What has your embassy achieved since LatAm INVESTOR readers last heard from you in 2022?
Ambassador Royo: As you know, the last two years have been a critical time. I had to deal with the repatriation of Panamanian students that were trapped abroad during the lockdown. It was tough but I felt lucky to have had the opportunity to help around 400 students in coordination with the Ministry of Foreign Affairs.
I wanted to help my country make the most out of lockdown so we organised an online course with the UK’s Infrastructure and Projects Authority within HM Treasury on sustainable infrastructure, which highlighted the Five Case Model that is widely used by the UK government when evaluating investment proposals and infrastructure projects. It was originally a way for Panama to receive technical assistance, but it was so successful that it was extended to the rest of the Latin American countries. We had a great turn out from the private and public sector, including Panama’s new Public-Private Partnership Secretariat. The plan is to make this a recurrent initiative; and hopefully the next course can be in-person in Panama and perhaps at some point, we could create a Latin American network of infrastructure decision-makers.
We have also been focusing on the Association Agreement between Central America and the UK. The agreement has three pillars: political dialogue, economy and cooperation. So far, the focus has been on the economic pillar – as both sides see trade liberalisation as a win-win. But there is still a lot of work to do within the cooperation pillar, so we have spent the last year trying to push for progress and now the FCDO has assigned a team for this so hopefully we will be able to give some content on cooperation for the development of our region.
We have also been active in promoting investment from the UK into Panama. We have been working with the local chambers of commerce and UKEF (UK Export Finance), the UK’s export credit agency, which has unveiled a £4billion market risk appetite for Panama.
How did Panama cope with the pandemic?
AR: In the early stages of the pandemic, Panama implemented a strict lockdown which helped contain the virus, a model that was possible to implement because at the same time we provided economic assistance to low-income Panamanians, including over 2 million food and essentials packages and $54 million USD in digital coupons. Then, as soon as a vaccine was available, we purchased enough doses to protect our people, focusing on the vaccines from Pfizer and AstraZeneca. In Panama, 84.1% of the population is now fully vaccinated; our vaccination program has been very efficient and successful. In fact, we have been using surplus doses to vaccinate seafarers that call into Panamanian ports. We are the first nation in the world doing this and it makes me very proud because these seafarers were essential workers that kept trade and aid going during the pandemic.
How has the bilateral relationship between Panama and the UK evolved?
AR: Panama and the UK have long had a good relationship, focused on cooperation and shared values, with some real advances in the last two years. During the pandemic, the Latin American countries were on the UK’s Covid-19 travel ban ‘red list’. That was a serious problem, so the Panamanian Embassy in the UK became the voice of the Latin American countries in trying to remove the region from the red list. Eventually we succeeded: we were out of the red list and Panama’s vaccination program was approved, which was an important step in our current relationship.
Climate change has been another big advance. COP26 was a great working platform for Panama and the UK; we made important environmental announcements there, such as the Eastern Tropical Pacific Marine Corridor and Panama’s role as one of the 3 countries in the world that is carbon negative. The protection of the environment and the fight against climate change is another fundamental shared value that Panama and the UK have. I also think that Brexit has created opportunities for Latin American countries as the UK is now focusing on the concept of a ‘Global Britain’ and it seems eager to explore new markets and partnerships.
What investment opportunities can Panama offer UK investors?
AR: The UK is the fifth-largest international investor in Panama, with around 30 British companies with presence or based in Panama, from multiple sectors like health, energy, infrastructure, telecommunications, and consumer goods, to name a few. We have an ambitious strategy that includes incentives for investments in clean energy and sustainable tourism, which is well suited to the UK’s strengths. Likewise, our new Agricultural Parks Law is ideal for green agriculture, which is another area where the UK is strong.
The fact that so many UK firms are already in our country shows that we have a lot to offer. Panama is the gateway to Latin America, which is a market of more than 600 million people. Panama’s geographical position, plus our Multinational Headquarters Law (SEM), our new Manufacturing Law (EMMA), along with our Special Economic Zones, among others, offer a wide range of benefits to international companies based in the country.
What are Panama’s advantages as an investment destination?
AR: Our location is key. But we have built on that by becoming a hub for trade and transportation logistics. The Panama Canal serves more than 144 maritime routes, connecting 160 countries and reaching some 1,700 ports in the world, concentrating close to 6% of global trade. We are now working to become a digital hub as we are the continental link of 7 submarine fibre optic cables providing virtually unlimited bandwidth. Google recently installed a private submarine cable called “Curie” that runs from the United States to Chile, and that will deliver much-needed bandwidth to South America via Panama.
Panama has been selected to host Bloomberg’s “New Economy Gateway” forum in May 2022, which will cover sustainable investment and the future of trade. It will be the first time that this happens outside of Asia.
Panama’s GDP growth in 2021 was 12% or 14.9% (Jan-Sept 2021) and the projected growth for 2022 is of 8.2%, the highest in the region, which makes us an exciting place for investors.
In addition to outstanding economic growth, Panama’s economy is dollarized and safe, with a stable democracy, world-class infrastructure and a solid banking system. The Milken Institute recently ranked Panama as one of the top 5 economies in Latin America for foreign investment.
In addition to the incentives for companies, there are also incentives for investors. We have investment visas that grant permanent residency through fixed rate bonds or real estate purchases of at least US$300,000.
What is this government’s agenda now Panama is emerging from the pandemic?
AR: The current government has demonstrated its commitment to inclusion, especially during the pandemic, when it spent considerable resources to support low-income Panamanians. The government is guided by its ‘Bicentennial Pact’: the result of 186,000 people arriving at a consensus in terms of Panama’s priorities in the 21st century. This was a true example of democratic participation. The result was a 187-point national agreement that President Cortizo is determined to implement for the remaining two years of his administration.
In January 2022, Panama issued US$2.5 billion in global bonds that were eagerly received by the market, with offers from 160 investors from North America, Europe, Asia, Latin America, and the Middle East, which is evidence of the confidence that foreign investors have in our country. Panama will use some of this to invest in infrastructure and fund our PPP programme. We will also have a big emphasis on health, which includes projects like the City of Health, the new children’s hospital, a new medicine department in the University of Panama, and an oncological hospital. These are positive investments that clearly demonstrate the government’s post-pandemic agenda.
How is your embassy working to promote Panama in the UK?
AR: We don’t have a Pro-Panama investment office in the UK, which means that my team and I play an active role in investment and trade promotion. We build personal relationships with companies that are interested in Panama and also work very close with Propanama based in my country and the British Embassy in Panama to help boost Panama’s profile in the UK. To that end, we are planning a trade mission to Panama in 2022, supported by high-level public sector figures.
In my remaining two years as Ambassador, I will keep promoting Panama as the best destination for British investment. I will also continue working on getting more Panamanian products to the UK, especially coffee and fresh fruits. Panama’s ‘Geisha Coffee’ sells for $1,000 per lb in Asia, and I would love for Britons to taste this marvellous coffee. Panama also has a strong cultural offer in terms of film, art and music; so we will keep working to see more of Panama in the UK cultural festivals. But my biggest priority is education. I would like to see more Panamanian students taking advantage of the quality education that the UK offers. I am especially keen to get more Panamanian women into STEM studies in Britain. I believe that Panamanian students can be the best ambassadors of our country in the UK.