1. NS4540 Winter Term 2018 Panama Indices
Federal Reserve Bank of Chicago, Strong Dollar Weak Dollar

2. Panama: Overview I
An ambitious Panama Canal expansion project was completed in 2016.
President Juan Carlos Varela’s single five-year term ends in 2019.
His predecessor, Ricardo Martinelli, was arrested in Miami in June 2017 and held in a Florida jail pending extradition to face corruption charges in Panama.
Panama’s U.S. dollar–based economy has been among the fastest growing in the region, recently stimulated by
the canal’s expansion and
other public infrastructure-improvement projects.
The economy is based primarily on a well-developed services sector that accounts for more than three-quarters of GDP.
About one-fourth of the population, however, still lives in poverty.

3. Panama Overview II
In recent years to boost growth, Panama’s economy has depended on
Transportation,
logistics services, and
debt-financed public works infrastructure projects.
Because public debt surpassed $37 billion in 2016, the government will have to rely on
Panama Canal revenues and associated services and
New investment to stimulate future growth.
International pressure over governance of Panama’s offshore banking sector should lead to
Financial reforms, and
anti–money laundering reforms,
International tax-haven compliance

4. Panama Governance Trends

5. Panama: Economic Freedom I
Panama’s economic freedom score is 67.0, making its economy the 54th freest in the 2018 Index.
Its overall score has increased by 0.7 point, with significant improvements in
judicial effectiveness and
fiscal health
offsetting declines in
government integrity and
property rights.
Panama is ranked 10th among 32 countries in the Americas region, and its overall score is above the regional and world averages.

6. Panama: Economic Freedom II
Rule of Law
Panama has an adequate legal framework to protect property rights
However enforcement is weak.
Most land is not titled.
The independent judicial system is inefficient and susceptible to outside influence.
Persistent corruption continues to undermine the rule of law.
Public concerns about government transparency and graft were reinforced by the 2017 arrest in the U.S. of former President Martinelli
His arrest related to the Odebrecht scandal and other malfeasance.

7. Panama: Economic Freedom III
Business Climate
The freedom to form and operate a business is relatively well protected within an efficient regulatory system.
Panama’s labor code remains highly restrictive.
The the nonsalary cost of hiring a worker is relatively high.
The government has extended price controls on 22 basic foodstuffs through the end of 2017.
Higher oil prices have raised the cost of electricity subsidies.

8. Panama: Economic Freedom IV
International Trade and Investment
Trade is significant for Panama’s economy; the combined value of exports and imports equals 94 percent of GDP.
The average applied tariff rate is 6.1 percent.
Nontariff barriers impede some trade.
In general, government policies do not significantly interfere with foreign investment.
The financial sector, vibrant and generally well regulated, provides a wide range of services.
Banking continues to expand, albeit slowly.

9. Economic Freedom

10. Trade Freedom

11. Business Freedom

12. Government Integrity

13. Panama: WEF I

14. Panama: WEF II

15. WEF: Panama II

16. WEF: Panama III

17. Legatum Panama 2016 I
Rising prosperity has lifted Panama into the global top 40 for prosperity
Ranking 39th in 2016 up from 41st in 2007
Comes despite slipping in sub-indices
Governance
Education
Health,
Safety & Security and
Natural Environment

18. Legatum Panama 2016 II However small gains have been made in
Economic Quality
Business Environment
Personal Freedom and
Social Capital
These core foundations of Panama’s prosperity have helped lift the country’s performance index
However if Panama is to continue to rise sharply declining
Health and
Safety and Security
performances must be addressed

19. Legatum Panama III

20. Legatum Panama 2016 IV

21. Legatum: Panama 2017 I

22. Legatum: Panama 2017 II