Baton Rouge, Plaquemines strengthen ties to Panama

Panama wants to expand its ties to Louisiana

Panama, the little country with a two-ocean canal operation that grows larger by the minute, wants to expand its business and other ties with Louisiana.

Members of the Baton Rouge-based nonprofit Committee of 100 for Economic Development Inc. are working to make that happen.

“Panama has averaged a 9 percent (annual) growth rate in their economy since 2007,” Michael J. Olivier, the nonprofit’s chief executive officer, noted in a recent interview. He said the service-based economy now has more money to buy the goods it doesn’t make.

Olivier added that the nonprofit is organizing a delegation of Louisiana business, education, health and government representatives for an October trip to Panama.

“If you know somebody, you’re more likely to do business with them,” Olivier said.

Mario E. Jaramillo, Panama’s ambassador to the United States, said, “October is going to be great.”

Jaramillo said completion of his Central American country’s second and much larger canal in December 2015 is expected to double the volume of worldwide sea shipments passing through Panama. He said much of that increased traffic will be headed for New Orleans and other Louisiana ports.

“Everything is going to be changing,” Jaramillo said.

Exports from Louisiana to Panama already are growing rapidly, Jaramillo added. He said the state exported $1.7 billion in goods to his country last year. That total more than doubled the $826 million in petroleum and other products Louisiana shipped to Panama in 2012, according to the U.S. Department of Commerce.

Jaramillo noted Plaquemines Parish has a 20-year plan to build a transshipment facility to off-load some of the largest vessels that will be coming through Panama’s second canal in the future.

“They (Plaquemines Parish) could become the gateway to the middle U.S.,” the ambassador added.

Jaramillo explained that the original canal can accommodate vessels with maximum loads of 4,000 to 5,000 cargo containers.

The ambassador said the second canal will be capable of moving marine behemoths carrying as many as 14,000 cargo containers. Those ships exceed 1,000 feet in length.

“This project is very big for the world and for Louisiana,” said Jaramillo, who graduated from LSU in 1973 with degrees in business administration and marketing. He later earned a master’s degree in business administration from Harvard University.

The original canal was completed by the U.S. in 1914 and then transferred to Panamanian ownership in 1999.

Ships passing through the original canal today pay Panama a $60,000 fee, Jaramillo said. Ships that pass through the second and larger canal, beginning in 2016, will pay a fee of $600,000.

Panama is not a large country. Its population is 3.6 million, according to the CIA’s estimate in its “World Factbook.”

That’s a million less than Louisiana’s 2013 population, as estimated by the U.S. Census Bureau.

Panama’s population may be small, Jaramillo conceded, but 8 million people pass through Panama City’s airport annually.

That compares favorably with Louis Armstrong New Orleans International Airport, which reported total passengers of 9.2 million for 2013.

Copa Airlines, Panama’s largest carrier, wants to increase passenger volume in both Panama City and New Orleans by adding direct service to Louisiana’s largest airport.

Discussions with Louis Armstrong officials are ongoing, Jaramillo said.

“We’re shooting for February,” the ambassador added.

A check of Copa’s service map shows it currently delivers passengers to Los Angeles; Las Vegas; Chicago; New York; Washington, D.C.; Orlando, Florida.; and Miami.

The airline has an existing tie to Louisiana.

Stanley Motta, chairman of airline owner Copa Holdings, is a graduate of Tulane University.

In Baton Rouge, the Committee of 100’s Olivier said Panama wants to attract educational partnerships with Louisiana’s four-year colleges and universities.

Schools from other states already have Panamanian campuses, Olivier said. “We should be there, too,” he added.

As explained by Jaramillo, some college students are taught in Panama by instructors from the Massachusetts Institute of Technology, University of Louisville and Georgia Tech.

Once those students complete their sophomore year in Panama, Jaramillo said, they transfer to those three schools’ campuses in the U.S. for their junior and senior years.

The ambassador said Panama has worked hard in recent years to improve the quality of its children’s education programs.

Jaramillo said those programs once were mired in 112th place in world rankings but improved to 75th place last year.

That achievement was spurred by private enterprise working under United Nations guidance, Jaramillo added.

Private enterprise, Jaramillo said, was pushed into participation by Panamanian leaders who said: “Sooner or later, they’re going to be working for you.”

The process took about 12 years, Jaramillo said. “It’s working. It’s really working.”

Olivier said Louisiana hospitals and medical research companies are being asked to consider collaborations with Panamanian health providers.

“They have a shortage of doctors,” Olivier noted.

Louisiana’s port authorities also are being approached for discussions on how they will be impacted by increased traffic and larger vessels, he said.

While petroleum and other fuel products have long topped the list of products shipped from Louisiana to Panama, agricultural exports are beginning to increase.

Mike Strain, Louisiana’s agriculture commissioner, said those exports totaled $150 million last year, a 3 percent uptick.

Despite Panama’s location between the Pacific Ocean and Caribbean Sea, Olivier noted, its citizens have a growing demand for shellfish.

“They want Louisiana oysters and large, 10-count shrimp,” said Olivier.

Panama today is not the Panama of 1989, when U.S. forces invaded the country to seize military dictator Manuel Noriega. Three years later, Noriega was convicted on charges of drug trafficking, racketeering and money laundering.

The dictator spent more than 20 years in U.S. custody before he was extradited to France, which incarcerated him for more than a year for money laundering.

Noriega then was extradited to Panama in December 2011 to begin a 20-year sentence for money laundering and participation in several murders.

“Panama likes Americans,” Olivier emphasized in April. “A visa is not required to go to Panama, and you can use American currency,” Olivier said. “That’s their currency, too.”

Added Jaramillo: “We’re a big banking center. Today, we have 180 banks. Only three are Panamanian.”

“They have become the Switzerland of Latin America,” Olivier said. “They’re the financial center for Latin America.”

Jaramillo added that Panama also is importing U.S. citizens in the form of 70,000 permanent-resident retirees.

“Plus, there are a lot more (U.S. citizens) with second homes in Panama,” the ambassador said.

Olivier said the economic-development trip to Panama is scheduled for the week of Oct. 12 and is sanctioned by the U.S. Department of Commerce.