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Panama Improves the Competitiveness of its
Companies for Export

By Juan Carlos Martinez

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There is a government program created in 2008 called Impulso Panamá. Impulso is a Spanish word meaning to boost or promote. This program was designed to contribute to improving the income and social welfare through increasing productivity and competitiveness. It is designed to boost the competitiveness of Panamanian companies and then promote their exports. The program is partly financed by the BID (Banco Internacional de Desarrollo) and operates through two trusts.

Companies submit a proposal which is evaluated and the corporation if approved is given the assistance technical and economic to carry on with its proposal. In its first four year phase the program is funded as follows: $97 million of which 52% is financed by the BID, 38.1% by the National Government and 7.8% by the private sector.

With the new government Impulso Panama is getting an overhaul so it can work appropriately according to government parameters.
The third component of Impulso Panama is the creation of a bank for Micro and Small Business in Panama. In Panama 90% of the companies can be considered micro and small companies and due to their size it is difficult for them to get traditional funding from banks as they are high risk.

This micro and small business bank has a budget of $25 million 370 thousand and will be executed under the program Impulso Panama under the Ministry of Commerce and Finance. This particular fund though will be managed by the the Panamanian consulting company IGRA allied to the Colombian company Alianza Valores de Colombia. This administration contract was issued through a public bidding progress carried out under the previous administration. This consulting company will be in charge of distributing the funds to banks who will lend out the funds to micro and small businesses.

The whole project will be supervised by AMPYME (Authority of the Micro, Small and Medium Business). AMPYME is an entity created in 2000 in order to execute policies and programs destined to to foster and strengthen the creation of micro, small and medium businesses in Panama. AMPYME is very active in training and focuses in many cases on helping people from low income neighborhoods organize micro business so they can generate income. Another benefit of AMPYME is that any formal company that registers has a two year exemption from income tax payments.

The collaboration between AMPYME and IMPULSO PANAMA is very important because currently AMPYME is running a program with the Panama Tourism Authority to create entrepreneurs and micro businesses in the tourism area. Most specifically in the areas identified as first class tourist routes. This will allow a mo
re varied and complete product offering for the tourism industry. Both entities can also provide businesses with seed capital.

 

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