CLEAR AS GLASS
Panama has committed itself to adopting globally accepted standards and renewing its image as a safe and transparent financial hub.
As a result of the recently expanded canal and the government's investment in impactful infrastructure projects, Panama seeks to retake the crown as the fastest-growing economy in Latin America. The IMF has predicted global growth in the order of 3.1% for 2016, which is considered a moderate product of the deceleration in world trade. Meanwhile, the Latin American region and the Caribbean as a whole recorded an economic recession (-0.7%). Despite this, Panama recorded GDP growth of 4.9% for 2016, according to official figures of the National Institute of Statistics and Census, making it the second-fastest growing country in the Americas in terms of economic growth and one of the highest in the world.
In order to achieve its growth target, the government is investing and promoting Panama as a reliable and transparent platform. 2016 will be remember as the year of the “Panama Papers,” which significantly impacted the country's reputation in the international arena. Local institutions, however, promptly reacted to boost and renew the image of the country as a safe and transparent financial hub.
Elizabeth L. Heurtematte de Alfaro, Partner at Lovill, confirmed to TBY the immediate impact of the Panama Papers scandal on the international community of investors: “The Panama Papers affected the general perception of the country; however, companies and individuals seeking to do business have not been that concerned by it. They are more concerned about the state of the market, the opportunities, the legal framework, and how they can grow their business.”
Rolando J. de Leon de Alba, General Manager at Banco Nacional de Panama, stressed that “Panama has taken many steps to promote transparency, fairness, and comply with the standards set by the International Financial Action Task Force (FATF) and the OEC. That is where the country made the biggest improvement this year (…). When something like this happens, it threatens the system.”
The World Bank supports the ambitious reform program promoted by Panama's government in terms of transparency; it approved a USD300 million loan to support the country's efforts toward strengthening and consolidating international tax transparency, financial integrity, and fiscal management. Furthermore, the loan seeks to improve social programs, among other services, to ensure that 60% of the population living in extreme poverty benefit from at least one welfare program.
In order to improve the exchange of international tax information, Panama has committed itself, through this operation, to adopt globally accepted standards for the exchange of financial information with other countries, namely the Common Reporting Standard for Automatic Exchange of Financial Account Information in Tax Matters (CRS). In other words, ownership and identity of information, including sensitive accounting records, if needed, will be available to all related institutions.
According to international organization, improvements in fiscal management will also underpin the continuity of the robust growth that Panama has been enjoying over the last decade, as they promote “a stable macroeconomic framework and sound debt management based on fiscal prudence.” In that regard, Dulcidio de la Guardia, Minister of Economy and Finance, commented: “The transparency of Panama and its financial system is the key to attracting investors for the country. Therefore, the country has been subject to the evaluations of financial regulators such as FATF to ensure our commitment to the fight against money laundering and terrorism.
In this regard, Panama has complied with the recommendations of the FATF and in 2015 was removed from the agency's gray list, since it has the regulatory and institutional framework defined in an action plan for the prevention of money laundering, terrorism, and the proliferation of weapons of mass destruction. In order to increase financial transparency and improve the country's reputation, the government adapted the legislation of the country in a short time to changing international standards and expanded its network of treaties and tax and trade agreements. The real challenge for Panama now is to not only implement the changes but to evolve into a financial hub where transparency becomes an opportunity rather than a risk for the expansion of the sector and its contribution to growth.
CLEAR AS GLASS
TABLE OF CONTENTS
Review
A Huge Foot in Both Worlds
Although Panama's place in the sun is all but guaranteed by the extension of the canal, the isthmus nation will still have to toe a fine line in assuaging the world over the transparency of its financial dealings.Happily, it seems to be making significant progress.
read articleInterview
Saint Malo de Alvarado, Vice President, Republic and Minister of Foreign Affairs
TBY talks to Isabel de Saint Malo de Alvarado, Vice President of the Republic and Minister of Foreign Affairs, on the historic significance of the Summit of the Americas and initiatives to boost Panama's competitiveness.
read articleGuest Speaker
The Most Honourable Andrew Holness, Prime Minister , Jamaica
TBY talks to The Most Honourable Andrew Holness, Prime Minister of Jamaica, on the potential to boost cooperation between the Caribbean and South America, learning from the success story of the Panama Canal, and further areas of growth.
read articleInterview
Miguel Ángel Esbrí, National Secretary, Competitiveness & Logistics Secretariat
TBY talks to Miguel Ángel Esbrí, National Secretary of the Competitiveness & Logistics Secretariat, on becoming the best place to do business in Latin America, growing GDP by 50%, and boosting Panama's nascent tech sector.
read articleInterview
Alberto A. Alemán A., Director, PROINVEX
TBY talks to Alberto A. Alemán A., Director of PROINVEX, on the transformation from services to innovation, meeting the needs of an evolving global economy, and honing what makes Panama tick as a unique part of the global commercial food chain.
read articleInterview
Jorge García Icaza, President of the Chamber of Commerce, Industries, and Agriculture , Panama
TBY talks to Jorge García Icaza, President of the Chamber of Commerce, Industries, and Agriculture of Panama, on eliminating bureaucracy, boosting trans-continental and value-adding shipping, and smartening the public sector.
read articleInterview
Roberto Forte Taylor, Director, Panama Green Building Council (PGBC)
TBY talks to Roberto Forte Taylor, Director of the Panama Green Building Council (PGBC), on how to multiply green construction projects, developing a comprehensive eco-protocol, and how to bring a new green Panama into existence.
read articleInterview
Dulcidio de la Guardia, Minister, Economy and Finance
TBY talks to Dulcidio de la Guardia, Minister of Economy and Finance, on increasing transparency, meeting the highest international standards, and supporting the government's commitment to accountability and citizen participation.
read articleInterview
Eli Faskha, General Manager, Soluciones Seguras & President of the Panamanian Chamber of Technology (CAPATEC)
TBY talks to Eli Faskha, General Manager of Soluciones Seguras & President of the Panamanian Chamber of Technology (CAPATEC), on his strategy to expand regionally and areas of opportunity.
read articleInterview
Luis Garuz Berenguer, Business Development Manager, Quality Freight Corp.
TBY talks to Luis Garuz Berenguer, Business Development Manager of Quality Freight Corp., on the benefits of being based in Costa del Este, the impact of the expanded canal, and the company's competitive advantages.
read articleInterview
Jorge Barakat Pitty, Minister, Maritime Affairs of the Panama Maritime Authority (AMP)
TBY talks to Jorge Barakat Pitty, Minister of Maritime Affairs of the Panama Maritime Authority (AMP), on facilitating maritime trade in the country, the importance of developing human resources, and its collaboration with the Port of Hamburg.
read articleInterview
Miguel A. Lohse Muñoz, Operations Manager , Intercoastal Marine Inc. (IMI)
TBY talks to Miguel A. Lohse Muñoz, Operations Manager of Intercoastal Marine Inc. (IMI), on the new development opportunities in the country, developing business in the energy segment, and regional growth potential.
read articleInterview
Paul Wallace, Executive President , Panama Ports Company (PPC), Hutchinson Ports
TBY talks to Paul Wallace, Executive President of Panama Ports Company (PPC), Hutchinson Ports, on the consequences of canal expansion, adding value in logistics, and future priorities for the company.
read articleInterview
Juan Carlos Croston, Vice President Marketing & Corporate Affairs , Manzanillo International Terminal-Panama (MIT-Panama)
TBY talks to Juan Carlos Croston, Vice President Marketing & Corporate Affairs of Manzanillo International Terminal-Panama (MIT-Panama), on creating capacity when volumes are down, its CSR initiatives in Colón, and future goals.
read articleReview
A Watershed Moment
With 50% of Panama's land used for agriculture, it is little wonder the sector is essential to the country's economy. However, in recent years, Panama's farmers have witnessed reduced output and exports of agriculture products. Whether the country can turn its agricultural fate around depends on the state's management of resources and regulations.
read articleInterview
Marcela Paredes de Vásquez, Minister, Education
TBY talks to Marcela Paredes de Vásquez, Minister of Education, on the importance of monitoring and benchmarking the education sector, language exchange partnerships, and creating a new generation of Panamanians qualified to power growth.
read articleInterview
Jennifer Champsaur,, Deputy Director , Tourism Authority of Panama (ATP)
TBY talks to Jennifer Champsaur, Deputy Director of the Tourism Authority of Panama (ATP), on the importance of MICE tourism, opportunities within niche sectors, and the expansion of infrastructure to support further growth.
read article
