Some time ago, I was speaking with the former president of the Colon Free Trade Zone Users Association, Usha Mayani, who told me at the time that the true measure of an economy’s success is its ability to generate jobs, a statement with which I wholeheartedly agreed.

On another occasion, at a meeting at the sub-headquarters of the Economic Commission for Latin America and the Caribbean (ECLAC) in Mexico City, I was enthusiastically showing the growth figures for Panama’s economy and how this was reflected in the decline in unemployment in our country at the time, until they told me: “You know what? This decline isn’t enough, since the unemployment rate is expected to fall twice as fast as the economy grows,” and that clearly wasn’t happening in Panama.

The mere growth of Gross Domestic Product (GDP) figures—a very healthy 5.2% in the first quarter of 2025—and maintaining investment grade status per se, for example, works perfectly for political discourse. However, when ordinary citizens are asked, according to La Estrella de Panamá’s Vea Panamá survey, whether they feel these figures represent any kind of benefit to meeting their family needs, 72.9% of respondents indicated that their perception of their economic situation was between very bad, bad, and average bad, which represents a 13.4% increase compared to the previous survey.

Meanwhile, those who indicated that their situation was very good, good, or average-good reached only 26.8% of the total, a decrease of 13.7%.

Likewise, this survey confirms that the economic model used in our country does not meet the needs of the population, as the lack of employment is precisely the second main concern of Panamanians, only after the growing problem of perceived corruption and just before their anxiety about the high cost of living.

It can be seen that the concern of Panamanians is real, since when analyzing the behavior of the GDP in the period from 2008 to 2024 compared to the percentage variation of the Unemployment Rate, expecting it to decrease as a consequence of GDP growth, it can be observed that in 14 years, the Unemployment Rate decreased in only five years, while in the remaining nine years, the Unemployment Rate, instead of decreasing, grew almost in the same proportion as GDP growth, except for the year 2019 in which it grew an extraordinary 59.2%, and in 2023 it increased 28.4%.

Thus, during the period indicated, while GDP grew by an average of 6.9%, the unemployment rate also increased by an average of 5.7% instead of decreasing by an average of approximately 13.8%, according to ECLAC estimates.

Since economic growth is not being translated into fulfilling its fundamental mission of generating decent jobs to meet family needs, we then ask ourselves: where are the benefits of this growth being directed?

Since there is significant room for improvement in the figures published, or not published at all, by the National Institute of Statistics and Census, we will have to answer this question in parts.

In this sense, one category that helps explain the destination of the benefits of economic growth is undoubtedly the Gross Operating Surplus (According to the 2008 SNA, it is the measure of the surplus resulting from production before deducting property income, for example, land rent and interest).

When comparing GDP growth with the growth of Gross Operating Surplus, it can be seen that from 2008 to 2015, while GDP grew by an annual average of 6.5%, Gross Operating Surplus almost doubled its growth in this period with 13.0%, while while in the period 2021 to 2023 GDP grew by an annual average of 11.6%, Gross Operating Surplus increased by 15.4%.

On the other hand, Panama’s economic growth finds a country that, according to the World Bank, occupies 14th place out of 162 countries in terms of inequality in income distribution, with a Gini coefficient of 0.489, where 1 represents total inequality and 0 reflects the greatest equity in income distribution.

Given that figures indicate that the benefits of economic growth are not reflected in a real improvement in the quality of life of the country’s poorest population, it is worrying that the current administration’s economic discourse, on the path to reducing a fiscal deficit of more than $6 billion in 2024 and consistent with its declaration of a Government by and for private enterprise, has decided that in order to reduce this deficit it will not resort to collecting the almost $8 billion that, according to the Tax Statistical Bulletin of the General Directorate of Revenue of the Ministry of Economy and Finance, legal entities in Panama have stopped paying in Income Tax in 2023 alone, much less continue the cases before the tax courts for tax evasion and fraud for tens of millions of dollars inherited from the previous tax administration.

Instead, he will resort to the easiest and shortest route, which is to continue dismissing a significant number of public servants, perversely copying similar actions taken in other countries and proudly displaying this measure as if it were a trophy.

These types of measures once again bring to the fore the issue of the practice of economism, which seeks to achieve “good growth and deficit figures” for the approval of multilateral institutions or foreign credit rating agencies, regardless of the internal collateral consequences of the measures taken to achieve this goal.

For example, these people who are leaving the union, before this, paid taxes to the National Treasury, contributed to social security, and also had spending power.

Since private enterprise has not shown any capacity or interest in making significant investments that could absorb a large portion of the laid-off employees, the “economic success” will be short-lived, or, as we would say in good Panamanian, it would be just “a flash in the pan,” since in the medium term, the increase in the number of unemployed and informal workers will lead to a worsening of the population’s living conditions, aggravating the social problems arising from the rise in unemployment. Therefore, as the Minister of Economy and Finance himself has said, “the cure will be worse than the disease.”

Any measure implemented to improve the economy must necessarily take into account that only to the extent that everyone is included in the construction of this economy will its performance be truly sustainable in the long term for the benefit of all. Therefore, all economic measures implemented must be defined and executed as if people mattered.