Panama: The Best Place to Do Business in Latin America
This year, the Latin Business Chronicle’s annual Latin Business Index placed Panama as the best place to do business in the Latin American region. Last year, the top spot was Chile’s, the long time darling performer of Latin American emerging markets, last year (Chile is now second place).
For the 2010 report, both countries, Panama and Chile scored above 17. The third place went to Uruguay, with a score of 16.3, no big surprises there. The last spot, as expected went to Venezuela, with a score of 1.4, surpassed by Haiti, named the second-worse, with a score of 7.8.
The index covers 19 countries and is the broadest measure of business climate in Latin America, and it takes into account political freedom, ease of starting a business and corporate tax rates. In the globalization and competitiveness category, Panama also moved one spot, to knock Costa Rica out of the top ranking.
The areas that were considered for this report were doing business, economic freedom, competitiveness and technology. Considerable improvements in all of these areas during the past 5 years were mentioned as the key to Panama obtaining the top stop in 2010. These improvements in the business framework and climate also helped offset a declining GDP of the past two years.
In a follow up article, the Latin America Business Chronicle states that “Panama is now the only country that is among the top five in all our five main categories.” In addition to this ranking, Panama continues to be the most globalized country in the region, as per the LBC’s Latin Globalization Index.
The economic growth experienced by Panama in recent years is mostly driven by mega projects like the Panama Canal expansion ($5.2 billion), The Panama-Pacifico (Howard) Economic Zone, one of the largest real estate developments in the world (by London and Regional) which is attracting many multinationals to set up their headquarters there (Dell, 3M, Caterpillar, FedEx). All of these projects are directly supported by the region’s largest international banking sector, the world’s second largest duty free zone and the top commercial ship’s registry in the world.
There is also the City of Knowledge, a conglomerate of higher education institutions, international agencies and think-thanks, attracting already many of the UN agencies like UNICEF, UNDP, FAO, to set up their regional headquarter there, as well as scores of universities, local and regional NGOs, and R&D firms.
Posted in Panama Investment