Can Panama Become the Singapore/Rotterdam-style Hub for Latin America?

at 11:25 am by David

• Keynote: H.E. José Domingo Arias, Vice Minister of Commerce and Industry, Panama
• Keynote: Philip Yeo, Chairman, SPRING Singapore, Special Adviser for Economic Development, Prime Minister’s Office (view background presentation)
• Keynote: Frank Heemskerk, Member of the Board of Management, Royal Haskoning
• Moderator: Don Ratliff, Executive Director, Georgia Tech Panama Logistics, Innovation & Research Center

Frank Heemskerk: Happy to see economic relations between Panama and Netherlands growing stronger. President Martinelli is visiting Netherlands this year, discussing how to avoid double taxation between the countries. These have been some of the fastest negotiations ever.

Location is important, but it needs to be maintained and shared. The Netherlands’ success is a combination of location, business/tax climate, and quality of life. Education is very important and people want the best environment for their children. Freedom of press and freedom of speech — this is what people want. The Netherlands has met these goals and this the reason for their success.

Panama outpaces the Netherlands on GDP growth, but this an advantage to the Netherlands and to Singapore as it creates more wealth and more trade for the entire world.

José Domingo Arias: Panama has been developing it’s place as a trade and logistics hub for 400 years, starting with the gold trade from the continent’s Pacific coast to Spain. Terms have now changed. Trade comes from the west of the United States and travels to the east.

The Canal will expand its capacity to be able receive bigger ships. This takes a great deal of investment. Panama is already the eleventh most competitive country in the world, and offers the most efficient and competitive port in the Western Hemisphere. The free trade zone of Colon moves $20 billion in trade a year. The airport Tocumen is seeing 12 million passengers per year and expected to see this grow to 14 million. The government is also in the process of building the highway between Panama City and Colon and extending the highway across the country. The most important thing is that the government is doing all this with global commercial partners.

We are focusing on developing teaching and education in Panama, especially executive education. Most of these students are from the public sector. Our long term project is to renovate the country’s entire education system. Our private partners and universities have the capacity to identify their needs are and will handle their training.

Experience exchange with Singapore and the Netherlands is vital for us. We have studied their model. We are learning enormous amounts from Singapore in terms of technology, a field in which they have considerable experience. Someone from the private sector asked me what guarantees we could provide that we can deliver. Our prestige is on the line, and our style of the administration is to get things done.

Panel conversation: Success comes from collaboration of the private sector, the public sector, and investigations. The impressive thing about Singapore is they never stop trying to be the best, even though they are considered by many to be the best. Panama is trying to encourage entrepreneurship. How can it encourage creating a “critical mass” of ideas?

Will East coast U.S. ports on the East Coast be able to handle new big ships that will be passing through the expanded Canal? If not, this will be to Panama’s advantage as it mean ships will be unloading their cargo, although the United States will catch up eventually.

Panama is more of a logistics hub than a trade hub. Panama needs to build on this and improve. Suggestions include broadening the agenda using better social policy and better water management. Singapore and the Netherlands have been able to convince shippers of the value of going through Rotterdam’s and Singapore’s ports. They’re efficient, tariffs are cheaper, and they’re easier to use. Panama should follow these models.

More in http://www.as-coa.org/blogs/panama2011/

24 Feb 2011: Panama - Where the World Meets

PANAMA
WHERE THE WORLD MEETS

Thursday, February 24, 20118:00 a.m. to 3:45 p.m.Registration: 8:00 a.m. to 8:30 a.m.Presentation: 8:30 a.m. to 3:45 p.m.
Panama Marriott HotelSalon Campo AlegreCalle 52 y Ricardo AriasPanama City, PanamaMap of location

Panama is set to continue growing at one of the fastest paces in Latin America. For 2010, Panama’s growth is expected to be 7 percent, and the IMF and UN forecast the country will lead GDP growth in the region over the next five years thanks in part to its public investment plans, which is close to $20 billion for the 2009 to 2014 period. More than 40 multinational headquarters have moved their regional operations to Panama due to its economic and political stability and have taken advantage of its strategic position and government incentives to attract investment. By continued strengthening of its logistics sector, Panama may be well positioned to become the Singapore-style hub for Latin America, providing foreign investors with a high-standard regional platform to develop its products and services in order to reach other markets.
For the second consecutive year, AS/COA, together with the World Bank and the government of Panama, is organizing a conference to provide an in-depth analysis of these issues. This year, the conference will be focused on the country’s economic prospects and the efforts and challenges to improve its competitiveness in the logistics sector.
Please join us as we address these issues with a group of internationally recognized senior business executives, government officials, economists and investment analysts.
CONFIRMED SPEAKERS:
Ricardo Martinelli, President of Panama
Demetrio Papadimitriu, Minister of the Presidency, Panama
Alberto Vallarino, Minister of Finance and Economy, Panama
Roberto Henríquez, Minister of Commerce and Industry, Panama
Alberto Alemán Zubieta, CEO, Panama Canal Authority
Edgar Blanco, Research Director, Center for Transportation and Logistics, MIT
Tanya Avellán, Director, Central America, Coca-Cola FEMSA
Frank Heemskerk, Member of the Board of Management, Royal Haskoning
Samuel Israel, CEO, Latin America, DHL Global Forwarding
Felipe Jaramillo, Central America Director, The World Bank
Sergio Luna, Vice President, Department of Economic and Sociopolitical Research, Citi Latin America
Rubén Ramírez, Representative Director, Panama, CAF
Don Ratliff, Executive Director, Georgia Tech Panama Logistics, Innovation & Research Center
Stefan J. Roehr, Director, Latin America Supply Chain, Sanofi-Aventis
Jordan Schwartz, Lead Infrastructure Economist, Latin America and the Caribbean, The World Bank
Peter V.A. Shaw, Regional Credit Officer for Latin America, Fitch Ratings
Carlos Urriola, General Manager Manzanillo International Terminal and Senior Vice President, Stevedoring Services of America
Philip Yeo, Chairman, SPRING Singapore, Special Adviser for Economic Development, Prime Minister’s Office (view a background presentation on Singapore’s economic development)
Susan Segal, President and CEO, Americas Society and Council of the Americas
ACCESS THE AGENDA.*

To register go to http://www.as-coa.org/blogs/panama2011/

Panama as Regional Business Hub

Because of the geographical position of Panama, located in the center of the American Continent, with access through land, sea and air, with a tropical year round climate, free of natural disasters. With an open service economy, capable human resources, dollarized economy, the international finance center, world class logistics platform and economic political and social stability, make Panama the ideal site for making businesses in the region.

WHY INVEST IN PANAMA?

Panama is a country with a service vocation, that possesses a privileged geographical location, that has allowed us to become one of the most important logistic centers of the Western Hemisphere for the storing and distribution of world cargo, a bridge for the mobilization of passengers to the entire American Continent and facilitator of efficient and modern communication services. As a commerce promoter, both nationally and internationally, Panama enjoys political, social and economic stability.

Panama has gone from being a bridge to becoming a logistic platform by air, sea and land, with the Panama Canal as main axis, transporting over 300 million of CPSUAB (Container, Bulk, etc.) presently serving more than 14,000 ships through 144 maritime routes and complementing with a system of container terminals in the Pacific and the Caribbean, that serve as cargo transship and redistribution, that recorded an annual movement of containerized cargo of 4.25 million TEU's, added to the inter-oceanic railroad that has a capacity 330,000 containers per year from one coast to anther. Panama also has the Colón Free Zone, the most important one in the Western hemisphere, with an annual trade exchange of over 19 thousand million dollars through its approximately 3,000 companies established in the Colón Free Zone. The development of the Panamá Pacífico Special Economic Area, in the former Howard Air Station, will serve as a space destined to the production of goods and high technology services.

We offer an efficient air service through the Tocumen International Airport, presently undergoing a remodeling process for offering a comfortable and safe atmosphere to all the travelers that visit our country and an expeditious and efficient attention to the transiting passengers, who do not go through customs or migration checks. From the airport the Copa Airline operates its Hub that offers more than 46 destinations to 25 countries in America and excellent connections, some of them with three daily flights to the most important cities of Latin America. In addition we account for with an excellent internal offer of direct flights to the principal cities of the interior of the country.

Panama has become the preferred center for the installation of five submarine optical fiber cables, turning into the ideal place for telecommunication companies and data centers since we have the advantage of offering great connectivity with North and South America, Europe, Asia and the Caribbean, advantages that companies have learned to use effectively, such as MCI, Cable & Wireless and Movistar that offer cellular telephony services and first quality internet to the international market.

Our prestigious International banking Center, with over 93 internationally renowned banks, reflected for the first Quarter of 2010, assets in the order of US$ 65,000 millions.

Our medical and health services are well known internationally and they have the two best private hospitals of the Central American region; equipped with the most recent medical technology, and they are affiliated to world famous hospitals such as the Baptist Hospital in Miami, Florida and the Johns Hopkins Medical Center in Baltimore, Maryland.

Our tropical climate and varied tourist offer sets us among those preferred for the travelers that can find in our country picturesque indigenous and colonial communities, white sand beaches and coral reefs with indescribable beauty, mountains with fresh climates and tropical jungles with an exuberant vegetation, habitat of innumerable flora and fauna species. And with our excellent highway network and short distances the country can be toured in only six hours.

For these reasons, Panama has been chosen by important multinational companies such as Samsung Electronics, Inc., DHL, DELL, Hutchinson Port Holding Group, HSBC, BICSA, SCOTIABANK, Assicurazioni Generali, American Life Insurance Company and many more, as main offices for their regional operations. In addition, some of the most recognized International Organisms such as UNICEF, UNDP, OAS, the Spanish Agency for International Cooperation (AECI, initials in Spanish), and the BLADEX [Latin American Export Bank] among others, have chosen Panama for establishing their operations.

Panama offers goods and services at reasonable prices as compared to its nearest neighbors, with Free Trade Treaties (TLC, for initials in Spanish) with Taiwan, El Salvador, Singapore and Chile. Furthermore, we are going through the final negotiations of a TLC with the United States and Central America and we are preparing our entrance in the G-3.

http://proinvex.mici.gob.pa

Is the Colon Free Trade Zone for you?

The Colon Free Zone was formed in 1948 with 10 companies in 38 hectares, after a 1946 feasibility study was made by U.S. free trade zone consultant Thomas E. Lyons.

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COLON FREE ZONE MULTIMODAL LOGISTICS CENTER OF THE AMERICAS

About a year ago, the Management of the Colon Free Zone, together with the Inter-Oceanic Region Authority, the Directorate of Civil Aeronautics and the Maritime Authority of Panama, started an ambitious project to turn the Colon Free Zone into the largest Multimodal Logistics Center of the Americas. This project includes the development of multimodal transportation and logistics services for Free Zone in the Coco Solito, France Field and Telfers areas, covering the use of the adjacent cargo transportation centers such as the maritime ports of Manzanillo Internacional Terminal, Colon Ports Terminal, Colon Container Terminal, Panama Ports, the Panama Railroad and the Enrique A. Jimenez Airport at France Field.

Background

At the beginning of the year 2000, representatives of each one of the entities involved in the project’s development gathered together in a meeting and approved the establishment of a technical commission to design and draw up the conceptual planning and development scheme of the areas making up the multimodal center. Apart from agreeing that there should be a conceptual plan for the reverted areas, the port, airport and railroad systems, and an integral segregated zone promoting the development of a logistics center for trade, services, transportation and industry, the project’s vision was defined, as well as the actual borders of the expansion area.

The Reasons behind the Project

The project was carried out, considering several factors that directly affected the efficiency of the center and consequently the internationalization of the production, the technological and regional economic changes. The search for an optimization of the efficiency in the means of transportation and the new modalities of world trade, are important to maintain the quality of the business undertaken in the Colon Free Zone.

The transfer of merchandise from our territory to the rest of the Americas and the rest of the world, together with strengths like our geographical position, the dollar as legal currency, the financial and insurance center, forces us to maximize all our other resources of the reverted areas, ports, highways, railroads and airports to ensure a site with excellent cargo services generated from this trade center.

The conjunction of all those indicated strengths make all users and customers of the Colon Free Zone to keep up the highest international competitive levels, reducing production, distribution, marketing and logistics costs in general and especially transportation efficiency. As a consequence, the reliability of delivery terms and the frequency of the services provided would also improve, so that this sector in the free trade, industry, transport, services and logistics zone would become the largest in the Hemisphere.

This would be an effort in enlarging and improving the currently existing facilities and infrastructure in the Colon Free Zone, by the private as well as the public sector in order to achieve a common benefit.

Other Reasons

The Colon Free Zone expansion and Multimodal Logistics Center Project is not only linked to transportation, but it is rather more of a strategy to improve the goods and services supply chain as well as looking to achieve an optimal competitive level towards the latest modalities and requirement of world trade, making the real difference between temporary users and permanent and satisfied customers.

Benefits Of The Multimodal Logistics Center

• Development of multimodal transport for world trade.

• Establishment of a customs storage and distribution center.

• Installation of guard houses to check merchandise entering and leaving the Multimodal Center.

• Establishment of Hi-Tech industries and, light manufacturing companies, taking advantage of a part of the reverted areas.

• E-Commerce development opportunities.

• Private investment for more than US $700 millions dollars.

• Enhanced competitiveness upon becoming a logistical center for trade, service, industry and transport and its consequent positioning in every sphere world-wide.

• Development of a new model strengthening international trade activities.

• Improvement of public services and utilities.

• Increase tourism.

• Increase in national and foreign investment in the Colon region area.

• Generation of thousands of jobs.

REQUIREMENTS TO OPERATE IN THE COLON FREE ZONE

General Rules and Regulations

Pursuant to Law-Decree 18 of 1948, corporations operating in the Colon Free Zone must comply with the following requirements:

• No minimum investment capital requirement

• No business license required

• The following documentary evidence is required:

Articles of Incorporation, Bank and Commercial references.

• Employ at least five (5) local workers

• Re-Export at least 60% of the imported merchandise

• Pay rent in the first five days of every month.

Management will collect a surcharge at an annual rate of 10% on late payments. If the client is more than two months behinds, the Operating code, it will not be possible for the company or corporation to operate in the Colon Free Zone.

• Report the commercial movements of all the merchandise entering and leaving the Free Zone, on the approved forms at the time of the operation.

Tax Benefits

• 0% Tax on Export Profits

• 0% Duties and Quotas on Imports and Exports

• 0% Billing Duties

• Very Competitive Costs

• Immigration visas for executives

Importer Advantages

• To be able purchase IN A SINGLE PLACE an excellent range of products

• With Credit Facilities

• With dispatching in less than 24 hours

Exporter Advantages

To have access from one site in the Heart of the Americas to consumers in:

• The American Hemisphere

• Europe

• Asia

• Africa

• Australia

• Ship Chandlering Services

WAYS TO SET UP OPERATIONS IN THE COLON FREE ZONE
Lease Agreement Operating Costs: A, C, D and E	Urbanized Areas France Field $0.35 m2 Colon $0.50 m2 Non-Urbanized Areas $0.20 m2 (The customer assumes the cost of urbanization. None available)
Building Lease Agreement Operating Costs of a property in the Free Zone: A, C, D and E Operating Costs of a private property: A, B, C, D and E	Free Zone Property Colon: $2.40 France Field $1.75 Coco Solo $1.65 Private Property Rent agreed upon between the parties, authorized by the General Manager’s Office based on resolution Nº 04-92 dated 25 March 1992. Operating Permit
Representation Agreement Operating Costs: A, C, D and E.	Percentage (For storage, handling, etc) Agreed upon between the parties
Public Warehouse Operating Costs: Only A and E	0.5% of the merchandise’s F.O.B. value (Freight on board)

OPERATING COSTS

A. Operating code (Annual) $200.00
Given to a Company in order to be able to make commercial transactions in the Free Zone

B. OPERATING LICENSE (Annual) $1,200.00
Given to a Company after its establishment in the Free Zone has been approved and all legal paperwork has been done.

C. RENT (Monthly)
Cost per square meter multiplied by the number of square meters, (depending on the area)

D. GARBAGE COLLECTION (Monthly)
Minimum $ 30.00
Maximum $ 120.00

E. SECURITY (Monthly $ 30.00)

Source: Colon Free Zone

For more information, contact www.laglex.com

NEW COMMUNITY: Logistics hub in the making

Tuesday Jul 24 2007 07:10

By Adam Thomson

Think of Panama City and one of the first images is the crescent-shaped bay, defined on one cusp by the growing sky-rise residential area of Punta Paitilla and the picturesque old centre of 19th century pastel-shaded waterfront buildings on the other.

But if London and Regional, a UK-based construction company, gets its way, the city could soon outgrow its traditional boundaries to occupy a huge area of land just across the Bridge of the Americas spanning the Panama Canal: Howard, the former US Air Force base.

This month, the company, together with Jaime Gilinski, the Colombian banker and entrepreneur, signed an agreement with the Panamanian government to build what it hopes will become a new business and residential hub within just a few miles of the existing capital.

The company has three months to present its master plan for the 1,400ha site and, as yet, few details are known. But London and Regional has pledged a minimum investment of $405m during the first eight years of the 40-year concession. A further $300m will follow during the remaining years.

This month, after paying the government a one-off fee of $20m to seal the contract, Ian Livingstone, who heads the company said: "We hope to exceed the spending limits established with the government quite dramatically."

Indeed, Mr Livingstone and Mr Gilinski believe the value of the finished project could top $10bn, equivalent to more than half Panama's gross domestic product. The idea, they say, is to construct a large industrial park, a media village, a downtown area with plaza, restaurants and shops, a showcase building to mark the nearby entrance of the canal and a swathe of residential buildings – for both the wealthy and low-income segments of the population.

"Our intention is to create a community, and that won't work unless you have a representative mix of society and a critical mass to achieve a stable and permanent population," says Mr Livingstone.

That is a far cry from how the area looks today. Large white houses adorned with red-tiled roofs and built up on stilts line grassy streets named to make the US soldiers to feel right at home.

On one side of the area lie a 3.2km runway and four huge hangars which served as centres of aviation maintenance and storage up to 1999 when the US packed its bags and went home.

Economists and town planners say that one of the measures of success will be the amount of interest and the number of firm offers from companies looking to use Panama as its centre of regional operations.

Mr Livingstone says he has already initiated detailed talks with many multinationals. "We have had between 20 and 30 serious approaches from companies whose names everyone is very familiar with," he says.

If they end up moving to the site, it is likely to be for two main reasons. The first is Panama's increasing emergence as a logistics hub for the wider region. Since the government of Martín Torrijos came to power in 2004, it has set in motion a plan to encourage shipping and transport companies to use its strategic position as a centre of distribution.

The second could be a series of tax benefits. Officials say companies involved in industries such as aviation and related activities, and information technology, will not have to pay any taxes or import and export duties.

"What we want to generate is investment and employment," says one official, who estimates that the project could create between 20,000 and 25,000 new jobs.

Full text and subscription at http://us.ft.com/ftgateway/superpage.ft?news_id=fto072420070720116045