Wide Remit

The Chamber of Commerce was established 100 years ago. What was the philosophy behind the creation of this institution?

The Chamber was created by a group of intellectuals who wanted to defend the country’s interests. The Chamber of Commerce has always supported the development of business, and has collaborated with the government in the best interests of the country. In 1986 and 1987, during the dictatorship of Manuel Noriega, the Chamber of Commerce created the Cruzada Civilista, which was joined by various organizations in Panama to seek basic freedoms for the country, which were being denied to Panamanians. Therefore, our remit has not only been to help businesses, but moreover the country at large.

What does the Chamber do to protect its members’ interests?

Most of the time we defend our members by negotiating with the government on prospective legislation that is not necessarily in the best interests of business people and traders. We also help our members to establish free trade agreements (FTAs) with other countries to boost the national economy, which helps our members to expand their enterprises. We also help the government understand the impact of laws and taxes on business and advise on what we see as best for the country. The most important benefit is having a 100-year-old organization fighting in your corner.

The Chamber is committed to national development through the CCIAP Foundation. What education initiatives has the Chamber sponsored?

The most important consideration for any country is a well-educated population, as this is the root of development. The Chamber of Commerce is committed to helping the Ministry of Education develop new methods of teaching, and we also assist children in rural areas that lack adequate resources. Once a year we choose one community and the entire Chamber collaborates to establish support for it. That is one of the most-pressing problems in Panama. The country has virtually reached capacity employment, so as an organization we aim to develop further work opportunities for its citizens. Firstly, we need to improve people’s access to education so they can subsequently gain access not just to a basic salary, but also to a job that allows them to develop themselves. One of the main initiatives that we started around 10 years ago was the English as a Second Language program, through which the Chamber and the government worked to make all public schools teach English.

What is your evaluation of English language penetration in the country’s economic sectors?

Among business people you will find high-level, English-speaking individuals. If you go to public schools you will see that there is a lot of work to be done, and the new program has not been well established because there is a shortage of English teachers. We have a deficiency in some of our sectors because we do not have enough fluent English speakers; for example, in tourism. Some people assume that because we are a small country, we do not need to speak English, but actually this is the only real way to take advantage of the impressive opportunities that are being developed in the country.

Law 41 on Sede de Empresas Multinacionales came into force in 2007. What is your evaluation of this law and its advantages for multinational companies coming to Panama?

We developed a committee run by one of our presidents that created a joint venture to assess business necessities and how the Chamber could help satisfy those needs. For example, in Panama Pacifico, one of the main bases for multinational companies, around 9,000 or 10,000 jobs have been created to date. The presence of these enterprises in Panama has helped to increase employment opportunities in terms of wages and salaries. One of the factors attracting companies is the legal framework. Then, of course, there is the connectivity offered by the national airline, the low cost of living in Panama, and the stability and security of the country.

What impact will the Panama Canal expansion project have for companies established in Panama and for the country as a whole?

The original canal is still operational, but the wider canal will run parallel, so there will be standard shipping traffic using the smaller canal, while wider shipping will be accommodated by the second. Labor, supplies, shipping, and other services will be demanded around the wider canal, with the impact not only being felt in Panama, but also across the globe. The US, for example, has already started a number of port expansion projects in Miami, New Orleans, and Houston. Even the UK is widening its ports for larger vessels, because once the Panama Canal becomes operational, traffic will increase. Although this is a small country, it is changing the way the world does business, as it did 100 years ago when it opened.

What is your medium-term economic outlook?

I expect GDP growth of close to 7% this year. Direct investments should approach $3 billion, and the most dynamic sectors currently are logistics, construction, retail, and wholesale, as well as finance and insurance. Industry and agriculture will remain limited contributors to the economy. Unemployment will be stable at 4%, and the inflation rate will be close to 3% or 4%.

© The Business Year – May 2014