At one time, Miami was considered the unofficial capital of Latin America. But that seems to be changing due to heightened security restrictions (according to a story in the Wall Street Journal - "Panama Seeks Miami's Heat"). The story relates how Panama is consciously seeking to undermine Miami's role:
Complaints about stepped-up U.S. border scrutiny since the Sept. 11, 2001, terrorist attacks are prompting many Latin American travelers to do more than gripe: They are using places like Panama City's Tocumen International Airport as a regional hub instead of Miami, once the preferred way station for Latin fliers making connections to Europe or North America or even destinations within the region.
It is just one way in which Panama is taking advantage of the post-Sept. 11 environment to help itself -- usually at the expense of Miami. The small isthmus nation, normally off the radar of international travelers and investors, also is luring banks that want to protect back-office operations from terrorist attack and is pitching itself as a safe but friendly port-of-call for businesses as diverse as cruise ships and call centers. Panama's historical ties to the U.S. and its relatively large number of English speakers -- 14% of the population -- also make it an attractive alternative to Miami.
As Professor Maryann Feldman has pointed out, a locality's competitive advantage come from a strategy of differentiation, not low cost (see "Constructing Jurisdictional Advantage" at the Athena Alliance website). Panama seems to be doing just that -- "avoid the hassles of Miami," they are saying. "We are different, better." That does not bode well for Miami's own jurisdictional advantage - which was to be better that any other city in Latin America. We will see if the city leaders take the Panamanian threat seriously and either revamp their activities or change their strategy. Or whether they just drift, like the frog in the pot of water who doesn't notice that the heat has been turned up until it is too late.
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