Panama: The Economy

( Source: http://www.iula.org/panama-the-economy-9911/ ) Panama has a strategic location in Central America. It relies in the isthmus which means that is borders the North and South part of America. It has diverse opportunities for economic development as it serves international trade, commerce and shipping. However, its economy is mainly into service industry which comprises 80% percent of the Gross Domestic Products. The economy of Panama in the service industries includes finance, health, insurance, telecommunications, transportation, banking, maritime service and Canal, logistics due the Colon Free Zone and the strategic ports, tourism and general commerce.

The economy of Panama has been successfully progressing the recent years. It is more into banking, commerce, trade, and tourism. Its economic activities are focused on the Panama Canal where international trade passes through it. The canal turnover from the US administration and the US military bases was one of the pioneers of the rise of new projects in Panama and the start-up of economic development. Currently the Panama Canal is under the Panamanian government administration developing a high quality standard being one of the most transit canals in the maritime industry, the government of Panama has improved several public programs, reforms on taxes, and trade agreement domestically and internationally that contributed to another phase of growth. Aside from the service industries that has great contribution to economy of Panama, Panama is also into agricultural and industry but comprises only a small percentage of the GDP. Agriculture focuses on banana, watermelon, sugar, corn, timber, coffee, livestock, vegetables and tuna exports while industry comprise aircraft manufacturing, cements, automobiles, drinks, adhesives and textiles among many other products.

Panama has coped up its economy due to the fact that the population of Panama has contributed its government reforms. At this time, the economy of Panama has been more open and accessible to foreign investments. The increase in foreign investment which contributed growth to economy of Panama paved way for more development in Panama as seen in the recent years. The result is steady economic growth. One of the targets of Panama foreign investment is the real estate that draws investors from America, Asia, and Europe. As soon as the real estate boom started in Panama, the prices of Panama properties and the value had increased up. However, the demands continued to rise and more property constructions and project developments are build in different provinces and neighborhoods in Panama. As the economy of Panama continued to progress, starting the expansion of the Panama canal. When this project is culminated, more investments are expected in Panama.

Growth in GDP has been remarkable in the last year compared to past years. So far, Panama becomes the third largest GDP per capita among other countries in Central America. The growth in GDP was mostly on the sectors of transportation and telecommunications. GDP as of 2006 was 15 dollars billion and the annual growth from 2005 was 8 percent. The per capita of GDP in 2006 was four thousand dollars.

In conclusion, the road to the progress of the economy of Panama has not been easy. Just like other countries that pass several stages of economic development, Panama has not been exempted. The combination of the industriousness of its population and the government programs had made it possible for Panama to rise above economic difficulties.