Harvard Business Review published the article Mapping Frontier Economies in its December 2016 edition. The article takes the top 25 countries with the highest forecasted GDP growth between 2016 and 2020 based on IMF statistics, and identifies those Frontier Economies (meaning Higher Risk) to suggest how companies can profit from investments in such economies.
Here’s the interesting twist: Panama is the only country in the Americas to be featured in the top 25 Hypergrowth economies. But even more interesting is the fact that Panama is NOT identified as a Frontier Economy. This provides the savvy investor with a unique combination featuring hypergrowth opportunities in a country with significantly less exposure to risk in comparison to its peers on the list.
The HBR article defines a Frontier Economy as a country possessing one or more of three characteristics:
- Its citizens experience faltering prosperity, where yearly take-home income is less than $1,500 per year, or their purchasing power has decreased 20% over a 6-year period
- Scores below 35 in the Transparency International’s Corruption Perception Index, where the country’s government or commerce practices are generally perceived as corrupt
- Scores lower than 3 on the Polity IV “executive constraints” measure, meaning that country leaders exert high power and authority with low accountability
Panama: an advantage for investors
Panama is no perfect country, but it’s truly far from a Frontier Economy, having overcome the barriers that traditional countries on the rise experience. The country’s average GDP growth above 6% from the last few years has brought prosperity for most Panamanians. And although Panamanian salaries are lower than those in North America, the lower cost of living compensates largely for the difference. Panama enjoys a thriving, robust middle class and a government focused on de-centralizing control in favor of provincial rights and governance over time.
You will see corruption in Panama, because unfortunately corruption exists everywhere today, and it’s becoming more evident in the US, Canada or Europe. However, I have to give credit to the local political parties who keep each other accountable for their actions, rather than turning a blind eye to scandals that news outlets bring to light. To this day, since the fall of Noriega, the people have refused to elect their new President from the current party in power.
Our article Panama: An Intelligent Investment Option explores some of the most prominent sectors to invest in Panama. We also offer a wide variety of high-quality Real Estate opportunities for you to preserve wealth and generate income.
Would you like to learn more? Are you ready to change the dynamics of your investment experience for the better? We are ready to discuss. Panama means low-risk Hypergrowth opportunities – ask the Harvard Business Review!
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