Panama's Property
Development Boom May Be
Bubble Ready To Pop
The shiny skyscrapers
that soar above Panama
City's coast and loom
over the small Central
American capital give it
a skyline more suited to
an Asian powerhouse like
Hong Kong or Singapore.
While a subprime
mortgage crisis batters
the US, construction has
been booming in Panama.
According to the most
ambitious construction
plans, Panama was to
have been home to nine
of Latin America's 10
tallest buildings by the
end of the decade.
But the lights are off
in many of the luxury
apartments, new
buildings sit empty, and
suspicion is growing
that Panama's property
boom may turn out to be
a bubble built by
speculators on South
American drug money.
Property agents say the
large number of
temporary residents in
the country is the
reason for the city's
dim skyline at night. US
anti-drug officials say
a more likely reason is
that Colombian drug
cartels use the property
sector to launder money.
In September, when
Panamanian police
arrested Colombian drug
lord Jose Urrego, they
discovered he owned
properties and
businesses across
Panama, including the
Pacific island of
Chapera, valued at about
$12 million (R82
million).
"It has become more
difficult to transfer
money through banks, so
we have seen a lot more
people carrying cash
into Panama through
Panama City airport,"
said a US government
official in Panama, who
spoke on condition of
anonymity.
"They launder money
through the real estate
sector, the banking
sector and the Colon
free trade zone," he
added, referring to
Panama's import-export
park.
Panama's unguarded
jungle border with
Colombia and its
numerous coastal
islands, bays and inlets
have made the country a
major stepping stone for
the drug trade between
South America, Mexico
and the US. Its relaxed
immigration laws and
good air transport links
make it an easy place
for Mexican and
Colombian cartels to
meet.
"The Colombians do not
need a visa to get into
Panama, so they are
increasingly using it as
a place to meet," said
the US official.
About 11 000 apartments
are forecast to come on
the market in Panama
City before the end of
the decade, according to
property agent Sam
Taliaferro. More luxury
apartments could be
built in Panama over the
next few years than
those built in Miami
between 1995 and 2005.
All that for a city of
about 800 000 mostly
poor Panamanians, some
of whom live in rickety
wooden homes built a
century ago to house the
workers who built the
Panama Canal. |
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