‘Informal jobs will increase due to lack of trust’

Panama faces a labor crisisdue to various factors, according to economists, of which lack of trust is the most influential.

The sectors that create the majority of jobs are no longer attractive private investments, and consequently, mostly generate informal employment. This trend will continue, from the point of view of experts employment, René Quevedo.

These sectors are internal trade, construction, logistics, industry, hotels/restaurants and other service activities, which make up two thirds of the private workforce. 4 out of every 5 new jobs created in 2022 and 9 thousand out of 10 thousand new informal jobs that are incorporated into the economy every month today.

He explains that this phenomenon is the result of a high level uncertainty in the climate for private investment in these sectors, a trend that will continue.

The informality in these sectors (INEC, April 2022) is: domestic trade (54%), construction (73%), logistics (61%), industry (64%), hotels/restaurants (62%) and other service activities (87 %) %), levels much higher than informality in the economy as a whole (48.2%).

In this context, the majority jobs which will be generated in the coming years will continue to be informal.

However trade and agribusiness They offer interesting perspectives for the creation of decent jobs in the short term.

Ability to create quality employment in other key sectors, such as tourism and logisticsthey depend on creating confidence that investing in these activities is good business.

Considers Quevedo that if the mining operation continues in the country, it will contribute to the confidence building process, as the largest foreign investment in the country’s history.

There are other emerging sectors that offer interesting prospects, such as energy and technology, but once again, we need to Foreign Direct Investment (FDI) make it a reality, so that its potential to create quality jobs is directly linked to our ability to attract investment.

Generation of decent employment in “traditional” sectors It will depend on our ability to convey confidence that investing in these activities is good business.

“Without an employer who wants to make money on his investment, employment on the salary, it does not exist”, he points out.

That construction trust implies the elimination of bureaucracy, unnecessary procedures, delays and discretion of officials, which only creates fertile ground for corruption, as well as feeding an excessive and parasitic payroll.

The specialist suggests that without private investment, Panama will continue to create informal.