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Panama: A Colorful Case Study for a Developing Economy

Despite the international chaos resulting from the recent Boeing 737-Max catastrophes, a group of Stern students all made their way at the start of Spring Break to Tocumen International Airport, hub of Copa Airlines, one of the many jewels in the crown of the tiny country of Panama.

For the past six years or so, Professors Harry Chernoff and Kristin Sosulski have been leading students on a trek to study operations in the still-developing Central American locale, using the convenient starting point of Tantalo, a funky boutique hotel filled with art and topped with a panoramic rooftop bar that Chernoff was an early investor in.

Not surprisingly, the rooftop was a favorite late-night gathering spot for the group and a place to marvel at the extreme juxtaposition of the UNESCO-protected Spanish Colonial buildings of the oldtown set against a backdrop of modern skyscrapers, which sprout up from the central business district. 

Tantalo drink tickets were refreshing incentives to memorize a variety of trivia: an ex-President of Panama jailed for racketeering and drug smuggling? Manuel Noriega. Capacity of the Panama Canal in ships per day? Roughly 40. Sosulski’s favorite menu item at the dockside restaurant on the Amador Causeway? Patacones. 

Using first the historic town where Tantalo is located and then the modern skyscrapers of Panama City as home base, the group explored sites that provided insight into topics in operations in Panama. Themes included the impact of the Panama Canal on logistics, the growth of entrepreneurship and real estate development in the country.

On the hike to the top of Cerro Ancon, a massive hill that dominates Panama City’s skyline and contains a dry tropical forest replete with sloths and armadillos alike, students were reminded of the often-tumultuous relationship between local Panamanians and their northern counterparts, during the American control over the Canal Zone. This hill flew the very first Panamanian flag in the Canal Zone, carried there by a group of rebellious student activists — and it was not a bloodless effort.

After an exhilarating ride on the historic Panama Railroad through thick forest and over the sunken jungle of Lake Gatun, the group arrived in the economic heart of the Caribbean side of the country: Colon. There, the group had the chance to visit a warehouse and logistics center located along the Canal, where enormous automatic gantry cranes were like giant worker bots keeping the sea of colorful cargo containers organized. Over and over, they loaded in, stored and then shipped the containers off to far-flung locations around the globe.

Sternies had the opportunity to witness an extreme close up view of container ships passing through the Panama Canal
Photo credit: Courtesy of Kristen Sosulski

Back on the Pacific side again, just outside of Panama City at the Miraflores Locks, the group witnessed an extreme close up view of the largest-allowable sized container ship, the Neopanamax, passing through the expansion locks of the Canal. It navigated into the locks, sank with the water line about 65 feet and cruised out again, belying the amazing engineering feat it required. Chernoff got an extra bit of satisfaction in getting to command the locks from the super techy control tower. 

A swift elevator ride up to the top of a contemporary art-clad luxury skyscraper in downtown Panama City took us to the offices of Morgan & Morgan, a law firm specializing in the nautical law that keeps traffic in the Canal flowing smoothly. 

For the last two nights of the trip, we stayed at the waterfront JW Marriot, which is shaped like a billowing sail primed for departure on the Pacific Ocean. Formerly a Trump-branded hotel, this site visit offered the group an important lesson on how branding and international politics can come to play in hotel operations.

Another highlight was the start up hub within the City of Knowledge, a 300-acre campus, belonging first to the US Army during the American control of the Canal Zone and then to the Panamanian government, before it passed hands to a private organization that runs it today with a mission of bringing together “entrepreneurs, scientists, thinkers, artists, community leaders as well as experts in government, NGOs and international organizations.”

A few of the students tested Chernoff on his chess skills on a nearly life-size set, while other students played ping pong or lounged on hammocks in the upstairs game room of the Google-like headquarters of the center for entrepreneurship.

What allowed students to dig in even deeper than the site visits was the final deliverable of the class, an ethnographic study, which forced students to get out and interface with local people to research a topic related to the course. 

Students interviewed local entrepreneurs facing difficulties in scaling their businesses, engineers working to solve the country’s public transportation issues and developers hoping to address Panama City’s economic disparity through real estate development projects.

As the students flew out of Tocumen on the return trip to New York, they saw the expansive jungle, rugged coast line, skyscrapers and terracotta rooftops — and of course the massive Canal, which intersected it all — in a totally different light.

Photo credit: Courtesy of Kristen Sosulski

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