Panama Announces $1.1 Billion Economic Stimulus Plan
(laht.com) President Martin Torrijos presented a $1.11 billion stimulus program intended to insulate Panama's economy from the worst effects of the global downturn.
The presidential press office said in a statement that even before last September's international financial meltdown, the government had taken steps to boost investment and incomes.
The Torrijos administration likewise touted Panama's 2008 growth rate - above 9 percent - and said the economy has created 50,000 new jobs annually since 2005, the incumbent's first full year in office.
Torrijos insisted the stimulus plan was not "a program of subsidies or financial bailout" but an initiative to "ensure stability and growth with the aim of maintaining the employment and economic activity achieved in recent years."
He also stressed that the stimulus package would not increase public debt.
The $1.11 billion for what Torrijos called the first phase of the program is to come from state-owned Banco Nacional de Panama, the Andean Development Corporation and the Inter-American Development Bank.
The funds are to be managed by BNP through a trust that will extend loans to financial institutions, which will in turn be required to offer credit using standard criteria.
Torrijos said the program has been structured to allow the trust to earn sufficient return on the loans to cover its own costs, including those associated with making sure the loans are repaid.
"Strict measures will be adopted to ensure that the utilization of these funds serves solely and exclusively to reactivate banking operations in our country," the president said.
He said the program would benefit all Panamanians, from prospective home-buyers to entrepreneurs who want to start businesses or expand existing enterprises.
"Panama is better prepared than at any other time in his history to face a situation of this nature: ample and growing reserves in the BNP; liquidity levels in the banking system beyond what is required by law; a budget surplus for the last three years; public and private investment projects that will implemented in the coming months, including the canal expansion, and greater income for Panamanian consumers," Torrijos said.
He acknowledged, however, that the Central American nation could not completely escape the effects of the world recession. EFE
