The government of Panama is hoping to reinvigorate their second city, Colon, which has suffered economically since the United States ended their military presence in Panama. Colon was founded in 1850 as the Atlantic terminus of the Panama Railroad, which was a major route to California during the gold rush. The United States had several major military bases in and around the city, including the base that was the birthplace of US Senator John McCain.
The US began closing its military bases at the end of World War II, and completely ended military presence in Panama with the 1990 turnover of the Panama Canal to the Panamanians. The city never recovered from the closing of these bases, and Colon’s economic outlook began to further deteriorate in the 1960s as political riots raged in the city, and worsened over the twenty year military dictatorship that controlled Panama through 1989. During the 1990s Colon’s population dwindled, and saw unemployment rates of 40 percent.
Once the economic woes of the city have been addressed, Colon will become a particularly interesting prospect for investors, with its French neoclassical architecture, deep historical significance, its role as the Caribbean gateway to the Panama Canal
Panama is hoping breathe new life into Colon with several new programs. According to an article in The Economist, a new highway is scheduled to be completed in 2009 that will connect Colon to the much more robust Panama City for the first time. There are plans to renovate older historical buildings and expand the airport to make the city appeal more to foreign tourists. A cruise line is going to start using Colon as a base in the next year, allowing passengers to avoid some of the hassles of immigration in Miami. The article also states that a group of Spanish investors are investigating building a $40 billion energy hub near the city.
While Colon may turn out to be promising prospect for investors in the near future, Panama must first address security concerns in the region before becoming an ideal location for foreign investors. The wealthy population of Colon is primarily confined to gated communities, and the high unemployment and drug use has lead to high crime rates in the city. Once the economic woes of the city have been addressed, Colon will become a particularly interesting prospect for investors, with its French neoclassical architecture, deep historical significance, its role as the Caribbean gateway to the Panama Canal.
Panama hopes to reinvigorate the port city of Colon (photograph from Wikipedia.org)
Sources:
Panama Real Estate Investment 