Panama business group: Legal certainty is key to attracting investment

Panama's business leaders are calling for a robust strengthening of national institutions, deeming it a fundamental requirement for attracting new investment and fostering sustainable economic growth. The Panamanian Association of Business Executives (Apede) emphasized that while Panama offers significant advantages such as its strategic geographic location, connectivity, logistics platform, and dollarized economy, investors are increasingly scrutinizing the country's legal certainty and the reliability of its institutions.

"Capital seeks opportunities, but above all, confidence," Apede stated, warning that clear rules and functional institutions incentivize companies to invest, reinvest, hire, and expand. Despite a high Economic Confidence Index in July, business caution persists, with a notable decrease in companies expecting to increase sales and a modest outlook for hiring.

International assessments highlight significant institutional challenges for Panama. The World Justice Project's Rule of Law Index ranked Panama 73rd out of 143 countries, with particularly low scores in civil justice, absence of corruption, and criminal justice. These figures underscore the urgent need for reform in the justice system to bolster confidence and competitiveness.

In response, Apede announced the launch of its Judicial Transparency Observatory, an initiative aimed at providing continuous technical monitoring of the justice system's performance. The association also pointed to other indicators, such as Panama's ranking in the Economic Freedom Index and Institutional Quality Index, which reveal room for improvement in both economic and political institutions. The perception of corruption also remains a concern, with Panama scoring below the regional average.

Apede further stressed the importance of institutional continuity, arguing that changes in administration should not lead to the disruption of public policies, especially in strategic sectors like education. The association cited the recent transition in the Ministry of Education as an example, advocating for long-term educational policies that preserve progress, address deficiencies, and cultivate the talent the country needs.