Panama Bids on Obtaining First World Service Infrastructure
By Juan Carlos Martinez
Many articles in the local press have mentioned that Panama as a country is not very competitive in the international market. Competitively for countries is their capacity to offer products or services in the international market and how this capacity compares to other competitors in the market. For a country it is important to determine where its competitive advantages lie and where it is failing because economic policy can influence this.
Recently during the IV National Forum for Panama to stand Competitively, the Minister of Economy and Finance, Mr. Alberto Vallarino, announced that the government intends to invest USD4 billion in the next five years to shore up Panama in the international market place. There are four main sectors that have been identified as being competitive sectors needing investment such as logistics, tourism, agriculture and financial services.
Logistics is one of the first sectors to receive the investment push with USD1 billion as the sector is primed with a lot of the structures already in place such as the Panama Canal, the railway and ports on both oceans. Where the government will invest heavily to support the existing infrastructure is in roads such as finalizing the Panama-Colon highway, rebuilding the road network in Colon, finishing the North Corridor and connecting Tocumen passenger terminal with the cargo terminal.
For agriculture the investment is estimated at USD2 billion in order to increase land use around the sectors where high margin crops are planted. High margin crops in Panama include tropical fruit such as pineapple, melons, watermelons, coffee, among others. With these crops the cost of production is low as compared to the sales margin. There will also be investment in infrastructure in order to provide the sector with appropriate irrigation through dams, pumps and drainage systems.
USD800 million will be invested in tourism in order to brand Panama as a luxury destination. In this sector there are specific areas which will be developed such as the Dry Arch of the Azuero Peninsula, Las Perlas Islands like Contadora and Saboga, beaches in the Central Pacific such as Santa Catalina, Coiba Island and Pedasí and finally the Western sector of the country with places like Boquete and Isla Colon in Bocas del Toro.
This is a huge commitment but it is one that should gradually increase GDP, reduce foreign debt and create new jobs for many years to come.
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