Global Engineering Capability Review

Infrastructure

This category measures the ability of a country’s infrastructure to support and demonstrate engineering activities using five indicators. These include the extent and quality of road and rail infrastructure, as well as the quality of ports.

Panama: Foreign investment versus domestic capability

Panama ranks 24th in this category but it received a higher ranking (joint 13th) for the quality of port infrastructure.

The country’s canal contributes to this result, as it enables cargo vessels to cross between the Atlantic and Pacific Oceans – a vital passage for global maritime trade. Given that it accounts for a major part of Panama’s GDP, it is in the country’s interests to maintain and develop the canal and its related infrastructure, as demonstrated by the recent Panama Canal expansion project. The expansion began in 2007 and was completed in 2016, overcoming budget overruns and labour disputes [25].

The job of digging a new access lane was completed by a European consortium rather than by a Panamanian firm, reflecting the enormity of the task.

Panama’s significance for maritime trade has contributed to the enhancement of the country’s broader logistics infrastructure, including container ports and the Colón Free Trade Zone [26].These infrastructure development projects have functioned as catalysts for growth in an economy that has produced an average annual GDP growth rate of 5.6% over the past five years, although the large public debt incurred and the focus on trade leave the economy more exposed to global competition and fluctuations [27].

The country’s prime minister from 2014 to 2019, Juan Carlos Varela, made infrastructure development the keystone of his premiership. Although he inherited several projects, his administration also issued public works contracts worth US$16bn, representing a major infrastructure push in comparison with the previous administration. Many of these contracts went to foreign companies, however, because the scale of projects was beyond domestic capability [28]. To bolster domestic capability, Panama’s largest university added several engineering programmes in 2013, including civil, industrial and airport engineering; and in 2019 it introduced two new engineering courses related to water resources and renewable energy [29].

Panama’s significance for maritime trade has contributed to the enhancement of overall infrastructure

Infrastructure:
Panama


Footnotes