Panama, a country at the crossroads of two oceans and two continents, is becoming the Singapore of Latin-America.

Most of the world is fighting a deep recession, but in this former banana republic the sky is still the limit. The enlargement of the Panama Canal, estimated cost 5.25 billion US dollars, is attracting capital from around the globe – and the Netherlands is in on the game. The new Dutch embassy is scheduled to open its doors later this month and KLM is increasing the number of direct flights from Amsterdam Schiphol Airport.

At a construction site in Panama City, the foundations are being lad for yet another skyscraper. In the past few years, dozens of hundreds-of-metres tall buildings have been built. “This country has a dollar economy, ports, a free-trade zone, the world’s second largest banking sector, a growing tourism industry, beautiful nature, the Panama Canal and so on and so forth,” says real estate broker Sander Temminck.

While the rest of the world is being weighed down by a financial crisis, in Panama the sky is the limit. Its economy has an eight-percent annual growth rate, which has everything to do with the enlargement of the Panama Canal.

Deeper and wider
The canal, handed over to Panama by the Americans in 1999, is crucial to the development of the Central American country. Panama is investing more than five billion dollars in deepening and widening the canal to keep the corridor between the Atlantic and the Pacific competitive.

In 2014, exactly 100 years after it was first opened, ships carrying no less than 12,000 containers must be able to pass through. So it had to become deeper and wider, and the Netherlands is playing its part. Although the biggest contracts went to the Belgians, Haskoning, Smit and Boskalis landed contracts for harbour construction work, towing and dredging. HCL sold two cutter-suction dredgers to Panama, which suck up silt and rocks from the canal.

Trade and transport
Investors from across the globe are fighting over orders from the Panamanian transport and real estate sector. For Dutch businesses too, Panama has become Latin America’s main attraction. Three years ago KLM introduced weekly direct flights from Amsterdam. This winter, the frequency will be increased to daily flights.

At least as noteworthy is the opening of a Dutch embassy – in mid November – in a region where the Netherlands is closing four embassies as part of an austerity programme. "There is a good match between the two countries." says Sander Temminck. "Traditionally the Dutch are into trade and transport and the same goes for Panama, there is a natural connection.”

Two countries
The canal is the biggest, but not the only mega-project in booming Panama. The country is also building new ports, a bigger airport and a metro, all part of Panama’s ambition to become the Hub of the Americas: the gateway to North and South America at a cross roads of two oceans and two continents.

And yet, something strange is going on. Looking up, it is very easy to believe you’re actually in Manhattan, but between the towers all you see is broken sidewalks and the dilapidated houses of the poor.

“Panama is actually two countries,” says economist Raúl Moreira. “The rich who benefitted; and the poor. Panama is one the most unequal countries in the world.”

Development has not kept pace with the huge amounts of money being made here. Sander Temminck agrees. “Considering that the canal brings in two billion dollars, you would expect everybody would able to make a decent living from that,” he says. “However, 85 percent of the Amerindian population does not eat enough calories, so there is still room for improvement.”

(gsh)