Reflection

Seeing English signs and ordering food in English at the Huston airport, I paused to realize that I was actually back in the United States. I am feeling bittersweet that I cannot feel the beautiful and tropical atmosphere anymore in Panama but I am safely back in my second home, Fayetteville. These three weeks flown by so fast with a lot of learning, sharing, and memorable moments. This first-hand experience could not have been replaced by taking classes and memorizing textbooks.

First of all, my first impression in Panama was very “Americanized” although it has its own unique features. The culture shock I encountered during this trip was not as huge as the ones that I faced when coming to the United States for the first time. Ethnic diversity, popularity of catholic, the way of communication were only a few examples of what I found similar to the United States. However, service-oriented economy of Panama is definitely distinct compared to other countries. Taking advantage of its strategic location and connectivity, Panama has developed with its limited production ability. Knowing these facts allowed me to understand that different countries tend to focus on their strengths which can be the “competitive advantages” of the country. It might be a commonsense that students learn in class, but actually seeing a significant example of Panama could not have been more effective to get the idea.

Also, visiting the concentrated regional headquarters’ area, I realized that accessibility to other parts of the world for both people and products is making this world smaller and more interdependent. In this globalized era, it is hard to find a product that does not have any relationships with other countries. No matter what the form is, such as procurement, marketing, and outsourcing, large majority of businesses are seeking out to the opportunities of international operation. Understanding of local culture, economy, administration plays an essential role when conducting a business across boarders. The group project that we had during this stay, in which we suggested a solution for a US-based bike company to expand their market in Panama, let me engage in the research process. I was glad to have had a chance where we could apply the fresh knowledge into the real business situations.

On top of everything that I experienced, I loved spending time with all the awesome crews in our group. I felt that everyone was open-minded to the different cultures and perspectives. They were all patient with my limited English ability and were always wiling to help me out. I would love to extend my gratitude to the professor, colleagues, and the university that gave me this great experience in Panama.

Thank you for those who read my journals, and I hope you enjoyed!

Yuki

Transporation Logistics in Panama

On Monday morning, we kicked-off this week by visiting the Panama Canal Railway Company, which is owned by Kansas City Southern and Mi-Jack Products. The Panama Canal Railway runs parallel to the Canal, yet offering different advantages from the Canal. Railway enables transportation companies to effectively transship cargoes without having to pay for the round trip through the Panama Canal. If containers come into the Panama Canal from Asian countries, unload the products, and go back thorough the Canal, it still costs the same amount for the empty containers. Using railway can eliminate this waste.

While visiting their terminal, I’ve learned that there are more cargoes coming from Asian countries starting around July till November. As getting ready for Christmas, companies import products from Asia.When I first came to the States, the scale of Christmas was one of the biggest culture shocks to me. Coming from Japan, where only 3% of population is Christian, seeing people getting excited for Christmas in Fall was surprising experience. I re-realized that transportation and logistics are influenced by many factors such as religion, culture, economy, politics, and so on.

We took a train to Colon on Tuesday, and visited Logistics Services Panama and Manzanillo International Terminal (MIT). At the logistics Services Panama, they offer variety of value-added services, including reticketing, relabeling, and repacking. One of the facts that blew my mind is that some countries require permanent relabeling for certain products, which means that they need to sew the label to the fabric instead of putting another label. This taught me that having customers across boundaries requires us to be cautious and flexible.

At MIT, we got to see one of the most recent technologies of crane. Automatic Stacking Cranes (ASCs) do not have a cabinet for a operator. For a traditional crane, a operator needed to work in a painful position, and the operator was allowed to work in the cabinet only for 4 hours a day. For ASCs, people control the movements from a building are called controllers, and they are able to work more than 4 hours. Rita, who works for MIT, said that company’s biggest investment is people, so they need to treat their employees well. It was very interesting to me that many of companies that we have visited were employees focused, and also have low rate of turnover. High profit does not necessarily make a company successful, but empathy to its employees as well as the community makes it successful.

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Yuki

Panama Canal: Miraflores Locks

On Friday, we finally got to see a part of the Panama Canal, Miraflores Locks. It was a breathtaking moment to see its scale, operation, and history. Many people know that Panama Canal plays a significant role in the world trade, but its history and background tend to be taken for granted. Its history goes back to 1513 when a Spanish explorer found the Isthmus of Panama. Although various nations considered the possibility to build a canal in Panama, a serious attempt was not made until 1880s by a French company. The project led by Ferdinand de Lesseps, a former diplomat who built Egypt’s Suez Canal, failed because of engineering problems and tropical diseases. The death toll during this constriction is estimated over 22,000. Panama made an agreement with the United States for the construction of the Canal, and it was successful finished in 1914. In 1991, Panama gained full operation, administration, and maintenance from the United States. I learned that Panama Canal was established with countless efforts and sacrifices.

At the Miraflores Locks, we were able to see a huge vessel going through the waterway. In order to keep the balance of the ship and not to scratch the sidewalls, there were several machines that attached with the ship with ropes.

The gate does not open for the ship until the water level drops to the same as the next section. It was interesting to see how vessels take “stairs of water” in the canal.

Yuki

Transportation and Logistics

On Thursday, we went to a logistic park called Parque Sur as well as CEVA, one of the logistics companies located in the park. Just as P&G and Unilever selected Panama to have their regional headquarter, many transportation and logistic firms are establishing their headquarters in the Parque Sur because of the high connectivity to airports, ports, Panama city, and Colon area. One of the other reasons that companies prefer to utilize Panama is that Colon Free Zone offers tremendous benefits companies, including zero tax on export activities income and zero import duties. As visiting companies and facilities for two weeks in Panama, many people told us that Panama Pacifico, a special economic zone, is becoming another hotspot for transportation and logistics. Besides the benefits that CFZ has, Panama Pacifico has no international phone calls tax, no remittance tax, and no licensing tax and so on. I wish we had a chance to visit Panama Pacifico to learn more about the reasons that the are is becoming more attractive for companies.

Yuki

Retail Industry in Panama

On Wednesday, we explored the retail industry in Panama, visiting Supper 99, Unilever, and P&G.

Supper 99 is the biggest retail company based in Panama, which owns 45 chain stores in Panama. Established in 1981, it has grown to be a leader in the industry with its everyday low pricing and customer satisfaction focus. Whenever we asked Mario Martinelli, the CEO of Super99, what is the key to be successful, he answered with two words: working hard. He started attending the University of Arkansas, barely speaking English. I cannot imagine how much effort he made to adjust to the different culture and to study without knowing perfect English. “You will never retire from the company if you are the top in the organization.” “Always face a challenge or problem in front of you” These are some words from Mario that remained my mind.

At Unilever and P&G, they both emphasized geographical benefits that Panama have. In addition to the canal, Panama has a high connectivity to their primary markets, Brazil and Mexico. Multinational Headquarters law includes tax incentives, labor regulation incentives as well. The labor proportion of 10% foreigners to 90% Panamanians required by the Labor Code does not apply when foreigners working with the MHQ. knowledgeable and experienced individuals are gathered in Panama in this way. Visiting these companies allowed me to have clear understanding of benefits businesses have in Panama.

Yuki

Relationships between Panama and the U.S.

We deepened our understanding on the relationships between Panama and the United States by visiting American Chamber of Commerce & Industry of Panama and U.S. Embassy in Panama.At the AmCham, not only did we learn its organizational background, we also learned the relationships between Panama and the States. The speaker said that Free Trade Agreement played a significant role to foster their growth by decreasing tariffs from 10-15% to 0% and by increasing transparency in banks and governments. Nearly 56 percent of U.S. agricultural exports became duty-free upon entry-into-force, with most remaining tariffs phased out over 15 years. In this way, Panama gained easier access for internationally well-known brands, which matches with the needs in the Panamanian economy.

In the U.S. Embassy, the first thing that I noticed was their intense security. There was a heavy and secured door to each room to protect important data and documents from outsiders. In the discussion, they mentioned that education system in Panama is not catching up to the standers, which includes poor English education in schools. As opposed to typical trends seen in other countries that young generations speak English more fluently than elderly, older people speak better English in Panama. It was because they were exposed to the U.S. culture though the canal operation supported by the States. After the Canal Zone got independence from the States, it was natural for Panamanian society to get their own identity back, which lead to less communication in English. English was removed from the school curriculum for a while in Panama, and it is now back, realizing the importance to be able to facilitate communication in English.

It was so sweet that they got a cake at dinner for our birthdays 🙂

Yuki

Finance and Monetary Policy in Panama

On Monday, we went to the Banco National of Panama to learn about finance and monetary policy in Panama. The department we visited first had a control over the system called “La Camara de Compensacion.” The system has all the balance sheet information from 54 banks in the system. When a bank experiences a bankruptcy, the bank can no longer participate in the system. However, the deposits that customers in that bank can be returned with funds that other banks have in the network. Therefore, the benefit to be in the network system is trust from customers.

In a lecture, the speaker mentioned that using US dollar as official and legal currency helped Panamanian economic grow stably, avoiding inflation caused by excess of currency. Because their local currency, balboas, is also made outside of the country, monetary policy does not exist in Panama. Instated, the government decides to keep or release some amount of USD according to its situation.

Then, we had a chance to have conversation with Eduardo, one of the UofA alumnus from Panama. He got double degree in Supply Chain Management and Finance, and is now working for a private bank in Panama. He thinks that “Panama Paper” was some kind of attack to the country itself from outsiders, and it explains why it is called “Panama paper,” not by the name of institute or bank. He also mentioned that Panama denied to sign a treaty by OECD, which might have triggered someone to leak the information. It was a great time to actually know what he does at work and to gain broader perspectives on global issues.

Yuki

Beach Vacation Part 2

After staying at the Cubita for two days, we went to another beach called La Playita Resort. The beach is known by its waves, and many surfers in Panama go there to enjoy surfing. It was so much fun to swim with the waves, and I also enjoyed having a walk along the beach.

On the way back to the City of Knowledge, we had a quick tour at a greenhouse in Cocle, where the University of Arkansas is trying to help with its operation. They grow tomatoes and peppers, and supply them to local hotels and institutes. That firm takes pride on their products grown without any pesticides. Also, if a part of their products is damaged, they take the rest and process them into chopped veggies or sauce. There was a whole system from Spain to manage the production, part of which senses temperature and humidity to make the environment consistent. Followings are some pictures from the greenhouse.

We will visit companies, government agencies, and banks, etc. in week 2!

Yuki

Beach Vacation Part 1

Leaving on Thursday, we had a nice and relaxing weekend on a beach in Chitre.

On the way to Chitre, we were able to see a part of a traditional festival at a church in a city called Parita. The church, Iglesia Parroquial de Parita was completed in 1723, and is one of the few churches in Panama that remain Spanish-style. This church has a unique festival in May, where people depict the biblical story of the battle between the devil and Archangel Michael. People were wearing colorful costumes and the road were very pretty with decollations. Here are some pictures from there.

Iglesia Parroquial de Parita

Road Arts

Inside of the Church

After arriving at the resort hotel, we had a craft lesson, where we made a small devil-mask from the festival. The instructor was telling us a story that people used these devil-masks to scare locals to guide them into the church. With the language difference, the devil-masks played an effective role to increase the religious feelings. I thought it was interesting that people 400 years ago utilized the symbolization to inform and educate others just like we do with icons and signs for foreigners in many places.

The beach was very nice without much humidity and warm water. At the both hotels that we stayed on this weekend, people were committed to protect the environment. We were told not to keep the air conditioner on while we are out, and the other hotel has a system to turn off all the electronics unless people key is inserted. I liked how Panamanian community is trying to save the environment.