Where to Invest in Panama 2021

2020 has been a difficult year for everybody, where we had to adapt to many things by trying to save our lives and to survive economically. But the COVID 19 pandemic has resulted in an unprecedented global economic crisis. But not a crisis that is the result of some kind of financial problem or "screw-up" or the speculation of the unscrupulous, but it is a crisis that provokes a pandemic that has kept us – more or less time – within some kind of quarantine. Now, this does not mean that all businesses or independents workers were affected, many survived by doing what is necessary to survive, while other businesses located niches to be in, other businesses flourished, and delivery became the standard of the post-COVID 19 world.

This article I write at the beginning of all new year's is meant to give you an idea of where we could invest in this year, based on the opportunities, laws, demand, that exists at any given time, and that we could take advantage of. This year is special for COVID 19, as it is not going to be a normal year, but a rebound year, as we have had previously as in 1990 and 2009 in Panama, where we were able to bounce from economic crises. This year, in addition to last year's crisis, we will continue to deal with a virus that spreads a lot and has lethality. How we learn to live with him will be fundamental to getting ahead.

I particularly like the agricultural sector a lot, and it is one of the things that President Cortizo was right about when he said he was going to make the agricultural sector one of the most important ones in his mandate, and that, although much remains to be done, it is the sector that continued to grow in 2020 and that has as much potential in an economy as ours (in fact, it long remained among the five major sectors of the economy until governments began to move away from the field and establish policies that would boost the sector). When we talk about investment in agriculture, we are also talking about livestock, poultry, porcine culture, and even fishing.

We have seen new agricultural projects developed in the country, and projects where young people have "returned" to farms looking for opportunities in the agricultural sector. But I do disagree with the president, as I do not believe the development of the agricultural sector should continue pre-Columbian agriculture/livestock projects, but they need to be helped to invest in technology, innovation so that it translates into efficiency and productivity (i.e., it is not to encourage the planting of rice on a stick, but to sow efficient rice, and with collection with machinery). This is a sector that generates a lot of jobs and deserves much more.

You have to invest in equipment, you have to take risks with new forms of planting, in seeds, in genetics, in short, you have to get out of the box so that this works. You have to look for the sowing 3 times a year, instead of once, which is what the vast majority of the actors in the sector do. You have to look for the weight in the animals, that is, change from grazing to stalling. We have to look to increase the number of quintals we can get in one hectare.

If you are a small farmer there is no way that you can survive alone (and even less if you only have less than a Hectare), so you have to partner with other small farmers in CO-OP’s, to share the expenses of being a farmer, and this if you could turn them together into a bigger and stronger "company" to get better results, and not only survive but have good profits.

But you have to invest in the sector: you can buy your land (or rent it), do research what you can sow (don't always think about the same thing, some products are easy to sow and get good crops, and that have a good demand – local and international, acquire technology (investigate well the options you have in the market, not everything is so expensive that you cannot buy it), innovate (innovation does not always require technology, but good ideas and dare to carry them out), and remember that here we can sow all year round (unlike countries that are in high demand and that its window of sowing varies between 3 to 6 months). Remember that you can do your job in greenhouses to avoid the bad weather of rain or the inclement sun. You can do drip irrigation, or simply plant hydroponics.

An additional element that can be invested in is Agroindustry, which is a complement to the agricultural sector. And we can turn these same farmers into raw material suppliers for agribusiness. We process canned foods, package in a glass, use Tetra Pak, give packs, or vacuum seal, to process food in a better way and reach the consumer. Agribusiness allows is that there is no waste in the harvest, that is, that once the producers send the best products to the market, there are the crops that do not "look" so well, but that if they have quality and can be eaten (that if you send them to the market, the consumer will not buy them because they look ugly). Here comes the agribusiness, which processes these crops, without any problem.

In the manufacturing sector, I especially like the cleaning/disinfection product packaging businesses, which are going to be in high demand (worldwide, and the actual supply cannot satisfy the demand), in the short, medium, and long term. The more innovative the project, the more successful opportunities it is.

The delivery business, especially with applications, has had exponential growth, similar to Zoom's (saving distances), but no one has yet developed a Local Courier business, just like UPS's, for example, which is what would catapult online sales. Our postal system is very bad, no government wants to invest in improving it and making it more efficient and productive and generating revenue for the state, so the opportunity is there for private enterprise, especially with current conditions, which have changed the way we do business radically and in the long term.

One of the first businesses that had to be adapted was education (private and public), and there is still a long way to go, however, Virtual Teaching is a business that came to stay in the very long term. And even though human relationships are something that remains its biggest flaw, really everything else is gain! Here I'm not only talking about formal schools and universities but any kind of educational institute on any education topic.

The construction sector is going to be extremely hit during 2021, and it won't be until unemployment drops to a digit when we see good growth. This is not to say that there are no niches to exploit, on the contrary, since an apartment of less than US$150,000 and houses of less than US$100,000 are the bread and butter for this sector, as the housing deficit persists in Panama, also, that the government raised the solidarity housing bond (US$10,000) to homes of less than $60,000, which; it's more consonant with the reality of prices. We must not forget that the construction sector inside will also continue to hit, but any project with houses under $100,000 must move very well, everywhere in the country.

If we see investment as a regional event, I particularly like the regions of Coclé, Herrera, Los Santos, Veraguas, Chiriquí, as they are the ones that have a good movement in their regional economy. On the other hand, they are regions where it is worth studying whether it is worth retiring in Panama, for retired Panamanians, specifically. The standard of living in them is cheaper, so retirement will tend to be enough for your expenses than continuing living in Panama City.

They are also good regions for business, as their saturation level is substantially lower than to the cities of Panama, for example, so the chances of success are higher. Keep into account that markets are smaller, prices should not be as high, they should offer new things.

There is an opportunity where companies must invest, and it is in virtual/internet sales – apps, websites, and processes. The world has changed, and the Amazon model has to be replicated now. Virtual selling is going to gain a lot of space in the business world, but it's not just having a good website, where people can order their products or services, but companies must also reach consumers using all available social networks and with consumers – i.e., Facebook, Instagram, Twitter, TikTok, LinkedIn, where each one arrives in different ways to their target group, and that their strategies have to be designed in this way.

But you also have to invest in the back office of companies, since it is not the same to know how to fill the shelves as to have a team that picks-up the orders of customers, packs them and sends them to the customer as safely and quickly as possible. We have seen that there are established and large companies in Panama that have not been able to do this process efficiently and productively.

And there is a business in the tourism sector that I like very much, especially because of its outdoor character that has and is the Food Trucks. There's a lot to do here and take advantage of this new outdoor trend to get products and services to Food Trucks for consumers.

This is going to be a very atypical year, with a lot of unemployment, controlled inflation, lower-than-normal demand, and still with a lot of uncertainty as to whether we can control the pandemic or not. But that doesn't mean we're going to die. On the contrary, we must look for new ways of doing business, reinventing ourselves, adapting to change, and going to the market to look for sales.

We have put forward a series of initiatives that can be converted into investments with great potential by 2021, will require a lot of entrepreneurship and innovation, trying to sell with as few costs and expenses as possible, look for new and ingenious things, and do everything more efficiently.

By 2022, Panama must be in an economy with its machine running very fast, and it could lead us to recover everything we lost in 2020 and what we could not recover in 2021. But if there will be positive results, if we work hard, thinking about the long term more than in the short term.