Diese Präsentation wurde erfolgreich gemeldet.
Wir verwenden Ihre LinkedIn Profilangaben und Informationen zu Ihren Aktivitäten, um Anzeigen zu personalisieren und Ihnen relevantere Inhalte anzuzeigen. Sie können Ihre Anzeigeneinstellungen jederzeit ändern.

Shifting gears in Panama: Policy recommendations for sustainable and inclusive growth

1.018 Aufrufe

Veröffentlicht am

Panama has been one of the fastest growing economies in the world over the previous decade. In that short but vibrant time span, the country managed to double its income per capita. Growth has been spearheaded by the development of a modern service sector on the activities surrounding the Canal, and non-residential construction. Large public infrastructure projects and the private provision for infrastructure demanded by the service sector, have fueled growth and expanded job opportunities for non-skilled workers.

Two warning signals hover over Panama’s stellar performance. The construction sector has been growing at a rate equivalent to doubling its stock of structures every four years. The demand for non-residential construction cannot grow indefinitely at a higher rate than the rest of the economy. Once the stock of infrastructure required by the service sector is set and large infrastructure projects are completed, the rate of growth will recede and other sectors shall take the leading role. The deceleration of construction, characterized by a lower demand of non-skilled labor, will feed into the second warning signal: Income inequality. In spite of the minor improvements registered over the accelerated-growth spell, Panama remains amongst the world's top five most unequal countries. Both warning signals point to the need of further diversifying the Panamanian economy, and promoting economic activity in the provinces so as to deconcentrate growth and make it more inclusive.

Veröffentlicht in: Wirtschaft & Finanzen
  • Als Erste(r) kommentieren

  • Gehören Sie zu den Ersten, denen das gefällt!

Shifting gears in Panama: Policy recommendations for sustainable and inclusive growth

  1. 1. Center for International Development at Harvard University Shifting gears in Panama: Policy recommendations for sustainable and inclusive growth Miguel Angel Santos @miguelsantos12 www.miguelangelsantos.net
  2. 2. 2
  3. 3. Panama: One of the top-ten fastest growing economies 2005-2015 3 Income per capita Transfer of sovereignty over the Canal
  4. 4. Growth has been accompanied by a significant reduction in poverty and inequality 4 52545658 IndiceGini 05101520 Tasadepobreza(%) 1990 1995 2000 2005 2010 2015 Year Tasa de Pobreza (US$1.9 al dia) Indice Gini Fuente: World Development Indicators, Banco Mundial Evolución de la pobreza y desigualdad
  5. 5. In spite of that, Panama remains among the most unequal countries in the world 5 PAN 2030405060 GINIIndex,year2010 6 8 10 12 GDP per capita (logs) Source: own calculations based on WDI (World Bank) Gini coefficient (2013)
  6. 6. Growth has been spurred by the development of a service sector that demanded non-residential construction 6 Weighted Contribution to Growth (CAGR * Ave Weight in GDP) -0.3% 0.3% 0.8% 1.3% 1.8% 2.3% 2.8% Construction Wholesale, Retail, Vehicle Repair Transport and communications Housing Financial intermediation Public utilities Mining Manufacturing Restaurants and hotels Other social services Social services and private health Private education Agriculture Fishing 2005-2015 2010-2015 Wholesale, Retail and Repair Transport and communications Financial intermediation Non-residential construction has been growing at a CAGR of 20.25% for a decade, that is equivalent to duplicating the stock of structures every four years
  7. 7. In terms of exports, the real driver behind Panama’s astonishing success is the development of an exportable service sector 7 Export of services per capita (US$ million)
  8. 8. The bulk of the growth in services was registered by Transport- Logistics, Travel, and - more recently - business services 8 -2,000 0 2,000 4,000 6,000 8,000 10,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 (1H) Panama: Export of Services, net (2008-2015) Transport Travel Communication Construction Insurance Financial Services Information Technology Royalties and licenses Business and entrepreneurial services Cultural and recreational Government services
  9. 9. The service sector has attracted significant amounts of foreign direct investment and has spurred demand for non-residential construction 9 -2,000.0 -1,000.0 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 (1H) Panama: Balance of payments (US$ million) Current Account Deficit Foreign Direct Investment Portfolio Investment Other, net
  10. 10. The steady inflow of FDI is mostly coming from foreign entities reinvesting their earnings in Panama 10 65% 20% 49% 67% 35% 70% 96% 85% 84% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 500 1000 1500 2000 2500 3000 3500 4000 2008 2009 2010 2011 2012 2013 2014 2015 2016 (1H) Reinvestment Ratio: Rent payments to FDI and Reinvestment of Earnings (US$ million) Rent payments to FDI Reinvested earnings Reinvestment Ratio (%)
  11. 11. By 2015 construction accounted for 25.6% of GDP, although most of the 2005-2015 growth occurred in the non-residential sector 11 21.0% 20.2% 6.6% 17.0% 18.3% 16.4% 8.6% 8.6%9.1% 6.8%5.5% 6.3%9.7% 6.2% 3.7% 4.4%3.3% 3.1%5.0% 2.6% 2005 2015 Hogares con personas empleadas Pesca Educación privada Servicios sociales y salud privada Minería Otros servicios sociales Agricultura Restaurantes y hoteles Servicios públicos Manufactura Intermediación financiera Bienes raíces Construcción residencial Transporte y comunicaciones Construcción NR Comercio al mayor y detal Composición del PIB Source: INEC, IMF. Excludes “Oher non-marketable production”.
  12. 12. What are the most important restrictions to sustainable and inclusive growth? 12
  13. 13. 1) Non-residential construction cannot grow indefinitely at a faster pace than the rest of economy and has started to decelerate 13 24.2% 32.4% 6.9% 7.7% )17.5% 2012 2013 2014 2015 2016-* Variación(en(Valor(Total(de(Permisos(de(Construcción((%) 15.7% 47.6% 24.7% 21.8% *9.0% 31.0% 21.8% *8.1% *8.3% *27.2% 2012 2013 2014 2015 2016(* Variación5en5Valor5Total5de5Permisos5de5Construcción5(%) Residenciales No(Residenciales 77.5% 16.3% (36.8% (36.1% (23.8% 2012 2013 2014 2015 2016(* Variación2en2Producción2de2Concreto2Premezclado2(%) 2.4% %7.7% %8.6% %6.0% 2013 2014 2015 2016(* Variación1en1Producción1de1Cemento1Gris1(%) Change in total number of construction permits Variation of construction permits: Residential vs. non-residential Variation in production of ready-mixed concrete Variation in production of cement
  14. 14. 2) Human capital: Panama embarked on a high-skill growth strategy, based on the competitiveness of its service tradable sector 14 Economic Complexity by Industry
  15. 15. 2) Human capital: Panama embarked on a high-skilled growth strategy, based on the competitiveness of its service tradable sector 15
  16. 16. 2) Human capital: Panama embarked on a high-skilled growth strategy, based on the competitiveness of its service tradable sector 16 Economic Complexity, qualified labor and share of employment (2010)
  17. 17. The Panamanian governments has made significant efforts to improve the coverage of education … 17 Distribución de trabajadores por nivel de escolaridad (% de la fuerza de trabajo, año 2012) Al menos Primaria Al menos Secundaria Al menos Terciaria *Fuerza de trabajo incluye a empleados y desempleados Fuente: Cálculos propios basados en World Developmnet Indicators, Banco Mundial
  18. 18. … but it terms of quality there is still a significant gap 18 0 2 4 6 8 10 12 14 Colombia (381) Panama (360) Peru (365) Mexico (419) Brazil (386) Argentina (388) Chile (421) Uruguay (427) OECD (496) Top performers in mathematics, PISA 2009 Percentage of students reaching the two highest levels of proficiency Level 5 Level 6 0 1 2 3 4 5 6 7 8 9 Colombia (402) Panama (376) Peru (369) Mexico (416) Brazil (405) Argentina (401) Chile (447) Uruguay (427) OECD (501) Top performers in science, PISA 2009 Percentage of students reaching the two highest levels of proficiency Level 5 Level 6
  19. 19. Panama: Headquarters Law (Law 44) Has attracted 117 multinational regional headquarters 19
  20. 20. Special Economic Zones: Import-Export, Industrial Park, Technology Park 20 Special Economic Zones • Special Visa for: • Investors • Workers • Dependents • Allowed to hire >10% immigrants • Labor regime: • Overtime rate (25%) • Days-off rate (50%) • Flexibility to operate Sundays & holidays • Special Custom Reg. • One-stop shop • Oldest in the world • Largest in LATAM • 2nd worldwide • 2,527 companies • 29,786 jobs • Income tax • Import-Export tax • Sales tax Import-Export Colon Free Zone (1948) Characteristics Tax exemptions Immigration incentives Other • Import tax • Remittances tax • ITBMS tax • Income tax • Dividend tax • Import-Export tax • Sales tax • Remittances tax • Commercial license • Patent & ITBMX tax Ciudad del Saber Technology Park (2000) Panama-Pacifico Industrial Park (2007) • 75 SMEs • 1,290 direct jobs • Focus: innovation and technology • 251 companies (41% multinational) • 2,305 jobs • Master plan: • 1,000,000 sq.mts • 40,000 jobs • Special Visa for: • Workers • Allowed to hire >10% immigrants • Allowed to hire >10% immigrants
  21. 21. Four facts about immigrants in Panama 21 1. There are scarce (they are expensive) 2. Immigrants are over-represented in high-skill occupations 3. Immigrants tend to work in the more complex industries 4. Immigrants tend to raise the salaries of Panamanian workers within their industry-district
  22. 22. 1) A sign of skill scarcity: Wage premiums to foreign workers are very high on average(50%), and positive for all industries and occupations 22 Wage premiums to foreigners (2010)
  23. 23. 2) Immigrants are over-represented in high-skill occupations 23 0.2 0.3 0.5 0.7 0.8 1.1 1.1 1.6 2.6 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Agricultores y trabajadores agropecuari Operadores de instalaciones fijas y maquinas Empleados de oficina Trabajadores no calificados Artesanos y trabajadores de la mineria Profesionales, cientificos e intelectuales Tecnicos y profesionales de nivel medio Trabajadores de los servicios y vendedores de comercios y mercados Directores y gerentes de los sectores publico/privado (% of immigrants in occupation / % of immigrants in workers) Over-representation of immigrants Under-representation of immigrants Fuente: Cálculos propios basados en Censo Poblacional, 2010 Immigrants by type of occupation
  24. 24. 3) Immigrants tend to work in the more complex industries 24 0123 IndicedecomplejidadeconomicaIndustria 0 2 4 6 8 10 Porcentaje de inmigrantes con al menos titulo universitario, % Complejidad industrial vs. Inmigrantes universitariosComplexity at industry level and immigrants with college degree Share of immigrants with college degrees (%) Economic Complexity at the industry level
  25. 25. 4) Immigrants tend to raise the salaries of Panamanian workers within their industry-district 25 Immigrants flows and Panamanian wages 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Fuerza laboral panameños Panameños de baja calificación Panameños de alta calificación Change in wages of Panamanian workers associated to an increase of 10 pp in the stock of immigrants Total Panamanian labor force Low-skilled Panamanian workers High-skilled Panamanian workers
  26. 26. 26 Panama wants to be Singapore or Hong Kong: they need to attract and retain a large number of foreigners demanded by their high-skill specialization strategy
  27. 27. The strategy of attracting multinationals raised the skill bar and allowed Panama to develop a modern service sector, but many restrictions prevent knowhow and productivity to spillover to the rest of the economy 27 • Hefty fees for visa renewals (US$2.000-3.000 per year) • Years spent on SZEs do not count for residence purposes • Special work visas granted to foreigners in MNCs and SEZ cease as they stop working in the company that sponsored them • Dependents of expatriates and other foreigners (“friendly countries”) not allowed to work • Firms threatened to be expulsed from City of Knowledge and visas of their workers ceased if they stop innovating and move on to the commercial phase of the business • There is a list of 27 occupations that are legally restricted to immigrants, including all type of engineers, dentists, agriculture scientists, architects, doctors, economists, lawyers, chemists, and educators in the areas of history and geography • There is a list of restrcited citizenships comprising 50 countries from Asia and Africa, that need a special bureaucxratic process “authopriozed visa” to enter Panama • Albania, Bangladesh, China (exception made via SEM Law), India, Indonesia, Lebanon, Pakistan, Sri Lanka RESTRICTIONS TO FOREIGNERS ALREADY LIVING IN PANAMA RESTRICTIONS TO POTENTIAL IMMIGRANTS
  28. 28. Policy recommendations for keeping growth momentum in Panama and make growth more inclusive 28 National Development Plan Guidelines Reduce transaction costs to qualified immigrants • Revises and gradually phase out list of restricted professions • Revise relevance of restricted citizenships subject to “authorized visas” • Grant working visas to highly qualified dependents Make growth inclusive • Create a public-private investment agency responsible for evaluating industry potential in the provinces, contacting the right partners, solve the most binding constraints and monitor progress • Leverage existing knowledge within Panamanian provinces and look at expanding to higher-value added industries that use similar knowledge Attract and retain high- skill human capital and know-how Maximize spillovers and knowledge diffusion Promote growth diversification in the Panamanian province Prevent knowledge from being locked into MNCs and SEZ • Ease residence requirements for expatriates in MNCs and SEZs • Create a minimum training requirements in MNCs receiving tax benefits • Extend length of visas across the board
  29. 29. 29 • Fabricación de partes y piezas carpintería • Fabricación de vidrio • Forja, prensado y laminado de metal • Terminación y acondicionamiento edificios Blue nodes: Current comparative advantages | Red nodes: Opportunities for diversification El espacio de industrias de Panamá: Una representación grafica de las oportunidades de diversificación a nivel provincial (Chiriquí)
  30. 30. 30 • Comunicaciones y transporte vía aérea • Elaboración aceites, grasas, jabones, bebidas y lácteos El espacio de industrias de Panamá: Una representación grafica de las oportunidades de diversificación a nivel provincial (Colón) Blue nodes: Current comparative advantages | Red nodes: Opportunities for diversification
  31. 31. 31 • Venta al por mayor de alimentos, bebidas y tabaco. • Productos lácteos • Elaboración de bebidas malteadas y malta El espacio de industrias de Panamá: Una representación grafica de las oportunidades de diversificación a nivel provincial (Darién) Blue nodes: Current comparative advantages | Red nodes: Opportunities for diversification
  32. 32. THANKS! 32

×