Further notes on Panama living...

(This is a 4th in my series on "Panama Living" issues.  See previously "Is Panama an Illusion?" , "Pros and Cons of Living in Panama" and "Is Panama Safe?"  )

Here is a link to a recent International Living article of interest. This blog today is based on an email exchange I had with an American couple who are coming to Panama to look at investing and retiring here. 

While there are many positive and truthful points about the International Living article...it is another example for taking caution in believing everything you read about Panama living and retirement. Some of what I take exception with is "living on $800 per month" and electricity costs being $50 per month. Cost here totally depends on lifestyle and location. For my wife and I, we spend around $800 per month just on food!  probably $100 wk at the grocery store and $400-500 month at restaurants. That's our lifestyle affecting costs, plus food costs for most everyone has increased 5-6% per year in the 8 years we have been here.  Does your pension or retirement income take that amount of increased cost of living into consideration?

If you run air-conditioning at all frequently, your monthly electricity bill is going to be anywhere between $140 (for our 1200 sf condo) to $300+ for larger homes or condos. And believe me, if you live in the city or at the beach, you will want to run AC to live in comfort. For allergy sufferers, AC is another major need here as molds and bugs proliferate in humid tropical climates inside your home. AC keeps those bugs and molds more under control. Perhaps this couple lives in the mountains above David where they say they live...but even in David you would be challenged to live as you do in the USA on $800 per month. So, as you can see...one has to read between the lines.

I also need to mention the risks when locating to another country regarding "political instabilities".  While historically Latin America has been a hotbed of leftist and socialist governments or outright dictatorships, USUALLY the domestic affairs do not affect ex-patriots or foreigners in said country unless it comes down to blocked roads for the frequent demonstrations against the latest government in fashion or frequent power and water outages based on inadequate infrastructure or lack of maintenance, and the simple lack of attention to trash pickup in the streets.  These are realities you WILL deal with in Panama like most other Latin countries that are based on poor leadership of the powers that be in these third world countries.  And lets not forget it was a little over 20 years ago (1989) the USA government/military invaded Panama for political reasons which cost well over a thousand lives in this relatively small country...the real number of which has been covered up by those "powers that be"..

While they have had infrastructural advantages in Panama based on 100+ years of USA investment and support via the canal and other foreign payments to Panama that have helped build the bridges and tollways (most of those payments I call "international bribes" for access and controls)...there are usually very limited budgets or plans for maintaining those infrastructures. While electricity in Panama City is much more reliable than when we lived in Costa Rica or Mexico...there still is a lack of steady ampage in many parts of the city and country. If you do not run a voltage regulator in your home or office, over time your computers, TVs etc will probably short circuit or wear out faster based on frequent spikes of electricity to your location. This can have a variety of causes...from the main issues of power sourcing (hydro electric mostly in Panama) to simple lack of code enforcement of electricity in the building structures themselves. 

The past two years living in arguably the newest and most high-end area of Panama City, we have observed many 3rd world problems in this zone as well. The water supply for this area AND for our building has been very inconsistent.  Fourteen months ago Panama had some terrible flooding at the end of the rainy season in November...and it apparently overwhelmed the whole water supply system for IDAAN, the independent company that operates water supply in Panama. For over 2 weeks the main water supply was either shut off intermittently or totally unpotable.  We had to bring in drinking water and for flushing our toilets we even resorted to bringing up pails of water from the swimming pool.  Since the restoration of service, our water pressure has never been the same and the water is more contaminated than before this disaster. Where before you could drink water from the tap...not anymore without special filtering systems at the tap. Also, there has been so much "crud" in the water, it stopped up or destroyed many of our faucets... shower heads etc had to be cleaned or replaced. Oh...and in one instance when water service was restored to our building, "someone" decided to refill the pool before refilling the back up supply tank for the building...so when the supply went off again the next day...well, we had water in the pool "thank God". I have taken many morning showers at the poolside shower which apparently is not connected to the main building water supply. 

I go into more detail than you probably wanted to know only to illustrate situations that most everyone I know living here has had to contend with. You can pay as much or more per square foot for real estate in Panama than Miami or many other USA cities, but your service and finish level will not match up.  Just accept it as fact and you won't be surprised or disappointed.  Of course, taxes and holding costs on real estate are significantly less than the USA, but they are slowly catching up with increased taxes no one in Panama seems to want to talk about. 

And bank accounts for Americans in Panama?  Unless you have very good contacts and connections locally, it is going to be very difficult...and for some impossible. Based on the recent tax treaty with the USA, Panama has for some reason agreed to make the local banks liable for all IRS tax reporting for USA account holders.  That means that we American citizens have become a liability and extra cost to the banks...criminals until proven otherwise...for wanting to live and bank in Panama. Canadians, Europeans and other nationalities have much better treatment these days as their governments do not demand this of Panama to "do business". This is one of the political "unintended consequences" of Panama being so eager to please "Uncle Sam".

Lets go back to the political cause and effect of these "problems".  With the water and electricity issues in Panama...NO ONE steps up and takes responsibility.  For example, on the water issue the government blames IDAAN for not managing the resources properly or doing regular maintenance.  IDAAN fires back and tells the government they don't provide the funding or support for zoning and infrastructure changes to keep up with demand.  I'm not sure whose fault it has been, but it was also reported during this time that over 30% of the water   in the IDAAN system was stolen or simply not metered and paid for...even in some large buildings or projects throughout the country. THAT is probably why they had some fund shortages. Now what you see most often on the local news are poor local Panamanians screaming at the cameras that their water has been shut off,.. in some cases for MONTHS.., until "someone"  pays the past bill...often thousands of dollars they will never afford to pay.

Finally...if you get unhappy about something down here as a foreigner...what are you going to do? Are you going to scream, rant and rave until someone agrees to respond to your need or demand? Are you going to demand or ask why they don't speak or understand English?  I have news for you. The more you are aggressive or rant at a Latino most anywhere...the less likely you are to get your desired response. Everyone is nice and calm here...even when they are saying "F you". Even maids or other employees will find ways to get their revenge if you treat them with "disrespect".  They live for themselves...today.  Not for you or your future happiness.

Oh...and I love it when fellow expats say "I am going to sue _____ ". I'm sorry, but I do not know of one successful lawsuit between a foreigner and a Panamanian where the foreigner won.  The Napoleonic code of law in Panama and other Latin countries makes it very expensive and a long process to "sue someone" into compliance with an agreement. If you stay here long enough...you WILL be ripped off in one way or another...and you will NOT have any real recourse in the courts. So...just plug that into your expat mentality if you want to live or do business successfully in Panama.


Basically I think there are three kinds of foreigners that live in Panama.  There are those who have blindly invested their life fortunes and futures here and live everyday justifying and defending their decision through "rose colored glasses". Then there are many who have dealt with themselves honestly and decided they made a wrong move and have either moved back "home"  or on to other destinations that fit them better. Finally, there are those of us who have "made peace" with the culture, change of life and have decided to be happy and content with the imperfections that are Panama. If you are one of the later...I welcome you to Panama. But I still say..."try before you buy".

( Next report...will be focused on questions about the costs of real estate here, sustainability factors and my predictions for the next 5 years.  Hey, my crystal ball is as good as anybody's... :)  )