Working in Panama?
Working in Panama
A high percentage of the local workforce in Panama are indeed employed in businesses directly or indirectly linked to the Panama Canal. The Canal doesn’t only provide employment and business opportunities, but it also injects millions of dollars from toll revenues into the national economy. In fact, every article on Panama’s economy should dedicate a special section to the Panama Canal, so here we go.
The Panama Canal
Finished in 1914 by an US Army Corps of Engineers, the Canal has changed Panama’s fortunes forever. The whole Canal Zone used to be under US sovereignty, but in 2000, Panama regained complete control. Expansion works on the Panama Canal started in 2007, thus boosting the economy through major investment, construction and infrastructure projects. In combination with the US-Panama Trade Promotion Agreement signed in 2011, the Canal expansion (to be completed in 2015/16) is set to significantly benefit the people of Panama.
It hardly comes as a surprise that Panama has established itself as a hub for maritime transportation. The Canal provides people working in the trade, transportation and logistics industries with direct access to one of the world’s major shipping routes. Given that the country has the largest merchant marine fleet in the world, it is no surprise either that a high percentage of people working in Panama have links to the shipping industry in one way or another.
The four modern container ports alone ensure employment for a significant number of people. Manzanillo International Terminal, Colón Container Terminal, the Port of Cristobal Container Terminal, and the Port of Balboa Container Terminal are all managed by world class operators with international staff.
An Economic Overview
Panama’s economy on the whole is modern, stable, and one of the fastest growing economies in Latin America. The country’s stable investment climate is helped by the fact that the US Dollar has been legal tender in Panama for over a hundred years. Inflation is low and the local currency, the Balboa, is tied to the US Dollar. In 2013, Panama reported a GDP real growth rate of 8.4%.
The unemployment has remained stable in recent years, and was estimated at 4.5% in 2014. The total workforce is currently counted at 1.563 million, out of a population of 3.6 million.
Due to its key location, the country has a well-developed services sector with large numbers employed in Panama’s banking, commerce, tourism and trading sectors. All in all, the services sector accounts for nearly 83% of the GDP and employs about 65% of the workforce. With only 19% of employees working in Panama’s secondary sector, the country’s industry is maybe not the place to look for expats– except maybe the construction industry, which is booming on the back of tourism and the Canal expansion.
Agriculture accounts for about 17% of the labor force, but only for about 3% of the GDP. However, agricultural produce such as bananas, coffee, sugarcane, and shrimp are among the country’s main exports and thus contribute significantly to the economy.
Tourism in Panama
Tourism also holds a special place in Panama’s economy and provides lots of jobs. Two big cruise ship terminals ensure a continuous flow of tourists into the country: the Cristobal Cruise Terminal and the Colón 2000 Cruise Ships Terminal.
There are various economic incentives both for investors and contractors working in Panama’s tourism industry, e.g. Special Tourism Zones in various parts of the country offering tax incentives and exemptions. As a result and due to increased demand, people working in Panama’s real estate industry have developed several new tourism destinations in the past years.
Europe is one of the key areas for promoting Panama as a tourist destination. Especially foreign retirees looking to spend their old age pensions in the country are targeted by PR folks working in Panama’s tourism industry.
We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.