The Untold Story of Panama’s Economic Prosperity

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Home to the Panama Canal and stuck between the tourist haven of Costa Rica and an increasingly stable and prosperous Colombia, Panama has been in the middle of an economic boom for years.  But many of us don’t even know it.

Even during the current economic recession, the country’s GDP grew by 9.2 percent GDP last year and is projected to grow by 3 percent this year—among the highest in Latin America. New luxury towers are crowding Punta Pacífica, one of Panama City´s most exclusive residential areas, including a $260 million condo-hotel development courtesy of Donald Trump.  Many Panamanians are no longer comparing their country to Miami, but earnestly call it “The Abu Dhabi of Latin America.”

So, just 20 years since the U.S. invasion that removed General Manuel Noriega from power, what is fueling all this wealth? Last month, while in Panama City, I was amazed to witness a place that isn’t only forgetting those bitter days, but is deeply invested in reinventing itself. 

It’s been three years since Panamanians voted in support of the $5.25 billion expansion of the canal, a move that has created jobs and opportunity even as infrastructure projects elsewhere have stalled. The government claims that once the project is finished in 2014, it will help reduce poverty by 30 percent.    

Panama‘s international reputation as a tax haven and a retirement escape is now firmly cemented as well.  Cheap housing prices, a growing and reliable health care industry, investment incentives, and minimal taxes have attracted companies and retirees alike.

But the bonanza isn’t trickling down to many Panamanians.  When I first visited Panama in 2007, I investigated whether Noriega (who had just finished his sentence in the United States) would be tried at home for murder, torture and disappearances. Though the United States estimates that 300 people died during the 1989 invasion, human rights groups say that 3,000 were actually killed during the attack.  Hundreds more are believed to have been kidnapped and tortured by Panamanian military forces—both before and after the invasion.  Many of those Noriega-era survivors I spoke to were from poor and working-class backgrounds, and they seemed convinced that their lack of means would get them nowhere in the courts.

On the other hand, middle-class Panamanians appeared nonchalant about Noriega’s possible return; many told me that they would prefer it if the new generation forgets their country’s dark past.  Revisiting that era, they said, would only end up hurting Panama‘s current economic prosperity.  That sentiment has continued, paving the way for Ricardo Martinelli, a conservative, multimillionaire supermarket chain owner to win the presidency this past May.

It’s still too early to say whether President Martinelli will want to dig into Panama‘s past and seek justice for those who suffered under Noriega.  Or whether he will deliver on his campaign promises to reduce poverty and increase opportunities for young people.  In the meantime, the expansion of the canal is ahead of schedule. But so is the expansion of city slums like El Chorrillo, which serve as a reminder of the people being left behind.

* Ruxandra Guidi is a contributing blogger to americasquarterly.org. She is an independent journalist based in Austin, Texas, and her work can be found at Fonografia Collective (http://fonografiacollective.com).