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PANAMA - Diplomacy

Jose Alejandro Rojas

Minister of Private Investment

Bio

José Alejandro Rojas Pardini, an accomplished leader in private investment and real estate development, holds the esteemed position of Minister of Private Investment for Panama’s Presidency. With a strong foundation in Industrial Engineering from Purdue University, he brings extensive experience from his tenure at General Electric (GE) and key roles in GE Consumer Products, GE Healthcare, and GE Capital. A valued board member for prominent organizations, his expertise and dedication continue to shape Panama’s economic landscape.

"Our priority as a government was to establish the necessary conditions to strengthen the investment climate and security after the challenges presented by the pandemic and a war that brought an energy and a supply chain crisis."
TBY talks to Jose Alejandro Rojas, Minister of Private Investment of Panama, about encouraging FDI, promoting the country, and key sectors in the national economy.
What makes Panama a great investment destination?

Our priority as a government was to establish the necessary conditions to strengthen the investment climate and security after the challenges presented by the pandemic and a war that brought an energy and a supply chain crisis. Social, economic, and political stability in our country have been key to a solid and sustainable recovery, allowing for stable and strong growth. Panama has worked hard to re-establish itself as a destination for FDI by installing anti-corruption mechanisms. There are also a series of unique characteristics that position Panama as a country with an ideal business environment to invest and establish operations. In 2021, Panama achieved historic GDP growth of 15.3%, and following its public policies by 2022, the country grew by 10.8% while seeing inflation of 3.2% and a 30-year mortgage rate of 1% below the US rate. Some ratings agencies and multilaterals expect GDP to grow over 6%. With a privileged geographical position, free from natural disasters, the country offers an excellent quality of life, global quality medical services, high technology, robust and reliable broadband communications, political and legal stability, sustainable and attractive investment regimes, commercial openness, and access to important international markets. Panama is a world-class banking and financial center, with the US dollar as its legal currency. We are home to more than 67 banks from around the world, developing transparent transactions in any currency.

What initiatives is the government taking to promote Panama internationally as a business destination?

Taking into consideration the current global situation, we have started to enhance our logistics and energy industries in order to promote Panama as a business destination. We are working to provide solutions to the energy and supply chain sector, and in 2022 82% of the energy consumed in Panama was renewable, positioning the country as the eighth-highest renewable energy consumer in the world. In the current energy crisis, AES Panama and Interenergy are investing USD1 billion to build a 670-MW power plant powered with LNG as part of our energy transition strategy to end bunker production as part of our USD5-billion energy transition agenda on private investment. In addition, while the world is facing supply chain challenges, MSC recently announced a USD1.5-billion investment in what will become the biggest port in Latin America on the Caribbean side of the Panama Canal. Once construction begins, it will provide 1,000 jobs and expected to move 5 million TEUs. During our administration, we have implemented investment migration tools such as Qualified Investor and Friendly Countries, which are extremely relevant to attract foreign investment into Panama as a destination. Apart from being a country with a solid banking jurisdiction, Panama also hosts 180 multinational firms that manage their regional operations under the manufacturing (EMMA) and Multinational Headquarter Law (SEM). It is important to mention that during the pandemic 48 new firms established operations in Panama. We are on the way to become a digital hub in the heart of the Americas. There are eight continental fiber optic cables located through Panama with unlimited connectivity, offering the same connectivity one would find in London or New York, allowing technology-intensive companies to develop their products or services from here at a lower cost. Panama has over 50 special laws and regimes to incentivize investment in key sectors, which provide tax, labor and migratory benefits and expedited procedures for certain businesses. This gives our country a competitive edge to be positioned as an attractive destination to develop business and investments.

Which countries have potential to partner with Panama, and what approach is the government taking here?

Currently, a series of new trends are reconfiguring global value chains, shortening supply chains in search of lower costs, less risk, and greater agility. Companies have a greater interest in guaranteeing the supply of their products, as well as minimizing environmental impacts, reducing their carbon footprints. The positive outcome in Panama is that due to our excellent relationships with all countries around the globe, we are able to welcome investment from every corner of the world. Our main focus is the implementation of first world transparency tools and strategic alliances with trusted partners. We understand that the social, economic and political stability of our country has been the key to a solid economic environment. Panama can be considered as a beacon of liberty, free market, prosperity, and democracy in Latin America. This goes hand in hand with the government vision to become a business hub for our region.

What key sectors is the government focusing on to promote private investment and economic growth in Panama?

In every crisis there is an opportunity. Panama’s 2023 economic growth has demonstrated its ability to rise to the challenge, and we are doing our part by developing our key sectors that include our three main business hubs—logistics, digital, and food—along with two other sectors; green energy and sustainable tourism. Now, more than ever, logistics resilience is a key part in global supply chains being put to the test because consumers demand products faster and cheaper. Regionalizing manufacturing and logistics in countries that provide a safe, efficient, and central location is the way to proceed to ensure resilient supply chains, reduce the time products take to reach their markets, and at the same time lower transport costs. Companies that adopt this strategy will be better positioned to grow and reduce the risks from future disruptions. In this sense, we see in “nearshoring” a solution to generate more opportunities to create added value. Nearshoring is a concept that we want to develop as our connectivity and our logistics infrastructure allow us to provide a sustainable and resilient solution. Panama recently partnered with the US State Department to explore opportunities to grow and diversify the global semiconductor ecosystem under the International Technology Security and Innovation Fund (ITSI Fund), created by the CHIPS Act. This partnership will help create a more resilient, secure, and sustainable global semiconductor value chain and underscores the significant potential to expand this global industry between the US and Panama that will bring new jobs and transference of technology to our fellow citizens. Last but not least , we are developing our digital cluster through physical and legal infrastructures, along with fostering a highly capable workforce, research institutions, collaboration with the world’s best and most innovative, and a favorable climate for businesses.

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