Caribbean & Central America - October 2016 (ISSN 1741-4458)

Global Competitiveness Report. On 28 September, the World Economic Forum (WEF) published the Global Competitiveness Report 2016-2017 which surveys 138 economies. The WEF assessment is based on 12 factors: institutions and infrastructure, health, primary and university education, market efficiency, labour market efficiency, technological advances, market size, development of the financial market, business sophistication and innovation.

Since the previous report for 2015-2016, Panama has soared eight places in the WEF rankings, securing its position as the 42^nd most competitive economy. It is only surpassed in South America by Chile, which is ranked in 33^rd place.

As regards the rest of Central America, the same 2016-2017 WEF report showed that Costa Rica was in 54^th place (down two places on the previous year) followed by Guatemala (78, unchanging); Honduras (88, unchanging); Nicaragua (103, up from 108) while El Salvador was in 105^th place (previously 95^th).

FDI: In a presentation on 29 September, Finance & Economy Minister Dulcidio De La Guardia revealed that foreign direct investment (FDI) to Panama grew by 6.5% in the first half of 2016, compared with the same period in 2015, amounting to a total of US$3.0bn, up US$184m.

A June 2016 report by the United Nations Economic Commission for Latin America & the Caribbean (Eclac) noted that in 2015 FDI inflows to Panama were up 17% to reach a record high of US$5.039bn – making the country the leading recipient of FDI in Central America.

During the presentation, De La Guardia also highlighted the importance of the Panama Canal expansion, completed earlier in the year [RC-16-08], to the country’s economy. She estimated that expansion would result in a 40% increase in investment in the logistics sector; create between 150,000-250,000 jobs by 2026; and boost Canal contributions to state coffers by 45% by the beginning of 2017.