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Why invest in azuero October 1st 2012

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A Social Economic Study, requested by The Cubita Wyndham Hotel, which is a construction project (50% completed) in Chitre Herrera. …

A Social Economic Study, requested by The Cubita Wyndham Hotel, which is a construction project (50% completed) in Chitre Herrera.
It is very important to highlight the business growth and quality of life in this part of the country and we hope you enjoy the publication.
Feel free to distribute.

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  • 1. SOCIAL-ECONOMIC STUDY WHY INVEST IN AZUERO? * Based on the study presented by Economist María Pedreschi *I. Population of Azuero vs. Comparable Populations:Table. Total population of some provinces in the Republic of Panama. Province 1,980 1,990 2,000 2,010 Herrera 81,963 93,681 102,465 109,955 Los Santos 70,261 76,947 83,495 89,592 Azuero 152,224 170,628 185,960 199,547 Coclé 140,903 173,190 202,461 233,708 Veraguas 173,245 198,495 209,076 226,991 Chiriqui 287,350 322,130 368,790 416,873 Panama 809,100 1,072,127 1,388,357 1,713,070 Source: Based on the 2000 and 2010 Population and Housing Censuses, INEC. The population of Azuero grew by 7.31% in 10 years (from 2000 to 2010). It is important to note the migration of foreigners to the area: Altogether, between 2005-2010, 12,067 people have migrated to the Azuero región, representing 6.05% of the population of Azuero in 2010. The percentage of people having a university degree or some level of university education is 13.7%, which is similar to the percentage registered in Cocle and Chiriqui (13.7% and 13.5%), above that of Veraguas (11.5%) and below that of the Province of Panama (21.4%). Almost a third (31.4%) of the population has a high school diploma or some level of high school education, which places Azuero above Veraguas and Chiriqui (28.9%) and almost on par with Cocle (32.7%), but below the province of Panama (44.2%).
  • 2. Table. Universities present in the Azuero Region: 2012.University Herrera Los Santos AzueroUniversity of 1 1 2PanamaTechnological 0 1 1UniversityUDELAS 0 1 1Latina University 1 0 1USMA 0 1 1Columbus 1 0 1Isthmus University 1 1 2UMECIT 1 0 1ISAE 1 0 1UNIEDPA 1 0 1Total 8 4 12Source: Created by the authors.II. Economic Dynamics 2.1. Gross Domestic Product of the Province of Herrera2.1.1. Estimate of GDP Value and Composition by Percentage Important sectors in the generation of GDP for both provinces include agricultural activities ((37% and 20%), transportation, storage and communications (12%), and the government (18% and 14%). The fishing industry is increasing in importance in Herrera. Azuero’s GDP is slightly higher than those of Cocle and Veraguas and slightly lower with respect to Chiriqui. The provinces of Herrera and Los Santos have the highest GDP per capita after the province of Panama, being higher even than that of Chiriqui. This indicator has been growing in part due to the economic dynamics reported for this region and in part because of the slow growth rate of its population. The comparative behavior of the per-capita GDP of Azuero with respect to the other provinces can also be taken as an indicator of the higher standard of living of the population of this Region with respect to other regions, excluding the province of Panama.
  • 3. Table. Gross Domestic Product at market price in some Provinces of the Republic of Panama, in millions of 1996 Balboas. Years: 2003-2011. Years Republic of Azuero Cocle Chiriqui Veraguas Panama Panama 2003 12,182.80 442.72 341.12 950.26 316.75 8186.84 2004 13,103.80 470.86 353.80 982.79 340.70 8792.65 2005 14,041.20 519.50 379.11 1039.05 365.07 9379.52 2006 15,238.60 563.86 411.44 1051.46 396.20 10133.67 2007 17,084.40 597.95 444.19 1178.82 444.19 11463.63 2008 18,812.90 684.83 507.95 1373.34 489.14 12593.36 2009 19,538.40 711.23 527.54 1426.30 508.00 13079.00 2010 21,024.80 765.31 567.67 1534.81 546.64 14074.00 2011 23,253.60 846.46 627.85 1697.51 604.59 15565.96Source: Based on data from the General Comptroller of the Republic, INEC, www.contraloria.gob.pa For 2003 to 2007, the estimate is based on thecomposition of GDP by percentage for each province as a part of the total; the 2008-2011 estimate assumes the average composition by percentage forthe 2003-2007 period.
  • 4. Table. Estimated Gross Domestic Product per capita for some provinces of the Republic of Panama: 2003-2010 Year Azuero Cocle Veraguas Chiriqui Panama 2003 2,249 1,559 1,431 2,402 5,300 2004 2,378 1,597 1,532 2,455 5,562 2005 2,610 1,690 1,635 2,566 5,800 2006 2,819 1,812 1,762 2,568 6,130 2007 2,975 1,933 1,975 2,847 6,786 2008 3,392 2,184 2,168 3,281 7,299 2009 3,508 2,243 2,245 3,374 7,427 2010 3,753 2,387 2,410 3,596 7,833Source: Based on data from the General Comptroller of the Republic, INEC, www.contraloria.gob.pa For 2003 to 2007, the estimate is based on thecomposition of GDP by percentage for each province as a part of the total; the 2008-2011 estimate assumes the average composition by percentagefor the 2003-2007 period. Estimated population for each province as of July 1.
  • 5. Table. Average composition (2009-2007) of GDP by percentage at market price for the Provinces of Herrera, Los Santos and the Azuero Region, by Category of Economic Activity, at 1996 prices Category of Economic Activity Herrera Los Santos Azuero % % % Agriculture, cattle farming and forestry 19.52 36.82 28.17 Fishing 13.20 4.2 8.7 Exploitation of Mines and Quarries 0.48 0.5 0.49 Manufacturing Industries 4.34 1.06 2.7 Supply of Electricity, Gas and Water 2.30 1.6 1.95 Construction 1.72 0.98 1.35 Wholesale and retail commerce, repair of automobiles, motorcycles, personal effects and household goods. 9.62 5.64 7.63 Hotels y restaurants 2.24 1.62 1.93 Transportation, storage and communications 13.00 11.78 12.39 Financial Intermediation 5.66 4.72 5.19 Real estate, entrepreneurial and rental activities 2.04 2.04 2.04 Private education 0.70 0.22 0.46 Social services and private health services 2.30 0.76 1.53 Ohter community, social and personal service activities. 3.04 4.28 3.66 Less: Financial intermediation services 1.80 1.46 1.63 General government 14.06 17.56 15.81 Homes with domestic service 1.44 1.48 1.46 Taxes on the net products of subsidies 6.16 6.2 6.18 Gross Domestic Product at market price 100.00 100.00 100.00Source: Based on data from the General Comptroller of the Republic, INEC, www.contraloria.gob.pa
  • 6. 2.2. Dynamic economic activities 2.2.1. Commerce and Services The decision by large national companies to establish branches in the District of Chitre is an indicator of the economic drive that distinguishes the Azuero region, and of the perception by investors of Chitre as the center of this development pole. A large number of the companies with operations at the national level that have established branches in Chitre have done so within the past 10 years (around 61) and in the service (53%) and commercial (47%) sectors. .Table: Companies with a national (or regional) presence that haveestablished operations in Azuero in the last 10 years. COMPANY ACTIVITY 1 Cochez y Cía Commerce – Hardware, construction materials 2 Spiegel Commerce – Hardware and household goods 3 Doit Center Commerce – Hardware and household goods 4 Super Pisos Commerce – Construction materials 5 Casa Goly Commerce – Hardware, construction materials 6 COMASA Commerce – Hardware, construction materials 7 Alumicentro de Panamá Commerce- Aluminum and glass construction materials 8 Bac Credomatic- Panamá Service – Financial Intermediation 9 BCT Banco Service – Financial Intermediation10 Banco Azteca Service – Financial Intermediation11 Banesco Service – Financial Intermediation12 Multibank Service – Financial Intermediation13 Banco Delta Service – Financial Intermediation14 Credicorp Bank Service – Financial Intermediation15 Banco Citi Service – Financial Intermediation16 Banvivienda Service – Financial Intermediation17 Seguros Mapfre Service – Financial Intermediation18 Aseguradora Ancón Service – Financial Intermediation19 bba Seguros Service – Financial Intermediation20 Farmacias Arrocha Commerce – Medicines and various goods21 Farmacia El Javillo Commerce – Medicines22 Farmacias Metro Commerce – Medicines and various goods23 Óptica Sosa y Arango Service – Visual health24 Óptica López Service – Visual health25 Óptica Metro Service – Visual health26 Madison Commerce - Department store27 Lumicentro Commerce - Lighting products
  • 7. 28 McDonald (2) Service – Fast food restaurant29 Dóminos Pizza Service- Restaurant30 Kentucky Service – Fast food restaurant31 Pio Pio Service – Fast food restaurant32 Subway Service – Franchise restaurant33 La Estancia Service – Franchise restaurant34 Hopsa Commerce – Sale of metal products35 Pesqueros Commerce – Sale of fishing goods36 July, Sport Center Commerce – Sale of sporting goods37 DDP (3 tiendas) Commerce – Clothing and complementary goods38 Bbb Commerce – Shoe store39 Payless Commerce – Shoe store40 Rodelag Commerce – Sale of household goods41 Aire Sí Service – Repair and maintenance of refrigeration systems42 Friolín, S. A. Service – Repair and maintenance of refrigeration systems43 Tambor Commerce and Service – Sale of automobile goods and auto service shop44 Budget Service – Car rental45 Arrendadora Económica Service – Car rental46 Auto Centro Commerce and Service – Sale of automobile goods and auto service shop47 Viajes Marbella Service – Tourism48 Supermercado El Rey Commerce – Supermarket49 Super 99 Commerce – Supermarket50 Universidad del Istmo Service – Higher Education51 UDELAS Service – Higher Education52 ISAE universidad Service – Higher Education53 UMECIT Service – Higher Education54 Servi Entregas Service – Delivery service55 Uno Express Service – Delivery service56 Casa Gala Commerce – Furniture and household goods57 Elektra Commerce – Furniture and household goods58 Bombasa Commerce – Products for water storage59 Riegos de Chiriquí Service – Installation of irrigation systems60 Fertitec Commerce – Fertilizers and agricultural technology61 ERA Commerce – Kitchen equipment and related goodsSource: Created by the authors
  • 8. 2.2.2. Construction An important indicator for measuring the dynamics of the construction sector relates to the number of construction permits issued.Table. Number of Private Constructions in Herrera and Los Santos: 2005-2011.Year Herrera Rate of Los Rate of Azuero Rate of Growth Santos Growth (%) Growth (%) (%)2005 396 ---- 307 ----- 703 ----2006 430 9 398 30 828 182007 397 -8 469 18 866 52008 390 -2 357 -24 747 -142009 455 17 332 -7 787 52010 528 16 462 39 890 262011 397 (1)(1) January to September of 2011 for Chitre onlySource: Based on data from the General Comptroller of the Republic, INEC, Industry.www.contraloria.gob.paTable. Value of Private Constructions in the Provinces of Herrera and Los Santos.Years: 2005-2011. Herrera Los Santos Azuero (B/) Rate of (B/) Rate of (B/) Rate ofYear Growth Growth Growth (%) (%) (%)2005 6,752,728 ---- 6,714,810 ---- 13,467,538 ----2006 7,055,829 4 7,306,469 9 14,362,298 72007 6,315,279 -10 12,850,902 76 19,166,181 332008 11,656,892 85 10,631,043 -17 22,287,935 162009 27,184,733 133 9,899,378 -7 37,084,111 662010 20,693,023 -24 12,347,982 25 33,041,005 -11(2) January to September of 2011 for Chitre onlySource: Based on data from the General Comptroller of the Republic, INEC, Industry.www.contraloria.gob.pa
  • 9. 2.2.3 Tourism The tourism potential of Azuero is demonstrated by the fact that Region No. 4 of the Master Plan for Sustainable Tourism in Panama 2007-2020 includes three priority tourism destinations and products that involve the Azuero Region: a- Destination: Ocu-Santa Maria-Parita-Chitre. Priority Product: Agrotourism b- Destination: Las Tablas–Santo Domingo–La Palma-Guarare. Priority Product: Culture and Community c- Destination: Pedasi – Tonosi. Priority Product: Sport fishing 2.3 Evolution of new businesses An indicator of sectoral economic dynamics is the growing number of new notices of operation and capital invested in new businesses:Table. Number of Notices of Operation of Businesses per year, in some provincesand in the Republic of Panama. Years: 2008-2012. Provinces 2008 2009 2010 2011 2012 (1)Herrera 465 542 716 800 897Los Santos 352 412 552 540 756Azuero 817 954 1268 1340 1653Cocle 626 891 1,081 1,244 1,404Chiriqui 1,798 2,145 2,687 2,974 3,250Veraguas 630 827 1,150 1,244 1,275Panama 12,555 13,283 16,525 17,813 20,184Total for the Republic 17,918 20,613 25,950 27,467(1) Data for January to August 31 of 2012 corresponds to real data; data for September to December 31 incorporates estimated data.Source: Created with information from the database of www.panamaemprende.gob.paIII. Occupations, Salaries, Incomes and Expenses. 3.1. Condition of the Population with regard to Economic Activity The Azuero region reports 51% of its population over the age of 10 as being economically active, meaning they are available to offer their labor, which is greater than the percentage of neighboring provinces. The unemployment level is low (4%).
  • 10. 3.3 Salaries The Azuero Region has a higher percentage of salaried workers with incomes greater than $1000 than Coclé, Veraguas and Chiriquí.Table. Salaries declared by individuals in some provinces of the Republic ofPanama, by salary range: 2010.Province Salary ranges (in Balboas) Less than 125 125-399 400-999 1000 and more Median Persons % Persons % Persons % Persons %Azuero 121890 62.5 28130 20.5 19454 13.6 3902 3.3 282.70Cocle 158720 70.1 26854 16.7 18592 11.0 2977 2.1 301.10Veraguas 163637 73.1 22756 14.2 16697 10.6 3085 2.2 319.00Chiriqui 262511 64.5 52461 18.9 40267 13.4 7574 3.2 302.50Panama 851586 52.0 182600 15.0 293647 24.0 71455 8.0 473.20Source: Based on information from the Data Base of the 2010 Population and Housing Census.General Comptroller of the Republic, INEC. www.contraloría.gob.paTable. Household income in some provinces of the Republic of Panama, by incomerange: 2010.Province Income ranges (in Balboas) Less than 125 125-399 400-999 1000 and more Median Households % Households % Households % Households %Azuero 11946 19.4 18732 30.5 19497 31.7 11287 18.4 391.5Cocle 12497 22.2 16548 29.4 17528 31.1 9719 17.3 379.0Veraguas 17080 28.4 18108 30.1 15138 25.2 9806 16.3 300.0Chiriqui 5741 6.8 18108 21.4 37888 44.8 22888 27.0 426.0Panama 33321 7.1 68798 14.7 174126 37.3 190741 40.8 804.0Source: Based on information from the Data Base of the 2010 Population and Housing Census.General Comptroller of the Republic, INEC. www.contraloría.gob.pa In Azuero, the percentage of households that receive monthly average incomes of 1000 Balboas or more (18.4%) is greater than in the provinces of Cocle and Veraguas (17.3% and 16.3%). 3.4 Some standard of living indicators The inhabitants of the Azuero Region have access to some activities that reflect a certain standard of living with regard to modern facilities and comfort.
  • 11. Azuero stands out in comparison with Cocle and Veraguas with respect to the percentage of homes that have a computer, Internet connection, cell phone and air conditioning. A large percentage of households (45%) in the Azuero region have an automobile, which is greater even than the province of Panama (32%).Table: Percentage of households that have certain assets, by province andby asset: 2010.Asset Percentage of homes having particular assets Azuero Cocle Veraguas Chiriqui PanamaComputer 20 15 16 22 37Internet 58 57 52 63 78ConnectionCable TV 15 15 14 19 32ConnectionCell Phone 81 77 71 86 91Automobile 45 20 19 28 39Air 13 6 7 22 21ConditioningSource: Based on information from the Data Base of the 2010 Population and Housing Census.General Comptroller of the Republic, INEC. www.contraloría.gob.pa An indicator which is used quite frequently to achieve an approximate idea of the standard of living of a population is the Human Development Index. The levels of this index both for Herrera and Los Santos reveal that the Azuero region is among the highest at the national level.
  • 12. Graph. Human Development Index in some provinces of the Republic ofPanama: 2007. Human Development Index 2007 Veraguas 0.677 Coclé 0.69 Chiriquí 0.738 Herrera 0.731 Los Santos 0.751 Panamá 0.777 Source: Human Development Atlas, UNDP, 2010 Another important indicator is related to the life expectancy of the population. In this regard, the population of Azuero approaches the life expectancy of the inhabitants of the province of Panama.Graph: Life expectancy in some provinces of the Republic of Panama: 2007. Life Expectancy 2007 77.2 76.6 76.6 76.2 75.1 73.8 Panamá Los Santos Herrera Chiriquí Coclé Veraguas Source: Human Development Atlas, UNDP, 2010
  • 13. IV. Why invest in Azuero?An analysis of the data related to the main variables affecting the economic andsocial dynamics of the Azuero Region - comprised of the provinces of Herrera andLos Santos – enable us to identify the most relevant factors which help to answerthe question “Why invest in Azuero?”. These factors are: Intangible Factors Tangible Factors**The slogan “In Chitre, no one is a Economic:stranger” is an intangible factor that Considerable increase in investment inhas been successful over time, as the public and private construction projectsarea is perceived as a place where Increase in incomes with the inclusion ofstrangers are treated kindly, and as a Chitre in Salary Zone 1good place to live and do business. Growing purchasing power which makesMost Panamanians identify Chitre as the offer of high quality products andbeing representative of the Azuero services viable.Region. Increase in certain activities which promote development, such as construction, banking services, tourism and commerce Growth in employment Significant increase in consumption**The study carried out by the Population:Gorgas Memorial Institute identifies The increase in migration of foreignersChitre as “The best city to live in” to Chitre and Pedasi attracts businessesbecause a high percentage of its interested in catering to theseinhabitants come fairly close to the consumers with high purchasing power.country’s potential standard of The migration of Panamanians of allliving. This has been a positive ages, but above all retirees who arefactor both for the attraction of looking for a place to live peaceably andforeign investments as well as safely in a city that has everythingmigration towards the entire Azuero necessary for a comfortable lifestyle.region. High reported levels for certain standard of living indicators such as the human development index and the life expectancy of its inhabitants. Young people have not emigrated away from the area. A human resource with a good educational level, well prepared and geared towards service.
  • 14. ** The slogan “Chitre, the city that Geographic Position:grows” reflects the drive of its people to The location of Chitre as the gateway toinvest and create advantageous the Azuero región and a mandatoryconditions for others to invest, favoring stopping place for tourists and otherthe attraction of foreign capital. temporary visitors. The widening of the National Highway will shorten distances and make the region more attractive for the arrival of tourists and for logistics and commerce. The proximity to other regional markets makes it possible to take advantage of them from locations in Chitre or Las Tablas. Social and cultural conditions: Increase in the middle and upper classes that demand higher quality products Low levels of crime and violence A rich cultural heritage favorable to tourism and complementary businesses Availability of good social infrastructure (medical centers, high schools, universities, recreational facilities, etc.Source: Created by the authors.

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