Did you know that Panama has two Canals?
In the two decades since the transfer of the Panama Canal to Panamanian sovereignty, the nation has registered an impressive growth record that has lifted it from "middle of the pack" to a Latin America leader! Panama is one of the very few Latin American nations, if any, that can say this remains true today, despite the immense financial requirements of the pandemic and its aftermath.
As Warren Buffett famously put it, ""It's only when the tide goes out that you discover who has been swimming naked." Well, the tide is out in Latin America and naked nations abound, but Panama looks good in its swimsuit.
Here is an example, one of many. Often people assume that Panama suffered a great loss of income due to a drop in global trade and thus a fall in revenue from the Panama Canal. Wrong. And the reason that is wrong is Panama's Second Canal.
Below is the total income from Panama Canal tolls from 2016 through 2020.
Yes, income grew, but that's not the full story.
The First Panama Canal was open for business in 1914 and built by the US. The Second Panama Canal was open for business in 2016 and built by Panama. The old canal could only take "Panamamax" ships, the largest size that fit the old locks. It still operates without problems and makes its contribution to Panama's financial stability, but it is not alone anymore. The new canal locks, the "Second Canal", take the much larger Neo-panamax ships in its new locks.
In the graph below you can see the division between the first and second canals in terms of their income contribution to the nation.
When Panama decided in 2007 to expand its canal, many questioned whether it was really going to be a blessing, or just an expensive burden. What do you think?
This is just one example of many that the Panama you may think exists has taken control of its destiny and is now a leader in Latin America with more growth to come.
Panama is a nation with social stability, financial security, and a bright future. There is no better swimsuit than that at a time like this.
-----
Data is friom the Panama Canal Authority via the Instituto Nacional de Estadística y Censo de Panamá.