Demand For Gourmet Coffee Pushing Growers Into National Parks

The demand for expensive gourmet coffee, as well as the high real estate prices in and around Boquete has forced some coffee growers in Chiriqui to encroach on protected park land. The ‘geisha’ coffee varietal, which is grown in the highlands near the border between Panama and Costa Rica, is considered to be the ‘champagne’ of coffee beans, with some growers fetching up to $130 per pound wholesale. A recent article published by Reuters says that while the current encroachment into Volcan Baru National Park is a relatively small fraction of the large park, the plantations threaten local biodiversity, a threat that is likely to increase given the high demand in North America for specialty coffees, and the rising real estate prices in the lower elevation areas of Chiriqui.

Traditional coffee farms operate under a canopy of trees, which can provide refuge for birds and animals, as well as supply the farmer with supplemental fruits and other beneficial products

From an environmental standpoint, coffee can be a tough issue to grapple with. As one of the most important agricultural commodities, it has a huge impact on many people, from the growers in Central America, Africa and Indonesia, to the Barista that pulled the shot of espresso for your latte this morning. It also has a major impact on wildlife. Large commercial coffee plantations, or sun plantations, often clear-cut habitat that would otherwise be the home of thousands of organisms, including many familiar bird species that migrate to North America in the summer.

Yet coffee trees are naturally shade loving plants, and shade grown coffee beans are naturally superior in taste to their sun grown brethren. Traditional coffee farms operate under a canopy of trees, which can provide refuge for birds and animals, as well as supply the farmer with supplemental fruits and other beneficial products. Many farmers in Central America still grow coffee in this manner, including many of those that produce the highest quality beans in Panama.

Regrettably it can be extremely difficult for consumers to differentiate between the ‘good’ coffee, and the ‘bad’ coffee. One of the most useful ways is to seek out coffee that is certified by a third party as shade grown, organic, and/or fair trade (and example being the Smithsonian Migratory Bird Center’s “Bird Friendly” label). Unfortunately not all certification processes are equal (the Rainforest Alliance’s certification has lower standards than Smithsonian), not all uncertified products are bad (as the certification process can be expensive and prohibitive to small scale farmers) and coffee that is certified organic is not necessarily shade grown or fair trade, and vice-versa.

The take home message from all of this is, as consumers, simply to be cognizant of where your coffee comes from, and what potential impact it may have on the people that produce it, and the wildlife that is affected by it. In addition to this, as real estate investors in Panama, it is important to be aware of the effects that higher real estate can have on local farmers. Invest in the local community, in local farms, and by purchasing sustainably grown local products.

For more information on shade-grown coffee, visit Seattle Audubon’s Shade Coffee Campaign website.

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Panama Tops Analysts Prospects As Long Term Investment

According to an article in Property Wire, analysts have named Panama one of the top long term real estate investment prospects in the world. UK based firm David Stanley Redfern listed Panama, along with Albania, as the two best long term investments, with Panama’s sustained growth being a major factor in the decision.

“Growth is also significant in Panama. Since the government announced plans to expand the Panama Canal in October 2006, Panama’s economic growth has been around 11% year on year and property values have been growing at a recorded and sustained 25% per year over the same period, the DSR research found.

‘Panama is currently growing into one of the world’s main financial and banking centres, with good communications and first class world amenities. Panama’s dollar based economy is sustained largely by the Colon Free Trade Zone (largest in the western hemisphere) and the Canal, as well as services from the operation of the two including flagship registry and canal tolls,'”

While I there may still be reason for concern that the condo market has been overbuilt in Panama City, the strong economic growth, and the canal expansion currently under construction provide compelling evidence that buying real estate in Panama remains a strong long-term investment strategy.

Source:

Strong economic growth potential puts Albania and Panama top of long term investment list (Propertywire.com)

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James Bond And The ‘Canoe Man’ Draw British Tourists To Panama

Unlikely current events have been fueling a sharp increase in British tourism in Panama; the ongoing investigation of John Darwin, the infamous ‘canoe man’ who faked his death and fled to Panama, as well as the upcoming James Bond film ‘Quantum of Solace’ (filmed in part in Panama) have brought attention to the country, kindling a recent spike in tourist activity. According to an article in The Times, one of Panama’s largest tour operators in the UK has seen an increase in sales upwards of 249%.
 
John Darwin, who has become notorious for faking his own death while on a solo canoe trip, fled to Panama with the hopes of opening an eco-lodge in the country. The ongoing investigation of Darwin and his accomplice wife has unintentionally brought a great deal of publicity to Panama and the eco-tourism industry in the country.
 
The timing of the buzz around John Darwin has also coincided with the filming and promotion of the upcoming James Bond film “Quantum of Solace.” The movie (which has yet to be released in theaters), was filmed in parts of Colon and Casco Viejo, and has spurred tour operators to create “James Bond” tours that visit locations from the film, and hotels that Bond actor Daniel Craig stayed in.
 
While I don’t find it all that shocking that the John Darwin story has spurred an increased interest in vacationing in Panama (I mean, if someone fakes their death to move to Panama, there must be something appealing about the country.. right?), I am surprised that the upcoming bond film, which has yet to be released, is bringing tourism into Panama already. I imagine once the film is released it will provide another bump to the tourism industry in Panama, although this will likely depend on how the region is portrayed in the film (as Colon is meant to represent Haiti in the film, not Panama itself), and whether or not the latest Bond installment is as successful as its most recent predecessors.

Con artist John Darwin has unintentionally boosted tourism in Panama

Source:

Canoe Man and Bond boost Panama tourism (TimesOnline.com)

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Copa Airlines Continues To Beef Up Fleet With New Orders For Boeing 737s

Copa Airlines, the national airline of Panama based out of Panama City’s Tocumen Airport, has announced an order for two additional new Boeing 737 aircraft, which will increase their current order to nine new jets. The expanding airline currently offers nonstop flights between Panama City and locations in the United States including Miami, New York, Los Angeles, and Orlando. Copa Airlines serves a total of 22 countries in North, Central and South America, as well as the Carribean. The airline’s fleet currently has forty aircraft total, twenty seven of which are Boeing 737s.
 
Copa’s continuing growth is good news for investors, as it now has one of the youngest fleets in the Americas. As Copa Airlines begin to offer new routes and more frequent flights on existing routes, Panama City will continue to increase in prominence as a Latin American transportation hub.

Source:
Copa Airlines Announces Orders for Two Boeing Next-Generation 737 Aircraft (Marketwatch.com)

Photo of Tocumen Airport courtesy of Wikipedia.org

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Pedasi: Small Fishing Town Beginning To Attract Investors

Pedasi, a small fishing town on the Pacific coast of Panama, is beginning to attract the attention of investors and developers. The area, which is still relatively undeveloped, is the birthplace of Panama’s first female president, Mireya Moscoso. The quaint town primarily attracts surfers and fishermen, yet the town is beginning to attract the attention of more tourists and expatriates.
 
Matt Landau, of The Panama Report, described Pedasi in a post a few months ago:
 

“The downtown part Pedasi, if you are courageous enough to call it that, is saddled by long stretches of rolling hills, not unlike you’ll see in the countryside of Vermont or Maine. For you Californians out there, the rustic coastline and jungle-icious mountain backdrop is quite similar, in my opinion, to the Tustin and Laguna areas. The people of Pedasi though, don’t wear stupid sunglasses. They don’t call you annoying things like ‘bra’ or ‘dude’. They don’t drive flat little convertibles that look like roving mousetraps and they definitely don’t know who Paris Hilton is…”

 
As Pamama’s economy remains strong and real estate markets in the popular areas of Panama City become increasingly overbuilt, it is likely that areas such as Pedasi will begin to attract the attention of real estate developers and investors. For Pedasi, this has drawn criticism, as described in a post on the Panama Investor Blog, in which a local newspaper lambastes developers for coming to areas such as Pedasi.

As with any newly discovered area, there is always risk that development could destroy the charm that initially brought people to the region in the first place. Yet there is always a flip side to this argument. Emerging and undeveloped markets can provide a unique experience, a clean slate to develop regions in a way that can be beneficial both to the local population as well as the local environment. As more development comes to Pedasi, and other areas like it, one can only hope that those with the ability to do so will embrace eco-tourism, sustainable practices, and provide fair wages to those working on their projects.

For a walking photo tour of Pedasi, check out this post from Panama Travels.

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Keep Up To Date On Panama’s Public Holidays

When conducting business or investing in real estate in a foreign country, it is always important to be particularly aware of the country’s customs, holidays, and social practices. Being negligent of these factors can be extremely damaging; even unintentional mistakes can sour deals that otherwise would have worked. A recent example is that of Anheuser-Busch, brewers of Budweiser Beer, who are currently being acquired by the Belgian conglomerate InBev. Some have speculated that the company could have avoided the recent buy-out, had they cultivated a better relationship with Modesto, the Mexican company that brews Corona, and which Anheuser-Busch owns a stake in. The two companies had an unfortunate fallout following, of all things, a fishing trip that occurred over a decade ago. Apparently the head of Anheuser-Busch, insulted his Mexican counterparts when he became anxious after hooking a Marlin, a fish that can take up to three hours to reel in, and passed off his rod so that he could take a phone call. Ultimately, both the fish, and any hope of a healthy partnership between the two companies, were lost.
 
Understanding different social customs is extremely important, and one mistake that is both easy to make, and even easier to avert, is being aware of the national holidays in the country you are investing in. Being aware of public holidays can help avoid any unnecessarily negative situations.
 
To avoid any potential tricky situations, here is a list of public holidays in Panama, for 2008 (click the image to enlarge it):

Source:
http://www.qppstudio.net/publicholidays2008/panama.htm

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Louisiana Politicians And Business Owners Wooing Panama Canal Authority

A delegation of Louisiana politicians and business owners are visiting Panama, in hopes to gain support from the Panama Canal authority in opening broader shipping routes between the Panama Canal and the Gulf of Mexico. Members of the delegation include New Orleans mayor Ray Nagin as well as other politicians and business leaders from the city. New Orleans, still reeling from destruction of Hurricane Katrina, is interested in establishing ties with the canal, and is hoping to receive traffic from the large Asian cargo ships that will be able to traverse the isthmus once the canal expansions have been completed. The city’s plans to attract the shipping industry include a $500 million expansion to their ports. According to Nagin, “this is another step toward reclaiming this region.” 

 

The Port of New Orleans faces stiff competition from other American ports in the Gulf to attract traffic from the Panama Canal.  The Port of Tampa recently signed an agreement with the Panama Canal Authority to route traffic to their port, which is the largest in Florida.  These new agreements will be instrumental in bolstering trade routes between the United States, China, and other Asian countries.

 

So what does this mean for investors? For one, it shows the commitment of American ports in supporting the Panama Canal expansion, and Panama’s crucial role as the midpoint of trade between China and the east coast of the United States. In addition to this, members of the New Orleans delegation are also discussing opportunities to connect international flights between Panama and New Orleans, which would make Panama City and other locations in Panama even easier to access from the United States.

 

Sources:

Group Seeks To Boost Ties To Panama (Nola.com)

Panama Canal, U.S. Port Of Tampa Sign Deal To Boost Trade Route To Asia (news.xinhuanet.com)

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Panama Hopes To Attract Movie Industry

Panama, following record 11.2% economic growth last year, is now looking for new ways to capitalize on their success by attracting movie producers to the country, reports the Houston Chronicle.  The upcoming James Bond film, “Quantum of Solace” was filmed in part in Panama, and “injected a huge amount of money into Panama,” according to Carmen Gisela Vergara, Panama’s minister of commerce.  The country is currently encouraging the creation of a movie studio in Panama, and is allowing movie companies to register for filming permits online, both in hopes that major movie companies begin will look to Panama as a filming destination.

The upcoming James Bond movie was filmed in Panama

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Panama Ambassador Visits US Tech Companies

Panama’s ambassador, along with diplomats from 40 other countries, recently toured several high tech United States companies to learn about operating technology companies.  According to a post in the Wall Street Journal’s Business Technology Blog, Ambassador Federico A. Humbert Arias was particularly impressed with HP’s “Halo Room;” a video conferencing system that uses 50 inch screens to show the participants faces.  The ambassador expressed interest in the system, which he said would save time if incorporated into Panama’s embassies, as diplomats often return home for single days at a time to attend meetings.  The ambassador stressed Panama’s advantages in the world technology industry, as the country shares the same time zone as the East Coast of the United States, and that a large portion of the population speak both Spanish and English.  Other companies visited during the weeklong tour of California included Google, and Cisco.

Panama’s Ambassador was impressed with HP’s ‘Halo’ videoconferencing system

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Emerging Real Estate Markets In Panama

As real estate prices continue to escalate in popular Panama destinations such as Panama City and Boquete, investors are beginning to look at emerging markets elsewhere in Panama.  Matt Landau, an expert in Panama real estate and publisher of The Panama Report, recently wrote an article on some of the budding markets in Panama.  Here are a few of the suggestions from his article:

Penenome and La Pintada:  These communities, less than two hours from Panama City, are near a major copper mining project currently planned.

Puerto Armuelles, Chiriqui:  This coastal city just south of the Costa Rica border is on the path of a crude oil pipeline project connecting Bocas del Toro on the Caribbean to the Pacific Ocean.

Boca Chica, Chiriqui:  This coastal town on the Pacific Coast has been made more accessible by new roads and a nearby international airport.

Pedasi, Los Santos:  An up and coming tourist destination, famous for surfing, sport fishing, and rainforests.

These are a few of the locations described in Landau’s article, who cautions real estate investors to perform due diligence when buying real estate in Panama’s emerging markets.  While there is an obvious potential for a higher rate of return in up-and-coming areas, there is also an increased amount of risk associated with investing in these types of locations.

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