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Panama Market Intelligence Report AGENDA I. INTRODUCTION II. OBJECTIVE III. BACKGROUND IV. SOCIAL SYSTEM V. INFRASTRUCTURE VI. SUPPLIES & SERVICES VII. LABOR VIII. REAL PROPERTY IX. BUSINESS PRACTICES X. U.S. COORDINATION XI. U.S. STATUTES & PUBLIC LAWS XII. CONCLUSION INTRODUCTION The purpose of this document is to provide a detailed overview of Panama from the perspective of commercially available resources. OBJECTIVE To analyze the area of operation for its potential to support contingency operations through indigenous sources of supplies and services GEOPOLITICAL CONSIDERATIONS • Government -Democratic • Politics -Nine parties -Arnulfista Party (PA) is in power -Democratic Revolutionary Party (PRD) -Christian Democratic Party (PRC) -Reform is slow -Wide range of ideologies between parties MILITARY • Structure -Panamanian Public Force • Capabilities -Defense of borders and internal social disorder -Minimal assets • Paramilitary Organizations -FARC • Stability -Segmented into 12 zones -Autonomy within the officer ranks CIVIL POLICE • Structure -Comprised of smaller units -National Dept of Investigations (DENI) -Traffic Police -Tourism Police -Community Police -Immigration Dept -The First Public Order Co. ECONOMIC CONSIDERATIONS • Economy -Sufficiently stable with fair balance of import/exports -National GDP of 16.9 billion with highest per capita -Well developed service sector -Strength of the US dollar -Tax system in place ranging from 4 to 30% -Has the second largest free trade zone SOCIAL SYSTEM • Close knit family structure • Highly developed historical trading practices • National holidays are as follows: Month Date Holiday January 9 Mourning Day February 19 Carnival May 1 Labor Day November 3 Independence Day from Colombia November 4 Flag Day November 10 The Uprising of Los Santos November 28 Independence Day from Spain December 8 Mother’s Day INFRASTRUCTURE • Logistical OPS -Transportation • Roads • Air • Rail • Port and Waterways • Public Transportation - Utilities • Electric and Gas • Water and Sewer - Communications • Telecom • TV, Radio and Print • Internet ACCESS TO, AND AVAILABILITY OF, SUPPLIES AND SERVICES • Market Research • Problem Areas • Commercial Practices • Colon Free Zone (CFZ) LABOR MARKET CAPABILITIES – Workforce • 1.1M workers, unskilled labor pool dominates • 82% private sector, 18% public service • Unemployment 13-14% average • Minimum wage $.80 - $1.50/hr, high pay for C. America • Skilled trades: maritime, chemicals, paper products, mining, food processing, metal working, clothing and construction – Labor Unions • Strong, regulated hiring and firing • Protests frequent, sometimes violent – Major Employment Sectors • agriculture 20%, industry 18% and services 60% REAL PROPERTY – Warehousing • Abundant in port areas, vacant bases and city centers – Office Space • City Centers and Hotels • Retrofitted offices at former military installations – Land • 364,000 acres at former bases actively marketed in CZ • Mountainous areas not practical for use outside of cities • Coastal property regulated by GVT development • Private property not actively marketed – Housing • Permanent and temporary housing is scarce SIGNIFICANT BUSINESS PRACTICES – Business hours (typical) • Public and Private Sectors: M-F, 0800-1700 • Half days on Saturdays for most businesses and banks – Holidays/Business calendar • Discussed in Social Section of presentation – Business attire • Business dress in most cities (American styles) • Latin casual outlying areas – Greetings/Courtesies/Formalities • Typical mix of Spanish and American tradition • Formal and informal parties to conduct business SIGNIFICANT BUSINESS PRACTICES – Women in Business • General Equality exists • Female is current president – Experience with US GVT procurements • Long standing relations beginning in 1903 • US military contracts until late 1999 • Ongoing activities with US GVT • Well established base of American companies present – Legal Considerations • Panamanian law prohibits monopolistic and anti-competitive behavior. • Government corruption is part of doing business, private sector has adapted some of the same corruption. US COORDINATION • Office of the Military Attaché and Office for Military Cooperations. – Western Hemisphere Affairs OASD/ISA/WHA – 4C800 2400 Defense Pentagon Washington, DC 20301-2400 703-697-6380 – Ambassador Linda Ellen Watt Avenida Balboa and Calle 37 Apartado Postal 6959 Panama City 5 507-207-7000 US COORDINATION • Treaties and Agreements with Host Nation – Panama Canal Treaty of 1977 – Bilateral Investment Treaty – Overseas Private Investment Corporation Agreement • Status of Forces Agreement • Mutual Support Agreements – Caribbean Basin Initiative – USAID, Inter-American Development Bank US STATUTES AND PUBLIC LAWS • Embargos • Notifications • Other – Drug Trafficking – AIDS CONCLUSION This operation should find a mature spirit of cooperation with Panamanian businesses and government, which can provide a variety of goods and services. There is an existing, understaffed US Army contracting office in Panama. Recommend preparation of a robust CCO staff for this operation that can work in conjunction with the existing office to maximize effectiveness of US contingency contracting.
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