Retrospective on Allison Warshaw, “Move Over, Florida: Retirement in Panama” From: A New Path for Panama Perspectives on Business and Economics, Volume 25, 2007 Allison Warshaw '07 is now a tax professional. How have US retirees affected the cost of living in Panama? Since 2007, Panama has remained one of the top retirement destinations (behind only Portugal) thanks to its low costs of living, economical healthcare, and beautiful locations. More recently, “Panama no longer is just for retirees. More young couples and professionals from the US, Canada and elsewhere are making the move to the small Central American country of 4.3 million residents” (Wakefield & Chormicle, 2020). Because of this, more land is being purchased by non-locals and real-estate prices are increasing. Not only are US retirees and other expatriates buying up everything, but they are creating American communities that are completely segregated from the rest of the Panamanian population, especially economically. And while the cost of living increases for locals, the retirees more readily can afford the increases. The presence of expatriates is helpful for Panama’s economic growth, yet detrimental to the cost of living for the country’s own citizens. Are US expatriates retiring in Panama beneficial or problematic overall? US expatriates are usually viewed as beneficial to the Panamanian economy because they bring in money and stimulate service jobs for native citizens. International trade in services and tourism contribute significantly to the economy. Indeed, “Panama, over the last decade, has been one of the Western Hemisphere’s fastest growing economies, benefiting from investment-grade credit, a strategic location, and a stable, democratically elected government” (US Department of State). However, the COVID-19 pandemic highlighted how much negative impact the expatriates have on Panama. Since 2007, Panama had high and unstable inflation through 2019, when the pandemic began. Then, in 2020, “the total production of goods and services in the Panamanian economy, measured through GDP, reflected a contraction of 17.9% compared to 2019…. It is considered the fourth-largest drop in the world. Panama depends a lot on international services and those services, as the world was affected, were greatly affected. That caused the economy to fall sharply” (The Tico Times). With Panama going on lockdown with strict curfews and refusing to let in international travelers, thus preventing new expatriates from entering, the economy tumbled. Many domestic service jobs were lost, demonstrating how reliant Panama’s economy has been on the US retirees and the stimulus they bring to the country. Another factor, one often overlooked, is the cultural affect outsiders have. Matthew Kepnes, an expatriate in Panama himself, writes, “I never really thought about the impact that large communities of expats have in developing countries. I don’t think it is for the better…. large amounts of money coming into a country can actually have a negative effect on the people and place” (Kepnes, 2021). References Kepnes, M. (2021, December 31). When the expats come and take over a place. Nomadic Matt's Travel Site. The Tico Times. (2021, March 2). Panama's economy registers historic decline due to pandemic. US Department of State. (2021, July 19). 2020 Investment cimate statements: Panama. Wakefield, S., & Chormicle, X. M. (2020, July 4). American expats find opportunity in Panama, despite the pandemic. Cronkite News—Arizona PBS. Retrospective by Sidney Jankanish ’23, Political Science and International Relations Martindale Retrospectives 3 December 2022
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