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Colón Port: Panama’s Free-Trade Experiment

By: Elisa Vásquez - @elisavasquez88 - Oct 27, 2014, 10:32 am
Surse Pierpoint aims to expand the free trade zone to the rest of Colón and breath new life into this historic port city and its inhabitants.
Surse Pierpoint aims to expand the free trade zone to the rest of Colón and breath new life into this historic port city and its inhabitants. (Viajando en Auto)

EspañolSurse Pierpoint, the new manager of the Colón Free Zone, dreams of a Panama without restrictions: open borders, entrepreneurship, economic freedoms, and above all, small government — a commitment the current president has yet to make.

Pierpoint, who also presides over the Panama Freedom Foundation, explained his revolutionary Colón Free Port project during the Latin-American Students for Liberty Conference at Guatemala’s Francisco Marroquin University (UFM) on October 11.

Pierpoint participó en el panel de Ciudades Emprendoras en la Universidad Francisco Marroquin en Guatemala (Cortesía)
Pierpoint participated in the Startup Cities panel at Francisco Marroquin University in Guatemala. (SFL)

In June, Panamanian President Juan Carlos Varela appointed Pierpoint to head the Colón Free Port project. The initiative aims to expand the free trade zone to the rest of Colón and breath new life into this historic port city and its inhabitants.

With a more academic than political disposition, Pierpoint offered the PanAm Post his perspectives on individual and economic freedoms in Panama.

The idea of a free, emerging city in Colón seems contradictory to Panama’s trend towards big government, which is evident in the Fraser Institute’s latest Economic Freedom Index. Panama is ranked 66 out of 152 countries in this index, but a closer look at the study reveals discouraging details.

What I always say is: research and development. This project is more manageable due to its small size, and not as impractical as trying to change an entire country. Still, its success will encourage more of the same because people will say “I want that.” It’s clear that not everything is perfect, but if this project achieves success it will help to change the mindset of those in favor of big government.

There are several objectives here. I try to focus on the Colón Free Port because I believe that, if well done, it can become an example of success. Will it change the country? I don’t know. However, I do expect it to change the city where my grandparents were born, and with these ideas of freedom it can certainly become something interesting.

How do you view the prospect of economic freedom under this Panamanian government? Price controls are an issue that frightened many people who fear another repeat of Venezuela and Cuba on the continent.

As I said during my presentation [at the conference], big government is something we have already witnessed and something that history has proven doesn’t work. We hope the [price controls] experiment is a short one, and they soon say “it didn’t work” and get rid of them. The experiment will prove that they aren’t as successful as imagined.

It’s a little frustrating, because at times one says, “Why do they do it if they know its not going to work?” I never cease being surprised by Friedrich Hayek’s essay The Use of Knowledge in Society, because it isn’t possible for any one person to anticipate everything. The economy is very complicated, and no matter how good your intentions may be, they are destined for disaster if not based in the application of sound economic principles.

Another controversial topic in Panama is the issue of migration and competition in the labor market. If Panama wants to sustain its growth, it must employ the best possible workers, regardless of nationality. Recent anti-immigration comments from public officials are certainly a concern. What is your perspective on the labor market and migratory freedoms?

We have a 4.5 percent unemployment rate. We need people. As far as the specific Crisol de Razas (Melting Pot) policy, I don’t believe critics recognize that we all came from different places, including the natives who originally crossed from Siberia to Alaska. Given this history, we must recognize the freedom to emigrate, and welcome with open arms those with the courage to try their luck in a new place.

The same discussion is valid in the United States. The words at the feet of the Statue of Liberty have lost their meaning. The same political party that wrote them now wants to close the border.

But the ability to migrate makes us strong, because, as you said, bring on the best and most qualified! Come regardless of sex, creed, race, or origin, because we need the best!

I consider this issue worrisome, but we’ll see what happens when it’s all said and done. Without immigration, we would have serious problems providing labor for local positions. A 4.5 percent unemployment rate is practically nothing. In the private sector, finding qualified workers is difficult because there aren’t enough qualified prospects.

Our situation is simply a product of supply and demand: small supply and high demand raises wages, making it very difficult to hire qualified workers. Then, out of desperation, a poorly qualified person ends up getting hired. We need more supply.

What is your position on the career restrictions established by the government to protect Panamanian professionals against immigrants?

I’m not in favor of any type of immigration restriction, because we ultimately want to attract the best workers, whether they be Panamanians or foreigners.

From a continental perspective, where has the current liberty movement stalled?

I’m sometimes pessimistic, because I see Cuba, Venezuela, Bolivia, and Argentina and I say, “It seems that the momentum is not in our favor.” However, then I see the rapid growth of [Students for Liberty] and I feel more optimistic. We know that a lot of people desire freedom, but the question now is how to apply these ideas in government.

That’s why I think that working on a small-government level is most effective. It isn’t so radical to think that you can have success and gain recognition with a legislator or mayor with good ideas. We cannot stay in the ivory tower forever. We must get out there and immerse ourselves in the vile political world, even if it’s hard to stomach. If the good get out, then only the bad stay in, and we’ve already seen the results of that.

Translated by Peter Sacco.

Elisa Vásquez Elisa Vásquez

Elisa Vásquez is a Venezuelan journalist with experience covering social and community topics. Her specialty is human rights education and international solidarity. She reports from Panama City. Follow her on Twitter @elisavasquez88.