…because it may break. In Panama, political tensions and too much public spending designed to speed up development may compromise this brilliant moment for the canal country.

This is a great editorial from Prensa that tells a balanced view of the economy here in Panama.

We have experienced the threat to businesses of political instability first hand several times. As a specific example, we can note that at the end of last year CentralAmericaData organized a trade mission from Canada to Panama, which almost did not happen due to the disturbances generated by the Gnabe Buglé tribe’s opposition to mining and hydro-power development in the region. The Canadian executives busy schedule did not allow them to postpone the trip for a few days, so the mission would have to be rescheduled for almost a year later, affecting the entire programming of industrial production. Finally, the agenda went ahead, albeit with difficulties associated with the situation.

An article in Prensa.com summarizes the views of various market participants, especially the financial market, warning about political stability and weighs against the possible risks of an imbalance in the state’s accounts in investment decisions.

In this regard the article states, “A first indication of these effects could be reduced foreign investment which fell by 15.3% in the first quarter.”

Personally, while I agree with the statement, I believe that a great deal of the reason that the FDI dropped was that few companies will continue to invest here if they cannot hire competent workers and Panama has a near zero unemployment rate right now.