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Interview with Alberto Aleman-Zubieta, the Administrator and CEO of the Panama Canal Authority

May 2009

It is a privilege for to interview Mr. Alberto Aleman-Zubieta, the Administrator and CEO of Autoridad del Canal de Panama (Panama Canal Authority). Panama Canal is the leading interoceanic waterway that serves world maritime commerce.

Alberto Aleman Zubieta received dual Bachelor's degrees in Industrial and Civil Engineering from Texas A&M University, College Station in 1973. Mr. Aleman began his professional career in construction and worked in that field for 23 years, becoming CEO of Constructora Urbana, S.A., one of the largest construction companies in the Republic of Panama. From 1996 to 1999, he served as the Administrator of the former Panama Canal Commission, the federal agency of the U.S. government who was responsible for the administration and operation of the Panama Canal until December 31, 1999.

In 1998, he was appointed Administrator of the Panama Canal Authority, the Panamanian entity tasked with the administration of the waterway upon its transfer to the Republic of Panama on December 31, 1999. For the next two years, he served simultaneously as Administrator of the Panama Canal Commission and the ACP, ensuring that the decisions taken under the Commission would have continuity under the new Canal Authority.

In recognition of his successful administration of the Canal Mr. Aleman was awarded The National Order of the Legion of Honor, the highest award bestowed by the French government, awarded in December 2006. Mr. Aleman, we at are very gratuful for this exclusive interview with us. Thank you for your kind consideration. Please tell us about the importance of the Panama Canal for the economy of Panama.
Mr. Aleman: To adequately gauge the economic and social impact of the Canal expansion on the Republic of Panama, it is necessary to understand exactly what the Canal contributes at the present time, the manner in which these contributions have increased over the past 50 years, and its impact on economic activity. Already 60 percent of the population lives in this Inter-oceanic Transit Region. Around three-quarters of the national economic activity are in the services sector, and approximately three-quarters of the total exports are services.
To a great extent, this is due to the utilization of Panama's strategic, geographic location. World and hemispheric trade, conducted mainly by sea, benefit from lower costs, resulting from shorter distances between ports of origin and destination by way of the Panama Canal. In turn, Panama benefits from this traffic because of the Panamanian service exports that are generated, which is good for the national economy since it stimulates multiple activities that generate employment, as well as investment and production opportunities.

The world economy has continued to expand in this century with an increase in maritime commerce and shipping, as well as with changes in transportation and communications technologies. The possible expansion of the Canal would accommodate the long-term demand in more competitive ways, and would also open opportunities to develop related economic activities around the Canal to consolidate the development of a dynamic, economic cluster that may contribute more to the integral development of Panama. This has already been done in Singapore, Rotterdam and Hong Kong.

Yet, the economic impact of the Canal on Panama has a wider range, for the following three main reasons:
1. The Panama Canal provides service exports. Its revenues are paid for by Canal users. As such, it is part of the country’s total exports, which are the fundamental generators of national economic growth and job creation, along with investments, the use of technologies, training and development. Every export dollar the Canal generates has a multiplier effect on the national economy because, when it circulates, it creates secondary demands for other goods and services. Analyses made with economic models using mathematical equations indicate that the multiplier was 1.27 for the period 1980-1999. This means that each dollar generated became $1.27 of economic activity in the country.

3. There are other economic activities located in the Transit Zone that are involved in service exports, developed under the stimulus of the monetary system, the tax system, and/or special laws (such as the Panama Merchant Marine Registry, the Banking Center and legal services), that become increasingly tied economically to the Canal Economic System. For example, the CFZ relies on bank credit to a great degree. Canal traffic, the ports, the CFZ and the international airport all complement each other.

The completion of the Canal expansion will create favorable expectations for investors, who will see renewed opportunities for growth in the Cluster's economic activities. More Canal traffic, more interconnections with world ports and more frequent transits would improve the competitive edge of Panama’s geographic location for all transportation and logistical activities, intermodal services, commerce, maritime services, tourism, freight processing, as well as financial, legal and telecommunications services - among other categories.

app2us: What is the highlight of your tenure as the CEO/Administrator of the Canal?
Mr. Aleman: The highlights of my tenure as the CEO/Administrator of the Panama Canal would be the following: (i) overseeing a seamless transition from the U.S. Panama Canal Commission to the Panamanian Autoridad del Canal de Panama (ACP); (ii) turning the ACP into a profit-earning entity for the Republic of Panama; and, (iii) overseeing the Panama Canal Expansion Program.

app2us: In 2006, the people of Panama approved a proposal to expand the Panama Canal in a national referendum. What is the progress on that plan?
Mr. Aleman: Before I answer your question, please let me point out the extent of the project. The Canal today has two lock lanes. The expansion project consists of adding a third lane, through the construction of two lock facilities, one on the Atlantic end of the Canal and the other on the Pacific. The project also includes the excavation of a new access channel through which the post panamax will navigate in the future and the widening and deepening of the existing navigational channels; as well as the elevation of Gatun Lake's maximum operating level.

The Panama Canal Expansion Program is progressing at full speed, on time and under budget. The project officially began on September 3, 2007 with a groundbreaking ceremony at Paraiso Hill that gave way to the first phase of the dry excavation of the new lane of traffic - the Pacific Access Channel (PAC) which is a four-part project that will connect the Culebra Cut and the area where the new Pacific locks will be built. Since then, we have awarded contracts for the second and third phases (PAC2 and PAC3) of the dry excavation part of the project. We have also awarded a contract for the dredging on the entrance of the Pacific entrance. The works began in November, 2008.

So far, we have awarded 339,4 million dollars in the different contracts. On March 3, 2009, we received the proposals for the design and building of both the Pacific and Atlantic locks facilities. This is the largest contract of the Expansion Project. We expect to award this contract by June of this year to one of the four (4) prequalified international consortia that are participating in the process. We also expect this year to contract the deepening and widening of the Atlantic entrance to the canal.

Construction for the Panama Canal project is slated to conclude by the year 2014.

app2us: How did your U.S. education help shape your career?
Mr. Aleman: My U.S. education, aside from teaching me the technical aspects of my career, provided me with a broader view of the world, made it possible for me to meet students from around the world and learn from their experiences and encouraged me to replicate, in my country, the good things I learned about life in the U.S.

app2us: Apart from academics, what did you like about your life at Texas A&M University?
Mr. Aleman: My life at the Texas A&M University campus was filled with wonderful experiences that enriched me. These experiences formed me during my transition from young adult to the professional I am today.

app2us: Are you still involved with Texas A&M University in some way?
Mr. Aleman: I am pleased to be a member of the International Advisory Board of Texas A&M. I am also honored to be the parent of TAMU alumni.

app2us: What is your advice to students who aspire to study at U.S. Universities?
Mr. Aleman: My advice to students from abroad would be for them to take advantage of the opportunities U.S. universities present to them, not only in the scholastic arena, but also in the cultural.

app2us: Would you like for your children to study at a U.S. University in the future?
Mr. Aleman: My two oldest children have both graduated from U.S. universities. I am confident that they have received an excellent education, aside from the advantage of having been exposed to life in the U.S.

app2us: What is your opinion of the free service provided by Do you think we can better help students from Panama if our content is available in Spanish also?
Mr. Aleman: I commend you for the free service you provide through I think that you bring the experience closer to home, making it easier for students in foreign countries to ask questions in a less formal environment. Even though having content in Spanish would help students from Panama, I do not think it is necessary because students applying for college admission to U.S. universities should have the language capabilities to fully understand what you present on your website.

app2us: The constitution of Panama Canal Authority specifies a two term limit for the Administrator. What are your future plans after the completion of your term?
Mr. Aleman: I really have not had the time to sit down and think about that. My agenda has been very busy with the Canal Expansion Program, but one of the things that come to my mind would be to write my memoirs.

app2us: On behalf of our team and our users, we deeply appreciate your kind gesture. Thank you very much.

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