ForestFinance Service Center
Eifelstr. 14+20D-53119 Bonn
Panama is situated on the narrowest part of the Central American land bridge. In the west, the country shares a border with Costa Rica and in the east with Colombia. The Panama Canal, a waterway that is approximately 82 kilometres long and highly important for shipping, crosses the country and connects the Atlantic and Pacific Ocean. This way, large cargo ships can avoid sailing around the Cape Horn, the southernmost tip of South America. The Panama Canal, which was opened in 1914, is one of the most important waterways worldwide.
Actually, Panama is a historical and political sensation. For 100 years there has been no revolution, no dispossession of property and no political turmoil that has done any long-term damage to commerce. In contrast, which European country can look back on such a long-lasting functional political system? Panama does not have its own military, uses the US dollar as its currency, and has a legal system very similar to the United States.
The climate and soil conditions are perfectly suited to the cultivation of finest cocoa (in the northwest of the country) and afforestation with fine timber. The average temperature in the coastal area lies between 21 and 32 degrees Celsius. An amarillo tree for example can reach up to 40 metres after a growing period of 20 years. Such a rapid growth of trees would be impossible to achieve in European forests. ForestFinance forests and cocoa farming areas are all located outside the cyclone belt and are not endangered by tsunamis.
The location in Central America is very well suited to ecological afforestation and forest investments which sustainably generate positive returns. Panama takes a stance against the destruction of the rainforest and has therefore restricted trade with around 100 types of wood. The Panamanian government made sure that these types of wood were added to the list of the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Since 1989, a German-Panamanian Investment Agreement which offers the most extensive international investment security possible is in place. Largely because of this, almost all major German companies in almost all sectors are represented in Panama. Due to its good investment protection strategies, Panama has shown the most economic growth within Central and South America for years. According to the Federal Foreign Office (as of September 2016), economic growth in Panama is currently at 6 per cent, making it the highest in Latin America.
This is one of the reasons for the high regional timber prices. The Panamanian government pays special attention to investments in forestry, actively promoting it, and for many years the country has shown unusually progressive nature conservation policies.