Let me have a brief look at Central America, as a colleague of mine is over there at the moment.
First an admission. It is ten years since I was last in that part of the world, and people tell me it has changed. But here are a few thoughts.
Let’s start where it counts; the money.
Central American countries have sorted out their money quite easily. Each country has its own currency, and therefore control over their own economy. However, each country also uses the US dollar along-side the home currency. That way each country gets the best of both worlds; a common currency for international transactions, and a local currency which means each country does keep control over its own finances.
The EU could have had a similar arrangement; a euro for international trade, together with liras, francs, and the rest of the local currencies for home consumption. Instead, they got central control, which has been disastrous, and T2, which works within a country, but not across different countries.
The UK’s way of dealing with regional differences was to disperse government departments across the regions, so you get DVLA in Swansea, the Pensions department in the North-East, and so on. In Europe you get horrendous trade imbalances where countries like Italy owe Germany insane amounts of money in a futile attempt to balance the books. The only balance that is achieved is by pretending the imbalance isn’t there.
But let’s go back to Panama.
Panama City is a great place to live, or certainly used to be. It does get rather hot, so living in the Northern hills amongst the woodland is definitely the best place to settle. I thought that the old city would be a wonderful place to move to in order to take advantage of a clean-up, if ever there is one. When I was last there, the area looked ripe for development with some impressive old squares. Unfortunately the whole area stank of urine and dead fish. I’d be interested to know what it looks (and smells) like now.
The main development area when I was last in town was the Pacific Island group. A decade ago that was merely an idea which didn’t seem to have much oomph behind it. Maybe things have changed.
And then there is the spat with the USA. Where is there anywhere in the world where the USA isn’t causing trouble?
I used to own land in nearby Nicaragua, and I loved the city of Granada, and dreamed of buying one of the islands on the lake. At the time there was talk of digging a canal into the lake from the Atlantic, and another one over to the Pacific, and setting up a rival to the Panama canal. Periodically I see articles about reviving the idea, but I’m not sure much has come of it.
But let’s get to some basic facts. Inflation is apparently running at -0.7%. Pretty good. I like it.
Debt to GPD is 55.8. That’s rising, but it is a long way from disaster.
GDP growth 2.9%. Sadly that figure is dropping, but the average person should be feeling better off by about 3.6% which is considerably better than figures for all of Europe.
Unfortunately youth unemployment is not so good, apparently hovering around 17%.
Like everywhere else in the world, the times they are not exactly changing, but more realistically they are wobbling. In other words, which way are they headed? This way or that? Up or down? Everywhere seems to be stuck in a permanent ‘maybe’, which makes it very difficult to come to any reasonable decision about where to invest.
Ultimately I think it rather dangerous to be in the US sphere of influence, and Central America is politically in that region, but culturally it is nothing like the US. And currently Panama is being targeted by the idiots in Washington.
The big trouble for me would be the fact that the USA is currently in a very dangerous state. It is a great power that is falling apart, and that leads to dangerous and uncertain times.
I look forward to an update on the place.