Panama's Blueprint for Prosperity
- Samuel Fernandez
- Apr 8
- 6 min read
Updated: Apr 15
The Nation’s Strategic Agenda for 2025-2029
On 26 December 2024 the Cabinet Council of the Republic of Panama issued Resolution 124 approving the Strategic Plan for the country for the years 2025-2029 (the “Plan”). The Plan encompasses comprehensive data analysis, proposed projects, and a five-year financial projection. Ultimately, it aims to elevate the quality of life for Panamanian citizens through targeted investments and policy reforms.
The primary objectives of this plan are to stimulate economic growth, enhance social well-being, and fortify governance and four strategic pillars have been identified to achieve these objectives:
economic development and job creation;
the provision of quality education and services;
efficient governance and institutional strengthening; and
sustainable environmental management.
Panama's 2025-2029 Strategic Plan offers valuable insights for investors seeking opportunities in a dynamic and forward-thinking economy. This comprehensive blueprint for sustainable growth and social development highlights Panama's commitment to fostering a favorable business environment, characterized by robust infrastructure, skilled human capital, and transparent governance.
It outlines a five-year plan, focused on economic and social development. The Plan aims to address critical challenges and promote sustainable and equitable growth across Panama. It includes economic, social, and environmental analyses, strategies, and a program of public investments. The document also presents a detailed review of the current situation as well as proposals to address core issues.
Main Themes and Strategic Pillars:
The Strategic Plan is structured around four key strategic pillars, which are interconnected and meant to guide all aspects of government action:
Boosting Economic Sectors for Growth and the Creation of Quality Jobs
This pillar focuses on stimulating economic growth by targeting key sectors, while ensuring the creation of good jobs. It emphasizes improving competitiveness and innovation. The document highlights the importance of developing skills and human capital.
Key initiatives:
Enhancing the competitiveness of the logistics cluster and the Panama Canal.
Developing value chains within the agro-industrial sector.
Promoting "sophisticated tourism" and sustainable tourism.
Adopting new technologies and promoting a strong innovation ecosystem.
Strengthening the financial system to be more inclusive and stable.
Opportunities for All with Relevant Education and Quality Basic Services
This pillar stresses that education and access to essential services like water, sanitation and electricity are crucial to ensuring equitable opportunities for all citizens. The aim is to give all citizens "a more prosperous and dignified life." This pillar links access to basic services with broader goals like employment.
Key initiatives:
Improving the quality and access to early childhood education.
Expanding access to clean water, sanitation and electricity to both urban and rural communities.
Promoting equity and addressing territorial inequalities.
Improving public health and well-being.
Efficient Governance and Institutional Strengthening
This pillar emphasizes the importance of good governance, transparency and accountability for achieving sustainable development goals. It argues that citizen trust in the government, businesses, innovation, and sustainable growth depend on institutions acting effectively and ethically.
Key initiatives:
Prudent fiscal management and modernization of the tax system.
Increased transparency, accountability, and citizen participation in governance.
Focus on improving the justice system and public safety.
Environmental Sustainability and Responsible Management of Natural Resources
This pillar highlights the importance of sustainable environmental practices as part of economic development. It recognizes the natural wealth of the country as central to national patrimony and sees it as needing responsible protection for future generations. It also acknowledges the impact of climate change as a key factor needing address.
Key initiatives:
Protecting biodiversity and natural heritage.
Sustainable management of water resources.
Reducing the carbon footprint and addressing climate change.
Promoting dialogue and national awareness regarding environmental protection.
Key Facts and Ideas
Economic Context
Panama has experienced “exceptional economic growth” due to investments in strategic sectors like the Panama Canal and construction. The country also has a thriving logistics hub and financial services sector, both of which help to maintain economic dynamism.
The document points out that despite the strong growth of the last two decades, significant challenges persist in areas of public services and access to opportunities.
Panama's plan for economic growth acknowledges the negative economic impact of the COVID-19 pandemic and the country's subsequent recovery. To achieve this growth, the plan aims to shift the country away from traditional sectors and towards sectors such as technology, logistics, and environmental sustainability. The plan also highlights the need for more direct public policies that support economic development.
Labor Market
The labor market has experienced significant shifts, and a high rate of informal labor is identified as a key area of concern. The document points out that 47.4% of jobs in Panama are considered informal.
There are significant challenges in youth employment as well as inequities between genders and ethnicities in the workplace.
Panama's Strategic Plan emphasizes the importance of aligning the educational system with the needs of the labor market. This includes strengthening the connection between education and employment, and increasing the number of university-trained professionals in key sectors to elevate the overall skill and education level of the Panamanian workforce.
Social Context
The Plan recognizes existing inequalities, particularly in access to education, health, and infrastructure and also regional differences. It stresses that "the public education system and the coverage of services" are key areas of concern that limit full citizen development.
Poverty remains an issue, despite progress in economic growth. This is particularly salient in rural areas.
The Plan acknowledges the importance of addressing the needs of vulnerable groups, like indigenous communities and those with disabilities.
The document describes several challenges in the area of health care access, particularly in poorer and rural areas.
Environmental Concerns
Panama is identified as a country vulnerable to climate change, and there is a sense of urgency from the Government to act decisively on it.
This is reflected in the document when indicating a direct correlation between economic activities and environmental degradation. Thus, the importance of protecting Panama’s biodiversity and promoting sustainable practices is emphasized.
Fiscal Policy
The Plan calls for a realistic fiscal adjustment in order to maintain the quality of public spending over the long-term. The plan calls for a reduction of the overall public debt as a percentage of the GDP to at least 50%.
The document identifies several areas of tax exemptions as needing reform. It also suggests a simplification of tax processes to improve efficiency.
Strategic Objectives
The Panamanian Government's vision is encapsulated in the phrase:
Convertir a Panamá en un país más próspero y seguro, con más dinero en el bolsillo de la gente, más crecimiento y pleno empleo. Y sentir el orgullo de que Panamá sea la economía de mayor crecimiento de toda América Latina
"To transform Panama into a more prosperous and secure country, with more money in people's pockets, more growth, and full employment. And to feel proud that Panama is the fastest-growing economy in all of Latin America."
The four strategic pillars support this vision, and the Plan lists the following specific objectives in line with the 2025-2029 period:
Prioritize sustainable and responsible natural resource utilization.
Foster transparent, efficient governance and responsible public administration.
Develop high-quality and equitable access to education and public services.
Promote economic growth by focusing on key sectors and developing regional production areas and infrastructure.
Key Initiatives and Planned Investments:
The document outlines numerous specific actions to be taken under each strategic pillar. These include investments in:
Infrastructure projects (roads, ports, airports)
Education and training programs
Health care facilities and services
Renewable energy and environmental protection initiatives
Digitalization and technology infrastructure
The document provides a detailed plan of public investments across various government ministries and agencies.
Conclusion
The Strategic Plan 2025-2029 represents a comprehensive framework for Panama's development over the next five years. It emphasizes sustainable growth, social equity, and institutional strength as the basis for a more prosperous and secure future. The plan calls for concrete action to address identified issues while leveraging Panama's strengths. A core idea that appears through the document is the aim of using strategic investments and policy actions to generate "equitable opportunities" for all Panamanians.
Panama's Strategic Plan targets the following key economic sectors for growth and job creation:
Logistics and the Panama Canal: Enhancing the competitiveness of the logistics cluster and the Panama Canal.
Agro-industrial sector: Developing value chains within the agro-industrial sector.
Tourism: Promoting "sophisticated tourism" and sustainable tourism.
Technology and Innovation: Adopting new technologies and promoting a strong innovation ecosystem.
Financial System: Strengthening the financial system to be more inclusive and stable.
Panama's Strategic Plan 2025-2029 offers a blueprint for a brighter future in Latin America. With its strong economic growth, strategic location, and commitment to sustainable development, Panama is an ideal hub for regional operations. Embrace the opportunities Panama presents and become part of the region's economic success story.
Panama, Pro Mundi Beneficio!
To explore the legal aspects of investing in Panama and to discuss how our firm can assist you in navigating the opportunities outlined in Panama's 2025-2029 Strategic Plan, please contact us for a consultation at connect@lexinnova.net.
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