With an economy on the rise and an influx of new foreign investment, Panama's businessman-turned-president Ricardo Martinelli is planning to push on with taking advantage of the country's location and expanding the Panama Canal, as more ships look to transport goods between the Atlantic and Pacific oceans.
"Don’t waste your time trying to open a bank account in Panama. You’d do better trying to get to Mars – it’s quicker," the country’s head of state, Ricardo Martinelli, says with a smile as he underlines how his centre-right government works worldwide to clamp down on money laundering.
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But that doesn’t make him anti-business. "Seventy per cent of my cabinet are businessmen and entrepreneurs, active or retired," he says. The 59-year-old, who won a five-year term as Panama’s president in a landslide victory in 2009, is keen to present his business credentials and is concerned about the bureaucracy and delays which can hold firms up.
He launches into paeans of praise of the business spirit that has brought benefits to what he calls his "big little country" of fewer than 4 million people. In the past year it has attracted $3bn in new foreign investment.
Geographical advantage
Mr Martinelli's strategy emerged in the first days of his presidency with the appointment of a consulting firm for Panama. “We had them in and we said: ‘This is where we are: this is where we want to be.' It was agreed that we would take advantage of our geographical position and our ports and concentrate on the business of logistics,” he says.
Today Mr Martinelli is unstoppable in the job of selling Panama’s attributes to foreign business executives, as well as improving its attractiveness to investors. A major aim is to transform world trade by producing an easier and cheaper flow of water-borne goods across the Isthmus of Panama between the Atlantic Ocean and the Pacific Ocean.
Panama is concentrating hard on the job of widening the canal to take much larger ships capable of bearing as many as 12,000 TEUs (20-foot equivalent containers) rather than the present limit of 5000, the so-called 'Panamax'. The capacity to widen the waterway from 33.5 metres to 55 metres, the president says, would allow Panama to push up its share of seaborne world trade to 10% from its current 6%. The $13bn programme should be completed by 2014.
We had [a consultancy firm] in and we said: ‘This is where we are: this is where we want to be.' It was agreed that we would take advantage of our geographical position and our ports and concentrate on the business of logistics
Mr Martinelli says that finance has been assured from the earnings of the present canal, which already provides Panama's government with direct revenue of $1bn a year, as well as bank funds called up at Panama’s initiative. Dismissing reports that the new waterway came at the instance of a Chinese government keen to develop new trade routes in Latin America, Panama’s foreign minister, Roberto Henríquez, has declared roundly that "there’s not one dollar of Chinese money in our plan".
Mr Martinelli is careful not to criticise the ambitions of Panama’s neighbours but adds forcefully: "We do have nearly a century of experience running a trans-Isthmian canal."
Business commitment
The president was born in Panama City in 1952 and grew up in the countryside, before starting school back in the capital and continuing to the US military academy and the University of Arkansas, before picking up a master’s degree in finance in Costa Rica.
This was but the prelude to his undying commitment to business in a bewildering succession of forms. Citi gave him a first tiny foothold in banking where, in 1981, he helped out with the accounts of Almacén 99, the Wong Chang family’s food enterprises. Mr Martinelli not only helped the family to sort out its business but eventually bought it out, creating the Super99 empire, which blossomed and brought him recognition in Panama’s business world.
With the acquisition of the Gago supermarkets, reports say, Mr Martinelli's small fortune grew into a big fortune. He embraced inter alia, pharmaceuticals, meat production, sugar growing, insurance, Avipac fast foods, television production and cable television and banking itself – in the form of the Global Bank Corporation and Panabank Trust, before putting this vast experience to use in his role as his country's president.
