Growth and Cement Plants in Panama
Despite the world economic problems Panama continues to grow. Investment in Panama’s business and real estate will remain strong for years to come. To prosper in Panama real estate investment a little homework and good advice are both good ideas. We revisit an old subject, the cement plant in Chorrera, as an example.
In March of last year we commented on the proposed construction of a cement plant in the Limon neighborhood of Chorrera. A group of investors had planned a 3,000 home subdivision in a quiet setting outside of Panama City. The investors were surprised, as was the community, by the announcement that ANAM, the environmental authority, had, allegedly, fast tracked an environmental survey and OK’d the construction of a cement plant in the same neighborhood. At the time our advice to investors was to “do your homework and keep doing your homework” to make sure not to invest in a housing development in an area that is about to become industrial.
There has been little in the press about the cement plant but an interesting tidbit, concerning the rise of presidential candidate Martinelli in the poles, is that Mr. Martinelli is a corporate officer of the cement plant. Another interesting point is that the mayor of Chorrera and another officer of the plant are both high ranking members of the PDR, the political party of current president Torrijos. It would seem that the cement plant issue has many facets. The wise investor in Panama will seek wise advice before committing money to a project.
Another cement plant controversy is in the former US Naval Base at Rodman. ANAM has approved an environmental survey for the “clinker” plant. The owners of the plant say that they want to build at Rodman because of the possibility of exporting the dry product and because they want to be able to bid for the cement business for the Pacific side Panama Canal Expansion locks.
A number of groups and governmental agencies including the Panama Canal Authority have lodged complaints with ANAM. According to the environmental authority pollution controls consistent with World Bank requirements will be in place and the plant will be shut down if it does not comply with the strictest of environmental requirements.
The cement plant problem in Panama is reminiscent of oil refinery problems in the USA. Everyone wants and needs the end product. However, there are environmental concerns and no one wants to deal with the issue in their own back yard. Nevertheless it appears as though Panama is going to continue its economic expansion and that the Panama Canal Expansion is going forward. Panama will continue to need cement as well as structural steel and will need to cope with the environmental issues involved.
Behind all of the public controversy lies the truth that Panama’s economy and real estate market are still growing and full of opportunity.
Panama Growth
ABPanama has been saying for a few months that Panama’s high end housing market is in a pause. There does not seem to be the danger of a precipitous drop in real estate prices but developers are going to be retargeting their houses and apartments towards local buyers as interest from North America and Spain tapers off.
The February 2, 2009 La Prensa, Panama notes that at the inauguration of the new board of the Panamanian Association of Brokers and Real Estate Developers, “industry officials agreed that the market has definitely started to show signs of slowing down.”
La Prensa quotes Iván Carlucci, a former president of the association, as saying that “Panama has been affected by the situation in the United States and Spain, which provided some of our main buyers.”
The consensus is that housing over $250,000 is not selling as well. What experts believe is that there will be some give on prices in the high end of the market and upcoming construction projects will be targeted for more, lower priced, units more appropriate for Panama’s local housing market.
Those interested in a residence in Panama will find attractive prices in the high end of the market in the next months to years. Those interested in residential real estate development will be building smaller homes and apartments and will keep selling.
Commercial real estate is not being hit by this “readjustment.”
Panama and the Rain Forest Debate
An article in the New York Times, January 29, 2009, uses Panama as an example in discussion a current debate about rain forest destruction, global warming, and how to best target the problem. The article has to do with research by The Smithsonian Tropical Research Institute which is headquartered in Panama.
Through the 1990’s Panama lost 1.3% of its rain forest per year to logging, farming, construction, etc. During the same time and to this day Panama is returning about 4% of its rain forest to jungle per year. As small farmers move to the city for better paying jobs their farms revert to nature. It takes 15 years in Panama for these lots to have trees 100 feet high, the beginnings of a forest canopy. Part of the debate centers around preservation of species in rain forest undergoing destruction as endangered animals do not leave destroyed rain forest to move hundreds of miles to find another rain forest.
On the other hand those concerned about “carbon sinks” and how to keep the world’s carbon dioxide levels within reason are pleased at what seems to be a growing trend throughout the tropics. It is not only in Panama that people are leaving subsistence farming to work in the city. Throughout the tropics there is movement to the cities and a return of farm land to forest.
A current issue is what will happen if the world’s financial crisis gets worse and jobs disappear. Will the same farmers return to cut down trees and resume subsistence farming? According to the Times article the United Nations in studying the issue and one of the chief sources of hard facts about this matter is the Smithsonian Tropical Research Station headquartered in Panama.
In the 1920’s the Smithsonian received permission to study an island, Barro Colorado, created when the Panama Canal was formed. A tropical research station has operated on Barro Colorado for more than eighty years and from that original project the Smithsonian has expanded to doing tropical research worldwide while its headquarters remain in Panama in Panama.
If you are interested in helping with reforestation you might consider a reforestation visa. Plant twenty hectares of teak and get permanent residency in Panama.
Panama Residency
Panama Real Estate Investment and All of the Above
Anyone who has lived in Panama for awhile knows that Panama is not just the poster of an island in Kuna Yala or a view of the locks at Miraflores. Panama is a vibrant, growing, energetic country. Panama has a democratic government, free press, a pro business government, and lots of opportunity.
