Bursts of Economic Growth in Panama Have Yet to Banish Old Ghosts

Gleaming new skyscrapers line the waterfront like a mini-Dubai, as boosters say, including a new 70-story Trump tower that is the tallest building in Latin America.       

A new free-trade agreement with the United States promises a surge of jobs. The Panama Canal is in the midst of a $5.25 billion expansion. And another big dig began earlier this year, to build Central America’s first subway system.

Panama, said Sergio Yurman, one in a flock of Venezuelans who have fled their troubled country to start anew here, is the place to be.       
“This is a third-world country on track to the first world,” said Mr. Yurman, a lawyer who arrived five years ago and established a company providing office space to start-ups. “The vision here is the right one.”       

As the thin bridge between North and South America, Panama has long been a geographic and financial crossroads, propped up with a tight bond to the United States. The removal of Manuel Antonio Noriega and his military rule by United States forces nearly 22 years ago ushered in an era of political stability and financial investment that has now made this country of 3.5 million one of the fastest-growing economies in the Western Hemisphere.

Several of the towers so impressive in the day stand out for another reason at night: Many of them are dark or nearly so, suggesting few or absentee tenants. Questions are raised here and abroad about the money behind them, and whether a bubble is swelling, particularly in the office market.       

Local and international corruption watchdogs rank the country low in transparency, and American law enforcement officials, while giving the country credit for improving its police forces and cooperation with international agencies, still consider it a major money-laundering haven.       

Streets flood from being overwhelmed by development. And while a new expressway promises to unclog ever-crowded streets, it has also become the center of protest over the toll of development, with plans for an extension that cuts close to the cherished Casco Viejo historic district and could lead to its removal from the list of Unesco World Heritage sites .       

The extension is expected to help develop yet another high-rise project and has the backing of the president, Ricardo Martinelli , a pro-growth supermarket magnate elected more than two years ago whose hard-charging, get-it-done style as he builds what he calls the “Dubai of Latin America” wins applause from supporters and derision from opponents.       

“If you had asked me a few years ago, I would have said that Panama has improved in every way since Noriega left,” said Patrizia Pinzón, a real estate agent leading the protest against the highway. “Now I am concerned that we are quickly heading back to being a kleptocracy.”       
Others note that public education is lagging and poverty remains deep, particularly in rural areas yet to feel the boom.       

“Growth has meant certain prosperity, but Panama has a dual economy whereby the urban areas benefit from the construction boom, government projects and foreign investment, but the rural, and particularly the indigenous areas, lag behind,” said Orlando J. Pérez, a Latin American politics scholar at Central Michigan University and author of “Political Culture in Panama: Democracy After Invasion,” published this year.