The ARI controls Panama's single most important asset. It is responsible for the stable transition of the Canal to Panamanian control, and whether or not Panama's economy can be reinvigorated depends greatly on its success.
Sinorama interviewed Dr. Nicolas Ardito Barletta, the chairman of the ARI, and asked him to discuss bilateral economic cooperation and diplomatic relations between Panama and Taiwan.
Q: Could you tell us the blueprint you have in mind for the Canal area in the future?
A: You know that there are two focal points: One is the Canal itself, which reverts to Panama at the end of the century. The other is the areas around the Canal, which are reverting to Panama gradually right now.
The areas that are reverting to Panama right now are the areas in the middle, and the areas around Panama City on the Pacific side and around Colon, where the US military bases have been located. These cover 35,000 hectares, and 7000 installations that include housing, office buildings, barracks, hospitals, schools, churches, ports, airports, infrastructure, golf courses, swimming pools, and other recreational facilities. These are the most valuable areas.
Fort Davis is a good example of that. We are using Fort Davis for the export-processing zone being developed with Taiwan and Taiwanese businesses. The areas nearby include ports like Coco Solo, where Evergreen is developing a container facility at the present time.
Now the main uses in our plans include, first, port development, and modern business development, then industrial development, as at Fort Davis, then tourism development, research institutions, and higher educational institutions, and then communications and trade.
A western Singapore
Q: How are you attracting foreign investment?
A: [We are letting businessmen know that Panama is a good place to invest] because of the Canal and the geographic location, one that connects with the whole world marketplace, especially with markets in the western hemisphere. There is also the Colon free-trade zone, which is the largest in the western hemisphere, with 1500 trading companies. There is the banking center, which has over 100 banks with 33 billion in assets. Also, the monetary system uses the dollar as the basis, so there is very little risk of inflation.
Investors are finding now that this is a good location for international business. This is just like many years ago, when they found Singapore was an important place to do business in the Asia-Pacific region, and I think they are beginning to find out that Panama is a good place to do business in the western hemisphere.
Q: So far what countries are showing interest in industrial areas like Fort Davis?
A: Well, the more dynamic initiatives are coming so far from the Asia-Pacific region-from Taiwan, from Korea, from Japan, from Hong Kong. The main investments are already on their way.
There are also investors from North America, especially from the United States, who are coming in some industries, but most of them are investing in tourism so far. And there are some investors beginning to come from Europe. We also have interest from South America, especially from Chile, Argentina, and Brazil, but their initial interest has not yet materialized into concrete projects.
Diplomacy and investment
Q: Can we have more details about Hong Kong and PRC investments here? I hear the PRC is very active.
A: The main Hong Kong investment is in the ports. Hutchison Whampoa has taken over the administration of two existing ports, and they are going to invest, perhaps, $170 million over the next five years, including ports for container operations. As for the PRC, there's a show of interest, but there's nothing concrete. We are not talking about anything.
Q: If China has investment and other activities here, do you think it could affect ROC-Panama relations?
A: Well, I think that the diplomatic relationship between Taiwan and Panama is very strong. It has a long tradition. And activities are already underway at the export-processing zone in Fort Davis and the Evergreen port in Coco Solo. These activities will continue in the future, so I don't foresee major changes or any changes at all.
Obviously, we also have commercial relationships with Hong Kong and with mainland China, and they probably will continue along the same way. But I don't think that implies any change in the existing situation at the present time.
Q: There is one key factor affecting whether or not the Fort Davis EPZ can succeed: Taiwanese businessmen still have a problem because sometimes, in our country, we hear that the relationship between Panama and Taiwan is not so stable. They are afraid of what will happen in the future, so they are waiting to see before investing. How can you resolve their doubts?
A: Well, I think that's more perception than reality. The reality is that the diplomatic relationship and friendship between Panama and Taiwan is very strong, very stable, and of long duration. And it's going to remain so for a long time to come. The fact that Panama has commercial relationships with Hong Kong and mainland China is not a problem. After all, there are many Taiwanese businessmen that have investment in mainland China today. That is not a problem over there, so I don't think that will be a problem in Panama.
Q: The original plan is that Fort Davis will create 20,000 job opportunities. But not so many firms have invested there yet. So far, are you satisfied with the results?
A: So far, we are off to a good start. There are already two firms operating in Fort Davis, and there are nine more already committed and scheduled to come over the next few months. They should generate over 8000 jobs. And it should become even more dynamic in 1998 and '99.
The proof is in the pudding
Q: But the firms in Port Davis say that the labor law is not so good for manufacturing industries, that you have very high standards in the labor law. Do you think it's possible that your country will loosen the labor standards a little bit to attract investors?
A: As they say in English: "The proof of the pudding is in the eating." The experience businessmen have had with labor in the Colon free-trade zone has been very good. We expect that the same experience will take place in the export-processing zone in Fort Davis.
In fact, the application of the labor laws in the free-trade zone as well as in export-processing zone has very special limitations, so that there is very little danger of strikes or other problems.
The reason our standards are so high is that the population of Panama, like that of Costa Rica, has a higher level of education than the rest of the countries in Central America and even in the Caribbean, with the exception of Jamaica. This means Panamanian workers are more productive. Moreover, there are several thousand Panamanian laborers that today work in US military installations, who have a high level of skills, and who will be available to work in the industries that locate in Panama.
Once a good working relationship is established between management and labor, one which is oriented towards production for export, I don't think that we will have many difficulties in that area.
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ARI General Administrator Nicolas Ardito Barletta feels that Panama can be a "Singapore for the western hemisphere." (photo by Diago Chiu)
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Autoridad de la Region Interoceanica Planning Blueprint (courtesy of ARI)
1. Fort Davis EPZ
2. Colon Free Zone
3. Port of Cristobal
4. Evergreen container terminal
5. Colon City
6. Panama City
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Though rumors continue to fly, Dr. Barletta emphasizes that ROC-Panama relations will not be affected by mainland China. (photo by Diago Chiu)
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