Country Strategy

Together, IDB staff and Panama determine how Panama’s priorities coincide with the Bank’s development strategies for the region. The product of that process is the IDB country strategy with Panama, containing the Bank's expected program for Panama.

Country strategies include an overview of the country’s current economic situation. They draw on analytical work conducted by the Bank and other parties on a wide range of economic and social sectors, such as rural and urban development, health, education, government modernization, transportation, trade, and the environment, among others.

IDB Country Strategy

Panama has been one of the fastest-growing emerging economies over the last few yearsexpanding by an average of over 9% per year in real terms between 2003 and 2008.Following a brief slowdown in 2009 in the wake of the international financial crisis,medium-term growth prospects (2010-2014) are highly positive, ranking the country as one of the Latin American economies with the greatest growth potential over the next five years.

Although Panama has been expanding vigorously and has made major progress in the fiscal domain, its development in recent years has been characterized by great disparities, in both geographic and opportunity terms. Economic activity is concentrated around the Canal Zone, where most of the country’s infrastructure and services are located, more than half of the population lives, and over 80% of GDP is produced. In contrast, the poverty rate in rural areas is 59.7%, but just 7.7% in urban zones; and extreme poverty mostly affects the indigenous population.

In brief, Panama’s comprehensive development faces the following challenges:(a) strengthening public finances, increasing revenue, and making expenditure more efficient, to allow for the investments needed in core sectors under a framework of mediumterm fiscal sustainability; (b) developing basic infrastructure especially in the country’s provinces beyond the province of Panama and the province of Colón [hereinafter referred to as “other provinces”], thus expanding economic and social opportunities in areas outside the Canal Zone, to reduce high levels of poverty; and (c) facilitating access to quality services in education, health, and nutrition, particularly in the indigenous territories and in rural areas.

The Bank’s Country Strategy with Panama for 2010-2014 will focus on the following sectors: (i) public finance; (ii) transport; (iii) water and sanitation; (iv) energy; (v) education; and (vi) health. The Bank will also endeavor to strengthen country systems in the areas of financial management, government procurement, and the environment.