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Foreign Direct Investment (FDI)

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An interesting typo in the title of the article.


Foreign investment in Panama up near !8%


FOREIGN direct investment (FDI) in Panama reached $4.1 billion in the first nine months of the year  an increase of 17.8% compared to the same period of 2015 reports  the Ministry of Economy and Finance.

“This figure shows the evident and continuous confidence of investors in the development of the country, stimulated by the macroeconomic policies, programs and projects carried out by the government” said the ministry.

An analysis of the figures shows that 64.5 percent of foreign investment this year is reinvested earnings, “which demonstrates the confidence foreign investors have about the positive future prospects of our economy,” said the report

Foreign direct investment in the third quarter totaled $1.5 billion, an increase of 54.3 percent compared to the $986.2 million invested in the same period of 2015.


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Foreign Investment Figures in Central America

In 2016 44% of foreign direct investment in the region was concentrated in Panama, and a fourth consecutive year of increases was recorded, with 16%, while Costa Rica received 27% and increased by only 1.1%.

Monday, August 14, 2017

From chapter I of the report "Flows of FDI in Latin America and the Caribbean", by the ECLAC:

FDI into Central America grew by 3.7% in 2016 and totaled 11,833 million dollars .The increase in investments to the two main recipients of the subregion -Panama, which recieved 44%, and Costa Rica, 27%- compensated for the drop in FDI to the other Central American countries.

With growth of 15.9%, Panama received investments of US $5.209 billion in 2016, a record figure that was reached after four consecutive years of increases and which is part of an upward trajectory that began in the mid-2000s. With this value, the country ranked sixth in Latin America and the Caribbean, behind Peru.  The largest component of FDI that entered Panama was the reinvestment of profits (66% of the total) and the level remained at levels similar to those of 2015 (up 2%).  Loans between subsidiaries accounted for 19% of total FDI and fell by 7%, while capital inflows accounted for 15% and remained the smallest component of FDI as in the last four years.  

See report by the CEPAL "Foreign Direct Investment in Latin America and the Caribbean 2017" (In Spanish).



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Flow of foreign direct investment drops 17% in Panama between January and March

Sat, 06/23/2018 - 19:21


The flow of foreign direct investment (FDI) in Panama totaled 1,098.5 million dollars in the first quarter of this year, with a decrease of 17 % over the same period of 2018, official statistics released.

Data from the National Institute of Statistics and Census (Inec) show that foreign capital income had in absolute terms a decrease of 225.6 million dollars between January and March, compared to the first quarter of the previous year.

It added that the percentage distribution of foreign capital income was 39.8 % of the item of other capital; 31.1 % in reinvestment of profits, and 29.1 % of shares and equity participation.

The flow of FDI totaled 5,319.2 million dollars in 2017 in Panama, which represented 8.6% of nominal GDP, as well as an increase of 1.8% compared to the result of the previous year, according to the official data.

Panama's economy grew by 4.2 % in the first quarter of 2018, while the indicator closed with an expansion of 5.4 % in 2017.

The International Monetary Fund (IMF) projects Panama's GDP growth of around 4.6 percent for this year and around 6.8 percent by 2019.



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First quarter  foreign investment down 17%

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Direct foreign investment (FDI) in Panama fell 17%  to $1.098.5 billion in the first quarter of this year, compared to the same period of 2017  according to l statistics released  Sunday, June 24.

Data from the National Institute of Statistics and Census (Inec) shows that foreign capital income had in absolute terms a decrease of $225.6 million dollars between January and March, compared to the first quarter of the previous year.

FDI totaled 5.319.2 billion  in 2017 8.6% of nominal GDP, as well as a 1.8% increase compared to the result of the previous year, according to the data official

Panama’s economy grew by 4.2% in the first quarter of 2018, while the indicator closed with an expansion of 5.4% or in 2017.

The International Monetary Fund (IMF) projects Panama’s GDP growth of around 4.6% for this year and around 6.8% for 2019.



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Businesspeople urge more legal security to attract investments to Panama

Sun, 06/24/2018 - 17:25


The Chamber of Commerce, Industry and Agriculture of Panama (CCIAP) said  that the lack of seriousness in the public bidding process frightens investors and urged that legal security be guaranteed in the country.

After recalling the fall registered by Panama in the Global Competitiveness Index 2017-2018 published by the World Economic Forum, the Chamber asked to be "careful" and not convert that indicator "of legal security into an indicator of the worst qualified".

That can happen thanks to the stock of "public tenders of national interest that leave many doubts unanswered and suspicion that only serves to stoke poisonous suspicions, said the union that groups more than 1,600 companies in Panama, without pointing out any process in specific.

"What is the sense of organizing these processes, establishing rules of the game supposedly characterized by seriousness and transparency, convening potential investors, standardizing participation criteria and designing evaluation committees composed of prestigious professionals, if then, surprisingly, we turn to the board to return to the starting point from scratch," the guild asked.

It added that in case of anomalies in the public bidding process, "the country needs to know, if they exist, to investigate them and demand responsibility for them."

In early June, the Ministry of Public Works (MOP) of Panama annulled the report of the first assessment for the design and construction of the fourth bridge over the Panama Canal, due to alleged inconsistencies in the traffic flow studies analyzed by two different entities.

The CCIAP also urged "compliance with the rulings of the Supreme Court of Justice concerning the millionaire investment projects whose execution awaits state officials to hear repeated rulings of that court of justice on that matter."

"Legal security is a significant component of the competitiveness of a country, and a determining factor in attracting foreign investment, as is the case of Panama in the need to generate new and growing sources of employment," it said.

The flow of foreign direct investment (FDI) in Panama totaled 1,098.5 million dollars in the first quarter of this year, with a decrease of 17 percent over the same period of 2018, according to data from the National Institute of Statistics and Census ( Inec).



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Central America: Foreign Direct Investment Up 10%

Partly explained by the regimes created to encourage investment in different sectors, countries in the region went from receiving $11 billion in 2016, to $12.1 billion last year.

Friday, September 28, 2018

According to a study by the Center for Economic Integration Studies, in 2017 inflows of Foreign Direct Investment (FDI) in the region reached a record figure of $12.083 billion, registering an increase of 9.8% compared to 2016. When analyzing the period from 2010 to 2017, it can be seen that the inflow of FDI has increased considerably, showing a growth rate of 7.9%.

This has led to Central America's share of total FDI received by Latin America and the Caribbean (LAC) to increase over time; in 2010 this share amounted to 3.9% of the total received by LAC, but in 2017 this percentage of participation had risen to 7.8% of the total. The Commission for Latin America and the Caribbean (ECLAC, 2018) estimates that this increase will follow the trend noted so far, in contrast to the downward trend seen in the rest of the LAC region in terms of attracting FDI, with an annual change in 2017 of -6.7%.

In 2017, Panama captured 47.5% of the total foreign investment income that came into the region, corresponding to 5.319 million dollars, followed by Costa Rica with 2.742 million dollars, that is to say, 20% of the regional total. Below this group are the amounts received by El Salvador (3.2% of the total), Nicaragua (8.2%), Honduras (10.4%) and Guatemala (10.8%). 

The report explains that FDI deepened in Central America after the privatization of public companies in the nineties, which were mainly oriented towards the services sector, such as financial intermediation, telephony, electricity and drinking water. In this way, the first wave of FDI in the region was concentrated in the acquisition of public companies focused on this provision of services. 

The document goes on to say that in terms of the origin of investment flows into the Central American region, this is characterized by high concentration in a few countries which in turn share important links with Central America in the commercial dimension. In 2016, investment from the United States prevailed, registering a total of 10,984.4 million dollars, representing 27.3% of the total received by Central America, followed by the European Union contributing 17.2% of the total, and thirdly, is the region itself contributing to 12.3% of total FDI income.

See full report: "Five trends of Foreign Direct Investment (FDI) in Central America". (In Spanish)



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Panama and its Strategy to Attract Investments

Encouraging investments in free trade zones, increasing the number of new headquarters of multinational companies and strengthening diplomatic relations with Asian countries, are some of the stakes of the Central American country.

Wednesday, April 10, 2019

Taking advantage of the competitive position in terms of connectivity and logistics is the main offer of the Panamanian economy for companies from all over the world to settle in the country.

See "Logistics: Business Stolen from Panama?"

Néstor González, Minister of Commerce and Industries, told Panamaamerica.com.pa that "... Panama is betting on connectivity issues, free zones, product distribution and the establishment of new headquarters of multinational companies (SEM). We want Panama to be a spearhead for all companies around the world, so that they can settle here and take advantage of the connectivity offered by our country."

The article adds that "... Panama's new foreign policy strategy is aimed at strengthening diplomatic relations with countries in Asia and the Middle East, including the United Arab Emirates (UAE).

You may be interested in "Logistics: Can Competitiveness Be Restored?"

Regarding Panama's pending logistical issues, the authorities believe that it should invest in infrastructure to improve the connection between the country's main ports, since it is one of the most determining factors for the economy to recover the competitiveness that has begun to lose regionally and globally.



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MEDIAWATCH: Investigating ex-leaders attracts investment


Marinelli and Varela facing coruuption probes

Posted 02/07/2020

On July 2, 2020, Panama made history: for the first time in our republican life, two former presidents of the Republic, from different parties, were being investigated simultaneously writes  Rodrigo  Noriega in La Prensa

Recall that the closest precedent was during the Ricardo Martinelli administration, when two former presidents of the Republic of the PRD were part of two separate judicial processes. Both processes concluded favorably for PRD politicians.

In these pandemic moments, and with a weak economy, does the element of the judicial processes against the ex-rulers help or harm the economy and the social stability of the country?

The most similar historical reference is that of Peru, which in 2018 had open legal proceedings against all the living ex-presidents of that country. That year, foreign direct investment was $6,488 billion.

If the investigation and prosecution of its ex-leaders had alienated foreign capital or sent a signal of political instability, Foreign Direct Investment would have collapsed.

In contrast, FDI for the year 2019 was $8.892 billion an increase of 37.05% over the previous year. At first glance, it is in Panama's interest that the world knows that former presidents are being investigated here.

Note: what is stated here does not imply any affirmation of guilt of the ex-leaders currently investigated.


http://MEDIAWATCH: Investigating ex-leaders attracts investment

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Five multinationals establish HQs in Panama


Posted 04/07/2020

The establishment of five  headquarters of multinational companies  with an initial investment of $38 million has  been approved by   The Ministry of Commerce and Industries (Mici)

Juan Carlos Sosa, vice-minister of Foreign Trade of the MICI, that this first stage will generate about 116 jobs.

"After complying with all the requirements set forth in Law No. 41 of 2007, the companies Spectrum Biomedical Latam (Canada), Inceca Regional Services, Inc. (Nicaragua), ABB Central America and the Caribbean, SA (Switzerland), Alórica Panama (United States States), and EY Latam North Holding, SA (the United Kingdom and the USA), will be able to start operations soon ”, said a Mici  statement,

According to Mici the multinational companies are related to the manufacture of medicinal products, beverage production and distribution, electricity generation, call center services, and audits and tax services.

"The approval of these licenses is one more step in the search for new investments, and will positively impact the economic reactivation that is currently being promoted," said Sosa.



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Business Chamber backs moves to attract investment as economy reopens


Posted 18/10/2020

Panama’s Chamber of Commerce, Industry, and Agriculture (Cciap) has voiced its support for Government moves to attract overseas investment and says that the country should boost its image, at a time when an economic reopening process has begun.

“Panama must present itself as a destination for investments that, in addition to implementing and respecting the established biosecurity measures, has an action plan that guarantees national development, as well as productivity, stability, and legal security for those who place their trust in this country, ” said the Chamber said in a statement on Sunday, October 18.

According to the Cciap, the country must take "firm and accurate steps to strengthen and project the competitive advantages" that distinguish Panama from other nations.

“The country not only needs economic reactivation planning, which encourages local investment. It also requires visualizing changes in the behavior of logistics chains and new global needs, in order to assess new opportunities in industries such as manufacturing and technology. Meanwhile, the logistics hub must be strengthened in the face of the challenges posed by the pandemic and adapt to them, "it added.

The Chamber supported recent government decisions, such as the recently enacted Law 159 that creates the new Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing and approval of an Executive Decree which creates within the category of Permanent Resident for Economic Reasons, the subcategory of Permanent Resident as a Qualified Investor".



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OPINION: Seeking leaders as investment plummets


Posted 13/05/2021

Foreign direct investment plummeted last year. In this area, Panama was only able to raise just under $600 million (a drop of more than 85%), so it will be a huge challenge to attract foreign investors. The National Competitiveness Center advises, to face the challenge, promote the country, but it also recommends more competitiveness and better prepare our human resources, and strengthen the country in terms of transparency, institutionality, ethics and simplification and digitization of procedures. For years, the country has lagged behind in these matters. Our education goes from bad to worse, the bureaucratic procedures are so cumbersome, that they lend themselves to bribery, as, indeed, occurs in municipalities and government entities. Accountability and transparency are undoubtedly our greatest institutional weaknesses, with the aggravating circumstance that justice is highly corrupt. Our economy is seriously affected by the restrictions to combat the pandemic. Recovering will not be easy if, in addition, we have those heavyweights that prevent it. Everything indicates that before recovering economically, we will have to improve ourselves as a country. And this includes, particularly, our leaders. – LA PRENSA, May 13.



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