Building a Better 2010

Wednesday, January 06 2010y 03 2010
Written by Matt Landau
The Panama Report

When it comes to 2009, Panama was nothing if not an oddity. In learning early on that the financial crisis would hit, the majority of the past year was described in terms of resilience rather than success. In general, Panama’s picture locally shined much brighter than the international scene: the economy was up, employment was down, people weren’t sitting around on their butts (well at least, they weren’t doing so while waiting for the recession to end). 2009 was Panama’s first real exercise in staying power and in terms of fortitude, it wouldn’t be unfair to say that its foundation faired quite well.

Yet 2010 will bring with it a whole new set of challenges for the hemisphere’s fastest growing identity. With President Martinelli’s grace period coming to an end, drama appears to be building to a crescendo on many different fronts, almost all of which revolve around what we’re calling the crux of 2010 and that is the Panama introspection: what does the country really want? Without serious thought, the vast gulf between Panama’s disparities – its haves and have-nots, its ego and reality, its past and its future – will continue to widen, leading to infrastructure evils beyond the repair capacity of a simple road crew.

In a period that many of the world’s previously-relied-upon institutions are failing, Panama’s institutions are improving, significantly, but that doesn’t necessarily say too much. I was tempted to title this article, The Panama Ball Drop of 2009 but in a more optimistic and accurate vein, ideas on how to build a better 2010 incorporate ideas not only of economics and law, but of truth and identity.

1. Rebuild Credibility: 2009 has shown much more meaningful growth than the immediate years before it, but not unlike a morbidly obese guy losing ten or twenty pounds, Panama still has a long way to go. Self-peddled as a banking delight, a cheap real estate haven, an eco-friendly paradise…etc. 2010 will require Panama to either recognize these traits or ditch them for something more realistic. Rebuilding credibility could deal with crime, corruption, eco-tourism, banking, cost of living.  The truth: Panama does have a number of really credible draws, but as it is promoted currently, the experience doesn’t add up. False advertising needs to be dealt with in 2010.

2. Avoid Complacency: As a testament to Panama’s laid-back history, it would not be unfair to say that a threat of complacency is among Panama’s top potential hazards in 2010. In its past, most policy has been driven by short-term necessity rather than long-term planning. Panama has accomplished great things to date. Stopping here to bask in its success though would be cancerous. 2010 must be a drive for realistic initiatives from green movements to shopping malls (or whatever they may be). The truth: Panama has a tendency to take things for granted. In order to build a better 2010, it must continue the motivated drive it has shown impressively in 2009.

3. Embrace Foreigners: After talking the talk and branding itself as a retirement, tourist, and investment haven, 2010 will be the most important year for Panama to walk the walk and cuddle those visitors that do arrive with every might of acceptance in their blood. Immigration and the first impressions of Tocumen must transform as must hospitality training, customer service, and other adaptations that a self-proclaimed role of “international business hub” requires. Bad experiences are the ones foreigners remember most. Polling foreigners for suggestions could be a start on the right track as might initiating an entrepreneur visa (see here for article) for young, talented, and innovative people looking to add to the fabric of Panamanian society. The truth: Tourists are treated like cattle and investors are looked at through dollar sign lenses. More genuine hospitality will be a deal breaker in 2010.

4. Fidelity vs. Convenience: Subscribing to the Panama mantra instead of vacationing or investing somewhere else is not unlike deciding whether to go to a nice movie theater or stay at home and watch Netflix. In 2010, Panamanians must grasp the consumer trade-off between delivering extraordinary experiences and making something cheap and easy (both of which have their place in the world market). As tempting as it is to appeal to everyone, opting for and focusing on one of these is its key for 2010. Panama can succeed at either end of the identity spectrum – whether it’s Latin America’s gambling mecca or the hemisphere’s most authentic tourism spot – but failure awaits those who attempt to mish mash all these attributes together. The more Panama goes in one direction, the greater its chance of success. Read Trade-Off, Why some things catch on, and others don’t by Kevin Maney. The truth: Panama has tried to appeal to everyone and without any kind of specialization in 2010, it may become a homogenous isthmus of mediocrity instead of the powerhouse it is entirely capable of.

The final defining role of 2010, one deserving of far more than a mere number in our list, will be Panama’s people. After all, aren’t they the ones who are really entitled to their country’s fate? Will the increased cost of living prove too much to handle? Would the majority of them prefer life to return to a simpler, more tipico style of living? As much as its foreign entrepreneurs and politicos and the country’s elite would have it their way, the question remains: do the majority of Panamanians really like the direction their country is heading? In the end, this is their, and only their decision to make.

Over the past few years, Panama has emerged as something of a mirage: it’s neither highly authentic nor highly cheap or convenient. Consumers are always willing to give up convenience for great product. They’re also willing to ditch the great product for great convenience. Oddly enough though, Panama has fallen into a no-man’s land of consumer experience. No one gets excited by products like that. At its current rate, Panama won’t provide a compelling enough reason to visit a few years down the line. One real possibility to long-term growth is to focus on excelling at one game-even if it’s at the cost of another. This while realizing its potential, rebuilding the credibility it fully deserves, continuing the drive to better itself, and truly embracing the very foreigners that make most of its growth possible.

I don’t know if it was always this way, but for as long as I can remember, just as the winter cold started to set on the northeast part of the United States, my mother would make it a habit every night to sit in front of a warm fire and watch PBS. The news show she watched was something of a recap of the days events, which were reported by a calming voice in a turtleneck and I liked it because amidst today’s era of flashy news programs, PBS was and still is a simplified, almost outdated throwback to the first days of TV. Visiting for the holidays, it was only about a week ago that I overheard on one of her shows a piece about the Federal Reserve and its chairman Ben Bernake. “Outstanding, with flaws,” was how one of the economists (quoted in a survey by the Wall Street Journal) described Bernake’s record in 2009, which was, I thought, a very nice way of looking at Panama’s progress too.

The test is not did Panama get it perfect? As a new and developing country, this is simply not a fair thing to ask. Instead, the question should be, did Panama get the big things right, with enough efficiency, speed and clarity so that the outcome wasn’t awful? This is a more reasonable litmus test in the current global scenario and in Panama’s case, as with Bernake in the WSJ, the answer with regards to 2009 was yes. The story of 2010, however, has yet to be told.