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Panama 2017 | ECONOMY | VIP INTERVIEW

TBY talks to Miguel Angel Esbri, National Secretary of the Competitiveness & Logistics Secretariat, on the country's ranking in global indices, establishing new educational institutions, and the effects of the “Panama Papers" release.

According to the 2016 Global Competitiveness Index, Panama ranked 42 out of 138 economies worldwide. What is the country's strategy to continue improving its competitiveness?

Panama improved its position in the World Economic Forum rankings by an impressive jump of eight positions. We are only nine positions away from Chile (33) and overall, this has been a massive success for Panama. The main objective of the secretariat is for Panama to become the most competitive economy in Latin America in 2019—Chile tops that list at the moment. However, it is worth mentioning that in the World Bank's Doing Business Report, Panama lost three positions—we currently rank 70th and are the sixth Latin American economy. By 2019, we want to be in the top three in the region in terms of doing business. At the moment, Mexico, Colombia, Peru, and Chile top the chart in Latin America. We want to be a part of that group. These are our objectives and my goals as National Secretary. Achieving all these will enable us to complete the Strategic Development Plan for the country that our President has implemented, namely to grow our economy from USD40 billion to USD68 billion by 2019. In this context, we have a competitiveness plan at the national level that we follow. Currently, our fiscal deficit is around 0.5% and the country's debt is just below 35%. We have increased the per capita income of Panamanians and GDP by almost 40% since we have been in office. We have identified three main challenges to improving the business environment in Panama. These include governmental bureaucracy that stifles entrepreneurs and businesses, the lack of highly specialized workforce, and a certain lack of institutionalization at several levels. The secretariat works to improve such conditions in Panama. One such project is the Panama Digital project: we want to make Panama the Silicon Valley of Latin America. We have put together joint efforts with other entities and organizations at the national level to boost the arrival and presence of tech-led companies to develop new projects and technologies in Panama. We coordinate and facilitate this project alongside SENACYT Panama and the Panamanian Chamber of Technology. One of our main advantages is that we are part of the Presidency of Panama. There are four secretariats under the presidency of the country: the Secretary of Objectives, which takes cares of the achievement of the government's goals; the Secretary of Legal Affairs; the Secretary of Social Affairs; and the Secretary of Competitiveness. Our role is to coordinate efforts from the presidency with all involved parties in each particular project. For example, with the joint efforts in terms of the lack of highly qualified workforce, we coordinate activities with the Ministry of Labor and other such institutions. We plan during our term in office to create over 120,000 new positions and train more than 232,000 people. Additionally, we have established the country's first technical and professional schools.

How is establishing new technical schools important for the country's efforts to increase the availability of qualified human resources?

Companies arriving here face a lack of technically qualified human resources (in some areas). At the same time, certain companies have also raised concerns over the lack of soft skills in people. We can see the consequences of this: in most customer-facing jobs such as in the hospitality industry, we have people from other nationalities working there. The development of these technical schools is in response to the needs and concerns of companies operating in Panama. The creation of these schools was also intended to help increase the number of expats allowed to work in a given company, and to prove to foreign companies that we are working to reverse the situation. We wanted to encourage them to stay in the country. There is also the Panama Bilingual project, which will allow us to have a completely bilingual primary education system by 2019. The budget for this project is about USD130 million.

What are other of the top priorities for the Competitiveness & Logistics Secretariat?

The governmental bureaucracy is far too tedious and long for both Panamanians and companies operating here. Therefore, one of our top priorities is the facilitation of bureaucratic processes, including the issuing of national documents and the payment of taxes. We prioritized either the revocation of certain processes or their digitization. Our efforts in the logistics sphere have gained momentum over the most recent government term, as the secretariat had another name before that and was more focused on the economy overall. However, we have appointed several positions within the secretariat that work only and solely within the logistics industry: boosting technology and increasing synergies between ministries and institutions working in the logistics industry. We are an organization that tries to facilitate business and we do a great deal in terms of boosting new regulation and implementing new sector strategies.

How has the Panama Papers impacted the country's image at an international level?

The Panama Papers had an impact on the way people see Panama across the globe. However, it did not affect our performance in economic terms. Our government unwaveringly faced this case and we understood that only by being transparent could we reverse any negative impact. Panama signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters with the OECD. We have boosted efforts against drugs trafficking and money laundering. The signing of the above-mentioned convention with the OECD is a clear example of this.

What are your main objectives for 2017?

We will make sure the country grows by 5.8-6% in terms of economic competitiveness. We will continue facilitating the fact that the private industry drives economic growth in Panama, supported by the public sector. We will work on consolidating a country in which doing business for private companies will become easier than before. The country currently invests USD19 billion in public infrastructure. Most of this budget is channeled through the private sector. It needs a collaborative government and public sector.