Is Panama Burned Out?

[Moderator_02]

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Is Panama Burned Out?

One of the best parameters of the strength of an economy is the amount of businesses it creates. In Panama, 47% fewer companies were created in 2017 than in 2016.

Tuesday, January 23, 2018

Not only were fewer companies were created in 2017, but more companies were closed than in 2016.

Although growth of the economy in general still remains above 5% -still far from the vigorous 10% of a few years ago- other macro data, such as the increase in unemployment and the growth of independent or informal work, shows that, starting in 2018, Panama has entered a phase of economic slowdown. Businessmen in the commerce sector are even talking about "recession", both in retail and in wholesale sales.The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) reiterated "its concern about the problems that are hampering the progress of sectors long marginalized by policies that discourage their permanence and certainly threaten their productive continuity, such as industry and agriculture. The same is true for other slowdowns such as in trade, tourism, construction and real estate, which also require new perspectives in the future," at the same time as proposing different measures to boost the economy. See "Panama: Actions Proposed for Economic Reactivation"

An article on Prensa.com reports that "For the economist Rolando Gordón the increase in unemployment is closely linked to the number of notices of cancellation of operations last year. He indicated that higher costs in electricity bills, as well as in other inputs could have had an impact on the closure of these companies."

See full article on Prensa.com: Decrease in business creation (in Spanish).

 

https://www.centralamericadata.com/en/article/main/Is_Panama_Burnt_Out

[Moderator_02]

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Panama: Actions Proposed for Economic Reactivation

Speeding up the execution of public projects and creating a public-private entity that enhances exports, are some of the proposals put forward by the business association to reactivate different economic sectors.

Tuesday, January 23, 2018

From a statement issued by the Chamber of Commerce, Industries and Agriculture of Panama:

Although we expect  growth of the Panamanian economy of approximately 5.4% for this year 2018, such increase continues to be supported by economic sectors linked to foreign trade, such as the Panama Canal, ports and airports.

As a representative organization of the country's private entrepreneurial effort, the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) reiterates its concern about the problems that hamper the progress of sectors long marginalized by policies that discourage their permanence and certainly threaten their productive continuity, such as the industrial and agricultural sectors. The same is true for other slowdowns such as trade, tourism, construction and real estate, which also require new perspectives in the future.

Read full release (in Spanish).

 

https://www.centralamericadata.com/en/article/main/Panama_Actions_Proposed_for_Economic_Reactivation

[Uncle Doug]

Instead of new public projects, Panama ought to try to complete their current ones. 

Reducing government inefficiency would help, too.  It takes forever to get permits for private projects..

The labor laws are so stacked in favor of the employee that it is easy to take advantage of the employer. Foreign investment in Panama is not actively encouraged.  There is a lot that Panama could do to encourage growth, but I don't see any of those measures being discussed, let alone implemented.

The exodus of North Americans living on tourist visas hurt the economy, regardless of any other merits of the new immigration policies.  It could have been handled differently.

Panama ought to explore the reasons why 47% fewer companies were created last year.

From the La Prensa article:

 Last year we managed to hold a meeting with the Economy Minister, Dulcidio De La Guardia , on the issues that concern the private sector, but we have not been able to find a new date to resume the talks, he said.

Are you kidding me?  What does the Economy Minister do to earn his salary?

[JohnF13]

It seems to me that the greatest asset of Panama is the canal.  Unfortunately, it is also it's greatest detriment.  As long as the canal brings in boatloads of cash ( pun intended) then no real effort will be expended on diversification.