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It has been five years since our family left Panama after spending 9 years of our lives there. We were there since 2006, watching all those buildings go up in Panama City, 2 different upgrades of Tocumen International Airport, the development of scores of hotels and resorts all over this small country which is the size of the State of Delaware. We saw thousands of expats come and go from Canada, the USA, Europe and eslewhere. It was exciting to see the new projects of infrastructure such as the transit system, new bridges, and gradual improvement of the roads. The expansion of the Canal was another feat of engineering that the country could be proud of. The GDP was supposedly growing around 6% per year while all your neighbors were strugging to grow at all.
Unfortunately, success and growth could not be sustained for long. We watched as government and street level corruption continually grew along with the growth of the country. While we lived through three shifts of Presidential administrations, the one thing that was consistent with all was ongoing graft and corruption. This ended up sucking the gas right out of the proverbial balloon of Panama's growth. International accusations against Panama as a black listed place to "launder money" grew to a level where your government succumbed to global pressures of submitting your country's financial system to international scrutiny and governance. Panama lost its sovereignty by letting the USA determine its banking laws and Panama becoming a vassal state for any other government that wanted to spy on its citizen's business affairs in Panama.
In 2010, in a major act of subsurvience to the USA government, your government signed the FATCA tax treaty with the USA which basically meant your sovereign banks were an extention of the USA's Internal Revenue Service. Shortly thereafter, most of your domestic banks were shutting down American's business and personal accounts unless they were valued at over x amounts. You even agreed to report the financials of sovereign Panamanian corporations and foundations if they had American investors or owners involved.
The unintended consequences of these actions were that your government made it impossible for Americans to invest or do business in Panama on an equal competitive playing field with other foreigners or your domestic businesses. Overnight, all Americans doing business in Panama were suspected criminals or tax cheats until they could prove otherwise. Based on having to legally report and pay taxes on our worldwide income from Panama while all our competitors did not meant we would have to make 25-30% more profits just to equal the profits of our competitors. This meant we would either have to become criminals per your new laws and trade agreements, or leave for greener pasteurs elsewhere. Many of us chose to leave, albeit not because we wanted to. We had to leave friends, family, and businesses behind to start over...just because of a Panamanian Presidential stroke of a pen.
Now, going on six years later, Panama's boom has turned to bust. Outside of growing revenues for the Panama Canal, everything else is down down down, except for maybe the illicit drug markets. Tourism is down, building/contruction is down, unemployment is up, along with crime and corruption. Your banks' reserves are significantly reduced, and now in the middle of this global COVID virus pandemic, you have shut down and locked in all your productive citizens. Just to survive, people are turning to the black markets once again for food, alcohol and money which is becoming increasingly scarce for everyone there except to oligarchies that run the country financially and pay off your politicians.
Now we are in the middle of the global economic lockdown. None of us know the full picture of why and how this has been done to us, but all we know is our lives throughout the globe are being changed forever. The powers that be are breaking down all resistence barriers to tyranny and while most of the masses are huddled in fear of a virus, some of us know that this is about much more than a pandemic. This is basically a peaceful "coup" of all the machinations of national sovereignties around the world that will likely cause a reset of all monies and global debt structures. Global socialism is the logical result. The rich and their countries will be FORCED to bail out the poor countries and their hordes. Panama will not have it as bad as most because you have the Canal and you have only 4 Million citizens to take care of compared to Colombia (50 Million) and other much larger Latin countries that will have a bigger challenge on their hands.
In response to all of this, many people are waiting to see what Panama will have to offer when this "crisis" has leveled off. There will be millions of displaced people who will have lost their jobs, businesses, and large portions of their assets. More people than ever before will be looking for GLOBAL options of where they can move and live more economically and under safe, consistent governmental structures. We ourselves would consider moving back if Panama was more inviting for American and other foreign retirees and investors. We also believe key to a turnaround in Panama will be more moneyed retirees and business interests investing in the banks and infrastructure of Panama.
To that end we recommend to you the following steps to bring back investment and foreign residents to your great country:
- Erase all trade or tax agreements that would limit the sovereignty and freedom of Panama to do business for the sake of Panama, not other powerhouse states such as the USA.
- Open your banking and currency systems to be less dependent on the USA or other global banks and their systems. Moving quickly towards a Panamanian digital currency would allow you to break the yoke of reliance on USA banks and the US Dollar which we predict will soon devalue against most other major currencies of the world.
- Open up your business regulations and become more global friendly for trade and direct investment. Let capitalism return to Panama making it one of the last bastions of free trade and open markets. This alone would rocket Panama into as vast future of wealth and international influence. Become the next Switzerland in the digital age.
- Streamline your immigration and customs process so foreign investors and expats can more clearly and inexpensively invest and live in your country.
- Free up regulations on education and get more funding for learning trades and technology for Panamanians. If they want jobs and a better financial future, they must develop the skills and services required to compete in the global arena. A freer economy could spawn a freer and more effective educational system for all in Panama.
- Reduce taxation by coming up with an easier and fairer tax system. A flat transaction tax could replace the terrible code of so many taxes that currently plague your small country. You can replace income tax, gaming taxes, and even reduce sales taxes by simply charging a 1% tax on every exchange of currency in your country. This means those with the most welath pay the most tax since they are the ones exchanging and controlling the money supply. The cost of collecting taxes would hugely diminish, and the windfall of income for social causes of the people will greatly increase. The people themselves would have more money of their own to spend and feed the booming economy as consumers. More home sales, car sales, vacation spending...all would contribute to a completely revitalized economy.
- Reorganize your dutyfree ports to bring goods in and out of Panama free of tax. Make it easy for companies to establish "maquilladoras" such as Mexico has at their borders for doing piece and assembly work. This could bring a tremendous amount of jobs to your unskilled labor masses.
- Asset protection for all. Extend your country's new sovereignty to protecting the sovereignty of all peoples in the world, not just your own. Give people privacy over their own monies and assets as they used to be under your constitution. Since taxes would be collected on transactions, there is no need to tax people's possessions or their interest income on savings held in your financial institutions. IF you create this safe haven for people and companies throughout the world, Panama could replace Dubai and other global havens as the best place to park and invest their monies...digital and otherwise.
These changes are not impossible to do. Since you have decreed such extensive changes and limitations of your people based on this virus, surely you could use your powers to make these changes that could once again make Panama a powerhouse of global tourism, enterprise and even bigger financial center for all the world!
We would return to such a Panama.
