Announcement Follows Successful Meeting between World Bank, Panama leaders
Washington D.C. April 28, 2011.- Panama’s President Ricardo Martinelli and World Bank President Robert B. Zoellick met here today to discuss the Central American nation’s impressive economic performance and continued support from the multilateral institution.
The meeting precedes next week’s scheduled discussion among World Bank’s Board of Directors of a new US$100 million policy loan for Panama.
A central objective for this new program is to support the Government of Panama’s efforts in areas such as:
- Improvements in the country’s tax collection,
- A more transparent system of corporate regulation to avoid tax evasion, and
- Stronger social programs.
During their hour-long meeting, Zoellick commended President Martinelli for his country’s impressive economic growth, currently among the highest in Latin America. Panama’s Gross Domestic Product was 7.5 percent in 2010, and it is expected to remain above 7 percent in 2011 and 2012.
The Panamanian head of state and Zoellick, who served as United States Trade Representative from 2001 to 2005, also discussed recent advances in the negotiations of the U.S.-Panama free trade deal.
The World Bank leader noted Panamanian efforts to address recommendations made by the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes.
The International Finance Corporation (IFC), the WBG’s private sector arm, is committed to supporting private sector companies in Panama that have a strong development impact, particularly in strategic sectors such as the financial industry, infrastructure, and renewable energy. IFC is supporting Panama’s goal of becoming a regional logistics hub through key infrastructure investments, namely a $300 million commitment to the Panama Canal expansion.
As of April 2011, IFC’s committed investment portfolio in Panama totaled US$457.9 million.
Since taking office in July 2009, President Martinelli has pursued an ambitious reform agenda aimed at improving economic efficiency, enhancing competitiveness, and protecting the poor and vulnerable. Beyond compliance with international standards, the government’s widespread tax reforms seek to widen Panama’s tax base and reduce its tax exemptions. By increasing its fiscal space, the government will have the resources to enhance social programs, including a non-contributory pension for the elderly poor, a scholarship for all students starting in public schools, and the conditional cash transfer program Red de Oportunidades.
The World Bank and Panama have agreed to a Country Partnership Strategy (CPS) for the 2011-2014 period. The new strategy, centered on creating opportunities for all Panamanians based on the joint activities of both government and private sector and aimed at increasing the country's productive capacity, will amount to at least US$400 million in lending plus analytical and other knowledge services that are being defined jointly with authorities.
As of this month, the World Bank’s portfolio of investments in Panama is US$236 million -- supporting projects in health, social protection, and rural development, among other sectors.