PANAMA REPORT: Spending in the Balance

Nov 1, 2008

The canal seems a done deal, but Panama has plenty of other infrastructure projects lined up. Amid crisis, some may not see the light of day.

by Andrew Beatty

With presidential elections scheduled for May 2008 and Panama’s ruling Revolutionary Democratic Party hoping to reap the benefits of the economic boom at the polls, a plethora of infrastructure projects should be advanced in the next few months. Many have yet to be fully financed, and they hang in the balance due to rocky market conditions.

Still, projects potentially worth $17 billion in the near term have been tabled across a range of sectors. They are part of Panama’s dream of becoming the logistical and business center for LatAm, which may well end up being shattered by global crisis.

A few government-funded infrastructure projects are certain to be completed because of their high political profile, including a $200 million motorway between Panama City and the down-at-heel second city of Colón. A $190 million venture to reclaim a strip of land from Panama bay...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management