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Though agricultural development in Panama has historically been hampered by a series of structural issues, including fragmented ownership of land, limited access to financing and deficient transport infrastructure, efforts are now under way to boost agricultural output. According to Panama’s National Institute of Statistics and Census, agriculture and livestock GDP increased steadily over the 2010-13 period, rising from $764.4m to $863.1m. The upward trend came to a halt in 2014, however, with the sector’s GDP falling 0.2% to $861.3m. The sector’s contribution to overall GDP has declined rapidly in the past decade, alongside the continuing industrialisation of the economy; in 2014 it stood at 2.4%, down from 8% in 2000. Soon after assuming office in 2014, President Juan Carlos Varela unveiled a multimillion-dollar plan to boost domestic agricultural production and enhance food security, a move expected to contribute to the revitalisation of the sector in the coming years. This chapter features an interview with Carlos Fernández, President, Chamber of Commerce, Industries and Agriculture of Panama.

Buoyed by expanded connectivity and increasing investment, Panama’s tourism sector has experienced unprecedented growth in the past few years. Today, it is a pillar of economic development, generating more revenues than transit fees from the Panama Canal ($1.92bn) or the Colón Free Trade Zone ($1.9bn). According to the Tourism Authority of Panama, visitor numbers have grown every year since 2002, save for a slight contraction of 0.8% in 2009, with total arrivals exceeding 2.3m in 2014. Sector revenues have followed a similar upward trend, growing by 7.3% in 2014 to nearly $5.5bn, up from $5bn in 2013 and a five-fold increase on the $1.1bn generated in 2005. The current’s government’s policy of diversification is set to usher in a host of new developments outside the capital likely to strengthen key tourism subsectors, in particular the ecotourism and “sun, sea and sand” segments.

Panama’s dynamic ICT sector has been a key enabler of the country’s high-growth, services-based economy. Strong technical infrastructure coupled with a robust legal regime make for favourable conditions for local and international technology companies. The “Global Information Technology Report 2015”, published by the World Economic Forum, ranked Panama 51st among 143 countries in terms of the quality and potential of its ICT infrastructure. With this score, Panama is among Latin America’s leaders in the field, outranked only by Chile (38th) and Costa Rica (49th). With a favourable location, good ICT infrastructure and attractive fiscal policy, the country is in a prime position to establish itself as a call centre outsourcing hub for the region. As efforts to enhance the e-government system and introduce initiatives for the full digital inclusion of Panama’s citizens continue, the sector’s outlook remains robust. This chapter contains interviews with Jorge A Motta, National Secretary of Science, Technology and Innovation; and Agustín de la Guardia, Executive Vice-President and General Manager, Cable & Wireless Panama.

Panama’s energy and utilities sector could be poised for a comeback. With a vision to turn Panama into an energy hub, the administration of Juan Carlos Varela is looking to strengthen the existing electricity and hydrocarbons market and its infrastructure, using both public and private investment. Multimillion-dollar investments in fossil fuel power generation, network infrastructure and renewables are in the pipeline over the coming five years. The electricity segment is set to undergo significant expansion in the coming years, with a 700-MW extension of the fossil fuel generation base under way. On the hydrocarbons front, various new terminals and special economic areas for oil are planned. The possibility of larger vessels crossing the canal, like LNG carriers, has also generated renewed interest. The addition of power through renewables and connectivity to networks in Central America and South America could drive Panama to become an energy hub for export in the region. This chapter contains an interview with Rafael Pérez-Pire, General Manager, Unión Eólica Panameña.

Buoyed by a combination of factors, including the country’s prime geographic location, sustained economic growth and the influx of foreign investment in recent years, Panama’s real estate market has seen unprecedented growth since 2006. Today it is a key component of Panama’s economy, amounting to $4.6bn or 12% of GDP in 2014. Though fast growth has led the cost of land to skyrocket, sometimes as much as three-fold, a growing middle class and a significant housing deficit, coupled with thriving industrial and retail segments, make for a positive outlook for the real estate sector. Meanwhile, representing $5.1bn and 14% of the nation’s growing GDP, the construction sector is another dynamic component of the economy. According to the Panama Construction Chamber, the sector grew by 14% in 2014 and is set to expand by 10% in 2015, with the residential market offering the most potential for dynamic growth. This chapter contains an interview with Ramón Arosemena, Minister of Public Works; and Alberto Vallarino, President, Grupo Verdeazul.

Profiting from stable economic growth, Panama’s retail sector has continued to expand over the past two years. The entry of luxury brands to the local market has diversified the retail landscape while growing demand for retail space has also fuelled the construction boom. The sector’s outlook is promising, with a number of indicators pointing toward continued growth in retail consumption. Between 2007 and 2010 poverty levels decreased by 11%, while the middle class, which now represents nearly 40% of Panamanian society, according to World Bank statistics, grew by 10%. The country also boasts the lowest level of inflation in Central America, with a rate of 2.6% at end-2014. Moreover, it has experienced a significant increase in the number of foreign residents, which have become an important high-end target for retail chains. Buoyed by the rising popularity of e-commerce among local consumers, the online retail market is particularly promising. This chapter features an interview with Abdul Waked, President, Grupo Wisa.