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FEATURE STORY

A Plan for Strategic Use of Lands around Panama’s Canal

October 24, 2012

Sherman Sur is one of the areas with potential for the construction of shipyards and marine terminals.

STORY HIGHLIGHTS
  • A study identifies key economic activities which merit consideration for optimal development of the “reverted areas”
  • Panama aims to become a world-class logistics center
  • Economic activities for greater development impact include maritime terminals, maritime industries services and housing development

The expansion of the Panama Canal is one of the most important engineering works of the 21st century, one that will fundamentally change maritime activity and logistics around the world. It will also continue to boost economic growth in Panama in the following decades. Within this context, the sustainable use of the lands around the Canal is a strategic priority for the country. But: where to begin to outline this strategy and make the best use of these lands?

With all efforts set for Panama to become the Hub of the Americas and a world-class logistics center by 2020, the Government  asked for support in evaluating development options for the “reverted areas” –lands that returned to the country’s administration following the Torrijos-Carter agreement in 1977- to maximize their long-term social and economic potential, without overlooking environment impact.

The study, undertaken by the World Bank with support from the Spanish Fund for Latin America and the Caribbean since 2011, has yielded a development strategy for optimal uses of these areas, covering almost 580 square miles between the Atlantic and Pacific oceans, to attract more investments and generate more jobs.

“We hope the Strategy for the Enhancement of the Reverted Areas will contribute to the discussion for strategic use of land, in order to generate long-term benefits and expand opportunities for all Panamanians”, said Ludmilla Butenko, World Bank representative in Panama, during the public presentation of the strategy.

The National Development Plan estimates that the Canal expansion and taking advantage of the country’s strengths in key sectors (logistics, tourism, agriculture and financial services) can generate up to 500,000 new jobs by 2020 and sustain economic growth between 6 percent and 9 percent per year –for 2012, GDP growth is forecasted to be between 6 percent and 8 percent, one of the few economies in the region with high growth.

Open Quotes

We hope the Strategy for the Enhancement of the Reverted Areas will contribute to the discussion for strategic use of land, in order to generate long-term benefits and expand opportunities for all Panamanians Close Quotes

Ludmilla Butenko
World Bank representative in Panama

“In 2009 the Government of Panama established a development strategic plan for the medium and long term, and the Reverted Areas are a key part of this development, since the Panama Canal expansion will bring a radical change to logistics around the globe”, said Juan Carlos Orillac, Secretary General of the Reverted Assets Administrative Unit of the Ministry of Economy and Finance.

Suggested uses

To design the strategy, 65 experts on logistics and human development were surveyed, focusing on 22 economic activities that can yield high impacts for the Panamanian economy. This set of activities was reduced to six priority activities: warehousing and added-value logistics, distribution centers for ship parts, terminals for maritime industries and passenger cruises, shipyards and residential development.

Other studies were also carried out to determine the demand for these priority activities and the suitability of each of the six selected reverted areas was assessed. These sites (Davis/Brazos, Telfers, Largo Remo Island, Sherman Sur, Horoko and Veracruz) were used mainly for military activities during the US administration, and some explosives and polluting materials can still be found. According to the study, further detailed assessments are needed for environment remediation and to warranty safety during potential construction, especially for urban development.

These are the study’s suggestions on how to proceed with each site disposition and development:

- Horoko ranks strong for residential development and moderate for warehousing and added-value logistics and distribution hub for ship parts.

- Veracruz ranks strong for terminal for auxiliary maritime industries, passenger terminal and housing and moderate for ship parts distribution hub.

- Davis/Brazos ranks strong for warehousing and added-value logistics, distribution hub for ship parts and housing.

- Telfers ranks strong for warehousing and added-value logistics and moderate for a distribution hub for ship parts and auxiliary maritime services.

- Sherman Sur ranks strong for shipyard construction and repair and a passenger terminal and moderate for terminal for auxiliary maritime industries.

- Largo Remo Island ranks moderate for shipyard construction and repair, terminal for auxiliary maritime industries.