In its most recent column titled “Key Factors for Building Confidence,” the Chamber of Commerce, Industry, and Agriculture of Panama (CCIYAP) advocates for the need to attract greater foreign direct investment (FDI) to the country. In a statement that combines hope and warning, the Chamber highlights the improvement in the Panamanian Consumer Confidence Index (ICCP) in March 2023, reflecting increased optimism about households’ future economic prospects.
However, the Chamber also alerts about the decline in private investment, the government’s debt to its suppliers exceeding $1.4 billion, and the lack of coherence in messages directed towards the international investor community. Additionally, it expresses concerns about the decrease in FDI over the past two years, as compared to pre-pandemic levels, the country has yet to achieve significant figures.
In contrast, other countries in the region such as Mexico, the Dominican Republic, and Costa Rica have made notable progress in terms of foreign investment. These countries have experienced growth in FDI and have generated significant employment through new investments.
In the case of Panama, consumer confidence has experienced a notable increase thanks to the announcement of the agreement between the government and Minera Panama. The breakdown of negotiations in January 2023 created uncertainty for both the workers and contractors of the mining company. However, the announcement of the agreement has had a positive impact on purchases, hirings, and the overall sentiment of the commercial and industrial sectors.
The labor crisis in Panama does not lie in the lack of employment but in confidence. There has been a significant reduction in new employment contracts in recent years, especially in sectors such as construction, hospitality and restaurants, trade, and information and communications. These reductions are directly related to lower levels of private investment.
Recovering the lost jobs will require considerable investment and conveying confidence that investing in Panama is a good business. It is necessary to act resolutely to achieve these objectives.
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