The World Bank and its farce of Panamanian economic growth

In his recent report entitled “Integration potential” The World Bank predicted that Panama will achieve real gross domestic product growth of 5.7% in 2023. It also predicts that this indicator will reach 5.8% in 2024 and 5.9% in 2025. This is a sample of what can be called the ideology of growth, which is widely celebrated in social media dominated by economically dominant sectors, which support the idea of ​​a kind of exceptionalism of the Panamanian economy. It is, however, an uncritical vision, incapable of recognize the existence of some important problems.

Own In the aforementioned report, the World Bank confirms that the employment quality index has declined in Panama significantly due to worsening job security and reduced benefits. This is, of course, an implicit recognition that economic growth does not necessarily lead to directly to social equality.

Actually, the Panamanian economy It grew by 10.8% in 2022, remaining at a higher level of 5.7% above the level before the pandemic, in the conditions that the unemployment rate at the end of that year reached the level of 9.9%, which is 2.8 percentage points points more than the one from 2019.

The hypocritical way the World Bank deals with this problem, which for obvious reasons coincides with the vision of the economically dominant sectors, explains this problem by resorting to the idea that everything is a consequence of the lack of human capital in the country. So in its digital publication “Panama: the big picture” suggests solving the problem by “reducing inequality to long term in human capital…”

Of course, inequalities in education must be reduced, but this is not only a “long-term” goal. Contrary to the position of the World Bank This is a problem that needs to be faced immediately, which requires decisive action to allocate funds for this purpose. However, in the same publication the world bank practically gives priority to the so-called fiscal consolidation, which is nothing more than a way of concealing the policy of fiscal austerity that is typical for this organization and International Monetary Fund. These, obviously, are not intended for strengthening sustainable human development, but ensure financial conditions timely payment of external debt.

It should be added to the above that The World Bank forgets that job insecuritywhich he himself recognizes as a part the problem of the decline of the Employment Quality Index, due to the systematic violation of social laws by private companies. Thus, in April 2022, there were 108,715 workers from formal enterprises who had to be classified as informal, because their employers of which they were shunned Social Security Fund. It is no less true that the transitist-extractivist model that governs the country emphasizes sectors that generate little employment per unit of output.

Although it is true that it is The World Bank in its “Panama: review” draws attention to the need to increase tax revenues, omits a comment on how to achieve this. In this way, what is more than obvious in our country is hidden: the need to reverse the high level of tax evasion through private enterprise, which reaches 6.0% of the gross social product . What the World Bank we cannot hide the need for a change in our development style.