Is Panama a developed country?
According to the definition from the International Monetary Fund (IMF), Panama is a developing country because of its lower economic performance. With a Human Development Index (HDI) of 0.805, Panama counts as one of the high developed economies by UN definition.
The toll revenue generated from ships passing through the Canal makes up a large portion of Panama's GDP. This combined with the country's other business sectors, like banking, commerce, and tourism, qualifies Panama as a World Bank high-income nation.
|Human Development Index||0.805 very high (2021) (61st) 0.640 medium IHDI (2021)|
|Labor force||2,063,132 (2019) 61.5% employment rate (2018) shortage of skilled labor, but an oversupply of unskilled labor|
|Labor force by occupation||agriculture: 17% industry: 18.6% services: 64.4% (2009 est.)|
However, corruption and impunity are serious challenges, affecting the justice system and the highest levels of government. Discrimination against racial minorities is common, and Indigenous groups have struggled to uphold their legal rights with respect to land and development projects.
The United States was the richest developed country on Earth in 2021, with a total GDP of $23 trillion. China was the richest developing country on Earth in 2021 with a total GDP of $17.73 trillion.
Panama's economic freedom score is 65.4, making its economy the 56th freest in the 2022 Index. Panama is ranked 11th among 32 countries in the Americas region, and its overall score is above the regional and world averages.
While Panama is a net exporter of services, it is also a net importer of goods. Panama is self-sufficient in some domestically-produced agricultural products such as bananas, sugar and rice, but imports large quantities of other foods.
Services have been the primary driver of growth, contributing to almost two-thirds of Panama's increase in GDP. The transport, communications and financial services sectors have played a particularly notable role in growth and industry represents the second most important driver.
Panama has the second-worst income distribution in Latin America: Although the country is rapidly growing in wealth, not everyone feels prosperity. According to the CIA World Factbook, approximately one-quarter of the population lives in poverty.
Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama are all considered part of the developing world. The term developing world is one of many terms used to describe these countries.
Why is there so much poverty in Panama?
Most of the vulnerable and poor in Panama rely mainly on labor income to sustain their livelihood. Thus, the large increase in unemployment, which led to over 370,000 people without jobs, would result in 130,000 people falling into poverty (even after accounting for the government's mitigation measures).
When it comes to telecommunications and technology, there's not a country in the region that compares to Panama. This tiny powerhouse has long been recognized as a telecommunications hub, as five of the world's major fiber optic cables intersect here.
Panama - Poverty and wealth.
|GDP per Capita (US$)||Panama|
Panama is a constitutional democracy and a presidential representative republic with a multi-party system. Head of state and head of government is the president. Executive power is exercised by the government.
Panama has the highest GDP per capita in the region. Panama is recognized as the most industrial country in Central America, and the second in Latin America after Chile. It has strong business relationships and treaties with the United States, China, Colombia, Costa Rica, Japan and Singapore.