The Dubai of Latin America: Panama City
From the look of the skyline of Panama City, one can easily understand why it is called the Dubai of Latin America. While Dubai saw many of its hopes and dreams fall crashing down in 2009, Panama came out of the global financial crash relatively unscathed.
The country of Panama has seen average economic growth of about 8% a year. Unfortunately, Panama’s growth is not spread evenly through all the sectors of society. As in many Latin American countries, there is a huge difference between the capital city, and the rest of the country.
The World Bank claims that over a third of all Panamanians live in poverty. In the countryside, this percentage rises to a full 60%
Opposite the Dubai-like skyline, is the old colonial town of Casco Viejo, which really encapsulates the country’s economic story.
Once a run-down neighborhood, Casco Viejo is now experiencing full-scale gentrification. Run-down colonial buildings are being given make-overs. Bars, shops and trendy hotels are springing up like flowers. But amongst the renovated houses, one can still meet some of the original residents. The CascoViejo of Panama City is a place where the rich and the poor live side-by-side.
The engine of Panama’s growth comes from the canal, of course. Panama took control of the canal from the United States in 2000 and has been praised all over the world for the meticulous and efficient daily operations of the canal.
“The canal has been such an important driver of growth for the country, that the whole domestic industry has been built around the operations and revenue coming from the canal”, says Michael Henderson, Latin American economist at Maplecroft in London.
“The waterway in itself , accounts for only less than 5% of the economy, but it is the port activity and the logistics and the shipping that really give a boost to a country of only 3.5 million people.”
Transit fees from the canal, now bring in about one billion dollars a year for the government of Panama.
(to be continued)
