Panama Is Coasting Along, but Not Fast Enough
PANAMA CITY -- Fifteen months after U.S. military intervention and the establishment of a new democratic government, Panama is like the half-full, half-empty glass. There is economic recovery, but not enough to have regained the 22% of gross national product lost since early 1988. Nor is there enough to provide sufficient employment or social improvement. The private economy is making an increasingly significant contribution and the public sector has made some solid gains, yet not enough given the needs and expectations of the people.</br></br>The new democratic government was welcomed with unrealistically high expectations. The announcement of a massive infusion of U.S. aid to rebuild the heavily damaged economy added regional and international optimism. The business community, invigorated by the taste of freedom and the establishment of law and order, responded enthusiastically from the beginning. The men and women in the street felt that a quick recovery of "normal" (pre-1987) economic life and employment would soon be achieved. Foreigners viewed Panama with renewed hope, stimulated by the fresh democracy and a U.S. call for international support.</br></br>Today, expectations are no longer so optimistic. Impressive gains are tempered by unsatisfied needs and aspirations:</br></br>-- GNP increased by more than 4.5% in 1990, generating perhaps 30,000 new jobs. But this is equivalent to the annual increase in the labor force, leaving the unemployment rate intact.</br></br>-- Banking deposits, previously frozen, were freed smoothly and the system has regained more than $3 billion of deposits. But local credit is only now beginning to increase.