European companies are top investors in Panama

Panama is one of the most dynamic emerging economies in the world. It is also a rich mine of opportunities for European companies. The ever-changing capital of Panama City is an accurate reflection of the country. Over the last five years Panama has grown annually by 10%. This small country of 3,600,000 inhabitants is among the top five best performers among world economies.

By 2020, emerging economies like Panama will be generating 70% of global growth. Opportunities abound and not just for the corporate giants, but also and especially for small and medium-sized European firms who are now faced with the big challenge of getting into international markets. Promoting internationalization was precisely the objective of Antonio Tajani, the European Commissioner for Industry and Entrepreneurship, in holding the most recent Mission for Growth in Panama, Argentina, and Paraguay.

Some forty European entrepreneurs participated in this mission, whose main goal was to fight offshoring, when companies relocate operations overseas. "Internationalization is the solution to offshoring," declares Tajani. "We don't have to shut down factories in Europe. While we have to continue working in Europe, we also must try to work in other countries by partnering with companies and new European factories in different countries."

Growth missions such as these have taken place in some 20 countries over the last several years, allowing around 600 European entrepreneurs the possibility of launching their internationalization process.

One such businessman is Paolo Franchetti, who heads his own engineering and architecture studio in Padua. “This provides an opportunity for small and medium businesses that would otherwise lack the potential to internationalize to make very high level contacts in a short time and with drastically reduced costs,” says Franchetti.

The program director for the Valencian Institute of Business Competitiveness, Rafael Escamilla, told Euronews that these missions "allow us to establish the first contacts and identify strengths and opportunities for the sectors covered by small and medium-sized businesses."

Major European companies have been operating in Panama for a long time, many involved in the gargantuan task of widening the Panama Canal. Once completed in 2016, the expanded waterway should have triple the shipping capacity and quadruple the revenues. Such a colossal opportunity should not be passed up by Europe’s small and medium-sized enterprises (SMEs), with their reputation for high quality and advanced technology.

European Commissioner Tajani is convinced that, "if we want to combat unemployment we have to prod our 24 million SMEs. Growth is closely linked to big business, but employment will be driven by SMEs."

Construction is a promising sector for European SMEs, but other opportunities lie in energy, mining, telecommunications, transport, logistics, and tourism. In addition, Panama is particularly appealing for its political stability and strategic geographical position.

As Roberto Henríquez, Secretary of the Presidency of Panama, is keen to stress, “Panama has free trade agreements with the United States, Canada, Singapore, Chile, Peru, Taiwan…with so many countries that doing business with Panama is a real gateway into all of those markets.”

Panama has always had privileged trade links with Europe. Today, the European Union is Panama’s second biggest trading partner, just behind the United States. European companies, however, lead American firms in their investments in Panama.

 

Source: Euronews