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ECONOMY
country is at the nexus of six fiber-optic broadband networks. This connectivity is part of the impetus behind Panama’s status as an up-and-coming innovation hub for the Americas. The International Telecommunications Union (ITU) estimates that Panama’s telecommunication sector accounted for 3 percent of GDP in 2012 and was directly responsible for nearly 16,000 jobs, or 1.2 percent of domestic employment. The ITU also states that broadband indirectly contributed more than 11 percent of all growth in GDP from 2006 to 2010.
Strong e-government leads business, municipalities
The Panamanian government is in the midst of rolling out a range of e-government initiatives.The 2013 Global InformationTechnology Report from the World Economic Forum cites one such initiative, PanamaEmprende, as cutting the time to set up a company from five days to 15 minutes. Other programs aim to create a Paperless Panama, deliver connectivity to every municipality, and implement a nationwide 311 Citizen Service Center.
The progress in both the public and private sectors rests in part on a collaboration that gave birth to a clear, cohesive, long-term, national ITC strategy: the approach brought together resources and knowledge from Panama, the Americas, and as far away as Asia. In 2008, the government facilitated the funding of the working group that put together Panama’s “National ICT Strategy 2008-2018,” which cites Korea as an explicit model.
Panama is the probable next member of the Pacific Alliance, which encompasses more than 210 million people and would end 90 percent of tariffs among member states.
Calling Korea “one of the most innovative, competitive, and successful ICT sectors in the world,” the strategy aims to emulate that country’s success by boosting private investment, strengthening human capital, promoting innovation and technological transfer, and enhancing the technical capacity of local companies in Panama.
Natural resources and new sources of power
Panama’s chief mineral resources are gold, silver, copper, and molybdenum. Mining accounts for just over 2 percent of GDP, but the sector grew at a blistering rate of more than 30 percent in 2013. Continued growth is expected, given that several projects are not yet fully operational. The government estimates that the country has $200 billion in proven mineral reserves, including what the Panamanian Mining Chamber calls the largest known, unexploited copper reserve in the world at Cerro Colorado. Raymond Gatcliffe describes the development of the copper industry as a “significant opportunity” that has not yet factored into the plans of many investors.
Electricity rates in Panama remain high amid attempts to diversify supply, increase availability, and make transmission networks more robust. Hydroelectric dams account for about 60 percent of power generation, while oil-fired plants supply 40 percent. Panama is working with the United States and the Energy and Climate Partnership of the Americas to diversify the supply of biofuels being used to supplement or replace hydrocarbons.
Investment target: tourism
Data from the World Travel and Tourism Council indicates progress in Panama’s tourism and travel sectors and points to further improvement in years to come. The direct contribution of travel and tourism to total national employment has increased from
Government Other Services Health Education Business Finance Transport Tourism Distribution Construction Utilities Manufacturing Mining Agriculture
0% 10%
2012 2032
20% 30% 40%
Projected Industry Share of Panama’s GVA to 2032
Source: Oxford Economics / Have Analytics/ Deloitte
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