Panama, Central America
Business
Economic Overview:
Panama's dollarized economy rests primarily on a well-developed services sector that accounts for 80% of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and should be completed by 2014 at a cost of $5.3 billion - about 30% of current GDP. The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway and should help to reduce the high unemployment rate. Strong economic performance has not translated into broadly shared prosperity. Panama has the second most unequal income distribution in Latin America. About 30% of the population lives in poverty. The government has implemented tax reforms, as well as social security reforms, and backs regional trade agreements and development of tourism. Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US, which, when implemented, will help promote the country's economic growth.
Panama moves to top of Obama's list for a trade agreement
By Chris Kraul / Los Angeles Times
The president, in a turnabout that reflects his vow to shun protectionism and his goals of rewarding strategic allies and confronting economic necessity, is pushing for passage of a deal by July 1.
A frequent critic of NAFTA and other trade pacts when he was on the campaign trail, President Obama is now throwing his support behind a trade deal with Panama, courting a potential backlash among his labor supporters. The administration is expected to make its case before a Senate Finance Committee hearing today in Washington, where his team is likely to face sharp questioning about Obama's change of heart on a deal the president now apparently views as a strategic imperative.
The Panama trade deal, which Obama is pushing for approval of by July 1, is one of three bilateral accords negotiated by the Bush administration that later stalled in Congress. The others are deals with Colombia and South Korea, both of which Obama wants passed this year as well.
But the president has offended some of his strongest election backers, including the AFL-CIO and human rights groups that oppose such trade agreements on general principles. The president risks "alienating core supporters in a way that could cripple the broader agenda," said Farnsworth, adding that "the fight in Washington has only just begun." >>> Go to Full Story >>>
— CIA World Factbook