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Panama: Latin America’s FDI Leader

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Panama has Latin America’s highest percent of FDI, while Venezuela has the lowest.

BY SEAN MATTSON

PANAMA CITYPanama has replaced Chile as Latin America’s leading recipient of foreign direct investment as a percent of its GDP, according to a Latin Business Chronicle analysis of new data from the UN the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and GDP data from the International Monetary Fund (IMF). 

Business is finding that tiny Panama has become much easier to locate on a world map. With breakneck economic growth, a $5.25-billion expansion of its famous canal and a capital city skyline unlike any in Central America, Panama has made a quick transformation from a military-run backwater to an outstanding economic performer that is the envy of its regional peers.

Panama attracted $2.36 billion in FDI in 2010, continuing a trend that has had the seen the country of 3.4 million people average above $2 billion per year in FDI since 2006. Last year’s FDI figure was the equivalent of 8.8 percent of Panama’s $26.8 billion economy. That was a higher rate than any other country in the region, including Chile, according to the Latin Business Chronicle analysis.

“The foreign investor finds everything here,” says Nicolas Ardito Barletta, the president of the PanAm Development Corporation, a regional business-services firm based in Panama City. Barletta points to carrier Copa Airlines, Panama’s expanding international airport, the canal, ports, telecom infrastructure and Panama’s geographic location as the key components to the country’s recent success. “The advantage is the connectivity,” says Barletta, a former president of Panama who also heads Panama’s private sector-led National Competitiveness Center, or CNC, which guides the government meeting competition-boosting priorities.

From giants like Caterpillar and Procter and Gamble - which set up its Latin American management headquarters in Panama in 2007 - to specialized

CHART: Latin Americas FDI-GDP Rank

 

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