n
2003, the Republic of Panama celebrates its centenary, marking 100 years
of independence from Colombia. It is a time to take stock and reflect
and, more importantly, to look ahead to the future.
As one of the strongest economies in Central America, with a stable
political democracy, Panama serves as a hub for international trade
and has an important facilitating role under the Free Trade of the Americas
Agreement (FTAA). A long-term ally of the United States – which
formally handed over ownership of the Panama Canal in 1999 – it
has been the focal point for much of the preliminary FTAA negotiations.
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Mireya Moscoso
‘It
is an ideal location for multinationals and small enterprises
alike’
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President
Mireya Moscoso, the country’s
first female head of state, is keen to promote Panama’s privileged
strategic location – home to the world’s most important inter-oceanic
waterway and Latin America’s largest container port, the Colon
Free Zone – to attract foreign investment. The dissolution of trade
barriers across the continent makes it an ideal location for multinationals
and small enterprises alike, she says, as it is a crossroads between
North America and Latin America, and between the Atlantic Ocean and
the Pacific Ocean.
Panama, a country slightly bigger than Ireland and bordered by Costa
Rica to the west and Colombia to the east, has always wielded an influence
greater than its size. As a transit corridor for international trade,
it has long been attractive for export-oriented business, and it enjoys
a sophisticated financial services sector, supported by a developed
transport and communications infrastructure.
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Norberto Delgado
‘We
should become a distribution platform for other countries’
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Norberto
Delgado, the minister of economy and finance, says it
is essential that Panama consolidates its strengths in services, communications,
skilled labour and location, to become the region’s preferred logistics
hub. “We should exploit our advantages and become a distribution
platform for other countries,” he says.
Domingo Latorraca, vice-minister of the economy, says the key to Panama’s
success has been its balanced management and track record of stability.
The country is now in its second decade after the overthrow of the Noriega
regime, and Mr Latorraca says Panama has developed a unique, robust
service-oriented economy that provides ideal conditions for international,
export-oriented business development.
In the past decade it has opened its doors to the world, with an extensive
programme of liberalisation and privatisation that has attracted substantial
foreign interest. The UK’s Cable & Wireless is the largest
single investor in the telecoms sector through its 49 per cent stake
in former state monopoly Intel. Competition in this sector was stimulated
at the start of this year with the abolition of the Intel monopoly,
underlining the government’s commitment to an open and competitive
market-driven economy.
Though growth has slowed, an inevitable consequence of the decline in
world trade, the medium-term outlook for Panama is extremely promising.
The government is now looking to accelerate growth in less-developed
areas, away from the canal, the free zone and the ultra-modern skyscrapers
in the capital, Panama City. With a population of just under three million,
there is still work to be done in addressing some of the social inequities
that survive in the country, especially in rural areas.
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Harmodio Arias Cerjack
‘Foreign
direct investment is critical in the overall development
programme’
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Newly-appointed
minister of foreign affairs Harmodio Arias
Cerjack is keen to consolidate relations with the US,
as well as with the UK and the European Union, in order to drive forward
the development agenda. Among his priorities will be the promotion of
a free-trade agreement with the US, the country’s main trading
partner. Foreign direct investment is seen as critical in the overall
development programme.
Although there is an established core of British investors, there is
ample scope for improved links. English is widely spoken alongside Spanish,
making business dealings comparatively simple. The opening of the free
trade area in Central America also raises the size of the local market
beyond Panama’s own population.
British ambassador Jim Malcolm sees the country as a platform for re-export
into other neighbouring states. He says there are opportunities across
the board, especially in shipping and marine services. There is also
scope to increase awareness of Panama as a tourist destination, another
priority for President Moscoso’s administration. The country offers
everything from jungle adventures to five-star luxury hotels. “The
great attraction of Panama is that it is a country of contrasts,”
he says, “a country of beaches, mountains, rainforests.”
Panama is set to be a gateway between continents, a hub for international
trade and commerce. Its ship registry is the world’s largest, the
Colon Free Zone is the biggest in the region, while the sophisticated
services sector provides ample support for business. Though agriculture
is important, the economy does not rely on primary commodities, unlike
many others in the region.
Nivia Rossana Castrellón, executive director of the Presidential
Council for the Attainment of the Permanent FTAA Venue, believes Panama
has all the right ingredients to become the permanent headquarters of
the FTAA from 2005. “I think it would be like giving Panama a quality
seal,” she says.
