Panama rising

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The steady march of foreign companies into Panama continued unabated this week as Hewlett-Packard and Caterpillar each announced they were relocating major new operations and distribution centers to Panama. Total new jobs to be created by the two firms could total 1,800 over the next two years.

Well-placed sources say the next multinational giant to announce entry here will be Procter & Gamble with a new Latin America distribution center. In recent weeks, other international companies have announced relocation or expansion, including China’s Sinopec and French pharmaceutical firm Sanofi-Aventis. The country is also attracting increasing numbers of call centers and is now home to 24 such companies employing 15,000 workers.

The recent interest has been generated by bright economic prospects, including the beginning of the $5.25-billion expansion of the Panama Canal and how that will boost the country’s standing as an international transportation and communication hub. Another stimulant is the possibility that Occidental Petroleum and the government of Qatar will build a $7-billion refinery in western Panama. Sources say that the partners are ‘very pleased’ with the results of preliminary engineering and cost studies and that they will make a final decision on whether to build by mid-2008.

A third major economic stimulant is the prospect of a free-trade agreement between the United States and Panama, a deal that has hit a speed bump, however, since the Sept. 1 election of Pedro Miguel Gonzalez as president of the National Assembly. Gonzalez is wanted on murder charges in the United States for allegedly killing a U.S. soldier in 1992. Bush administration officials and members of Congress say the deal is dead unless Gonzalez resigns.

Posted by Chris Kraul in Bogota