Regional Newsflash

In addition to information about economic developments in Panama, regional (Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) economic information will be offered to our clients. In line with an ever more integrated Central America, and the expressed need for regional insight, the Dutch Embassies in the region are joining efforts and is publishing the Regional Newsflash.  If you wish to receive the Regional newsflash or desire to send an observation, please feel free to forward a message to  nltrade@racsa.co.cr or you can download it from our website  www.handelswijzer.com .

Excellent relations between Panama and the Dutch Antilles
President Martín Torrijos received Prime Minister of the Dutch Antilles, Emily Saidy de Jongh-Elhage. The PM visited the country on a special invitation to the 8th Reunion of the Central American First Ladies. Both Heads of State elaborated on and emphasized the good economic and political relationships.

Minister of Foreign Affairs reaffirms Panama´s interest to the Association Agreement
The first vice-president and minister of Foreign Affairs, Samuel Lewis Navarro, repeated the importance and willingness of Panama to be part of an eventual Association Agreement between Central America and the European Union. Participation in the economic part, however, is subdued to a further economic integration of Panama with the region. Panama is currently part of the Sistema de la Integración Centroamericana (SICA) and the Parlamento Centroamericano but still needs to become part of the  Secretaría de Integración Económica Centroamericana (Sieca) and the union of borders.

Panama Regrets EU Suspension of Banana Accord

The Panamanian government regrets the European Union (EU) unilateral decision of suspending the accord on banana tariffs with Latin American countries.  "We lamented this situation, because the pact had been independently negotiated and consider it should not depend on the Doha Round results," Trade Minister Carmen Gisela Vergara stated.

 

Parlacen will organize forum on tourism

The Central American Parliament, Parlacen, will hold the IX Forum of Integration and Development of Tourism in Panama on the 23th and 34th of August. The aim is to develop a regional strategy on tourism. Safety and security will also be important topics.

23 trimesters of consecutive growth
The GDP of Panama has grown consecutively the past 23 trimesters, according to statistics from the Contraloría General de la República. The last five years the average annual growth has been 7.8% and for the coming ten years it has been estimated to be between 5% and 10% according to the Centro Nacional de Competitividad (CNC), if the world economy doesn´t experience major changes.

Panama and Canada optimistic about FTA
Minister of Comerce Carmen Gisela Vergara declared that, after concluding exploratory talks, both countries are interested in a Free Trade Agreement. The current trade accounted up to USD 700 million in 2007, of which 10% was export from Panama. The investments from Canada grew steadily over the last years, from USD 85.5 million to USD 106.3 million.

 

Increasing trade with China
The trade between Panama and China accounted for USD 5.056 million last year, an increase compared to the USD 4.800 million in 2006. The trade is expected to keep growing, mainly because of increasing mutual investments and commerce over sea.

Record amount of investments
A record amount of investments, both private and public, equaling USD20 billion is expected between 2008 and 2010, according to the consultancy agency Indesa. These investment will partially off set the negative effects as a result of a decelerating economy in the US.

Over 21 thousand companies started through internet
Through the electronic platform panamaemprende.gob.pa over 21 thousand businesses has started in the one year that the platform exists, according to the Ministry of Governmental Innovation. This is double the amount that subscribed the previous year using the traditional system. PanamaPrende is said to be easier, faster and cheaper.

 

Construction grows 56.8%
Despite the growing costs of materials and the weakening of the Dollar, the construction sector grew 56.8% in the first half year compared to the same period in 2006. The construction equaled USD504,7 million. This growth is partly a result of large projects as the amplification of the canal, the construction of the Cinta Costera but also of housing. For 2008 7.800 living units are expected to be sold, equaling transactions worth of USD 668 million.

Financing housing
With 24% Panama has the highest ratio of mortgage in relation to the GDP in all of Latin America, where the average is only 8%, according to the Banco de España, This low percentage is due to several factors such as macroeconomic instability, inadequate regulation of private property, the unequal distribution of income and the elaborate informal economy, all causing long term investments to be risky.

Increase revenue Canal
The total of passages through the Panama Canal increased with 2.5% to 3.821 vessels during the second trimester of 2008, amounting to a total an income of USD 291 million; this despite the economic situation in the US, the weak Dollar and high oil prices. Because of higher tolls this resulted in an increase of 16% in revenues.

Tender third set of locks
The date to bit for the tender of the design and construction of the third set of locks, the most important part of the amplification of the canal, is postponed from the 22nd of August till the 10th of December. This postponement will not jeopardize the completion planned for 2014, according to the ACP.

More post-panamax vessels
With the amplification in progress, the amount of post-panamax vessels has increased from 479 to 601, an increase of 25.5%. Above that there have been 481 boats ordered, which represents 36% of all vessels to be built. Equally as a result of the amplification several ports in the US are preparing to widen and deepen their ports to receive these larger vessels; the East Coast of the US represent 63.4% of total cargo traffic that passes the canal.

Most maritime cranesPanama has the most maritime cranes in Latin America, it has 50 of them which equals 21% of the total. Mexico and Brazil have 33 and 31 respectively.

Maritime Business Centre
Panama will inaugurate its Maritime Business Centre in the beginning of September. It´s aim is to become the main reference of the country and a place for the maritime sector to come together. It will start by hosting ten companies but has the capacity to grow. It further offers meeting and conference rooms, a library and a café ´Paris Stile´.

20% growth Manzanillo Port

The Port of Manzanillo, that presented red figures last year, grew 20% the first semester this year, moving 708.319 TEU´s. Movement by vehicles and machines even grew by 98%.

 

 

 

Balboa Port to be the biggest in Latin America

The port of Balboa, on the Pacific side of the Panama Canal, is expecting to become the biggest port in Latin America by the end of the year.  Last year the port handled 1.8 million TEU but over the year 2008 this will be over 3 million TEU due to amplifications, thereby overcoming the Brazilian port of Santos that handled 2.9 million TEU.

New multi-modal service
Cosco Container Lines Co. (Cosco) started a new multi-modal service in the Balboa Port, connecting the Asian markets with those of Mexico, Panama and the Caribbean. The new service includes seven vessels that offload their cargo which is then transported by rail to the Cristobal Port at the Atlantic Coast. The cargo is consequently distributed within the region by smaller vessels.

Central American oil refinery 

The plan to construct an oil refinery in Central America within the project aimed at regional integration concerning the energy market is still alive. With a daily capacity of over 350 thousand barrels the refinery will be one of the largest in the regions. Disputes on where to build the refinery, however, have caused delays; Guatemala, Honduras and Panama have all presented themselves as candidates. The companies Royal Dutch Shell, BP Plc, Chevron, Valero Energy and Petrobras have shown interest in the construction, which is expected to take around 8 years.

Panama is also investigating the possibility to construct its own refinery near the Costa Rican border.

Increase passengers Tocumen
The international airport Tocumen registered an increase of 18.15% in passengers between January and April compared to the same period last year. In total 1.42 million passengers arrived at Tocumen, transfers included. Current expansion plans will augment the airports capacity from 5 million passengers to 10 million.

Panama and Dominican Republic sign open air treaty
Eustacio Fábrega, president of the Autoridad Aeronáutica Civil (AAC), and José Luis Rodríguez Ariza, president of the Junta de Aviación Civil Dominicana, signed an open air treaty which allowes the unlimited reciprocal exploitation of existing routes between Panama and the Dominican Republic.

Airport in David

The general manager of the Instituto Panameño de Turismo (Ipat), Rubén Blades, believes it to be necessary to construct a new international airport in David, located in the northern province of Chiriquí to cope with the growing number of tourist, mainly coming from Europe.

Italian multinational Savino del Bene expands activity
The Italian multinational Savino del Bene, a company that offers logistical services and multimodal transport, is planning to expand their operations. The reason here for, according to General Manager Doménico Mallia, is Panama´s geographic location and the rapid increase in commerce and movement of trade. The example of the Italian company, that came to Panama last year, demonstrates the opportunities in the logistical sector. A trade mission, probably combined to the fair Expologistica, from the Netherlands is expected later this year to come to Panama.

Duplication of agro exports
Momentarily the agro producers of mainly melon and watermelon have made losses due to a bad harvest. For the coming period, however, things look brighter since the amount of orders has doubled equaling an export of US$200 million.

15 projects will add 748 MegaWatt
Fifteen projects that will generate 748MW have started this year, according to the Autoridad Nacional de los Servicios Públicos (Asep). The termical plants take less time to construct but have become less attractive due to higher oil prices. The hydroelectric plants have, because of the same reason, become more interesting but take up to 5/6 years to build.

 

 www.panamacompra.gob.pa
Since 2006 all governmental organizations, except the ACP, are forced by law to announce their tenders through the site  www.panamacompra.gob.pa. This new system is more efficient and transparent thus raising confidence amongst people and companies to do business. From the 1st of January till the 31st of May almost 28 thousand public contracts worth roughly USD 200 million were given out. The ACP alone awarded contracts worth of USD 286.5 million.

 

Expologística 15-16 October

Expologística Panamá is an International Exposition of Logistics and Transportation organized by the Chamber of Commerce, Industry and Agriculture (CCIAP) in cooperation with the National Secretary of Science, Technology and Innovation (SENACYT). The fair is an import factor in promoting Panama as a logistical platform; the country handles over 4 million TEU´s and 164.8 million gross tonnage annually of which the far majority is being re-exported. National and international impresarios and industrials will be presenting their products and services, amongst theme the leading logistical companies. The fair will take place on 15 and 16 October. For further information on the program, participation and inscription visit  www.expologistica.org or contact the Embassy at  nltrade@racsa.co.cr.

Matchmakingfacility Panamatch

As part of the EVD 2g@there program, the consultancy firm Ferendi will organize several Collective Promotional Activities (CPAs), in cooperation with the Netherlands Council for Trade Promotion (NCH). This project is called Panamatch and will, for a period of two years, consist of a number of outgoing and incoming sectoral trade missions, collective fair exhibits and matchmaking activities. Panamatch focuses mainly on entrepreneurs and organisations active in the fields of transport, logistics, infrastructure and hydraulics.

Panama has started with one of the most prestigious and visible mainport projects in the world: the expansion of the Panama Canal. The expansion is necessary since the Canal can no longer cope with the capacity of the modern freighters. For Panama this waterway is one of the largest and most stable sources of income. In order to strengthen the position as a main international hub for transport and distribution the government is investing considerably.

In Latin America, Panama does not only play an important role in maritime transport, it constitutes the centre of international banking, trade and services as well. Naturally, the country’s favourable geographic is key to success. Think about it: just after Hong Kong, Panama is the second largest free-trade zone in the world. And, on top of that, the Panamanian government actively advocates foreign investment in all areas.

Panama is an emerging market: the Panamanian economy grew by 11,2% in 2007 en for 2008 growth is expected as well, between 8,5 and 9 percent. Hence, it is a country with numerous business opportunities for foreign entrepreneurs.

For more information and the possibility to register your company to obtain more information, surf to  www.ferendi.com. For any questions you can also call us on  +31(0)20.471 12 28 or send an email to panamatch@ferendi.com.

 

 

 EVD Panama country webpage

The EVD has a Panama country webpage where you can find up to date information, such as: business news, economical developments, tenders, country information (incl. fact sheet and laws), interesting sectors, activities, important documents and the business country guide from the Embassy of the Kingdom of the Netherlands.  More information please visit website:  www.evd.nl/landen. More information can be obtained from Marcel Knoors, country manager Panama, through email  panama@info.evd.nl  or by phone (0031) 070-7788698.

 

Embassy of the Kingdom of the Netherlands as information source

On the internet site from the Embassy of the Kingdom of the Netherlands in San José (covering the countries Panama, Costa Rica, Honduras and El Salvador) you can find general information on the specific countries but also commercial information.  Our ‘handelswijzers’ (business trade guides) entail broad and up-to-date information on how to do business in each of the four countries. It is a useful tool/guide for Dutch exporters and investors. Visit:  www.holanda.cr or  www.handelswijzer.com (still under construction).  For more information you can contact our commercial department at the Embassy of the Kingdom of the Netherlands in San José by email  mailto:nltrade@racsa.co.cr or by phone (00506) 2296 1490 (Carel Richter of Hans Buhrs).  You can also contact our Consulate-General of the Kingdom of the Netherlands in Panama, Phone: (00507) 263 6494 or (00507) 264 7257 (Dieter Ploeger).  Email:  consuladonl@cwpanama.net