ricardo Martinelli was formed at a meeting at the US ambassador’s residence — got $700,000 from Odebrecht via a US foundation.” “In the October 30 online edition of La Prensa, it was reported that former Panamanian ambassador to South Korea and Panameñista Party activist Jaime Lasso told anti-corruption prosecutors that the Brazilian construction conglomerate Odebrecht gave $700,000 to President Varela’s 2009 presidential campaign.”  http://www.thepanamanews.com/2017/10/third-witness-says-varela-took-money-from-odebrecht/

Lava Jato, Odebrecht, corruption, stadiums, World Cup, scandal, investigations, politicians, corrupt businessmen, kickbacks, kick back, bribes

On the other hand, almost 1/3 of Brazil’s current ministers of government are under investigation.  In Colombia a former senator and the former vice-minister for transport have already been charged.  In Venezuela a number of people were implicated, all the way up to the President Nicolás Maduro. Peru has two ex-presidents under investigation, and even the opposition leader Keiko Fujimori has come under investigation.  (more at http://www.bbc.com/news/world-latin-america-41109132) This is considered to be one of the biggest corruption cases in history!

#Dirty Money

After all that history of Panama’s money stories, how much more can I say about the dirty money in Panama? Almost thirty years ago when you mentioned “Panama”, everyone responded with “Noriega”. If you were lucky, someone had heard about the Panama Canal and that would be the topic of conversation, rather than Noriega and the 1989 invasion!  Twenty years ago you mention “Panama” and everyone is talking about John le Carré’s book “The Tailor of Panama”, the cocaine towers, and his own description of how he”was drawn by the obvious corruption of Panama and the wonderful collection of characters you meet there”. Ten years ago, you mention “Panama” and every one says “oh, the canoe lady“, referring to the Anne Darwin case of the missing canoeist who showed up alive and well in Panama, alleging “amnesia”.  Role on 2016, twenty years after Le Carré’s publishing of The Tailor of Panama and you get the #PanamaPapers!

Panama, Darwin, canoeist, missing, scandal

A 2003 examination of tax havens by Jeffrey Robinson quotes a US Customs official as saying:

[Panama] is filled with dishonest lawyers, dishonest bankers, dishonest company formation agents and dishonest companies registered there by those dishonest lawyers so that they can deposit dirty money into their dishonest banks. The Free Trade Zone is the black hole through which Panama has become one of the filthiest money laundering sinks in the world.

Of course, Robinson’s book then goes on to say:

It is a path that leads ultimately to the dealing rooms of New York, the vaults of Zurich and the plushest boardrooms of the City of London.

But most people get stuck on the first quote.  And this perception of Panama is shared by all the publicity on #PanamaPapers, which focused on “The Secrets of Dirty Money“. Of course, the name itself fails to remind readers that most of those secrets were because Mossack Fonseca had “offices in more than 35 locations around the globe” and that most of the referrals of clients were from “first world” countries – bankers, lawyers and other professionals.

PanamaPapers, Panama, money, dirty money, scandal, challenges

On the other hand, there are issues that Panama is tackling in the non-financial institution sectors.  As highlighted in Open Democracy:

the task force identified nearly 730.000 Panamanian businesses considered to be at “high risk” of participating in money laundering. The group found that supervision of these entities is low, and that most of them are still active.

Nevertheless, in 2016 and 2017, Panama took some significant steps in legislating and implementation to clear up those areas of business which were previously unregulated or unsupervised:

The final challenges – perception & development

I can remember speaking with a client on the phone in 1996, who would be visiting Panama for the first time, and he asked me what kind of clothes he should bring and how far out of town the airport was.  I don’t know what got into me that day, but I told him to wear his khakis, and that we would have a white land-rover at the airport to pick him up, and that he shouldn’t worry too much about the accommodation, because we had managed to put air-conditioning in our “huts” in “town” with generator electricity. When he arrived in our office a few days later, he was livid at me! He’d only brought khakis and taken everything I had said seriously!

Image result for caesar park  hotel panama cityHe really did think that he would “walk down the steps” off an airplane at a “jungle airport” where a driver would pick him up in a white land-rover and drive him into “town” which was basically huts. When he got through the airport and the driver ushered him into a sedan and took him to the Caesar Park hotel, he realised that I had been pulling his leg!

In my defense, I was young, with a sense of humour! But those are the images that he had in his head of what he was coming to in Panama!

Some rustic huts, sitting on the beach, perhaps?

Panama, development, challenges, infrastructure, perceptions

It really is all about the perception!

And Panama continues to battle with the perception of how life is in Panama – “Banana Republic”.

 

But, I disagree with Ursula Keiner – I think there is a lot of room for money to be made in Panama by honest, entrepreneurial investors.