Economics on Wednesday

Panama's economy is practically under normal conditions (besides wearing facemasks all the time and a lot of unemployment). We can go out on Sundays now, which will create a little more demand in the country. However, with unemployment still hovering around 20%, there is not much to expect, so you have to resort to many tricks to reach the pockets of those who have work, money and who can generate some demand. So, what can we do now? Let's begin to delve into the details of what entrepreneurs can do to first survive and open, and then gradually return to normal conditions. One of the new trends that are resulting from the pandemic is that, as the Americans say, "less is more". From there to that at this moment we are seeing how large corporations are looking to reduce their operation, but not reducing without analyzing it, but they are looking for technological solutions for process issues that before they preferred not to change, but that the pandemic has made you ...

  We are already in the month of October 2020, a year that will go down in the history of the world as a year full of surprises, especially bad ones, but from which, as always, we will recover. Even though to date, the INEC has not provided any figures to be able to measure the economy properly, we have certain data that will allow us to infer, calculate and analyze how we are at this moment, and be able to make a forecast of how we will close the 2020 and a first attempt at how we see 2021. It is important to remember how we closed 2019, with a GDP growth of 3%, unemployment of 7.1%, inflation of -0.8%, a Foreign Direct Investment (FDI) of $ 4.8 billion, a debt of $ 28,000, and a debt-to-GDP ratio of 39%, a fiscal deficit of the central government of 3.85%, figures that although they have been deteriorating, especially in the last five years, still maintain us as a prosperous country, not only in the region but in the world. Panama needs to grow at a rate of 5% per year in GDP...

Panama and Costa Rica have a lot of history together. We are neighbors, we had a border “war” 100 years ago, there are families of the same kind in both countries, there is a lot of trade between both countries. We both became independent from Spain in 1821, Costa Rica along with the other Central American nations, and Panama as part of Bolívar's dream, which made us join Gran Colombia until we were able to become independent from Colombia in 1903. They have many similarities, the tropical climate (even though San José has a more pleasant climate), they are the southernmost nations of the Central American isthmus and that is why they are something apart from the other Central American nations, they have coasts in the Pacific Ocean and in the Caribbean, and are strategically located so that the hurricanes that devastated the Caribbean do not touch them. However, they are also very different. Their idiosyncrasy/culture is somewhat different, their capital cities have developed diff...

Those who have followed me since 2007 when I started writing this column know my economic and financial positions on certain topics. One of them is about the actions taken by this country to be able to “get out” of the lists of any color in which any country, region, organism or pseudo organism wants to put us. Panama has been fighting foreign banking competition since the 1970s. First, it was Miami, accusing us of money laundering of the drug traffickers, when in Miami they laundered money right and left. Obviously, Noriega and his cronies of the time allowed the establishment of two banks linked to the Medellín and Cali cartels, but by 1990 they had already left the system. But this slip was not of the Panamanian people, it was a matter of a narco dictator and his cronies, which unfortunately embarrassed us all. From then on, Panama has changed many laws and has improved a lot (it was obvious since we went from a narco dictatorship to 30 years of democracy and a rule of law with ...

  With the pandemic, many passions have been unleashed in different countries (yes, in all countries, contrary to what we Panamanians think, that only bad things happen here) especially about the role of banks in a pandemic, on the one hand, or how to repay the debts to the banks if we have not been able to work for several months. These are valid questions, especially for the bulk of the population, especially those with bank debts of any kind, which must be paid monthly. First, let's put Panama's Economy in context. Panama does not have a Central Bank. We do not issue currency; much less can we establish monetary policy. The National Bank of Panama (Banco Nacional de Panama) has some functions of a Central Bank, such as the transit of the checks of the local banking system for their compensation, collects mutilated bills, and exchanges them for new bills, among the most important. Its other main mission is to bring commercial banking services to the most remote parts of t...

  The month of September has turned out to be a month of returning to economic life. We can now go outside, with an 11 p.m. to 5 a.m. and all day on Sunday curfew and without distinction of sex which can result in more movement of the economy. You notice more movement than there was previously, but not everything has opened yet, so an impact cannot be measured - yet (still, we have to wait for economic figures to be published by Government). In any case, if there is movement, it could be converted into employment, wealth, and in the end, it can give us an interesting end of the year. But I would like to speak to entrepreneurs who are in serious trouble. Those that the pandemic knocked down, but who feel they can still revive. Those who do not want to give up. Those who do not want to lose years of working on a project. Let's see the problems that we can find: Cash Flow: This will be the main problem that the pandemic leaves us. Recovering from this is not easy. Especially if ...

One of the main engines of our economy, and even of any economy in the world, is financial intermediation, led by the banking sector. In Panama, since 1970, with the promulgation of new banking law, the system was modernized and Panama became a regional banking center, where the best banks in the world could be installed, even though we had a totalitarian regime established by the military coup. 1968 (a total incongruity). In fact, with the worst of all, Noriega, the system accepted two banks that belonged to the drug cartels of the time, under the approval of the officials on duty and the boss of the "A" Avenue garrison. Even so, all the banks stayed in the banking system, and nobody said anything about Panama. For those with a short memory, many (if not the vast majority) of the documents that were "discovered" with the theft of what was later misnamed the "Panama Papers" belonged to this black era (not even opaque ) from Panama. Even so, the banking...