The corona virus has arrived in Panama and there are currently 989 cases and 24 deaths (as of 29 March 2020). The Panamanian government has taken strict measures very early in order to control the virus spread. This is to prevent the stress on the health system, which is of course not as stable in a country like Panama as in Germany. Panama has a very young population (average age 26 years / Germany 44 years), which hopefully will help to keep the mortality rate low. The United Nations praised Panama’s measures from the beginning as a model for Latin America (Info-Link).
Here is an overview of the measures:
- Within 30 days a new hospital for corona patients will be built (module construction system, which allows to use it in other places in the future).
- Since 25.March there is a curfew throughout the country. People are only allowed to leave their homes for two hours a day to do their shopping. Who thinks that Panama does not get this organized is wrong. The end number of the identity card of everybody in Panama determines on which two hours a day this has to happen. This automatically avoids overcrowding in supermarkets, pharmacies, etc. and the meeting of many people. Pensioners have their own time of day when they can do their shopping in peace.
- The streets are controlled and non-compliance is sanctioned.
- Exceptions are professionals at the Panama Canal, in banks, in some authorities and of course in hospitals and other security related institutions. Otherwise, work is done via home office.
- All international passenger flights are suspended until 22. April.
- China has donated 5,000 corona tests and other medical equipment to Panama.
- The government is using 2,000 hotel rooms in Panama City (including the Hard Rock Hotel) to isolate corona patients who have tested positive.
- The government distributes 30,000 shopping vouchers to socially weak families worth USD 1.5 million. In addition, thousands of food packages are given away every day.
- Electricity prices are reduced by 30% – 50% and credit payments can be delayed.
Panama has responded very quickly to the new situation, but we have to wait and see how it develops and how the measures work, as is the case all over the world.
The measures taken will have a negative impact on the economy in Panama, as everywhere else in the world. The tourism sector (the main season is fortunately almost over) including the cruise sector and the gastronomy sector are particularly suffering.
The service sector represents about 70% of the Panamanian economy. The main service sectors are logistics, trade, finance and tourism. Thanks to the Panama Canal, the country generates annual revenues between 2 – 2.5 billion USD, which is a lot for a country with 4.2 million inhabitants. Accordingly, great importance is currently attached to the Panama Canal and the seaports functioning as usual, as approximately 6% of world trade flows through the Canal. Currently, many corona supply measures of Latin American countries are organized from Panama (“Hub of the Americas”). The Panama Canal will help to stabilize government revenues. Even if these stable Panama Canal revenues will be lower than normal in the current difficult times. The canal is a windfall for the small country.
The construction sector in Panama is another important component. Currently, construction in Panama is at a standstill due to the corona measures. The “reactivation of the construction sector” with the large infrastructure projects (third metro line, fourth bridge over the Panama Canal, new copper mine) will give Panama’s economy a boost again. Let us hope that we will return to normality in Panama as quickly as possible, as in the whole world.
Klaus Happ’s real estate company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama and also administers these properties. In addition, Klaus supports companies that want to become entrepreneurially active in Panama.
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