La Jolla – Disruptors are not just for the tech industry anymore. Speaking at the Institute of the Americas on July 22, United States ambassador to Panama, John D. Feeley, called the $5 billion dollar expansion of the Panama Canal a “disruptor of international commerce.” Ambassador Feeley’s remarks centered on what he called the three reasons to be interested in Panama: history, prosperity and US foreign policy.
Amb. Feeley was quick to note that the US and Panama have a long history and the two nations are inextricably linked; he added that the historical connection goes back to long before the Panama Canal. Indeed, he underscored the role Panama played, and the Trans-isthmian railroad, as a primary route for Americans to get from the East Coast to California for the gold rush in the middle part of the 19th Century. More recently, the epic construction and operation of the Panama Canal was a major piece of interconnection between the US and Panama, eventually culminating in the Carter-Torrijos agreement that saw the US hand over the Panama Canal and its operations to full Panamanian control at the end of 1999.
Opened on June 26, the expansion of the Panama Canal was a 10 year plus infrastructure project that cost over $5 billion and is the aforementioned disruptor. The expanded Canal will shave between 12-14 days off shipping times from the US East Coast. Additionally, it will considerably reduce shipping time for liquefied natural gas (LNG) exporters from the US Gulf Coast to Asian buyers. But it is also the center piece of Panama’s prosperity.
Panama has for several years been a leading economy in the region with GDP growth averaging around 8% per year and GDP per capita steadily climbing each year. Much of the country’s prosperity is linked to the Canal, its expansion, but also a broader services industry. Counting no significant natural resources, Panama has developed an economy focused on services and, as Amb. Feeley put it, “being useful” to global commerce.
When it comes to US foreign policy, Panama has long played an outsized role for the nation of just under 4 million at the intersection of Central America and South America. Indeed, as Amb Feeley noted in discussing the historical connection, even prior to independence from Colombia, the Isthmus was instrumental for US citizens heading to the West Coast, but with the development of the Canal came a critical juncture.
Panama was home to not only the Canal and the Canal Zone, a 10 mile wide swath of US territory cutting through the middle of the country, but also found in Panama were several vital US military assets including the headquarters of the US military’s Southern Command. The 1989 invasion and removal of Manuel Noriega on drug trafficking charges to stand trial in the US also is a key moment in the country’s connection to US foreign policy.
More recently, the Panama Papers, the leak of thousands of pages of law firm information regarding offshore accounts and tax evasion has brought international attention to Panama. The name, which unfortunately invokes Panama due to the location of the Mossack Fonseca law firm, is really a conversation on global tax policy and international banking underscored Amb. Feeley. He added that it is not an issue directly related to Panama per se.
Amb. Feeley exuded a tremendous amount of optimism for Panama’s outlook and implored everyone in attendance to consider the country and what it has to offer, not just in terms of business and commercial opportunities, but also tourism and historical attractions.