Transcript Panama´s Opening Doors to Investment

Panama´s Opening Doors to Investment:
Reverted Areas of the Panama Canal Zone
Dulcidio De La Guardia
Vice Minister of Finance
Ministry of Economics and Finance
London, September 2010
Why are Multinational Companies driven to Panama?
Major drivers for shifting operations to Panama include political stability, strategic location,
sustained economic growth, investment grade rating, and great logistical connectivity
Additional Benefits of Investing in Panama
•
Central location with modern infrastructure
•
Investment grade with dollarized economy
•
Great connectivity with region
•
Efficient telecommunications infrastructure
•
Modern multimodal logistics platform that
facilitates global commerce
•
Tax and importation incentives of law 41
•
Immigration flexibility
•
Special economic and free trade zones
•
International financial center
•
No capital flow restrictions
•
Lower cost of living and security
•
Eco-tourism and biodiversity
World Economic Forum
“Panama ranked 53rd and had the largest
improvement in the region based on
infrastructure quality and economic stability”
2
Panama leads the region with stable macroeconomic indicators
Despite the global crisis, Panama outperformed expectations with the highest growth rates in
the region averaging 8.2% between 2005 and 2009
Panama´s economic performance is the strongest
in Latin America
FDI as % of GDP
GDP Grow th (% change)
5.6
4.9
5.1
5.2
4.9 4.2
4.5
3.0
2.9
2.4
2.2
2003
2004
FDI inflows averaged over 7.0% of GDP since 2003 and
reached US$1.7B in 2009.
•
Resilient public finances as the deficit was only 1.0% of
GDP in 2009.
•
Inflation averaged less than 2.0% in the past 40 years.
2005
2006
2007
2008
2009P
2010 Q1
Source: National Institute of Statistics and Census, Central Bank Peru, Central Bank Brazil
* Fitch estimations for Nominal GDP 2009 of Brazil and Mexico
Marine Ports,
1.7
Hotels, 2.6
Utilities, 3.0
2002-09 Share of
GDP (% total)
Agriculture,
4.5
-1.1
2002
•
Different sectors contribute to Panama´s growth
10.7
10.1
7.5
3.6
Real GDP growth rate 4.9% in the first quarter of 2010.
12.2
Global GDP Grow th (%
change)
4.2
•
ACP, 4.7
Transportatio
n, 5.3 Telecomm,
Source: INDESA
Manufacturing
, 7.6
Construction,
4.4
Commerce,
7.2
Free Zones,
7.1
Banking, 6.6
5.6
3
High value-added sectors continued to grow in 2009 despite global crisis
•
Logistics center with Panama Canal serving 144 maritime
routes in 80 countries with 14,000 transits in 2009.
•
The Canal´s US$5.3B expansion will enable it to capture 50%
market share by 2020 and reach 3.5B people
Tourist expenses doubled in 5 years and is
driving growth
•
Great connectivity as Copa Air offers direct flights to 45
destinations in 22 countries.
•
The Tocumen International airport will add 12 new gates to
increase capacity to 9 million passengers by 2020.
•
Hotel capacity will expand to 7000 new hotel rooms from 20
projects coming online in the next 2 years
•
The UN awarded Panama with the best connectivity
regionally supported by a modern telecom structure
that is globally connected via 5 fiber optic submarine
cables
Value-added
sectors
continue to
grow despite
global crisis
Canal revenues grew 4.9% from 2008-2009 while
the Suez Canal decreased by 20.3%
Panama Canal total traffic:
Number of transits
Toll Revenues (US$ billion)
14,721
1183.9
14,702
14,342
7,330
1317.5
Entry of passengers residing
abroad (‘000)
Expenditures by tourists
(US$ billion)
Source: National Institute of Statistics and Census
Reexportation of goods and services in the
Colon Free Zone grew 11.4% in 2009
Exports of goods, services
and income by sector (US$)
1438.2
360.0
Source: ACP
4
Source: National Institute of Statistics and Census
Panama is recognized as a financially prudent choice for investors
The investment grade rating will create benefits in Panama such as lower borrowing costs,
less investment risk, and a higher degree of confidence in the financial sector
Jun'10
Change
International Monetary Fund
1.8%
5.0%
+ 3.2%
World Bank
1.3%
2.8%
+ 1.5%
CEPAL
2.5%
4.5%
+ 2.0%
INDESA
4.0%
6.9%
+ 2.9%
Panama Economy Insight
1.6%
4.5%
+ 2.9%
BBVA
3.5%
4.5%
+ 1.0%
Standard & Poor's
2.5%
5.0%
+ 2.5%
Average
+ 2.3%
INVESTMENT
Feb'10
Panama is the 5th country in Latin America to
obtain investment grade
SPECULATIVE
The economic outlook is promising for investors.
Real GDP growth rate to surpass 6% in 2010
“Panama is a regional hub for trade, finance and
transportation that will support its growing economic
resilience and diversification”
RISKY
Moody´s Investors Services
5
Panama is promoting new business development in the Reverted Areas
Discover the potential of developing and investing in commercial activities strategically located
in the Reverted Areas of the Panama Canal and in terminal areas of the Atlantic and Pacific
The Reverted Areas offer an incredible range of incentives and opportunities for investment
Supply
Chain
Mgt
Insurance
Services
Tourism
& Events
Ship
Yards
Maritime
Services
Cluster
Retail
Sales
Fishing
Industry
Nautical
Training
Telecom
Port
Development
Airports
Air, Land,
& Sea
Cargo
Logistics
Cluster
Commercial
Business
Services
Colon
Free Zone
Railroad
Storage
Yards
Telecom
6
The reverted assets have a unique history and are strategically located
The Reverted Areas will be developed to compliment the expansion of the canal and the
modernization of ports
Reverted Areas accessible to 3.5B billion potential
customers at the crossroads of the world
•
The Canal Treaty of 1977 reverted the operation of
the Canal along with 147,386 hectares of land in the
former canal zone back to Panama.
•
5,000 hectares of reverted land is available for private
sector development and concessions.
•
The reverted assets along the Panama Canal and in
the terminal areas of the Atlantic and Pacific will
become a regional hub for commerce.
Source: ACP
Transit the Canal
Feeder Services
LAGO
GATUN
Canal
Railroad/Fiberoptics
Trans-isthmus highway
Pan-American highway
Ports
Airports
Panama
City
7
Atlantic coast opportunities for touristic and housing developments
Valuable investment areas for hotels, university campuses, technology research centers,
residential complexes, and commercial centers
Sherman North
266.5 Hectares
Residential José Dominador Bazán
(old Fort Davis) 380 hectares
8
Atlantic coast areas for potential logistical services investments
Competitively situated for port development, industrial manufacturing, container storage,
combustible bunkering, thermal electricity generation plants, shipyards, etc
Telfers
100 hectares
Sherman South – Lemon Bay
228 hectares
9
Pacific coast areas for tourism and housing development opportunities
Prime investment areas for hotels, universities, technology research centers,
residential complexes, and commercial centers
Altos de Batele
160 hectares
Clayton
Veracruz
380 hectares
Ciudad de
Panamá
Ciudad de
Panamá
Clayton
Amador
Amador
Howard
Howard
Veracruz
Altos de Batele
10
Pacific coast areas for potential logistical services investments
Ideal locations for port development, industrial manufacturing, container storage, combustible
bunkering, thermal electricity generation plants, shipyards, etc
Pedro Miguel – Red Tank
90 hectareas
Corozal East
43 hectares
Clayton
Ciudad de
Panamá
Amador
Howard
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Conclusions: Bright outlook for investing in Panama
Panama is a destination for foreign investment with the strongest economic performance of
emerging markets regionally
Panama offers a positive outlook for future investment with many competitive advantages:
•
Strong economic growth and political stability.
•
Investment grade based on sound fiscal disciplinary measures.
•
Regional connectivity to open new long term business opportunities.
•
Major fiscal and immigration incentives designed for Multinational Companies.
•
Exciting new opportunites for private sector development of over 5,000 hectares of reverted assets for
logistical, manufacturing, R&D, touristic and residential housing projects.
•
The government is marketing reverted areas that would be ideal for the logistical development of ports,
transport services and telecom, such as Telfers in the Atlantic and Corazal West in the Pacific
•
In addition, the areas of Sherman and Altos de Batel could become luxury tourist destinations.
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Thank You
Reverted Assets Management Unit
Ministry of Economics and Finance
www.mef.gob.pa/uabr