Panama’s Economic and Infrastructural Inequality

Kennon Pearre
Office of the Simon Chair

Panama is the fastest growing economy in Latin America, according to the UN Economic Commission for Latin America and the Caribbean (ECLAC), with 8.5 percent growth expected in 2011. Visible signs of this economic boom abound in Panama City, which boasts new high rises and a $1.2 billion subway system under construction. These investments, coupled with the $5.3 billion expansion of the Panama Canal, have made Panama a regional leader in economic and urban development. However, the aggressive push for a modern skyline has neglected basic infrastructural requirements, forcing the government to scramble to meet basics needs.

Questions with regards to over-development are becoming common, as the growth of Panama City has largely been unregulated and haphazard. Public Works Minister Federico José Suárez commented that “the country did not visualize growth at this rhythm. [Panama] is a victim of its own success.” Newly constructed buildings on Punta Pacífica, a land filled point on the edge of Pacific Ocean, have become emblematic of Panamanian urban development and its lack of basic infrastructure. While boasting Latin America’s tallest tower, the Trump Ocean Club, Punta Pacífica has been referred to as a “swamp island” after heavy rain. The overwhelmed drainage system, aside from being clogged with construction waste, is too small for the buildings it now serves. In an attempt to catch-up, the Panamanian government has pledged $13.6 billion over five-years to update infrastructure, according to The Economist.

Panama’s growth in recent years has been the envy of Central America, with much of the region beset with anemic growth and rising crime rates. Its efforts to become the “Singapore of Central America” appear to be paying off in a rapidly expanding economy and rising incomes. Yet, while the future looks bright for the isthmus nation, many challenges remain. Panama still lags in many areas besides infrastructure, including poor education and high income inequality. Having the tallest building in Latin America may add to Panama’s international prestige, but the inability of Punta Pacífica to update its sewage system is illustrative of how far Panama has to go.
 

Photo courtesy of Wikimedia Commons