Traditionally, Panama has been known as a safe and drama-free jurisdiction, which is why expats and retirees have been flocking there in the tens of thousands to enjoy a low-tax and peaceful environment.

Panama has one of the best Plan B residency programs with flexible physical presence requirements. I obtained residency in Panama.

But what is happening with these massive protests that have been engulfing the country for the past two weeks? Roads are blocked, the supply chain is breaking down, there is barely any fuel left.

I called Calvin, whom I went to visit last year in Boquete. I know him from Twitter as he runs a very interesting research service for commodities and shipping investing (use code WANDER for 20% off).

He has been living in Panama for many years, does business there and knows the country very well.

We discussed the reasons for these protests, the potential impact on Panama’s fiscal balance, implications for expats, and what it could mean for the local real estate market.

No place is perfect

I talk a lot about Panama because I think it’s a very decent residency option and banking destination, but I always made it clear that no destination is the silver bullet. There isn’t a single perfect destination that will solve all your problems or be 100% aligned with what you are looking for. If you think you have found such a place, you will be proven wrong eventually.

Am I happy to have residency in Panama? Yes

Am I happy to have other residencies, companies, and bank accounts? Right now especially so.

Will I go back to Panama soon? Of course.

To a World of Opportunities,

The Wandering Investor.

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If you want to discuss your internationalization and diversification plans, book a consulting session or send me an email.

Transcript of “What to make of the copper mine protests in Panama? An expat’s perspective”

LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from So a lot of things are happening in Panama right now. It’s making negative headlines. And I wanted to have a discussion with Calvin, who’s on the ground and who has a lot of insight. So Calvin, you’re based in Boquete, in northern Panama. You even went down to Panama City at some point to have a look at the protests. 

What is happening in Panama?

LADISLAS MAURICE: So essentially, what’s happening in Panama and what are the implications?

CALVIN: Well, I just had gotten back from a few months abroad, and I landed in Panama City. And basically, the next morning, I’m noticing some protest signs and stuff. And I’m thinking, okay, what’s going on? My wife’s like, “Oh, yeah, Friday night, the President signed this new mining contract into law, and people are mad about it.” So there was a protest on Sunday, two weeks ago. And I went to this protest. And the first one was small, I mean maybe 500 to 1,000 people, not 50,000. And I interviewed one of the guys who voted no on the contract, I talked to some people there, read the signs. And I’m thinking, okay, well, this could be a big deal.

And then when I saw that SUNTRACS, which is the largest union in Panama, 40,000 members, and they have like a fund for strike action, when I saw that they were going to be joining, I knew it was going to be a big deal. So Monday morning, I wake up 5:00 am or 6:00 am, there’s loudspeakers pounding in the street, and there’s a bunch of guys walking around the red SUNTRACS flags, and they’re starting to block streets, and I’m like, “Oh, shit, I’ve got to get to the airport.” Luckily, I got to the airport that day. I flew into David that night, but the next morning had I been a day later, they’d already blocked off the airport. And it’s been blocked off sort of intermittently. And since then–

LADISLAS MAURICE: Just for local flights or international flights as well?

CALVIN: For local flights. I think there definitely have been disruptions as well at Tocumen and some intermittent blockages of entering the terminal. They never disrupted the tarmac, but they prevented people from getting there, for example. So if your stewardesses can’t get there, your pilots can’t get there, obviously, there’s going to be delays. So I talked to a few people that said that they’d had three-hour delays, five-hour delays. So some effects even at the international airport, effects at the local airports.

Now, the roads within this country are essentially, at a district level, they’re pretty clear, except for around some of the big agricultural production areas. But between David and Santiago, which is kind of the most rural part of the Pan American highway, in a lot of places, it’s the only road. And it’s the only road that has a bridge crossing the river. So there’s 20 or 30 river crossings between David and Santiago, and pretty much all of them have people camped out walking, blocking it. So there’s truck drivers that have been stuck there in a semi-truck with all their produce going bad for two weeks. Like, literally stuck in the same place for two weeks.

No food has gone through, no fuel has gone through, no medicine. People have died because they couldn’t get medical services. Even if the protesters would have allowed them through the roadblock, maybe the line is miles long before you even get to the protest, right. So, that’s what’s been going on. The government has been flying some food to Panama City, flying medicine to here. Some people are bringing in some black market fuel from Costa Rica. Right now it’s going for like $13 a gallon for gasoline.

LADISLAS MAURICE: That’d make Biden proud.

CALVIN: [laughs]

What is in the First Quantum Minerals contract that everyone is protesting?

LADISLAS MAURICE: So essentially, all of this is due to a mining contract. Can you give us a few figures in terms of the mine, what are people actually protesting? Because the country has been at a standstill for two weeks. It’s radical.

CALVIN: Yeah, I did kind of a deep dive post on this on my blog that really digs into the history. But essentially, the story is that, about 30 years ago, there was an American-Panamanian engineer, grew up in the Ancón area, which is Canal Zone. And one day became governor of Colón Province. He was kind of a powerful guy. And he had studied geology. And he figured out that there was this huge copper and gold potential in the jungle between Cocle and Colón provinces.

So basically, 20 years ago, they start building out gold and copper mines out in the jungle, and it’s kind of gotten bigger and bigger over the years, it’s gone through different hands, different companies. The Vice President’s mother was involved with it 30 years ago. Now the Vice President is one of the attorneys for the company. So there’s been a lot, heavy political involvement from the beginning. And the mine has gotten bigger and bigger. It’s now 1½% of the world copper supply. Also, I think, I can’t remember exact figures, but I think like 100,000 ounces of gold or something a quarter. So it’s a pretty significant mine, big reserves of copper, gold, silver, and some other minerals.

So, historically, people have basically been exporting the minerals out of that mine almost for free. So you know about Panama’s territorial tax system, and they were just paying the 2% impuesto complementario on the foreign revenue from exporting the minerals, and they weren’t really paying anything else into the economy. So there’s been more and more scrutiny over it. And then they finally negotiated what I think was a pretty decent contract for Panama. The royalties were much higher, they had a $375 million minimum, they had commitments on environmental remediation, they had commitments on a lot of the infrastructure in the surrounding area. So I thought it was a pretty good contract. It was a huge step above what they had before.

But people went absolutely apeshit when this contract was signed, and started accusing the President of taking a billion-dollar bribe, which is crazy. There’s no way that they gave the President a billion dollars. There’s no way that happened. It’s too much money. They’re saying a bunch of the deputies took bribes, which I’m not saying that there was no bribery. I mean, it’s Latin America, there’s always bribery at some level. But it seemed like, actually, things were kind of getting cleaned up from a fiscal standpoint, and from contributions to the state and that sort of thing. So, I think, for this to blow up on a contract that the details have been public for nine months or something, they’ve been negotiating this since 2021. So for it to blow up now, all of a sudden, was just weird.

Russia, today, had a camera crew on the ground, the next day after the protests started. SUNTRACS is not backing down. I’ve heard all kinds of conspiracy theories on who’s behind it. But some of the propaganda that people have latched onto is really good, really professional, it doesn’t look organic. There’s definitely a lot of organic interest in the protests as well, though, especially among the Indians, for example. Panama has an indigenous population of like 450,000. And they are militantly against this mine, the only group that has really always been militantly against mining in Panama.

So my estimate, it might be wrong, but just my estimate is there’s probably about 5,000 people that are directly environmentally impacted by this mine. And the indigenous population is 450,000. And there’s easily tens of thousands of them in the streets, or supporting the people in the streets. They got the road between David and Santiago, which David area produces 70% of the country food, and they’ve got 30 places where the road’s blocked.


CALVIN: So it’s 150 miles or something, so do the math on that. There’s road blockages all over the place.

What will the Panamanian government do?

LADISLAS MAURICE: So what is the government going to do?

CALVIN: You tell me. So, what’s happened so far is the Legislature, which overwhelmingly supported this mining contract two weeks ago, I want to say it was like 44 to 5 with some abstentions or something that the Legislature passed this mining contract. And then the next week, there were, I think, 50,000 or 60,000 people in the streets in one day. And they were outside the President’s house, they were attacking the people who voted for it on social media, there were death threats, they were outside people’s houses. And so the Legislature basically does a 180˚ and immediately starts moving to do like a moratorium on all mining in Panama.

At the time, they were actually going to do the moratorium on everything, including this mine, but they pulled this operating mine out of it, and decided they were only going to ban any new concessions, any concessions that were in process, any renewals of existing concessions, any extensions of existing concessions. And then there’s a separate thread in the Supreme Court to declare this mining contract, Law 406, unconstitutional. And there are a number of constitutional challenges, there’s a lot of lawyers in Panama that are kind of behind this effort, a lot of them are working for free on challenging this, or at least they say they are, in challenging the contract constitutionally.

So what it looks like is going to happen is, I mean, what’s already happened is the Legislature said no new mines, the mines that are in process, no, and no extensions, no renewals, no etc. So it looks like the Supreme Court is going to declare this contract unconstitutional. And I don’t know what comes after that. Maybe it’s a cessation of the mining activity. I don’t think there will be like a nationalization, but it’s not unthinkable that that could happen. It would certainly get more popular support if it was a national asset rather than a foreign-owned asset for which Panama was getting royalties. It could be just shut down for a while till people calm down, and then they start it back up again. But I think it’s somewhat probable that, at least for some period, the mine shuts down altogether.

What are the implications of this crisis for Panama from a fiscal point of view?

LADISLAS MAURICE: What would be the implications for Panama from a fiscal point of view?

CALVIN: Well, Panama has got 40-some billion dollars’ worth of debt. GDP is about $65 billion. The mine will do a gross revenue of probably $3 billion to $4 billion. So that’s on par with the gross revenue that the canal does. Twenty thousand jobs, I think, at the mine, 40,000 jobs indirectly. And these jobs are above the prevailing wage. A lot of the engineers and the managers are getting anywhere from $30,000, $40,000, $50,000, over $100,000, which, in Panama, is an extremely high salary. So it’s not just the $375 million, which is more than 10% of the gross revenue from the mine that they’re going to lose, it’s also all of those indirect tax contributions and economic contributions from the 40,000 people that are directly or indirectly employed by the mine.

So, if Panama loses this mine, there was already a credit rating downgrade just on the possibility that it could happen, if Panama loses this mine, I think you’re looking at international arbitration, I think it’s $10 billion to $15 billion in damages awarded to the Canadian company. So if you think about, compared to GDP, compared to debt, it’s 20% of the debt, it’s a big chunk of GDP as well, 15%, 20%. And it’s three or four times the annual budget. So, it would be a huge amount of money for Panama to lose in an arbitration. So that process could take quite a while, right? I mean the Argentina case, for example, when they expropriated Repsol, that took 10 years, I think, but eventually state assets were frozen and they were ordered to pay up.

So right now, I think that people perceive that there’s very heavy popular opposition to the mine. And so politicians want to get reelected. So even if they all thought that it was a good deal economically before, they perceive that this is really unpopular. And they’re not thinking about what happens to the budget in five years, they’re not thinking about what happens to the debt in five years, they’re not thinking about the budget next year, they’re just thinking about getting their own butts reelected. So I think that’s kind of the issue, is you just have that, at the popular level, general population, people just believe a lot of stuff that’s, frankly, nonsense. I mean, I heard claims, not just in English, but also in Spanish among educated people that Panama had sold the whole country for $300 million and that 70% of the country was going to get covered in mines. I mean, I heard the President taking a billion-dollar bribe, like, just stuff for which there was no evidence.

This mining contract, which was signed into law, had nothing to do with any of the other mining concessions or exploration areas, and people just didn’t really understand this. I think most people didn’t even know the mine existed two weeks ago. I mean, if they did, wouldn’t they have been protesting it four years ago when it finished the completion of their expansion, or 2013, 2014 when it got sold to the big Canadian company with planned expansion? Why wouldn’t they have been angry about it before, and now that Panama is actually getting a good deal from it, and is actually getting some contributions to the national economy, now everybody loses their mind? It just doesn’t make sense.

I understand the anger, okay? I mean all open-pit mining, it’s a big-ass hole in the ground with a lot of environmental hazards. I mean, they use all kinds of chemicals, arsenic, etc., to separate the ore that they mine and clean stuff up, they put that in tailings ponds, there’s drone footage of dead trees. Yeah, it’s terrible environmentally. And it’s right in the middle of a huge bio corridor on a narrow isthmus and between the three most ecologically diverse countries on the planet. I understand why people don’t want this environmentally, but to come to this impasse now, after essentially 30 years, is just kind of insane.


CALVIN: So that’s sort of my thoughts.

Potential implications for expats in Panama

LADISLAS MAURICE: So what are some of the potential implications for expats in Panama, or people who are considering moving to Panama? Because one of the key advantages of Panama is that it’s relatively business-friendly, it has a good and friendly tax system, decent banking stability. Does that put everything in doubt?

CALVIN: Well, I mean, it’s important to remember that we don’t know what’s going to happen yet, we only see what is happening. And I would think that the government has a very strong interest in keeping this mine going, and I’m sure that there are people within the government, behind the scenes, that know this and are trying to make sure that nothing happens to it, especially considering the outlook for the canal. Because of drought, you’re looking at 50% reduction in Canal transit capacity. So think about what has to happen to the canal tariffs in order for revenue to stay stable.

And they say the canal’s independent, kind of like people say the Fed is independent, so there could be a delay between any changes in canal revenues and action to remediate their contributions to the state. About 80% of what goes through the canal financially ends up in state coffers. But when you’re talking about a 50% reduction in capacity, it’s kind of a big deal. So the mine is 10% of the budget, the canal is another 50% or 60% of the budget. So, let’s say, that you get, in the end, a 30% hit to the national budget, let’s just say that that’s what you get next year, 30% hit to the budget, I mean, think about what’s going to need to happen to some of the social programs.

I mean, the mine was supposed to fund the disability program for Social Security. I mean, if you think people are pissed now, wait until grandma in a wheelchair loses her check. Right?


CALVIN: I mean, then people are really going to have something to be pissed off about. I mean, the mine, except for the maybe 5,000 people that live in that area, again, my estimate, and the tens of thousands of people that directly or indirectly work for the mine, drive there every day, the mine doesn’t have an impact, I think, on most Panamanians, on 99% of the population. But a 30% budget reduction, and the closures that are happening now, that impacts everybody. So I mean, there have already been tremendous economic losses. I mean, I estimate, just in Boquete, just in the tourism sector, you’re probably looking at $5 million or $10 million a day in losses right now. And this is a town with 30,000 people in it.

The dairy farmers are losing millions every week, the pepper farmers, the potatoes, onions, I mean, carrots, everybody that can export their crops. And the farmers are, there was one ag union said that they were losing $50 million a week.


CALVIN: So there’s already been an enormous impact on, especially the economy in Chiriquí, which is about 10% of the country’s population. I think that there have been impacts all over the country. So our economy here, our local economy is practically frozen. I mean Saturday night on a national holiday, supposed to be the most important holiday of the year, I bet, at midnight on Saturday night, there were 20 people in town. Normally, you would have thousands.

So thinking about how is this actually going to have an effect on expats residents’ tax system, I don’t care what country it is, if you have a 10%, 20%, 30% hit to the budget, that’s going to have huge impacts on programs getting funded, and people are going to be screaming about, why did we lose funding for this? Why we lose funding for that? Why aren’t teachers getting a raise? Why aren’t firemen, policemen, whatever getting a raise to keep up with inflation? Why are we losing this subsidized housing program? So there’s going to be a lot of pressure to look for that money in other ways.

And to me, I mean, I think taxes are likely to go up in the US because of the fiscal pressures. Panama had historically been pretty fiscally conservative and in pretty good shape, but this really impairs the outlook. And I think the government’s going to need to look for money in other places.

LADISLAS MAURICE: Yeah, it’s something that a lot of expats fail to understand when they move to Latin America, they think everything is nice and rosy. The reality is, most of these countries, if not all of these countries, at some point, go through issues like this. There isn’t a story of just things going well in a country in Latin America and growth without any issues. There’s always–

CALVIN: Yeah. I mean, there’s plenty of countries in Latin America that have had decades of uninterrupted stability, but yeah, this stuff happens seems like increasingly frequently.

LADISLAS MAURICE: Yeah. Yeah, yeah, it’s just part of the cycle.


Implications for the real estate market in Panama

LADISLAS MAURICE: But this one is quite bad. What are the implications for the real estate market?

CALVIN: Well, if you look at Panama City, I think that, on a good day, the occupancy can’t be higher than 50%.


CALVIN: And it’s just they’ve got a city for 2 million people that’s sized for 4 million people. I think that’s kind of the bottom line in Panama City. So the other hand is I was talking to an institutional money guy who is living in Panama, and he’s plugged in with a lot of the wealthy families here. And he said the thing here is that there’s really just a lack of financial sophistication. And a lot of the rich families will have a lot of money in apartments that are yielding 4%, and they don’t know that they can get better than that. I mean, you really can’t, in Panama, within Panama, with one of Panama’s banks, you can’t get access to a trading platform within the country.

Now, you can get an account at Interactive Brokers in the US as a Panamanian company, for example, but within the country, there are no real options for like equity trading. A few of the more boutique kind of catering to the rich, private banks, so these are places where you can’t open a retail account, they’re going to ask $250,000 or so as a minimum to open an account, and they’re going to put you in bonds mostly for the biggest Panamanian companies, the airport, big banks, Melo, the big agricultural company, Liberty Telecom, Costa Rica, it’s going to be big LATAM companies, but only bonds. You’re not going to have a trading platform. You have to call the trading desk manually to tell them how you want to allocate, and then they’re going to send you like a statement quarterly or something.

So there’s not a huge level of financial sophistication in Panama, and that probably supports the market significantly for real estate in Panama City because real estate’s just like it’s kind of the asset class that everybody knows, right. I would say that, in general, though, foreign money has probably provided a lot of the liquidity for a lot of Panamanian transactions. And I think it’s going to be more difficult to get access to that foreign money because people aren’t going to want to take the risk after seeing what’s happening here. And even if the mine keeps operating and kind of things go back to the way they were before, it’s, I think, still going to be kind of like, “Oh, remember that time Panama almost had a Marxist takeover?”

So I think that it’s bad for the real estate market in Panama. I don’t know that there’s the financial sophistication, though, for people to really know it’s bad.

Are expats leaving Panama?

LADISLAS MAURICE: What about markets like where you live, in Boquete, where it’s predominantly expats? Do you think you’re going to see expats just pack up and leave because they just can’t deal with it?

CALVIN: You already have seen some. You already have seen some expats that are like, “This is it. I’m out.” We had a big kerfuffle like this last year, last July. And a lot of people were pretty weirded out by that. That was over, basically, fuel prices and cost of living. And the government responded by subsidizing about 30% of the fuel cost for the entire country, which is insane. But that’s then part of why the debt is so much higher now, but that’s what they did. So anyway, we’re just seeing more of that. So yeah, I, personally, know expats, business owners, some wealthy people that have decided to pack up and leave.

I think, generally, in Chiriquí, again, most people just don’t know enough to know it’s bad. So I think it’s going to be gradual. You’ll always tend to see here it’s harder to get a loan here for real estate, for example, than it is in Panama City. Most purchases here are done in cash, especially among expats. I mean, to get a loan as an expat, you basically have to have a company here, you have to have years of tax returns, you have to have years of profitability, and preferably, you have some Panamanian shareholders in your company. It’s very difficult to get loans. So most stuff is all cash. People tend to be pretty patient. I mean, you’ve been here, it’s nice.


CALVIN: Like, people aren’t in a hurry to leave.


CALVIN: So I think that you are going to see impacts. I think liquidity is going to be even worse, I think things are going to sit on the market for longer. I don’t think that there’s just going to be like an across-the-board 30%, 50% price cut or anything like that, even if there should be. But I do think that you are going to see more stress, and you are going to see more people leaving, especially if this goes on for another few weeks or another month or two months.

The referendum for the Panamanian people voting on whether or not they want this mine is supposed to be December 17th. It’s November 6th. So that’s 40 days between now and when they’re supposed to vote on this contract. We don’t have any fuel for another 40 days, it’s going to get crazy here. I mean people aren’t going to have jobs, working class people are going to be in tough shape. They’re not going to be able to work, they’re not going to have money, they’re going to be stealing. It’s going to be tough. So, I hope that the roads open soon because if we go 40 days without fuel from here, it’s going to be bad.


CALVIN: I think so far, we’re basically at two weeks now, and it’s annoying, people are pissed, the farmers are pissed that they had to dump a bunch of crops, people that own restaurants and hotels and stuff are pissed that they lost one of the best weeks of the year. But it’s still at the point where it’s just kind of annoying, it’s not fatal. I think 40 days would be fatal for a lot of businesses. I think that you would have farmers go bust, you would have restaurants go bust. I mean, even during the pandemic, people were still doing like home delivery, farmers were still exporting their products, there was still fuel. I mean, we had shutdowns across the economy, but I think the economy, during COVID lockdowns, was more functional than it is right now.

LADISLAS MAURICE: Interesting. Look, Calvin, thank you very much. I contacted you because I subscribe to one of your newsletters, and you talked about the situation. And I thought it would make very interesting content for my channel. Can you talk about your two newsletters?

CALVIN: Yeah. Well, I have a blog that I write, usually, weekly on economic analysis, companies, countries, etc. So that’s Calvin’s Thoughts, it’s in my Twitter profile. The other business, it’s really a research business. We have a data platform, we have a Discord where people trade, we have five fulltime people doing research on shipping commodities. Right now we’re doing a deep dive on the chemicals market. We, recently, did offshore. We cover lots of segments, lots of commodity stocks. So that’s I believe you have a coupon code for a discount on that subscription.

LADISLAS MAURICE: Yeah. All the links are below to his Substack, to Calvin’s Twitter, and also to the Marhelm research service (use coupon WANDER FOR 20% OFF).

CALVIN: Yeah. Well, I appreciate your time.


CALVIN: Thanks for the update on what’s going on here.

LADISLAS MAURICE: Thank you very much, Calvin. Take care.

CALVIN: Yeah. See you.