The Inter-American Development Bank today announced the approval of a $7 million loan to Panama for a program designed to foster competitiveness in key sectors of the Panamanian economy, an essential activity for achieving growth and social inclusion.
The innovation program supported by the IDB will launch a participatory process involving the public and private sectors and civil society in Panama in the development of strategies and projects to make their businesses more efficient, dynamic and capable to face increasing international competition.
The program will focus on four sectors. In two of them, agroindustry and logistics, Panama has an established productive base with potential for diversification. The other two sectors, tourism and technology services, are less developed but hold competitive potential.
“This collaborative effort by the public and private sectors to develop a national competitiveness strategy is expected to have concrete, measurable results in terms of productivity gains and exports,” said IDB project team leader Martin Chrisney. “Currently, the IDB is supporting competitiveness initiatives throughout Central America, with similar consensus-based programs being started in Costa Rica and Honduras.”
Under the program, Panama’s competitive conditions will be diagnosed, both at a national level and at the level of business clusters in different sectors. The program will also assist the drafting of a national competitiveness strategy to improve Panama’s business climate, as well as specific strategies for sectors and subsectors to improve business productivity.
Another component of the program will support the creation of a Competitiveness Fund to provide matching grants for projects arising from the action plans agreed for the clusters. The program’s impact and the quality of its services will be monitored and measured.
The program is expected to help Panama eliminate barriers to competitiveness and foster business expansion, higher economic growth rates and job creation.
The program, which has been earmarked as a priority by the Panamanian government, reflects an agreed strategy of Panama and the IDB to promote competitiveness in order to attain sustainable development.
The loan was granted for a 20-year term, with a three-year grace period, at a variable interest rate, currently at 6.19 percent a year. Local counterpart funds will total $3 million.