CAF praises Panama’s growth, sees opportunity to boots development

(Panama, Nov. 2, 2012).- During a visit to Panama on Oct. 30-31, the president of CAF –development bank of Latin America– Enrique García fulfilled a busy work agenda including his participation as keynote speaker at the Seventh National Competitiveness Forum, organized by the National Competitiveness Center, as well as meetings with Panamanian President Ricardo Martinelli and government high officials and businessmen.

In his speech at the Competitiveness Forum –which was also attended by Presidency Minister Roberto Henríquez and Finance Minister Frank De Lima–García highlighted the great opportunity Panama has to consolidate its growth through investments in quality education, logistics, infrastructure, productive transformation and institutional strengthening

García praised Panama for its policies, which have turned it into one of the four fastest growth economies in the world. In the last two years, Panama climbed 19 positions in the competitiveness ranking, he said at the inaugural session.

According to García, Latin America should replace its current model of comparative advantage for one of competitive advantage, moving away from natural resources and low wages to knowledge, added value, innovation and technology.

CAF’s President highlighted the case of South Korea, whose GDP per capita went from $265 in the mid-sixties to $23,000 today. "That is mainly because it focused on education, which is the instrument that adequates human capital to the necessary productive transformation,” he said.

For this reason, García said, the region and especially Panama should not be merely contented with good macroeconomic growth rates, as it now has “a historic opportunity to make structural changes that enable sustained and equitable growth.”

To achieve that, he called for greater regional investment in infrastructure and logistics. “Latin America invests less than 3 percent in infrastructure, while China invests 10 percent, and the average in advanced countries is between 5 percent and 6 percent.”

In addition, to overcome what he called “modest” growth “in terms of productivity,” García called for a greater investment ratio to GDP and improvements in savings capacity. “Asia saves more than 40 percent of its GDP.”

During his visit, García also visited President Martinelli, repeating CAF’s interest in providing continued support to the country, financing projects for sustainable and equitable growth that contribute to social development and integration with the world and fundamentally the region.