(MENAFN - Newsroom Panama) While Panama has one of the fastest growing economies in the Western hemisphere corruption remains its biggest challenge says a US State Department report on the investment climate released on July 11..
The report notes that US investors claim that there is "rampant corruption" in both the private and public sectors and recalls that Panama ranked 93 out of 180 countries in Transparency International's Corruption Perception Index in 2018.
The State Department points out in particular land titling processes, "which have been very problematic for multiple US companies," some of which have had to wait decades for their cases to be resolved.
"The process to apply for permits or titles can be opaque and it has been known that public servants request payments at each step in the approval process."
US investors also complain about the lack of transparency in public procurement. "The parameters of the bids change frequently during the bidding process, generating confusion and the perception that the government makes customized bids for certain companies."
The State Department recalls that Brazilian construction company Odebrecht admitted to paying $ 59 million in bribes to win public contracts, "but it is still doing business in Panama and actively participating in government projects."
"Panama lacks a strong system of checks and balances that could serve to encourage accountability," said the report before recalling that only the National Assembly can initiate investigations of corruption against judges of the Supreme Court of Justice and vice versa , which has led to a kind of non-aggression pact between the two institutions.
The Treasury Department also highlights that Panama is the Central American economy that receives the most foreign direct investment and that it is one of the economies in the Western Hemisphere with the highest growth rate, with good credit, a strategic location and a stable government.
Despite these advantages, "Panama has challenges such as corruption, judicial capacity, a workforce with low education, as well as labor and financial issues, which could have prevented the arrival of new foreign investment or complicated existing investments."