According to the Industrialists Union, Panama Needs to Improve the Business Climate and Reopen the Mine to Reduce Unemployment

The Panamanian Industrialists’ Union (SIP) warned that the Panamanian economy will grow by 3.6% this year 2025, a figure that is insufficient to reduce unemployment (9.9%) and informality (49.4%) in the country, for which reason it recommended that the authorities take measures to improve the business climate, promote productive investment and increase exports, in addition to the need to reopen the Cobre Panamá mine.  According to a study presented by the president of this business association, Raúl Montenegro Vallarino, in 2024  the local industry represented 4.6% of the Gross Domestic Product (GDP), despite the fact that some activities in the sector such as beef and pork production were affected by climatic phenomena, while other niches, such as the production of cement, concrete and other construction materials, were diminished by the closure of operations of Minera Panamá, SA and by the drop in the construction of social interest housing due to the uncertainty over the possible renewal of the Preferential Interest Law. 

Montenegro stressed that these phenomena have resulted in an increase in unemployment rates and informality in the country, which implies a decrease in domestic consumption that impacts local industry.  However, he highlighted that despite this difficult scenario, Panamanian industrialists not only continue to invest in the country, reporting an 11% increase in loans granted to the sector by the banking system, but also an increase in the gross added value of the sector, which reached $4,204 million in 2024, in addition to being the third largest employer in the country with a total of 152,603 ​​workers, being surpassed only by commerce (324,323 workers) and the agricultural sector (314,8454 workers).  The business leader also highlighted the good performance of the sector’s exports, which were valued at $362 million in 2024, reflecting a sustained growth of 32% from 2010 to date.

This is despite the fact that exports covered by the more than 22 Free Trade Agreements (FTAs) that the country has barely amounted to $71 million last year.  Given this scenario, the SIP noted that, in order to improve the performance of the industry, increasing its competitiveness and its export capacity, it is important to address some structural problems such as the ease of starting or expanding a business, the quality of logistics infrastructure, the high cost of electricity, the lack of drinking water, the low quality of human capital and the difficulties in paying taxes.  Finally, Montenegro reiterated that the reopening of the Cobre Panamá mine is vital to reactivate industrial activity and domestic consumption. He clarified that this reopening may require a broad debate on the ideal legal figure, but warned that without the restart of mining activity the country will not be able to grow at an annual rate of 5%, which is what, in his opinion, is required to reduce the current rates of unemployment and informality that affect the Panamanian people.