The festive and consumerist atmosphere is palpable in almost all Panamanian capitals; Can you imagine the tension if the anti-mining protests had not stopped before Mother’s Day? But that didn’t happen and many are enjoying their Christmas plans. The question is whether we will have a prosperous New Year.

And that is one of the questions that, I imagine, every inhabitant of this country should stop and reflect on; paraphrasing the late John F. Kennedy, “it’s not just what my country does for me, but what I do for my country,” because if we older people remember it, since the unfortunate final days of the dictatorship there has not been such a a serious crisis… and the protagonists are the new generation.

When President Guillermo Endara (1989-1994) assumed power after the US invasion, we had an economy with 16% less growth; adjustments, privatizations, foreign aid and the work of thousands of Panamanians managed to stabilize the country.

For Raúl Moreira, former president of the College of Economists of Panama, it is clear that “consumerism is going to continue at the end of the year, it is evident, there is a good influx of the public to shopping centers.”

However, he anticipates that “2024 is complicated, it may not be so happy.”

“We will face important challenges, the end of a government, the other that begins will have to apply quite important fiscal adjustment measures, plus the closure of the mine, the fall in consumption, the increase in the cost of credit…, “we will have many consequences”, summarizes.

He admits that the financial markets are already treating Panama as if it did not have investment grade, “they are recovering from what could happen and it is imminent that it could happen.”

It refers to the fact that, without investment grade, if they lend you a dollar, before they charged you 2% monthly interest, but now they raised the interest to 3% or 4%, because your risk of being able to return what was slowly increased.

Moreira said that the issue is not one of terror either because, if they go down to the country, they will be on the next step to recover it again, the question is to work on it.

The economist affirms that this year and in 2024 the government “will not comply” with keeping the fiscal deficit below 3%, as ordered by the responsibility law in this regard, “and the maneuvers (past to achieve it) will be to pay in “the next administration, an adjustment will have to be made due to the greater narrowness (in collection) hopefully not for political purposes.”

He has argued that “the shortest path is to raise taxes and eliminate subsidies, but the best thing is to show that work is being done to reduce tax evasion and fraud, compensate for the needs of the population and acquire less debt.”

Moreira urged the current government to “give the appearance that it has learned” from the recent crisis and apply the cut to the 2024 budget (originally $32,754 million) that must be reduced to at least $4,000 million of what it had been allocated. added compared to that of 2023.

The next government must show “real transparency, change the image of the country, which is friendly to foreign investment, that we are not a tax haven as we are accused abroad with impunity,” he added.

In 2024, he described, “although (First Quatum) was not paying anything for the extraction of the minerals, we will not have the contributions that the mine workers generated; The Panama Canal will also give a smaller contribution due to the situation it faces; the Colón Free Zone has remained positive; Banking has two scenarios: the increase in interest, which gives more profits and the lower movement of capital, because consumption will decrease.”

I met Eddie Silvera before the pandemic at the head of a local private bank, today he is vice president of Av Securities and financial advisor, and without hesitation he stated that Panama will formally lose its investment grade, in a context of “an electoral year .” ”.

He sees “moderate growth (of the economy), depending on the result of the elections we have to see the degree of convergence that (the new government) achieves with the sectors (of society).

The closure of the mine “will affect the level of investment, because the cost of borrowing will increase, investments will (probably) decrease” temporarily.

According to Silvera, we must focus on “the country’s strengths, strengthen the financial system, the Panama Canal, trade, distribution (logistics), real estate, especially the preferential housing market, put the focus on the agricultural sector and agroindustries.”

Official figures for half a year indicated an increase in the economy of 8%, however, due to the social unrest that led to the declaration of unconstitutionality of the mining contract, Silvera placed the drop in activity between 3% and 4%, with a “multiplier effect in the economy” and considered that unemployment, which was also 8%, could rise by about 5 percentage points.

His advice: you have to “have greater fiscal discipline.”

The one who knows about global finance, especially the Asian market, is the expert Edie Tapiero, who places Panama in 2024 “in a world of more moderate growth, with a stronger US economy, although less than in 2023”.

The value of this is that a strong dollar from Panama’s most important partner gives it relief, which will not happen in Europe and Asia, which sees them “almost the same as in 2023 or a little less due to the slowdown , more importantly due to the problems in the Chinese economy.

China represents “50% or more of the global demand for products and materials, it buys 50% of the iron in the world” and if its purchases decrease, then the charge that passes through the Panama Canal is reduced, he explained.

It predicts that the price of copper will drop momentarily due to the moment of transition that the world is experiencing, but after COP28, the climate summit, the transition from fossil energy generation to electric energy will accelerate, which will give “price stability”, but if China slows down more “it hits us as a (Latin American) region” for being commodity exporters.

The trade differences between the US and China also affect Panama, not only the Canal but its ports due to the decrease in the passage of containers, because the routes are being diverted to Southeast Asia or go through the Suez Canal, he explained.

Another element to consider is the rise of production of all kinds in Mexico aimed at the United States, because this replaces China as a supplier to the Americans.

Add to this the impact of climate change, which will force ship traffic and the tonnage they carry to be reduced even further due to the lack of water, which will affect “international trade.”

The opening of China to Panamanian agro-industrial products is an opportunity, Tapiero points out, but here comes the factor of “global diplomacy” that the late General Omar Torrijos wisely used to achieve support for the cause of abolishing the treaty in perpetuity of the Interoceanic Canal. .

“We cannot remain in the middle of trade frictions between the United States and China, we cannot afford that luxury, we must target all markets, we have the opportunity,” he assured.

Furthermore, the Panamanian State already has an agri-food policy “that the new government must continue” to develop the sector, especially that there are three ports on the way, two in the Pacific and one in the Caribbean Sea, to increase exports.

According to Tapiero, 2024 will be “difficult financially due to the restrictions” on income, but he also called the government’s attention to worry about injecting liquidity into the system by expediting the payment of the million-dollar debts with suppliers.

I have suggested putting aside austerity and putting in circulation so that the liquidity of companies increases so that they can hire, preventing the closure of the copper mine from driving up unemployment, and clarified that, of the 40,000 jobs that are alleged, they will be lost . , many “did not have Minera Panamá as their only source.”

Getting into the manufacturing of semiconductors is another strong bet for the source, because “we will no longer only export cheap stuff, but products with high added value and we have the human material to do it, the Technological University of Panama is advancing in that training.”

Tapiero says that “we no longer only talk about the industrial revolution 4.0, but about 5.0, which incorporates the human factor, it is brand new, and Panama has great human capital that we do not take advantage of, we do not value it, “We have to believe in ourselves again, break with what we are not capable of.”

“I don’t see 2024 as so dark, it is a year of challenges, different, we have to force ourselves to think outside the box, accelerate payments, break paradigms, the key is execution,” he advised.

*Freelance journalist and university professor