BUREAUCRATIC AND CENTRALIZED

Panama 2017 | ECONOMY | COLUMN

TBY talks to Gina Montiel, General Manager, BID, on the sector.

Gina Montiel

How are you improving the quality of life in Panama?

One of our main objectives here in Panama is to help Panamanians participate in sustainable growth. Working with them, we try to lay the foundation for inclusiveness and sustainable growth. We are trying to help the Varela administration design a better education system and improve access to social services. Health and education ministries do not have services in remote areas where demand for social services is low because of the circle of poverty. The policy of social protection is important because it gives lower-income people incentives and access to social services to develop their skills.

Why is it so hard in such a small country to divide the wealth more equitably?

The problem is not about using the rent from the Panama Canal or redistributing taxes; rather, it is that, institutionally, Panama is weak in many sectors, especially social ones. If you do not develop human capital in these areas, people will not be productive or participate in economic growth. This is a major challenge because institutions are usually bureaucratic and centralized, but social expenditure is captured by the bureaucracy. The main challenge is developing efficient institutions that provide services and create incentives.