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Analyzing Panama’s shifting foreign policy and economic ties, CGTN’s Rachelle Akuffo spoke with Margaret Myers, director of the Latin America and the World Program at the Inter-American Dialogue.
Comments from Margaret Myers:
Panama’s Growing Economy
“Panama’s economic policy has been really good over the past few years, with both domestic investment and a lot of foreign direct investment that has been attracted into the country. This has led to a boom in a lot of different strategic sectors, infrastructure being a very important one. There is also there is a free-trade zone that is booming largely because of Chinese investment there.”
Panama – China Relationship
“The [relationship between China and Panama] has been booming, even before this diplomatic switch. We have seen considerable Chinese interest, specifically in foreign direct investment, in the canal in particular, a lot of canal-related projects. There is a major company, Costco, that is interested in expanding and developing some of the territory around the canal. There has also been considerable Chinese interest in financial services and other major infrastructure projects. This is something that now, with these new diplomatic relations, we may expect more of.”
“Both countries are looking to expand trade, and for Panama that is key. In general, countries that are affiliated diplomatically with China as opposed to Taiwan tend to have a lot more trade and a lot more FDI from China than countries that are affiliated with Taiwan.”
“For Panama, this is a very important economic move. For China, it is a very important diplomatic move. Latin America and the Caribbean remains a stronghold for Taiwan, there are 11 countries that are affiliated with Taiwan diplomatically still, but this transition is a big deal for Beijing.”
Panama – United States Relationship
“The expansion of the Panama Canal is a very important development. For the US it’s critical, since a majority of the transport through the canal is coming from and to the US. Panama is a very important partner for us and a very important line of transportation.”
Challenges in the Region
“Venezuela is a key concern for Panama. This is presumably part of the discussion that took place between President Varela and President Trump.”
Panama & Economic Challenges
“There is still a major rural-urban disparity in Panama, with still some very underdeveloped rural areas in particular. Panama has made considerable advances, working also with multilateral banks, such as the World Bank, to address specific developmental challenges. Reduction of poverty, especially extreme poverty has been a major accomplishment of the government over the past few years, but also growth in general. Panama has one of the highest growth rates not only in the region but in the world at the moment, somewhere in the neighborhood of a 5% on an annual basis.”
