Year 2020 in review: Panama
2020 has undoubtedly been a unique year, for my country, Panama, the year began with a long list of challenges to face, which made it look complicated and demanding of intelligence and creativity.
On the one hand, an economy that had been declining towards its natural growth adjustment, after several years of exorbitant public investments, among these, the expansion of the Panama Canal, the construction of the Metro, the new International Airport and many other public infrastructures such as roads, schools, hospitals etc., with an investment that brought the external debt from fifteen billion dollars in 2015 to thirty-two billion dollars in 2019, and an economic growth of almost 12% in 2010, to 10 % in 2012, 6% in 2017, up to a realistic 3% in 2018.
Even so, the perspectives of all the rating agencies recognized at the end of 2019 that Panama would continue with reasonable sustained economic growth, between 3 and 4%, which in the region is a positive rate.
On the other hand, during 2017 and 2018 the exhaustion of the Panamanian economic model, based fundamentally on the economy of financial and legal services, was evident in the face of the constant attack mainly by the European Union against the national banking center and corporate services, product of the international scandal unfairly called the Panama Papers.
The dire implications of being blacklisted, the risk of losing banking correspondents, and the direct actions of justice in many countries against law firms, accountants, banks, and other financial service providers, was evident and resulted in the closure, merger or retirement of several banks and the reduction to negligible levels in the constitution of corporations and the opening of bank accounts and the administration of patrimonial trusts.
Added to this reality is the Covid-19 pandemic, with the paralysis of the economy for more than five months and a tightening process that is going through serious difficulties similar to those of the rest of the world and that already glimpses an unprecedented economic cataclysm of which it will take many years to recover.