Rosemary Piper, Deputy Director of Panama's National Competitiveness Center, presented an economic overview of Panama at the 2012 Caribbean Growth Forum. Panama has experienced strong GDP growth between 2001-2011, especially in recent years. The main contributors to GDP are the Colon Free Zone, ports, Panama Canal, and telecommunications. Foreign direct investment in Panama has also increased substantially in recent years, reaching $2.79 billion in 2011. Panama has improved its competitiveness rankings but still faces challenges related to its judicial system, infrastructure quality, and education. The government is committed to promoting competitiveness through public-private partnerships and investments in sectors of comparative advantage like tourism and logistics.

1. PANAMA:
Rosemary Piper
Deputy Director
National Competitiveness Center
Caribbean Growth Forum, Kingston, June 2012

2. Quick Economic Overview:
Gross Domestic Product
25,000
20,000
15,000
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
%
0.6%
2.2%
4.2%
7.5%
7.2%
8.5%
12.1%
10.1%
3.9%
7.6%
10.6%
10,000
5,000
0
2000 2001
2002 2003
2004 2005
2006 2007
2008
2009
2010
• 2012’s government forecast: 10%
2011

3. Gross Domestic Product:
Contribution by Sector
Construction
Commerce
Transport, storage, communicat
ions
Financial
Real estate, renting
Manufacturing industries
Others
• Colon Free Zone, ports,
Panama Canal and
telecommunications: 24.2%
• Commerce: 15.2%
• Financial: 8.1%
• Construction: 6.1%

4. Foreign Direct Investment
FDI (in USD billions)
3,000
2,500
2,000
1,500
1,000
500
0
2000 2001
2002
•
•
•
•
2003
2004
2005
2006
2007
Last year: ports, mining and tourism
Historic level in 2011: $2,790 Billions
Source of innovation and “learning by doing”
In 2010 LAC was the destiny of 10% of the
FDI up from 5% in 2007
2008
FDI
2009
2010
2011

5. Competitiveness
Ultimate goal
• Achieve sustainable development to
improve the citizens’ quality of life
Why we need to measure
• “You can’t control what you don’t
measure and you can’t improve what
you cannot control”

6. Important Competitiveness
Indexes
Panama’s Position (# of countries)
Source
2007
2009
2011
2012
World Bank
(Doing Business
Index)
81
(175)
81
(181)
63
(183)
61
(183)
World Economic
Forum
(Global
Competitiveness
Index)
59
(131)
59
(133)
53
(139)
49
(142)

7. GCI: Evolution 2005-2011
70
65
65
60
59
60
58
59
55
53
50
49
45
2005-2006
GCI = ???
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

8. Indexes Analysis
STRENGTHS (Advantages)
Infrastructure: ports and airports
Government surplus
Life expectancy
Buyer sophistication
Financial market
Soundness of banking system
Mobile telephone subscriptions

9. Indexes Analysis (cont.)
IMPROVEMENT OPPORTUNITIES (Disadvantages)
Judicial independence
Quality of roads
National savings rate
Quality of primary education
Internet access in schools
Rigidity of employment
Domestic market size

10. Panama’s Commitment to
Promote Competitiveness and
Sustainable Growth
1. Prioritize public investment in sectors where a
comparative advantage exists
2. Assure transparency in all government’s actions to
safeguard investor’s trust
3. Strengthen the internal market within a safe
environment to stimulate the confidence of producers
4. Guarantee a simple and fair distribution of the tax
burden, while maintaining competitiveness within sectors
5. Maximize the government’s investment, increase
income, establish outlines for public-private participation
and diminish the operative expenses.
Alberto Vallarino, Minister of Economy and Finance at the 4th National Competitiveness Forum, Panama City , November 2009

11. Economic Sectors Hierarchy
and Potential
Competitive
advantage


Tourism

Social impact
(jobs)
Logistics
Agriculture

Growth
Boosters
Economic
impact on GDP
Financial Services

Future
Potential
Off-shoring
services
 Maritime services

Private health
services

Regional
headquarters of
multinationals
Alberto Vallarino, Minister of Economy and Finance , on the Government s Strategic Plan 2010-2014, November 2009
Government´s
capacity to
intervene

12. Some Reforms and Actions

Businesses:
 Law 34 of 6/5/2008: Social Fiscal Responsibility
○ Requires financial and public investment planning
 Law 41 of 8/24/2007: special regime for the establishment
and operation of headquarters
○ Drives AEEPP (Howard, a former US Base)
 Laws 5 of 01/11/2007 and 31 of 07/22/09: speeds up
businesses opening
○ PanamaEmprende
 Taxes payments via internet

Energy:
 Energy Savings Plan in effect for the public sector
 Law frameworks in progress: program to establish the
rational and efficient use of energy; Eolic Law and Bio-fuel
Law

13. Some Reforms and Actions (cont.)

Infrastructure:
 Extension of the Panama-Colon Highway
 “Metro” system
 Panama Bay’s clean-up
 Reorganization of the roads system

Technology and Innovation
 Law 59 of 08/11/2008: promotes digital inclusion
○ Universal Internet access
○ “Panama Inteligente” (by 2014): a paperless country (Ejustice; E-exports…)

14. Actions Led by the NCC

National Competitiveness
Forum:
A public-private encounter
to build consensus
Status of implementation of the previous year's
Action Agenda
57%
59%
56%
57%
38%
31%
○ The “Action Agenda”
29%
23%
○ Implementations follow-up
13%
18%
14%
5%
2st NCF
3rd NCF

In process
4th NCF
5th NCF
 Completed  Pending
Source: National Competitiveness Center

15. Actions Led by the NCC
(cont.)
 Monitoring of
competitiveness indexes
• Thorough analysis
• Joint efforts with
SEAC
• Workshops with
local partners
 Investigation, analysis
and diffusion

16. Final Words…
The nation’s competitiveness hinges on the “smart
management” of micro and macroeconomic forces, and
the willingness of individuals, enterprises, and
policymakers to work hand-in-hand to meet shifting
challenges.
If a country is to reach a sustainable level of
development, both government and businesses must
move in tandem toward common goals: contributing to the
improvement of the quality of life for all
citizens, overcoming the barriers of unemployment and
poverty, and improving productivity across the board.
Competitiveness is not exclusive to a single group or
sector; it can be achieved only through a joint effort.

17. Competitiveness is not a
destiny, it is a path…

18. NATIONAL COMPETITIVENESS CENTER
TOGETHER WE DO IT BETTER!
A not-for-profit private organization with a
public-private board of trustees
www.cncpanama.org
Justo Arosemena Ave. and 31st Street
Panama City, Republic of Panama
(507) 394-4363 or 394-4364