Whoever has been fortunate enough to transit the Panama Canal by ship, has been part of a unique experience. In less than 10 hours you have crossed the American continent from coast to coast. And you have witnessed an engineering feat that counts as one the Wonders of the World. Many cruise ships enter the Panama Canal only to turn around halfway and go back the same way. Just to give their passengers the excitement of going through the locks and to be able to say: I have been into the Panama Canal. Most people know that the canal is situated somewhere in Central America. And that it literally splits the Americas in half. But as for the rest of Panama, its inhabitants and its culture, this is a black hole for most of the world.
Even for me, a Dutchman born in Colombia, married to a Colombian woman and with a profound interest for the Latin American region, Panama was quite unknown to me. I knew about the Panama Canal and knew where to find it on the globe, but that was about it. Until I was sent to Panama to lead an HR project in Latin America. I had visited Colombia many times over the past decades which made me realize why my youth in Colombia was such a happy one. I had fallen in love with the country, its people and the warm and human culture. Somehow I expected Panama to be about the same, perhaps with a more ‘costeña’ (coastal) touch. How wrong I was.
In the late 19th century Panama was a province of Colombia. In that era the United States realized that a canal through Central America would save their Navy a lot of time to get from the East Coast to the West Coast and vice versa. They examined the possibilities of digging a canal through Nicaragua or Panama. In 1902 they chose for the Panama option and started negotiations with Colombia to obtain a concession to construct the canal, since Panama was a province of Colombia at that time. Colombia was unwilling to cooperate and the US turned to support a slumbering uprising that was taking place in Panama. Since the jungle between Colombia and Panama (The Darien) is impassable for vehicles, Colombia was forced to send its troops by ship to Panama to suppress the uprising. But the US had sent gunboats to Panama to prevent the Colombian troops getting there, a perfect example of ‘gunboat policy’. Once Panama gained its independence, in 1903, the United States quickly expanded its influence over the new Panamanian government and obtained a concession to build the Panama Canal and subsequently an eternal lease to operate it.
After World War II, U.S. control of the canal and the Canal Zone surrounding it became controversial. Many Panamanians felt that the Canal Zone rightfully belonged to Panama; student protests were met by the fencing-in of the Canal zone and an increased military presence. Unrest culminated in riots in 1964, when approximately 20 Panamanians and 4 U.S. soldiers were killed. A decade later, negotiations toward a settlement began and resulted in the Torrijos-Carter Treaties. This started the process of granting the Panamanians free control of the canal and in 1999 the Panama Canal Authority (ACP) assumed command of the waterway.
The Panama Canal is nowadays one of the main sources of income for Panama. It generates an estimated revenue of $2 billion per year. The Panamanian economy is among the fastest growing and best managed in Latin America. Because of its key geographic location, the economy is mainly based on a well-developed service sector heavily weighted towards banking, commerce, tourism, and trade. In 2011 Panama had an unemployment rate of 2.7%. The handover of the Canal and military installations by the United States has also given rise to large construction projects. The skyline of Panama City has changed considerably over the past decade and rivals that of Miami. The city is bursting with big and luxurious shopping malls and new ones are opened every year.
Because of its unique geographic location and the booming economy, many international organizations have opened, and are still opening, offices in Panama. Also the expansion of the canal, a $5 billion project over the next 5 years, is attracting an international workforce. Panama is known to be one of the safest countries in the region and has a wide variety of excellent international schools. Besides the international organizations, a lot of individuals are drawn to Panama too in search of a better future. Not only people from Latin American countries such as Colombia, Venezuela, Costa Rica and Nicaragua, but also many Chinese, Indians, Arabs and, recently, Spaniards have come to Panama to try their luck . All these expats and immigrants are dealing with the challenge of living and working together with the Panamanians.
Why is living in Panama a challenge for foreigners? One of the reasons is that the nature of the Panamanians is a complex one. The Panamanian people stem from a mix of native Indians, conquistadores, blacks, Chinese, French, Americans, Arabs, Jews and a variety of other (mostly European) nationalities. Despite its strategic geographical location and natural wealth, Panama has never been a rich country until the beginning of this millennium. It has frequently suffered from incompetent and sometimes corrupt governments, military coups and indignation over the fact that the Americans had lured the country into a treaty over the Canal that was extremely unfavourable and unfair towards Panama. This makes the Panamanians still resent American exploitation and power, and have developed a strong national and personal honour. It is quite typical for Panamanians to say one thing and do another. They will change their course of action according to changing circumstances. All these things make it difficult for foreigners to adapt to living in Panama.
But now that there is money, economic growth and a lot of foreigners coming to Panama, Panamanians realize that they as well have to start dealing with these new circumstances. That is, if they want to move forwards and keep developing as they have been doing over the last decade. Because they still display features that are hard to deal with for Anglo-Saxons, Northern Europeans and some Asians, such as poor finishing power, reliance on paternalism, low productivity, weakness on accountability, poor sense of time, schedules, agenda and a flexible attitude to truth. On the other hand there are many positive aspects of dealing with Panamanians: they are loyal (if properly motivated), they cultivate relationships and believe in the value of friendship, they desire to please others, obey rules (if monitored) and defend your interests once you have gained their loyalty.
Managers in Panama often struggle to create successful multicultural teams. There is a lot of complaining about the poor Panamanian work ethics (in the eyes of the foreigners) as well as about the unwillingness or inability of foreigners to adapt to living and working in Panama (in the eye of the Panamanians). To overcome these differences, there are 5 simple rules of building winning multicultural teams:
- Understand very clearly who you are
- State objectives and roles very clearly
- Define them in a way which means something to everyone
- Use diversity as an asset
- Have fun!
Often I see foreign management struggling to get to grips with Panamanian employees, because they expect them to be something that is not entirely clear to them. These (international) companies fail to make clear who they are, what they stand for and what their core values are. Once they have done this, they should state clearly what their objectives and roles are. Panamanian culture is typically high context. If you are not very clear about what you mean, Panamanians will give your words a meaning that goes with their context, not necessarily yours. And be sure to define your roles and objectives in a way that means something to them. Typical British understatement or coded speech, for instance, is not understood by Panamanians. And since international companies operating in Panama have to deal with Panamanian customers, suppliers and authorities (sometimes more frequently than they would wish), why not have Panamanian employees whose loyalty you have gained to deal with their fellow countrymen? These employees can provide the necessary leverage the country needs to transit from a quite passive attitude and inward perspective, to a more pro-active and international orientation. At the same time especially western foreigners have to let go of some of their typical linear-active way of thinking and acting and give in to a more multi-active attitude, where family, relationships and feelings are more important, and time and agendas not as much.
Mahatma Gandhi said: “No culture can live, if it attempts to be exclusive”. If Panama wants to reach its full potential given by its strategic geographical location, its economic outlook and multicultural diversity, it will have to strive for inclusiveness, open up to international influences and start building a 'canal' to connect the best of both worlds.
by Maarten Stal
Maarten Stal is a Dutchman living in Panama where he owner of People in Companies, specialized in HR Management and Cross Cultural Communication. He is licensed partner of Richard Lewis Communications Ltd. for the Central American and Caribbean region. Born in Colombia as child of expats, he always had a profound interest in diverse cultures. After spending his military service as a naval officer and graduating from law school in Amsterdam, Maarten went for half a year to Colombia to go back to his roots. There he met his Colombian wife. Back in The Netherlands he held several HR positions in a variety of Dutch and international companies. In 2011 he was sent by an international company with his family to Panama as HR Manager to lead a project to analyse and improve HR in the Latin American region. After the project was finished, Maarten decided to stay in Panama where he saw many opportunities for International HR Management and Cross Cultural Communication. Currently he is working with World Vision International, a relief, development and advocacy organization dedicated to working with children, as HR Consultant on a variety of restructuring projects throughout Latin America.
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