Foreign direct investment does not create jobs

The country has not yet recovered 30 thousand jobs which were lost with the economic crisis caused by the covid-19 pandemic.

There are many factors that influence this fact, however, one was raised during Forum on employment and entrepreneurship organized by the Chamber of Commerce, Industry and Agriculture of Panama, is that foreign direct investments (FDI) that have arrived in recent years do not create jobs.

Queila Delgado, from the Inter-American Development Bank (IDB)reported that current FDI is concentrated only on reinvestment of profits and loans between companies, i.e. they do not create jobs.

The National Institute for Statistics and Census (Inec) table on foreign investment between 2017 and 2022 reflects how they fell from $4.281 million to $2.906 million between those years.

On the other hand, doc In 2017, more was invested in mining activity ($2,061 million) and in wholesale and retail trade (1,128 million USD), now the situation is different.

In 2022 FDI is focused on financial and insurance activities (716 million USD)followed by information and communications ($640 million) and wholesale and retail trade, which, far from the figure from 2019, generated only $584 million.

Roberto Artavia, international consultanthe said that FDI brings capital, enables us to expand and diversify exports, diversify markets, modern jobs in technology and knowledge, and brings new production methods, while creating the kind of entrepreneurship that is needed.

He added that there is a need for enterprises that have alliances and chains with large production systems in the country and the world so they are sustainable.

“The world of Panama is transformed when companies are connected to large systems and value chains, formalized in this way and in this way become sustainable businesses“Indeed,” said the expert.

What influences the lack of interest in investing?

The IDB representative did not fail to mention either the inclusion of Panama in the discriminatory lists of tax courts to which he added other details such as excessive paperwork, deteriorating customs times and high costs prevailing in the country.

In fact, the costs for a company to invest in the country puts Panama on the spot the fourth most expensive country on the continentnot forgetting that we also have a high price of electricity.