Panama offers investment opportunities as Canal treaties take effect.

AS THE NEW MILLENNIUM APPROACHES, THE Republic of Panama is entering a new era that has caught the eyes of investors around the world and ultimately will transform the Central American nation into a major economic center.

The last of the U.S. military properties in the Panama Canal Zone reverts to Panamanian control late this year -- opening up unparalleled opportunities for international investors to participate in one of history's most ambitious national economic development programs.

"This is a unique opportunity not only for Panama, but for investors in a wide range of industries around the world," says Dr. Nicolas Ardito Barletta, a former president of Panama who now heads the Autoridad de la Region Interoceanica (ARI), which is in charge of developing the lands.

Under the terms of the 1976-77 Panama Canal Treaties, 7,000 former U.S. military buildings and 328,645 acres of prime real estate are being transferred to the Panamanian government.

Already, ARI has made significant progress. More than US$1 billion in projects are under way or under contract, even though only about one-third of the land had been handed back as of late spring 1999. Another chunk will be turned over in June, and the largest, most valuable assets come to Panamanian authorities in November. Those include Howard Air Force Base, the Sherman, Clayton and Corozal Army installations, and Rodman Naval Base.

"We are working very hard to promote these properties and make them available to investors who want to take advantage of this strategic location," says Ardito Barletta. "We are receiving this year twice as much as what we received over the last 3.5 years. We've made strides, but we still have great challenge and opportunity ahead of us. What we hope will emerge is a bit of Singapore and a bit of Rotterdam."

ARI's strategy, outlined by zoning plans drawn by local and international experts, falls into several key areas: Economic, social, environmental and urban development, as well as protection of the Canal.

"Essentially, Panama wants to develop a much greater center of commerce and international services around the cities of Colon, on the Atlantic, and Panama, on the Pacific," Ardito Barletta adds. "And we want to protect the part in the middle, the Cuenca, which is one of the most biodiverse regions in the Western Hemisphere."

So far, development is unfolding as follows:

MARITIME: More than $400 million in investment is under way. "Our goal is to make Panama the No. 1 container transshipment area in Latin America," he explains. Four years ago, 150,000 containers were moved; last year, the number approached 1 million. Within four years, the figure should reach 2 million, making Panama's ports the Latin American leader and among the top 15 in the world. In addition, ARI aims to develop a huge ship-servicing industry.

INDUSTRIAL: ARI wants to add to its three new export processing zones, bringing together the synergies of the seaports, the 1,500 trading companies in the Colon Free Trade Zone and the banking sector.

TOURISM: More than $500 million is committed over the next five years, and ARI invites bidders to continue to develop facilities for cruise ships and eco-travelers. More than 300 cruise ships go through the Panama Canal each year, and the Canal is the No. 1 tourist attraction. In addition, a U.S. company is rebuilding the railroad that parallels the waterway, and the town of Gamboa is being converted into an ecological village. A tourism hub, with hotels, shopping and other amenities, is under development in Amador on the Pacific.

COMMERCIAL: The City of Knowledge (Ciudad del Saber) is emerging as a major educational and research center, with participation from international universities, pharmaceutical companies and more.

Ardito Barletta notes that 90% of the properties bequeathed to Panama over the past 3.5 years are in use, even though it normally takes three to five years to convert a U.S. military base to civilian use. "That shows us that the banks of the Canal are very, very attractive to business," he adds.

The proceeds of all this work benefit the Panamanian people. To date, ARI's activities have produced $100 million in revenues for the country's National Endowment Fund, dedicated to social development projects. "The ongoing projects have generated 4,500 jobs already, and should generate another 8,000 lobs over the next 18 months," Ardito Barletta says.

For more information about business opportunities, investors are invited to contact ARI's bilingual, professional staff.