Why I Don't Want The Recession To End |
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| Written by Matt |
| Tuesday, 21 July 2009 01:00 |
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This was the first real recession of my life and while I hear regularly of job-loss and ailing finances at home, in Panama I found myself relatively unimpressed by the magnitude of its fury. What I envisioned was a dustbowl of scraggly men panhandling and eating soup from a can. I remember the dot-com collapse, the accounting scandals, and September 11th attacks but being (for the most part) outside of the US for the current recession, I find myself describing Panama's reaction to the world economic crisis with nothing less than a sigh.
So when my friends in the States email me with desperate hopes of an end to the recession like the drowning gasping for breaths of air, I (sometimes jokingly and sometimes not) say I actually don't mind. There are in fact industries that are doing fine (if not flourishing during the recession) I tell them. Sperm banks, for example, are getting more and more donations from the cash-strapped and fertile. Bicycles, I suggested, because no one wants to drive to work. Add to that list piggy banks, liquor sales, drug dealers and...Panama? 1. Business is good Speaking on my own behalf, as well as that of a number of friends and associates in Panama (excluding the real estate hawks who are still slow), the majority of foreigner-run businesses seem to be thriving here. Whether it's one of the many posh new restaurants popping up around town or the latest high-end spa, a boutique luxury hotel on the coast or relocation services surfacing around town, Panama as a country is still growing and its small network of entrepreneurial establishments reflect that. Malls continue to open new elite brands, serious hospitality names are putting their money where their mouths are, and associations like the World Bank back up this buoyancy with stats. This is in stark contrast to many other places in the world. I wouldn't say that Panama's businesses are doing as well as they would in a global boom, but they've certainly not fallen deathly ill. 2. Real estate corrections The recession has, in my opinion, been singularly responsible for tempering Panama's real estate bust. It was before Panama reached it's absolute height that money got tighter and investors more risk-averse. Panama real estate's period of artificially contrived growth would have almost definitely spiraled out of Miamiesque control. However, the recession provided just the thing the country needed to avoid the hyper-bust. As a result of tightened bank financing, less speculation, and an overall better-researched fanbase, buildings that would eventually sit empty will now never be built in the first place. While a number of projects that got in B.C. (before crisis) will still fuel a slowdown in the market, Panama's overall real estate purge will be significantly less severe because of the recession. 3. Immigration improvement For the longest time, it pained me to see the people considering Panama for relocation: the tacky, the clueless, the downright oddballs looking to make a buck off an unsuspecting fannypack. This was a time when money was free-flowing in the world - when many of those who arrived down south were either outcasts or gold rushers. Yet somehow, the recession has inspired a new demographic: a creative (perhaps desperate) cluster of (in many cases) young, smart, professionals looking to adopt an up-and-coming destination during down-and-out times. To boot, Panama's recession-time immigrants are increasingly more level-headed and realistic about their new temporary home, having bypassed the hype machine of paradise and discounted real estate. They arrive in Panama coming from jobless, tightfisted cities and accordingly have lowered (perhaps more pragmatic) expectations. Of course, an end to the recession would (truthfully) probably benefit Panama in many ways. Tourism, trade, investment - both its traditional breadwinners and newly emerging markets - would probably see great progress. But to put it bluntly, things in Panama during the recession are simply not that bad. Restaurants are still full, clubs are packed, beach resorts are still slammed. Some speak of the recession's reverse impact on Panama development and buzz, but I'd argue this is just what the country needs. Quality over quantity. Sustainable growth as opposed to typical boom and bust.
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Comments (1)
  written by Salvavida , July 21, 2009 Matt, I would commend you on this article as it is the same way I explain to my clients (I am broker in Panama). While the world is not still BOOMING here like it was year(s) ago, it is still growing (as you point out - by noted groups). This will be great for Panama real estate market (even though I am broker) as people will be more realistic and people will do more research before coming to Panama.
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| Last Updated on Tuesday, 21 July 2009 07:28 |
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