The study used geologic, chemical and biologic methods to date rocks and fossils found in sides of the Gaillard Cut of the Panama Canal. The results show that instead of being formed by rising and subsiding ocean levels or existing as a string of islands, as scientists previously believed, the Isthmus of Panama was first a peninsula of southern Central America before the underlying tectonic plates merged it with South America 4 million years ago.
That's interesting news, but I doubt it will have much impact on the 3 million people who live in this famous country the size of South Carolina -- a small country that also happens to be the crossroads of world shipping -- as well as the site of one of history's major technological miracles -- the American built Panama Canal.
Back on the Isthmus Again
Since Wednesday I've been just a stone's throw from that Panama Canal at a conference of our sister Agora group, International Living. We`re meeting at one of Panama's many new developments constructed by master builder Jose Bern -- the Playa Bonita Hotel and Resort built on the site of the Officers Club at the former Howard Air Base just outside Panama City.
I was last here in Panama May when the Sovereign Society held its annual Panama meeting, and it's always good to see old friends and check out the domestic situation here.
Panama Politics
As in the United States, Panama, a country that loves the U.S. and Americans, is in the midst of a presidential campaign.
father, the dictator General Omar Torrijos, was killed in the crash into a mountain in central Panama of the small plane in which he was flying. It is a measure of the
great progess in democracy in Panama that the son of a dictator was freely elected many years later, and that Panama regulaly elects its leaders without the bloodshed and political turmoil that marks some Latin American countries.
Good News
For possible investors or prospective retirees considering the Republic of Panama the news is encouraging.
One of the Big Three international auditors, Deloitte Touche Tohmatus, predicts that the Panamanian economy will continue its booming growth through 2008, leading all other Latin American countries. Construction, banking, the Panama Canal and the services sector continue to be the principal engines of the national economy. Other good news for potential foreign retirees is the officisl reinstatement of the 20-year tax exemption for foreign property buyers here that expired last year.
As one the world's leading tax and asset protection havens, Panama continues to attract billions in investments and beyond foreign retirees, it is becoming a refugee nation for those escaping increasingly oppressive leftist political regimes in Venezuela, Bolivia, Ecuador and even Nicaragua.
Prospective investors in Panama, particularly those looking to escape the faltering U.S. economy, should be encouraged by this new economic report. It predicts healthy GDP growth in 2008 with growth at between 7% and 8%. Some analysts think the Panama dynamic economy, with many important private and public investment projects, will offset the negative impacts from the U.S. economy.
The biggest plus for Panama may be the massive expansion of the Panama Canal, approved in a referendum in 2006 and due for completion in 2014, exactly a century after the U.S. completed the original canal. Qatar Petroleum and Occidental Petroleum is planning construction of a major oil refinery worth about $7 to $8 billion. The Canal expansion has been estimated at $5.2 billion but probably will cost much more. Both are projected to create thousands of new jobs.
The real property tax exemption now covers all new construction with building permits issued before December 31, 2009. Resale properties are also exempt from property tax, with the 20-year exemption starting in the year the property was built. This means major tax savings for those buying existing or resale property or building their own property.
Some Problems
There are problems. Inflation for the last 12 months ending in May was at an unusually high rate of 9.6%, a reflection in part of the declining value of the U.S. dollar, the official currency here since 1912. Over the last 20 years inflation in Panama has avereage between a very low 2% and 3%. Many here worry about when and if the construction "bubble" -- if that is what it is -- may pop.
But all in all I found a lot of optimism here about what's ahead for the country, but also a lot of worry about the United States government and its policies, now and in the future.
* Learn all about Panama and its potential for investments and as a retirement home for foreigners. Click here for Panama Money Secrets.
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