Improving competitiveness and modernizing institutions are some of the challenges that Panama must overcome in order for high levels of economic growth to result in greater development for the country.
The document “Panama: Challenges to consolidate its development“, developed by the Inter-American Development Bank (IDB), explains that the Panamanian economy has been one of the most dynamic in the world in recent years. Between 2006 and 2017 the country had an average annual growth of 7.2%, compared to 2.9% in Latin America and the Caribbean (LAC) and 1.8% in the countries of the Organization for Economic Cooperation and Development (OECD).
“During this time, the country has also managed to consolidate its macroeconomic framework. The inflation rate has remained among the lowest in the region, the deficit of the Non-Financial Public Sector has moderate levels and the debt-to-GDP ratio has decreased from nearly 80% to less than half. All this made it possible for Panama to achieve and maintain investment grade since 2010,” the document details.
However, for the economy to reach levels of development for its growth to be sustainable certain conditions are needed. Carlos Garcimartín, an economist at the IDB, explains that “… the country has several challenges to ensure that economic growth can be reflected in improved education, social indicators, competitiveness and institutionality.”
Regarding the country’s challenges, the report explains which are the main areas to focus on:
“… Competitiveness and productive transformation:
Competitiveness and productive transformation are key to maintaining Panama’s economic expansion. However, it presents problems in this area, which are reflected in a fragile foreign sector, with a need for greater export capacity, and in a dual economy.
Education:
Related to the above on the productive side, the country has an important education gap, which must be closed to increase competitiveness and accompany productive transformation. Educational coverage is good, but not its quality. Moreover, deficiencies in the education system penalize social cohesion. The skills that workers have and those required by the productive sector are not aligned.
Institutional quality:
Institutional quality is another key factor in consolidating Panama’s success. Among other factors, adequate levels of accountability and transparency, as well as efficient bureaucracy and regulatory frameworks are essential. However, there are important weaknesses in this area, which complicate business activity and social cohesion.
Social and territorial cohesion:
Despite strong economic growth, the country is still very unequal. There are important differences in income, territory, coverage of public services, ethnicity and some gender.”
See full report.
Panama prides itself in being a financial hub in Central America.
Have you ever tried to exchange any other world recognized currency in Panama?
It is almost IMPOSSIBLE!
Only 2 currencies are recognized in Panama… Balboa & USD!
Travel to any other country and you can easily exchange foreign currency into local currency.
NOT POSSIBLE in Panama!
Panama has a lot to learn from other countries to welcome business and tourism.
They still have their heads buried deeply into the sand!
Bragging about their financial strength… and having almost nothing to back up that claim.
Almost ANY other foreign country is capable of exchanging currencies.
NOT HERE in Panama!