Diversifying the economy, promoting innovation, and increasing its competitiveness is part of the benefits obtained by a country that manages to attract significant flows of Foreign Direct Investment (FDI), says Adolfo Fabrega president of Panama’s Chamber of Commerce, Industries, and Agriculture (Cciap).

"For a developing country like Panama, FDI is crucial to boost economic growth," says the businessman, who maintains that foreign companies that invest in Panama benefit from a welcoming and dynamic business environment.

Fábrega's words are in line with those expressed by Tomás Bermúdez, the new representative of the Inter-American Development Bank (IDB) in Panama, who said that it is crucial that the country diversify its economy so as not to depend on a few sectors, and, instead, have multiple engines that allow us to continue advancing reports La Prensa.

“From the Bank's point of view, Panama's challenges are, on the one hand, the formation of human capital and closing territorial gaps. Secondly, it is a priority to increase the country's competitiveness and product diversification. Although we are saying that some of the important sectors such as construction have fallen, new engines of growth must be sought and tourism and agriculture clearly appear there,” Bermúdez commented.

The United Nations Conference on Trade and Development (Unctad) indicates that FDI worldwide decreased by 12% in 2022, while in Latin America it grew 51% to $208 billion with Brazil and Mexico being the main destinations for capital invested abroad last year.

FDI in Panama contracted 86% in 2020, being one of the few countries in the region with red numbers during the pandemic, while in other nations the arrival of capital only slowed down. Although FDI flows have improved in the last two years, they are still below the $4.62 billion reported in 2019.