The College of Saint Rose and UDELAS in Panama

A partnership about education, culture and the exchange of ideas

Economics in Panama

ABIGAIL FOX

This week I decided to focus on the economy of Panama.  During the week I interviewed and asked some Panamanians questions on the country’s economic status and on topics related to its economy.  Throughout my time in Panama, I have learned many interesting things.

Panama is an up and coming country that has a rapidly developing economy.  One can realize this information in just minutes of viewing the city of Panama since half the skyscrapers in the city are all under construction.  It is interesting to zoom up on any of my Panama City photographs since you are able to see the cranes on top of the unfinished buildings.

Panama consists of about 3.3 million people, with over just about half the population (1.7 million) people residing in Panama City.  Their current gross domestic product, estimated from 2008, is reported to be about $25.04 billion.  The GDP per capita would then calculate to be about $7,500, which is up from the $6,000 GDP capita figure from 2002.  However, Panama suffers from a huge disparity of wealth.  It is known that the wealthiest 20 percent of Panamanians control more than 50 percent of the country’s wealth, and that the poorest 40 percent only control 12 percent.  We have come across these extremes every day since our Hostal was located in a very rich neighborhood, Punta Paitilla, and we had to drive past Casco Viejo in order to get to the university, in which it was a very poor part of the city.  Additionally, like any poor neighborhood, Casco Viejo is one place foreigners should never be a night time since it is very dangerous.

 

 

Nicolás, a man who worked in the finance office at the university, UDELAS, discussed how the majority of the country’s GDP comes from the service sector because of the canal, maritime services and other transportation the country provides.  In addition more services provided in Panama are finance, insurance, health and medical, telecommunications, and tourism.  He stated how another big section of the country’s GDP is made up the products they export such as coffee, bananas, pineapples (which are only 50 cents in Panama), fish, and beef.

Imports of the country were said to be goods such as oil, seafood, and technology-intensive manufactured goods.  The top five countries importing goods to Panama are the United States, Costa Rica, Mexico, China and Japan.  From my personal experience of grocery shopping in Panama, I could really tell how most products were actually more expensive.  Goods such as a half gallon of ice cream were about $7.50 compared to $2.99, cereal about $4-5 compared to $3, and shampoo/conditioner about $7, compared to about $4.  The only products that I noticed were cheaper were the alcohol.

I then asked Nicolás about the unemployment in the country.  He stated how there has always been a very high unemployment rate and it has improved significantly in recent years.  However, there are many people in Panama who care not to work.  He took out his local Panama City paper and showed me pages full of advertisements looking for workers.  I asked what level of education is required for the majority of the jobs, and he said usually just a high school diploma.  Another man in my office Demetrio added that people who do hold jobs that require higher education such as a college degree, make un poquito más (a little more) than the people who do not.  This is not the case in the US.  The average cost at attend a university per year is around $1,200 for UDELAS, but they also reported how other big university, University of Panamá, is much cheaper!  I barely could comprehend this, since prices like these are impossible even for an instate community college student.

Also, when talking with the Brazilian construction workers that work on the Bridge of the Americas in Panama that live in our Hostal as well, they said that many Panamanian construction workers receive around $2 per hour of work.   A wage rate of this little is mind boggling for an American since it would be extremely illegal.  It makes you realize how appreciate we should be for each state in the US setting minimum wages.

Additionally, when I first brought up the topic of Panama’s economy, Nicolás talked about the current gas prices.  He stated how through the conversion of kilograms to gallons, it cost Panamanians about $4.43 per gallon of gas!  Gas prices like these can be found California, but to upstate New Yorkers and also Vermonters (where I am from), these prices are outrageous.  We already complain about our $3.70 per gallon.  Nicolás said that recently, the government had made a deal with an oil provider, and it someone allowed gas prices to drop between $1.50 to $2 per gallon but only for a month.  Since then prices have been steadily increasing daily.

In conclusion, Panama is a country that is rapidly changing and improving daily.  It would be very interesting to go back in years to come to what the country has become.

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