A map showing the location of Panama within the region and the prominence of its commercial artery, the Panama Canal, which provides the only link from the Caribbean Sea to the Pacific Ocean.

Since its inception in 1948, the Colon Free Zone has gone from strength to strength. Today, 2,000 international companies and 23,500 employees are located at the commercial center of Panama

For latin America and the Caribbean, 2006 was another good year for economic growth. According to the Economic Commission for Latin America and the Caribbean (ECLAC), also designated the Spanish acronym CEPAL, the regional gross domestic product (GDP) increased by around 5.3 percent – equivalent to a per capita increase of 3.8 percent. Following an average annual growth rate of only 2.2 percent between 1980 and 2002, this marks the fourth consecutive year of economic growth in the region, and the third consecutive year producing rates exceeding 4 percent.

The United States and Panama have a long history of close ties and a strong economic partnership. The free-trade agreement announced in December 2006 expands an already vibrant trade and investment relationship. It will provide new economic opportunities for U.S. exporters, including significant openings in the $5.5 billion expansion plan for the Panama Canal, and the increased need for infrastructure that inevitably accompanies economic development.

“The recent expansion of the airport has made Panama the hub of the Americas, providing services to South America, the Caribbean, Central and North America, and 34 other destinations in 20 countries that only transport their goods on Panama’s national carrier, Copa Airlines,” says Minister of Commerce and Industry Alejandro Ferrer. “We want to turn Panama into a multimodal, worldwide logistics center. We have a network of land, maritime port and air communications and we are striving to get a railroad that will be able to handle refrigerated containers and transport merchandise from the Pacific to the Atlantic in less than an hour.”

ALEJANDRO FERRER Minister of Commerce and Industry	NILDA QUIJANO General Manager of the Colon Free Zone

Telecommunications gives the country another edge, with five fiber-optic cables linking it to the rest of the world. “In the Americas, this advantage can only be found in cities like New York,” adds Ferrer. Energy transportation is another sector with unfulfilled potential.

A crucial element connecting Panama with global trade is located around 75 minutes by car from Panama City: the Colon Free Zone (CFZ). It is the largest free-trade zone in the Western Hemisphere, exceeded globally only by Hong Kong. Around 2,000 companies operate within its 400 hectares (988 feet) and the free-zone laws create a climate for businesses to trade with a minimum of restrictive legislation. No tax is paid on income derived from export activities within the zone, no tariffs or quotas exist on imports and exports, while costs are highly competitive. Additionally, executives and foreigners receive several immigration benefits.

Location is one of the main keys to the CFZ’s enormous success. It is served by five major ports only a few miles away, and its proximity to the tiger economies of Southeast Asia and North America, as well as its relatively easy connections to Europe, makes it an ideal intercontinental hub. The free zone is constantly reconstructing and modernizing warehousing, shipping and transit systems for all types of merchandise, keeping one step ahead with the use of modern technology and by offering the best multimodal services.

‘The recent expansion of the airport has made Panama the hub of the Americas, providing services regionally and to 34 other destinations’

“Panama’s future looks bright,” comments Nilda Quijano, General Manager of the Colon Free Zone. “Following our growth and looking ahead, we are concentrating on improving employment – training and preparing people for the upcoming surge in development to ensure a skilled work force, able to generate sustainable growth, wealth and social welfare, and who are ready for the business people of the free zone.” She adds: “We prepared a strategic plan to turn the zone into an efficient, global logistics center with greater security and an automated trade system. Also, I believe strongly in social responsibility. We adapted our mission to be more oriented toward social issues and put more back into the community.”