Latin America leader in transport
infrastructure, wireless and Asia imports and a growing magnet for
BY LATINVEX STAFF
Panama – the host of
this year’s World Economic Forum Latin America – has become a regional champion
when it comes to business.
“Panama has come to
stand out as one of the best places to establish business operations for
multinational companies,” President Ricardo Martinelli said in an article in
connection with the WEF event.
An increasing number of
multinationals have set up their Latin American headquarters in Panama,
including Adidas, Caterpillar (training center), Maersk, Mars and Nestle. The Latin America head
of security giant G4S is based in Panama.
They have been attracted
by a combination of factors, including the country’s central location between
Central and South America, an attractive business environment and a
highly-efficient infrastructure in technology and transport.
It has Latin America’s
second-most competitive economy (behind Chile), according to the Global
Competitiveness Index from WEF and ranks fourth in Latin
America on the World Bank’s Doing Business ranking.
Meanwhile, Panama has
Latin America’s best transport infrastructure, according to a Latinvex
ranking of 19 countries based on
17 key factors.
Part of the reason is
Tocumen, Panama City’s international airport, which many business people
consider the most efficient in Latin America. It boasts an extensive offer of
international flight connections that is increasingly rivaling Miami.
However, Panama also
boasts a strong shipping infrastructure, with major port operations on each
side of the Panama Canal. Panama’s top container port Colon handles more
traffic each year than Brazil’s top port Santos.
And the canal, which
turns 100 years this year, is undergoing a historic, multi-billion expansion
which will enable it to handle larger ships. While the expansion has been
marred by some disputes and delays, experts say
the final expansion will clearly benefit Panama’s economy.
In technology Panama has
also become a champion, having Latin America’s highest wireless telephony
penetration rate, according to a Latinvex analysis of data from the International
Telecommunications Union (ITU). In 2012 it reached a
whopping 187 percent, one of the highest in the world and significantly higher than
the Latin American average of 109 percent. It also has Latin America’s 5th-highest
PC penetration (27.2 percent) 7th-highest Internet penetration rate (45 percent),
according to data from Computer
Industry Almanac and the ITU analyzed by Latinvex.
In tourism, it leads
Latin America when it comes to receipts per visitors, according to a Latinvex
analysis of data from the World
Tourism Organization. It also has Latin America’s second-highest ratio of
receipts as a percent of GDP.
TRADE: HIGH IMPORTS, LOW EXPORTS
It is also among the
champions in Latin American trade. It is the largest Latin
American market for both Japan and Singapore and the
third-largest market for South Korea. However, much of those
exports are then re-exported to the rest of Latin America, using Panama as a transshipment
hub. Panama also posted Latin
America’s strongest real increase in two-way trade with Singapore in 2012,
according to a Latinvex analysis of data from the International Monetary Fund (IMF).
However, Panama has a
long way to go in terms of exports, which only account for 2.2 percent of its
GDP, according to a Latinvex
analysis. That’s the lowest rate
in all of Latin America.
FDI AND GDP
Thanks to the growing
presence of multinationals as well as major purchases of Panama assets, it now has
Latin America’s second-highest ratio of foreign direct investment as a percent
of GDP, according to a Latinvex analysis.
The growing imports,
tourism and FDI, in turn, are helping to boost the economy. Panama is expected to have Latin America’s
highest economic growth rate this year, according to a Latinvex analysis of estimates from the IMF.
As a result of recent economic growth, Panama last year became the second-richest country in Latin America after Chile, according to another Latinvex analysis of data from the IMF
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