Panama not immune to jobs loss

PANAMA. Close to 2. 4 million people will lose their jobs in Latin America due to the world financial crisis, joining the army of 15 million currently unemployed say projections of the International Labor Organization (ILO).

It is the first time since 2003 that a rise in unemployment in the region will be registered.

It is estimated that 2009 could close with an unemployment index of 8.3 percent, while 2008 ended with an index of 7.4 percent.

ILO regional director for Latin America and the Caribbean, Jean Maninat, said the rise will have a significant impact on the labor market, which is why he urges governments to adopt the necessary measures that would allow the possible reversal of the projections.

The report also states that the region’s minimum wage increased by 3.7 percent, a figure lower than the 5 percent increase obtained last year.

Even though unemployment rates decreased in Panama last year from 7.8 percent to 6.5 percent, according to official statistics the country will not escape the regional trend.

According to president of the National Council of Private Enterprise (CONEP), Gustavo Garcia de Paredes the country‘s economy will face two hard years.

Garcia de Paredes forecasts that activities in the construction sector, in ports and in Colon’s Free Zone will decrease this year, leading these sectors to reduce the labor force.

The report doesn’t make specific projections about Panama, but the economist Juan Jovane considers that the unemployment index could increase from 1 percent to 1.5 percent in 2009, as a consequence of the economy’s deceleration.

The World Bank estimates that Panama will only grow by 3.3 percent this year, which would have a greater effect in the number of unemployed.

This figure is not shared by other entities, however, as the International Monetary Fund (IMF) estimates the country will grow by 7.8 percent, while CEPAL (the UN’s Economic Commission for Latin America and the Caribbean) projects a 4.5 percent growth for the country.