By Duncan McGowan
The smoke is clearing from a competitive presidential election in Panama, leaving a clearer view of the potential impacts on the economy and property market.
New President Laurentino “Nito” Cortizo is a cattle rancher and former agricultural minister, who is generally considered a “centrist” and pro-business. He’s vowing to boost foreign investment in Panama and improve the relationship with the United States, which certainly resonates with the business and property communities. Cortizo studied business in the United States and earned a doctorate from the University of Texas, Austin.
Cortizo told a Reuters reporter, “The United States is our strategic partner, our main strategic partner… This relationship has to improve.”
Corruption was a major issue during the campaign and Cortizo was seen as the one major candidate with an unblemished reputation. Despite years of government service, he has never been caught up in a corruption scandal. In addition to elevating Cortizo over a long list of candidates, voters also removed several long-serving deputies, who were viewed as dinosaurs and part of the old system in Panama. As one writer, “the electorate became big winners… ousting many lawmakers who spent decades feeding at the public trough.”
Cortizo built his economic platform on growing tourism and international investment — two areas that have been lagging in recent years. Both initiatives could directly impact the property market, especially tourism, which many believe is long overdue for more attention. Outgoing President Juan Carlos Varela was often seen as slow to move on economic issues, while too quick to enter into agreements with China.
The economy was a frequent topic, but much of the rhetoric didn’t match the reality of Panama’s business climate. The economy is still growing at the fastest rate in the region. But many people are hoping for the double-digit annual increases of a few years ago, which is simply not realistic and doesn’t really represent what is happening in Panama.
What we have is a stable, healthy economy, growing at a sustainable rate. There are big, fundamental drivers, including the growth of traffic in the Panama Canal, large infrastructure projects and the opening of the biggest mining operation in the region, the Cobre Panama copper mine.
The election campaign was tumultuous, but it represented democracy in action. This was only the sixth Presidential election in Panama since the overthrow of Manuel Noriega in 1989. Panama is still a young democracy and it’s exciting to see the peaceful and orderly progress of government.
Now that the battle of the election is over, investors and the business community can see Panama as a stable environment with a strong foundation to build for the future, as the country develops as the “Hub of the Americas.”
Duncan McGowan is president of Punta Pacifica Realty, the largest sales, rental and property management company in Panama City.