Diversification helps country

PANAMA. Much has been talked about the Panamanian sectors that will take the biggest hit from the global financial crisis. However, there are sectors that could compensate for the economic damage of the world’s economicslow down

The former Finance Minister, Domingo Latorraca, believes that the diversification of Panama’s economy will help the country fight against economic repercussions, as no sector is more than 15 percent of Panama’s gross domestic product (GDP).

The former minister points to the expansion of the Panama Canal, whose most important phase will start at the end of this year, and to the stability of Panama’s banking system. Both elements proven to be good allies of the local economy.

Another sector that has maintained a positive performance has been tourism. Latorrraca reiterated that the concept of diversification in the tourist industry will guarantee a continued rise of activity in this sector.

Faced with the possible restriction of credit from the banking entities, the former minister believes companies can use the stock market as a viable financing tool.

The president of the risk rating company Equilibrium, Ernesto Bazan, explains that even in the case of banking entities, the emissions of debt, bonds, common stock, and preferred stocks are viable alternatives to deposits in order to raise funds.

Latorraca believes that Panama will have a satisfactory growth in 2009, at least in the first semester. But the economist warns that during the second semester, “a lot of attention needs to be paid to recognizing what the impact of the financial crisis will be on the country.”

Meanwhile, the tourism sector remains optimistic for its prospects for 2009. The overall sentiment was felt during the swearing in ceremony of the new directors of the Panamanian Association of Travel and Tourism Agents (APAVIT), headed by Ernesto Reina.

Reina denied that there is a decline in travel agency’ transactions, and even though he did not reveal any statistics he stressed that the 2008 results were positive.

The president of the Panamanian Chamber of Tourism (CAMTUR), Jaime Campuzano, agreed with this perception. “We still haven’t felt the impact of the crisis,” suggesting that the sector might remain immune to it, as tourists visiting Panama do not come from one single market, but from different regions.

In a recent interview, the president of the Panamanian Association of Hotels (APATEL), Jorge Loaiza, reported that up to now the inflow of tourists had not decreased.