Misconceptions and misunderstandings around the banking and financial systems in Central America are an everyday reality for countries like Panama. As a result, it is critical that we constantly communicate the efforts we are undertaking to ensure transparency within our systems, and demonstrate our commitment to meet the international standards that preclude money laundering and the financing of terrorism.
This is no small task, but let me be clear: We do not shy away from the challenge and are proud of the tremendous progress we have made thus far.
Over the past five years, Panama has completely restructured the country’s legal framework and collaborated closely with leading international authorities to overcome the stigma originating from the misleading report called the “Panama Papers”. While the title was a clever literation, the vast majority of the parties cited in the report originated outside Panama. When you look closer at reports like the recently leaked “FinCEN Files”, it essentially validates that we are not the cause or the facilitator of the problem.
In our efforts to strengthen our international standing, it is also vitally important that smaller nations like Panama are afforded the requisite consideration and understanding they need in order to facilitate and implement changes to our legislation and regulate our financial services sector.
Unfortunately, countries of our size simply don’t have readily available resources and finances to dedicate at the pace that is expected of us from international authorities. What we need from international communities is partnership and support, not unnecessary adversity that could hinder our progress. Put in simple terms, what we need is cooperation.
Panama is focused on delisting as an integral component of its growth plan, which includes a series of commitments: to the environment and sustainability; to democracy, security, the rule of law, global financial standards and women’s rights; and to being a responsible destination for investment and tourism.
Panama has modernized its legal framework through the approval of laws, executive decrees and other regulations in order to be removed from the European Union, Organisation for Economic Cooperation and Development and Financial Action Task Force lists and to turn the page, once and for all, on negative claims that impact our country’s reputation. Although we recognize there is still work to be done, we are proud of what we have accomplished to date, especially as we collectively navigate the adversities imposed by the COVID-19 pandemic.
Despite the challenges that we, like all countries, have faced during the pandemic, international markets have continued to recognize Panama’s political and financial stability. Not only have we been able to successfully mitigate the financial impacts of the pandemic, just recently, Panama’s National Bank issued a 10-year bond for US$1 billion – and it was oversubscribed by close to $5 billion.
This demand further solidified our standing to the world, demonstrating that our economy remains strong and that investors trust Panama’s approach to financial recovery from the pandemic. Our stability is also thanks in large part to our diversified economy, which is less exposed to macroeconomic shocks than other economies in the region and ready to take on the challenges of a 21st century economy.
Vital to our resiliency is also the strength of our growing digital hub. Panama boasts a robust digital infrastructure with strong connectivity, thanks to the seven submarine optical fiber cables that allow us to offer unlimited bandwidth to businesses and academia with minimal risk of interruption by natural disasters.
Its full compatibility with the US and the UK has allowed Panama to become a destination of choice for global telecommunications companies and data centers. Today, Panama is the link to 100 percent of regional internet traffic, 90 percent of international voice traffic and over 90 percent of data transmission.
Panama is, and has always been, at the service of the region and the world, and we are proud of being a reliable partner to a number of companies and nations. Our geostrategic position, connecting the Atlantic to the Pacific, allows us to play a critical role in international trade.
We understand that with such a privilege comes the responsibility to ensure uninterrupted flow of essential goods to and from countries around the world. We have never seen that more evident than with the COVID-19 pandemic.
Amidst the crisis, we remained committed to ensuring that international supply chains for critical resources such as food and medicines were uninterrupted. Our ports and airports were open to international traffic, never ceasing to connect the 144 maritime routes and over 1,700 ports that depend on the Panama Canal.
Panama is about collaboration and has a strong foundation for continued success. Its sound business environment ranks Panama 7th out of the 32 countries in Latin American and the Caribbean by the World Bank for its ease of doing business. Classified as an investment-grade country since 2010, Panama has built up strong partnerships across the international business world, with over 150 companies choosing Panama for its regional headquarters.
Because of the great foundation that exists today, Panama is the world’s most robust logistical hub with a state-of-the-art maritime industry that is critical for global trade and the distribution of essential goods, including energy, agriculture and healthcare supplies, such as the COVID-19 vaccines.
Panama is on a transformative path to regain international confidence and showcase the strides the country has made in the past years. Working in partnership, and not as adversaries, with the international community, we can and will enable a sustainable future for generations to come.
The writer is foreign minister of the Republic of Panama.