So What's Happening In Panama?

 

Security in Panama

One of the first things you notice when you arrive in David is that there are security people everywhere. The first thing you notice are the number federal police - seldom can you look out on the downtown Central Park and not see a pair of police officers (and usually more than one pair).  This was especially noticeable having just come from Costa Rica where the police seem to be collectively missing-in-action.

Then as you become acclimated to downtown David you realize that there are private, armed security guards in most businesses as well. The pharmacy, supermarkets, casinos, department stores, and many others all have security people as well as the more obvious businesses such as jewelry stores and pawn shops (where you normally have to be buzzed in the front door as well). And if you go to one of the city's malls, you find that evry store, regardless of the type of merchandise being offered, have security people including the restaurants.

According to the latest data just released there are 17,500 people working as private security guards in Panama.  And the security-related companies in Panama billed as a whole $18 million per month. That is big business!

In a country of only about 3 million people, when you factor out the 1/3 (about a million folks) who live in the boodocks, that leaves about 2 million in Panama City and the handfull of other cities (and their suburbs) in the country. That works out to approximately one person in the security business for every 100 residents. And if you then factor out children and retirees, you end up with one person in the security business for every 40-50 working age adults in the urban areas.

U.S. based businesses and chain restaurants have to adapt to the security environment in Panama, particularly in Panama City where crime is more prevalent than in the rest of the country. Last year the owners of a new Kentucky Fried Chicken franchise in Panama City decided that a fast food place certainly did not require armed security guards. Didn't take long for the word to get around. They were robbed three times in as many weeks - ugly incidents with armed robbers in broad daylight in a restaurants full of customers. The KFC managers changed their mind on the security issue.

All in all, the security presence makes for a very quiet and tranquil environment. And this is partly due to the fact that the security people, including the police, are very low-key and not in the least bit imposing.

 

Tourism Continues To Grow

 The total expenditure of the tourists who visited Panama from January to May 2012 was 923.8 million dollars, an increase by 21.1% over last year.

A government report also revealed  an increase in the average number of hotel rooms occupiede per day, up from 3,973 last year to 4,831 this year. However, due to the increase in the number of hotel rooms operating in Panama City (a result of the 'building boom') - with 2,137 new rooms added last year- the overall rate of hotel occupancy declined slightly this year.

On average, the total number of visitors have increased by 6.6% every year since 2009, primarily due to the effort to increase the number of air links from various destination, for both local and foreign airline companies.

Don Winner Also Notes An Added Long-Term Benefit To The Tourist Traffic: ...Very often future residents start their Panama experience by visiting a few times as tourists. It's nice when a tourist comes here to spend a few thousand bucks. But it's even better when they come here to spend a few hundred thousand dollars, to buy a house, buy a car, and spend all of their retirement money....... So, while tourists are great, expat residents with an income and money in the bank are even better.

 

A Job Fair In Panama City

 Last Saturday they held a job fair organized by the Ministry of Labor and Social Development at a big arena (Arena Roberto Duran) in downtown Panama City. The numbers are interesting to say the least.

Interested job seekers carrying their resumes, identity cards, previous job references, food handler cards, and a copy of their driver's licenses where out in big numbers. Why the big turn-out? Over 27,000 vacancies were being offered, by 130 participating companies from around the country.

However it is not all good news. Here are the some comments on the subject from Don Winner (Panama Guide): So, if 130 companies are trying to fill 27,000 vacancies, that's an average of 207 jobs per company. The underlying fundamental manpower shortage continues in Panama. There are more jobs available than people to fill them. Sooner or later, something has to give. I have come to the conclusion that the government of Panama wants to keep this shortage in effect. The increasingly intense competition for skilled employees creates an upward pressure on wages, as employees are forced to cannibalize employees from their competitors, in order to obtain the labor force they need to get the work done. This means employees will make more money across the board. However it's a dangerous strategy because it's flirting with inflation, which can be crippling in the long term.

Larry Adds: Panama is going to have to open up their labor market. To protect the Panamanian workforce they have very strict and restrictive laws on foreigners working in Panama. Their economu has now outgrown the available local labor market, and is still growing. The government has already made 'concession' and allowed foreign workers are the big construction projects in Panama (the canal expansion and construction of the Panama City subway).  But something has got to give across the entire labor front.

 

The Continuing Drug War

Panama is making Herculean efforts in fighting drug trafficking. Every day there is at least one big bust and hopefully the word will get out to take your drug business and go elsewhere. On Monday this week, Don Winner (Panama Guide) reported The National Police confirmed the seizure of 406 kilos of cocaine as part an operation in the district of Chepo and one of the Panamanians arrested is a Lieutenant in the National Police, with 26 years of service in the institution. Ouch!

Most of us are not that familiar with the drug business, and some of the details are staggering.  Did you realize that 406 kilos of cocaine has an approximate wholesale value of $1.8 million dollars in Panama. But once it reaches the U.S. the wholesale value increases to about $10.5 million. Even worse, the 'street value' (what it sells for in the alleys and dark parking lots) increases to about $40 million.

 

Till Next Time. Pura Vida

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