The coronavirus has devastated the economies of many countries, including Asian nations. India, Cambodia, Bangladesh and Myanmar are among the most affected Asian countries, especially in the textile industry. As for Panama, the logistics industry could take advantage of the global crisis by offering itself as a warehousing hub for Asian countries. This is because the world’s main markets, Europe and the United States, remain closed and the Asian markets, which are slowly reactivating, need to store their goods while awaiting the reactivation of the economic sector. How does this new strategy favor Panama? A new form of economic reactivation Panama had already been planning to function as a storage center for goods coming from other countries due to its privileged geographical location: it borders Costa Rica and Colombia, and is connected to both oceans, facilitating the transport of goods to the United States. This connectivity could be very valuable for Panamanian economic reactivation, especially because, once the U.S. borders are opened, goods would take only 7 days to reach the U.S., compared to the 20 to 30 days it takes from Asia, depending on the destination city. Therefore, this new logistics opportunity for Panama could even favor the U.S. market. Advantages for Panama Panama’s ports are consolidated and, before the temporary suspension of economic activities, received thousands of shipments daily. The international ports, mainly those located in the province of Colon, received 95% of shipments destined for other countries. This means that Panamanian international ports are accustomed to operating in the field of logistics and redistribution. This is of great value to the Panamanian economy and, if consolidated as a warehousing center, could lead to stable economic development in the long term. Among the main advantages that this would bring to Panama are the following:
- An increase in the employment rate in the logistics and distribution sector.
- The promotion of trade thanks to free trade agreements that may be signed with other countries.
- Lower costs by centralizing operations in a warehousing center.
Finally, the economic contributions that this new strategy could bring to Panama could be of great benefit. This is because the commercial activity dedicated to logistics represents 30 percent of the country’s economic earnings, of which the Panama Canal accounts for more than 50 percent. For this reason, locating Panama as a storage center for goods coming from Asia could be a very good business for the economic reactivation of our country.
Due to its geographical location and consolidated logistics activity, Panama can benefit greatly from acting as a storage center for goods coming from the Asian sector. Faced with the devastation of the national and global economy due to the pandemic, Panama could be facing a successful opportunity.
Source: ANPanamá
