Friday, January 05, 2007

Musing: PanaMania

PanamaniaI was only in Panama -- the city -- for a few hours, but I liked what I saw. Having spent the better part of three months transiting the length of Central America, the first thing that struck me about the city is how clean, organized and tidy it is. Unlike its disorganized, dilapidated and dirty neighbors to the north, Panama is a sparkling little gem. With this initial, attractive impression in mind, I spent my brief but highly informative tour with Hector exploring the five points of my “criteria for prospective US expatriates.” Here is the recap:

1) Proximity -- For most prospective expats, proximity to the US (for purposes of visiting family and friends, checking in with various professional services, etc.) is very important. Located only a few hours away by plane from several major US hubs, Panama clearly ranks high on this criteria.

2) Security -- While there certainly have been uneasy times in the past between the US and Panama, conditions have never been dire and they are very stable at present. Going forward, they are expected to stay very good. Beyond that macro view, crime in Panama is relatively low and general economic conditions -- a forward looking indicator of crime -- are excellent. Plus, having the US dollar as Panama’s official currency ties the two countries together in significant ways.

3) Infrastructure -- The power grid is stable, the water is drinkable and plenty, hi-speed internet is ubiquitous, the roads are excellent and health care is highly regarded. Strong marks all around.

4) Privacy -- Banking has always been a major industry in Panama and the Panamanians take their banking very seriously. Banking and privacy laws in Panama are some of the tightest in the world and, without getting into too many details, let’s just say that if Panama is a good place to put money for people who may have some things to hide, it is a great place for those who don’t.

5) Value -- I wasn’t “in-country” long enough to get a full sense of Panama’s cost of living, but I got enough to know that it is much lower than the US and probably about the same as Costa Rica. (For the same money, though, you get much better living conditions than in Costa Rica -- more for the same, so to speak.) While Hector and I were speaking frankly, I asked him how much it costs to live “well” in Panama, “you know, a house, a car, some decent spending money...” He replied that you can do well on $1,600 to $2,000 a month, though “more is better, no?” This turned out to be a perfect segue because his next comment was “You know, a lot of Americans are moving down here and living well on their Social Security.”

Bingo, a number of other vague observations fell into place for me. For one, I had been noticing a lot of construction going on around the city, mostly high rises of various kinds. I was about to ask Hector what kind of commerce was booming that requires so much new space when I realized that the buildings all had balconies on every floor and “mixed use” (retail, restaurants, etc.) at ground level. Now it was obvious to me that they were being built as condos, not office buildings. Many, many new condo complexes are on their way up in Panama. Maybe not as many as I saw in Atlanta, but proportionately so at least.

So here’s the rest of what Hector told me about the expatriate boom in Panama: If you are over 65, you only need to show the government your Social Security and retirement papers and you automatically get permanent residency. No “ninety day rotations” required. If you are under 65, you need only show proof of modest financial resources (Hector thinks it’s about $250k) and residency is yours. Even better in Hector’s opinion is the fact that “going into business” with a Panamanian handles both the residency thing and lets you have benefits at company expense. His immediate example involved me becoming his partner in a modest tourist business where I would provide the capital to buy a van which he would easily run at a good profit. I didn’t do the deal, but i admit I was intrigued.

So, what’s my point about PanaMania? Well, I am not in a position to say “go for it” because I haven’t gathered enough corroborated intel to give it my seal of approval. I am clear that Panama is worth a strong look, and I would anticipate going back there at some point to check it out in detail. Meanwhile, there is a lot going on in Panama and a lot of developed property will be available pretty soon. Prices are probably as low as they are going to get. If you’re thinking about a place to go, don’t wait for my final evaluation. Panama is a place to check out now.

No comments: