One of the world’s fastest-growing economies, this Central American powerhouse is a multinational business hub of immense strategic importance, thanks to the Panama Canal, and has close ties with the US. Modern infrastructure and government support through tax incentives, plus an overlapping time zone, make this an attractive outsourcing destination.
Talent Pool & Education
Panama has a relatively skilled yet inexpensive labor force, with more than 75% of jobs being in the service industry. Now, a new generation of entrepreneurs is emerging in the tech sector, backed by government initiatives, academic hubs such as the Technological University of Panama (TUP) and the non-profit Innovation Center at the City of Knowledge, where resources include an investment program for startups and an entrepreneurs network for women.
LanguageThe official language is Spanish but many Panamanians are bilingual and speak fluent English.
The Economist’s Intelligence Unit estimates real GDP fell by 17% in 2020 and projects a 9% recovery in 2021, with the economic rebound hinging on a successful vaccination programme. President Laurentino “Nito” Cortizo is implementing a 125-point plan to boost the country’s economic recovery, including a $7.7 billion investment in infrastructure and a new $2.8 billion monorail in Panama City; bolstering small and medium-sized enterprises, and attracting more foreign direct investment. The local currency, known as the Balboa, has been pegged to the US dollar at parity since Panama gained independence from Colombia in 1903.
Cortizo, a Texas-educated business leader, vowed to curb corruption and close the wealth gap when he was elected in 2019 after the closest presidential race in decades. The changing of the guard marked a turning point in Panama’s democracy, according to the Fair Observer news site, as voters punished the conservative ruling party for a series of corruption scandals and a weakening economy. Late in 2020, the government launched a national dialogue to achieve consensus in such areas as health care, education, security and the economy. The country has close relations with the US.