Panama’s history in the latter part of the twentieth century was not always a happy one, including as it did things like military rule, political violence, corruption at all levels and finally a military invasion by the United States, followed by the Panamanian military being disbanded. Things have improved greatly in recent years, though: unemployment is now under 3% (although many people remain “employed” in subsistence agriculture), GDP growth is exceptional, elections are free and non-violent, the crime rate has lowered and the country’s somewhat infamous financial sector is thriving.
Some kinds of destruction will take a little longer to repair, though. While Panama still has an enormously diverse ecosystem and as much as two fifths of its land area remains under tree cover, the other side of the equation is that it has lost half its forests and jungles since the 1940s. At that time, conservation was simply not a priority, although earning money through exporting timber or farming certainly was.
The Alliance for One Million
In 2014, several Panamanian organizations joined forces with a plan to curb the rate of deforestation, which then ran to around 20,000 hectares per year – approximately two and a half times the size of the New York Metro area. The amount of land that would, in addition, eventually be damaged by deforestation (through erosion, disruption of water supplies, etc.) was estimated to be a hundred times this, while existing reforestation efforts were having limited effects.
The project’s goals are certainly ambitious, even when keeping its 20 year timeframe in mind. The main objective is to plant or replant a full one million hectares with trees in a sustainable way. This represents a full one-eighth of the entire country’s surface.
Apart from reforestation on this scale, Alianza por el Millón is also concerned with job creation, attracting hundreds of millions of dollars in investment, expanding the country’s supply of renewable energy and trapping as much as 7 million metric tons of atmospheric carbon per year.
Calling for Investors
Part of the Alianza’s strategy revolves around education, encouraging people to plant or donate trees, supporting conservation efforts and directly rehabilitating land that was cleared for pasture or crops, or disturbed by mining activities. The obvious dilemma with this is that all of these actions are expensive and can’t be expected to bring any cash in.
The solution they chose was using other people’s money, but certainly not by robbing them. As it turns out, planting hardwood trees for lumber is a not a bad investment. It takes at least two decades from first planting for returns to be available as cash, but these are stable over time and run to about 10%. With a supportive government, several companies have already found the opportunity worth it.
Although teak, which is not native to Panama, is one of the species most commonly planted, environmentalists are not concerned. These trees are often found in multiculture plantations where they’re interspersed with native hardwood species. This provides a suitable habitat for a variety of other fauna and flora while also maintaining soil health over the years. Also, even though they will eventually be cut down, this is done in a responsible and sustainable manner – and these managed jungles work just as well as any other carbon sink.
Panama’s Reforestation Visa
Most countries offer permanent residency to investors above a certain amount, but Panama is probably unique in using this specifically as an ecological tool. For under $100,000, you can get both an immediate permanent residency visa and 5 hectares of your own mahogany or teak forest.
This amount is steep for immigration to a Latin American country, but you will own both the land and the trees on it free and clear. Such investments come in two main flavors: either the company you buy it from continues to manage it, or as a turnkey project where they’ll advise you on the options you need. Be aware, though, that neither forestry nor ecological management is easy.