by Larry Smith
PANAMA CITY, Panama -- Except for the straw hat, Panama has never been on my personal radar.
Years ago I knew it as a nexus of American imperialism - a colonial enclave carved out of Colombia in 1903 to facilitate the US construction and operation of that engineering wonder known as the Panama Canal, the world's most strategic waterway.
The Canal Zone was a source of friction between Panama and the United States for decades, culminating in the 1964 riots that were suppressed by US troops. As a result, in 1977 the US agreed to transfer the canal to Panama with effect from 1999.
American troops were used again in 1989 to topple the military dictator Manuel Noriega, who was later imprisoned in the US and France on drug trafficking and money laundering charges.
So it was an entirely unexpected experience for me to visit a stable, prosperous and democratic Panama for the first time via Copa Airlines' new direct flight between Panama City and Nassau.
The $514 roundtrip flight has enjoyed passenger load factors of more than 80 per cent since its launch last June, with most arrivals staying on Paradise Island but 10 per cent going on to Grand Bahama and/or the out islands.
The country's tourism motto - where the world meets - is more apt than might at first appear. Over six million passengers transit through Tocumen International Airport here each year, making it one of the busiest air hubs in Latin America. And some 38 ships a day make the 10-hour journey through the canal - in fact, they are lined up like taxis at the misty Pacific coast entrance overlooked by our hotel.
And since Panama occupies a three million-year-old land bridge linking North and South America, the isthmus is a biodiversity hotspot that has become a magnet for international scientists. This is reflected by a vast national park system that takes up about a quarter of the country, as well as by the presence of the Smithsonian Tropical Research Institution, one of the world's elite biological research centres.
But though it is a year behind schedule, the star environmental attraction here is the $96 million Panama Biodiversity Museum now under construction. Conceived and designed by acclaimed architect Frank Gehry, whose buildings - such as the Guggenheim Museum in Spain - are legendary tourist attractions, the museum is expected to receive some 600,000 visitors a year when it opens in 2012.
Built on 70 acres of reclaimed land on the Amador Causeway at the Pacific entrance to the canal - just a few blocks from the main cruise port - the museum will trace Panama's incredible biodiversity through a series of eight open-air pavillions on two levels protected by immense architectural canopies. This structure will be surrounded by a botanic park and is expected to generate revenues of $60 million a year.
I visited the project's headquarters in the old US Officers Club at Fort Amador, next to the construction site, where architectural models are on display. Nearby is a marine field station operated by the Smithsonian, and a 30-minute bus ride towards the interior delivers you to the stunningly beautiful 55,000-acre rainforest of Soberania National Park.
The more obvious meaning of the slogan - where the world meets - refers to the canal itself, a 50-mile waterway blasted through the mountains from Colon on the Caribbean coast to Panama City on the Pacific coast, that transformed global trade when it opened in 1914. More than 26,000 workers died building the artificial lakes and channels, and three sets of locks on each end of the waterway, which raise and lower ships some 27 metres. And some of those workers were Bahamians.
The Miraflores locks, on the Panama City end of the canal, are a major visitor attraction in their own right, featuring restaurants, a shop, theatre and museum. From the observation deck you can watch massive container ships towed by electric locomotives as they begin their passage to the Caribbean. Not far away is the imperial canal headquarters building, an imposing edifice built by the Americans that resembles something out of the British Raj.
On the Caribbean side of the canal, near the Gatun locks, is a huge tax-free zone that describes itself as a "hub in the globalized economy". The Colon Free Zone encloses 1100 acres of warehouses, showrooms, shipping and transit systems, and its 28,000 employees break down endless container loads of goods for resale - handling more than $16 billion of merchandise a year and a quarter of a million visitors.
This is the as yet unfulfilled vision of a major commercial distribution centre that the Grand Bahama Port Authority has for Freeport. And in fact, both ports are operated by the same Chinese company - Hutchinson Whampoa.
"The free zone is strictly wholesale for re-export," our guide told us, "but some shops will sell retail to foreigners. You just have to know which ones and you have to tip the security guards on the way out."
It seemed like organised hustling to me, and the steamy, dirty, congested streets are certainly not designed for retail shopping. Our visit was more of an advert for trade, as well as an interesting cultural experience. Our mandatory guide, for example, was part Jamaican and able to switch effortlessly from street Spanish to yardie English.
Panama's tourist industry is still relatively small - accounting for about 15 per cent of the gross domestic product of $44 billion. Some two million visitors are expected this year (compared to the Bahamas' 5.2 million last year), but Copa Airlines is a major player in western hemisphere travel.
One of the industry's top earners, Copa flies to 59 destinations in 28 countries from Canada to the tip of Argentina, boasting a 90 per cent on-time record with a fleet of 70 Boeing and Embraer jets that have an average age of under five years.
"The Bahamas route is the most successful launch in our 60-year history," claimed Copa's vice president of planning, Joe Mohan. "This was completely unexpected because the Bahamas is not well known in Latin America. Our first flight to Nassau had some 10 nationalities on board because of our wide network, and load factors continue to be high although there are concerns about the lack of Spanish speakers in the Bahamas."
While Copa is expected to bring some 14,000 plus Latins to Nassau this year, only about 320 Bahamians have made the reverse trip so far, according to Tourism Authority chief Gabriella Antelo. But this is sure to change as Panama becomes better known to Bahamians. And a stop-over promotion with Copa Airlines lets passengers visiting other destinations stay in Panama City at no extra fare, and benefit from special hotel and activity rates.
English language skills are well developed here and the US dollar is legal tender just as it is in the Bahamas. Moreover, the shopping opportunities are enough to make any red-blooded Bahamian swoon. Albrook Mall, on the site of an old US air base near the canal, bills itself as the largest in Latin America and it is certainly the equal of any American emporium in price, presentation and selection. Casinos are also a popular attraction and international hotel brands are well represented in Panama City.
The country's dollarized economy rests on a well-developed service sector centred around the canal with GDP growth projected at 13 per cent this year. Panama is a regional base for a range of well-known corporations like Hewlett Packard, Proctor & Gamble, Sony and Caterpillar. Major investments underway in the capital include a $5.2 billion metro rail project, the $96 million biomuseum, a $1 billion port expansion, and a $10 billion expansion of the Panama Canal that will almost double its capacity by 2014.
But Panama City's soaring skyline, well-maintained infrastructure and sophisticated financial services could give a false impression to travellers who don't venture into the countryside. More than a quarter of the country's population of 3.4 million lives in abject poverty, and the political system is still dominated by a wealthy elite.
Despite a relatively low jobless rate (about 5 per cent), most of the population earns less than $800 a month. But military coups are a thing of the past and economic growth has dampened social discontent.
The centre-right president, Ricardo Martinelli, is a supermarket tycoon of Italian ancestry who won only 5 per cent of the vote as head of a new party in 2004, was swept to power in a landslide five years later, but who has seen a sharp drop in support - his vice president recently joining the opposition.
The leaders of the two main traditional parties - Martin Torrijos (the son of General Omar Torrijos, who negotiated the canal transfer) and Mireya Moscoso (the widow of three-time president Arnulfo Arias) - were elected prior to Martinelli. The constitution prohibits consecutive terms, and the next presidential election is set for 2014.
There is one more meaning of 'where the world meets' that is worth mentioning. It relates to Panama City's eight-acre Atlapa Convention Centre near the airport, which can seat over 10,000 people and features two theatres with the latest audio-visual equipment, 10,000 square-feet of exhibition space, 19 meeting rooms, and a six-language translation system.
According to Gabriela Antelo, this superb facility is available free to groups of more than 500 who stay a minimum of three nights. Also included are air tickets and hotel rooms for three speakers plus a welcome reception with a local show.
Another of Panama's key target markets is the yankee baby boom generation. Eighty million of them are now reaching retirement age, and Panama is listed by Forbes Magazine and Businessweek as one of the world's top places for retirement living. Incentives include duty-free imports, tax exemptions and service discounts, plenty of direct flights, modern medical facilities, and a cost of living one fifth that of the United States.
Although the Nassau route is doing well, we are not Copa's only Caribbean destination. Our competition includes Jamaica, Trinidad, Cuba, Dominican Republic, Puerto Rico, Haiti and St Maarten. For Bahamians interested in travelling to Panama, I found the service excellent during the two-and-a-half hour flight to Panama City, and the 140-seat Boeing 737-700 aircraft was in good shape.