A recent trip to Panama City revealed a skyline graced by cranes building high-rises that boast stunning ocean views -- a physical symbol of Panama's growing position as an economic bastion in Latin America. The country's less obvious symbols of economic strength lie in its innovative business policies.
At 6.2 percent, Panama boasts the highest gross domestic product growth rate in Latin America. Its real GDP has expanded an average of 8.4 percent annually between 2004 and 2013. And the country's economy even performed well during the global financial crisis - up 4 percent in 2009, while other countries' economies contracted.
As its influences in the region grows, Panama continues to attract top talent and businesses. It serves as the Latin American base for many multinational companies, thanks in part to its growing infrastructure resources.
The Panama City airport is busy with 25 passenger airlines from around the world flying into and out of Tocumen International. Passenger traffic there grew roughly 300 percent in a little more than a decade - from more than 2.1 million passengers in 2003 to 8.5 million passengers in 2014.
The Panama Canal expansion, nearing completion, will provide future fuel to grow an already strong economy. In the 2015 fiscal year that ended in September, canal cargo tonnage hit a record high and toll revenues were the second-highest ever. When the expanded portion - with its wider locks and deeper channels allowing for passage of larger freighters - becomes fully operational in April, tonnage and tolls are expected to grow.
I recently attended a conference in Panama City on innovation and technology. While there, I was struck by the optimism, professionalism and modernity of attendees and city residents alike.
With a thriving economy, Panama is about growth and success, not politics and protest. Panama's success is not random. It results from a strategy. And like any good strategy, it builds on strength and overcomes weakness.
Here are four reasons why Panama is succeeding:
- Panama capitalizes on its historic relationship with the United States. Since the creation of the Panama Canal, Panama's leadership has built on the best parts of its U.S. relationship. Panama has kept the U.S. dollar as its currency, invested in infrastructure and the canal, has high bilingual (English-Spanish) proficiency and strong relations with the U.S.
- Panama focuses on free trade and relaxed immigration. Both exports and imports have grown since the U.S.-Panama Trade Promotion Agreement went into effect in 2012. Unlike the walls around Brazil and Argentina, and travel restrictions imposed by many countries, Panama essentially encourages temporary workers to participate in its workforce. This flexible labor supply, combined with the uniquely Panamanian reliability and positivity, is enticing to foreign investors looking to start or expand a Panamanian business.
- Panama works with the business community and encourages innovation. The Panamanian Chamber of Commerce and government work together to encourage investment, host conferences and enact policies - such as low taxes - that encourage business investment. Panama even has a former business executive focused full-time on innovation as a government policy. And instead of opposing Uber - standard policy in many other countries - Panama has embraced this beloved ride-hailing service.
- Panama has a stable government with a relaxed view on most social issues. Silicon Valley meets Las Vegas in Panama City, with several hotel casinos and an eagerness for investment and new business approaches. Yet, you can still buy a three-bedroom water-view condo for about half the price of a three bedroom home in Washington, DC.
It's clear that Panama's economy is on a roll. Pay attention as the country grows as a hub for the Americas and develops its own reputation as the go-to headquarters for innovative businesses in Latin America.
Gary Shapiro is president and CEO of the Consumer Technology Association (CTA)TM - formerly the Consumer Electronics Association (CEA)® - the U.S. trade association representing more than 2,200 consumer technology companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro