Category Archives: Panama
By Jim Garamone
DoD News, Defense Media Activity
WASHINGTON, Oct. 8, 2014 – The potential spread of Ebola into Central and Southern America is a real possibility, the commander of U.S. Southern Command told an audience at the National Defense University here yesterday.
“By the end of the year, there’s supposed to be 1.4 million people infected with Ebola and 62 percent of them dying, according to the [Centers for Disease Control and Prevention],” Marine Corps Gen. John F. Kelly said. “That’s horrific. And there is no way we can keep Ebola [contained] in West Africa.”
If it comes to the Western Hemisphere, many countries have little ability to deal with an outbreak of the disease, the general said.
“So, much like West Africa, it will rage for a period of time,” Kelly said.
This is a particularly possible scenario if the disease gets to Haiti or Central America, he said. If the disease gets to countries like Guatemala, Honduras or El Salvador, it will cause a panic and people will flee the region, the general said.
“If it breaks out, it’s literally, ‘Katie bar the door,’ and there will be mass migration into the United States,” Kelly said. “They will run away from Ebola, or if they suspect they are infected, they will try to get to the United States for treatment.”
Also, transnational criminal networks smuggle people and those people can be carrying Ebola, the general said. Kelly spoke of visiting the border of Costa Rica and Nicaragua with U.S. embassy personnel. At that time, a group of men “were waiting in line to pass into Nicaragua and then on their way north,” he recalled.
“The embassy person walked over and asked who they were and they told him they were from Liberia and they had been on the road about a week,” Kelly continued. “They met up with the network in Trinidad and now they were on their way to the United States — illegally, of course.”
Those men, he said, “could have made it to New York City and still be within the incubation period for Ebola.”
Kelly said his command is in close contact with U.S. Africa Command to see what works and what does not as it prepares for a possible outbreak in the area of operations.
March 8, 2012
I had dinner the other night with a bank executive in charge of government finance who told me that the aggregate spend of all the infrastructure projects in Panama totals more than $13 billion. This is roughly 50% of the entire Panamanian economy.
The equivalent in the United States would be the government announcing a ‘Rebuild America’ infrastructure spending initiative in the range of $8 TRILLION! No doubt, it’s a lot of money for this small country.
Panama (and particularly Panama City) has been in a seemingly perpetual state of construction for nearly 10-years. The long boom in residential construction created an impressive skyline of condo towers along the new Cinta Costera. But residential demand peaked and petered several years ago.
In an effort to keep the party going, the government has essentially swapped a residential construction boom for an infrastructure boom.
There are so many projects here, you’d think you were in Chonqing, China. And it’s made life miserable for anyone who has to get into an automobile– Panama City’s already dismal traffic has now become utterly hopeless.
The real issue is that Panama’s debt has been steadily rising to finance several projects. In many cases, the debt increase has outpaced the country’s dizzying GDP growth. For example, Panama’s debt rose 10.3% in 2010, while GDP only increased 7.5%.
According to some of my local attorneys who work on the deals, many of these infrastructure projects are now being creatively financed: selling bonds of off-the-books quasi-government entities that own securitized future cash flows.
It’s all an elaborate process to keep the debt from hitting the government balance sheet and obfuscating Panama’s true fiscal status. Official debt is now hovering near 50% of GDP, but the actual figure is much higher.
It’s possible that some of these projects will prove to be good investments– it’s not the same as Chinese ghost cities down here, Panama has legitimate infrastructure needs and is building accordingly.
What remains to be seen, though, is what happens after the infrastructure projects are complete in, say, another 5-years. The hope is that the real economy will have grown enough to absorb the loss of infrastructure spending. This supposition is not out of the question… but it’s definitely not guaranteed.
For now, nobody seems to mind. People are working, they’re making money, the country is improving… and except for the obvious and ridiculously high inflation rate, life is good.
To be clear, Panama is definitely a good news story. It has had one of the most resilient economies in Latin America over the past few years, and perhaps more than anywhere else in Central America, Panama has a very clear (and growing) middle class.
When you go out at night, you see Panamanians out on the town spending their discretionary income… and I mean regular Panamanians, not just the Porsche-driving 20-year olds who inherited papi’s business.
A strong middle class with disposable income is important in any healthy economy, and its emergence marks the transition from ‘developing’ to ‘developed’ nation. Panama still has a -long- way to go, but it’s moving in the right direction.
When I think back to how this place used to be 10-years ago (and all the years in between that I spent here) versus today, the positive change is overwhelming. When I think about how places like the US and Europe used to be 10-years ago, the change is resoundingly negative.
It’s this trend, by far, that’s most important.
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