(Martes Financiero) Colon Free Zone, Panama Pacific, City of Knowledge and export processing zones, now called zones, are the four special economic zones that promotes the agency for attracting investment and promoting exports (PROINVEX) under the Ministry of Trade and Industry (Mici).
But why are special economic zones? These are areas with tax breaks for specific activities, with treatment only immigration, customs, labor and legal stability. However, not all stakeholders can be established in these areas because they must meet specific requirements (see box: Criteria for admission).
One of the oldest economic areas is the Colon Free Zone (CFZ), located in the province with the same name.
When the FTA began operations 63 years ago only had 30 acres and only 10 companies opened their doors then.
However, the trade has been moving that area has forced them to expand to the point of today’s 725 hectares of land and 2 000 960 companies operating (see box: Commercial Movement).
Severo Sousa, president of the Association of Users of the FTA, said currently occupied about 400 hectares, and a new area of over 300 hectares, which is developed and occupied almost entirely.
In addition, several private projects with an investment of over $ 180 million and are in various stages of completion.
These are projects such as infrastructure development adjacent to the airport in Columbus for the sum of $ 50 million, the building for the Regional Customs Authority by $ 280,000, the fire station for 1.1 million dollars, the extension to four lanes of Via Ahmad Waked “Corridor of Columbus” by 12 million, among others.
According to official figures, the first quarter of 2011 were re-exported 131 million 4 thousand dollars in merchandise and 3 000 875 were imported. The projection of the end of this year will reach 24 billion dollars in sales.
This special economic area products are imported mainly from Asian countries like China, while re-exports of goods to Venezuela, Colombia, Dominican Republic, Costa Rica, among others.
Electronics, clothing, footwear, pharmaceutical goods, perfumes, cosmetics are among the main products of export.
But the great commercial that is generated in the area not only brings good news, but some not so good regarding the entry and exit of goods from the FTA.
Leopoldo Benedetti, general manager of the FTA talks of specific situations. He says one of the doors is stuck all the movement of goods into and out of place.
“For this reason we are making a new building in Balboa to have two exits, as Coco Solito and Sixth Street.
Thus we split the best in the area, which has grown a lot, but in which we kept the same outputs, “says the entrepreneur.
So far the commercial movement in that area is done with the aid of ports. However, a new opportunity with the future construction of the airport in Columbus, as this could attract the interest of entrepreneurs to move their merchandise ZLC air more quickly to countries in Latin America.
And although the FTA has boomed in recent years, there remain some areas available to complete development.
“If we develop the cold chain, this will give a huge logistical advantage to the FTA,” says Benedetti.
But the boom that has seen this area, which generates about 30 000 direct jobs, still has potential for developing the assembly activity to manufacture semi-finished or finished products.
This is covered under the law of the FTA, but Benedetti said that the re-import business has been “much better” for this sector because it does not require much physical space to operate.
“A factory assembly maybe take up much space and is not going to give any economic outcome,” says Benedetti.
While the FTA continues to make millions of transactions per day in Clayton is doing new research, establishing a new system or technology is innovating a product that promises to revolutionize the technology marketplace.
There, on the banks of the Panama Canal, established the City of Knowledge (CDS) 13 years ago through a contract between the Government and the City of Knowledge Foundation to develop 120 hectares of land in a State project.
Tomas Paredes, director of infrastructure and services of the CSD indicates that they differ from other special economic areas because they have a different vision and mission.
He explains that the CDS is a platform where a business, academic and international organizations work synergistically to search for sustainable human development.
The CDS has installed 56 companies, 21 academic programs, 47 agencies, 48 institutional, 60 in the Technopark and 141 residences.
When opened, this economic area only had 175 square meters available, but its growth led to 25 thousand meters enable more to total 200 thousand square meters today.
Of the 200 thousand square meters are 85% occupied and are still expanding its range, as they have room to grow to 400 thousand square meters.
Both growth required an investment of $ 20 million in infrastructure. This year we will invest around 14 million dollars in a shopping plaza and bedrooms in order to expand services to its users. Both projects should be ready by summer 2012.
The mall is concerned primarily with variety of restaurants, while the bedrooms (96 rooms and 241 beds) will be built for lack of rooms available in the area, although within the CDS is a hotel.
“There are companies, professional organizations or academic programs at the regional installed within the city and bringing students or staff to provide training,” said Paredes.
As its name suggests, this area seeks to become a comfortable city for its users and even already has facilities such as medical, fire, police, schools, playgrounds, convention center, a cultural association, among others.
But anyone interested in settling in the CDS must meet certain special requirements (See box: Admission Criteria).
It is estimated that 6 000 people work at CSD thousand daily visitors attending these facilities.
The master plan envisages the development of this city by 2020 is expected to generate 15 000 jobs.
Across the bridge
Like the previous project, other special economic area also developed on an air base is Panama Pacific.
A project that gradually rises west of the capital city, a few miles from Bridge of the Americas.
Panama Pacifico is a project carried out between the State agency under this name and London & Regional Panama, SA The first is that the administration and the second, which develops it.
It was created by decree No. 41 of July 20, 2004 in an area of 400 thousand hectares in flexible construction of warehouses, office buildings and single family homes, apartments, commercial areas and parks.
Kardonski Henry, general manager of London & Regional Panama, SA, says the project has many benefits but also challenges ahead.
Kardonski qualifies as “pretty well” the development of the logistics area, while the office area “grows regularly,” as they have to compete with the offer of the city of Panama.
This project has already invested $ 170 million, of which $ 140 million has been earmarked for infrastructure development and $ 30 million in areas such as marketing, among others.
However, companies that are interested in settling in this area have found their first challenge as the lack of qualified personnel.
To date 100 companies have registered in the project, of which 74 are already operating in the area in maritime services, call center, high-tech manufacturing, logistics and distribution.
They have generated 5 000 direct jobs, which have been discovered using “tweezers” because they are skilled in every area.
Currently, 90% of employees are Panamanian and the rest are foreigners, says Olmedo Alfaro, manager of the Agency for Air Panama Pacific Special Economic (AAEEPP).
Given the difficulty of finding skilled labor, a reality which is not denied by the entity administering the project, it was decided to create a training center.
Alfaro says that companies have approached them to express concerns that are not personal.
One example is the lack of skilled labor for the maintenance of aircraft engines.
Only in that area there are a thousand positions, but have not been filled due to lack of staff. Technological University of Panama (UTP) produces only 12 per year.
The goal is to open AAEEPP 10 000 jobs with 400 companies operating in the area by 2014. But to reach this goal will require the support of the training center.
This center will address three areas, the first language is English, the second is instructed in a systematic, ie, in networks so that students can use the tools of the internet and solve problems.
The third key element is the work ethic, indicating that the prospective employee must have discipline, commitment and good customer service.
Zone change to
The fourth special economic zone which apparently was not happy with some groups that were created after the Law No. 25 of November 30, 1992 was the so-called export processing area, now called zones.
Aida Michelle Mature, responsible for the commercial division of Panexport, the first export processing zone established in Panama, said that the sector failed to build on the momentum that made Panama to promote foreign investment and incentives for domestic production.
In addition, the designated “export processing zones” was a concept not supported by the World Trade Organization (WTO) in relation to the incentives given to this sector for export.
In this situation, Panama was forced to make adjustments to give rise to Law 32 of April 5, 2011 that creates zones in Panama.
Maduro explained that remain a special economic area. However, changing the name and concept of free zones, as previously focused on export.
Now, through the free zones seeks to encourage domestic production, foreign investment and create jobs.
“They used to say that everything was developed for export and was not written, but it was the general idea.
Now with the changes open the compass to a number of activities that can be developed not only in production but in services, logistics, marketing, educational institutions and to housing development, “says the executive.
Currently there are about 14 zones, mostly located in Panama, San Miguelito, Albrook, Resume and
Columbus.
Panexport, SA, Isla Margarita Development Inc. in Colon, Panama Export Promotora Industrial, SA, are among these. The four special economic zones have generated at least 46 000 direct jobs.
And investments in each of them continue according to its plan of work, but also on the way found some obstacles, the most obvious difficulty in obtaining qualified staff.
These areas have the benefits for growth, but must take steps to pay off the deficit that afflicts them.
Economic areas in numbers
1.000 visits. Number of people who daily go to the City of Knowledge, indicating that a month receive at least 20 000 people in its facilities.
170 million. Resources allocated for the development of Panama Pacific, of which 140 million was allocated to infrastructure and the rest on marketing and other areas.
100 companies. Number of companies that have registered in the Panama Pacifico project, located west of Panama City.
2.960 COMPANIES. Number of companies currently operating in the Colon Free Zone (CFZ).