Social Security and Employment, Panamanian Economy Challenges for 2023

Social Security and Employment, Panamanian Economy Challenges for 2023

At a forum to assess these issues held in this capital, the National Council for Private Enterprise (Conep) warned that the major challenges are taking place in a year rocked by external factors such as rising interest rates.

Internally, they signaled the end of the reserves of the defined benefit-only disability, old age and death (IVM) subsystem of the Social Insurance Fund (CSS).

Economist Carlos Arauz pointed to the over $2 billion deficit that the IVM would face in 2030, in a context where the state is already allocating $2 billion in subsidies and the Panama Canal is contributing a similar amount.

This is happening in a country with a debt of $44,274 million at the end of 2022, the level of which in itself should not be the most worrying given economic growth; What should worry and arouse interest is the spending ratio and its effectiveness, he noted.

In this sense, the expert called for the restoration of formal sector jobs as well as the arrival of more foreign direct investment.

For her part, the labor market specialist of the Inter-American Development Bank (IDB), MarĂ­a Teresa Silva, made a diagnosis that included the weaknesses of the Panamanian market, overwhelmed by the scars of Covid-19 but also by old problems structural.

One of the biggest problems he pointed to was informality in the labor market, which was 48 percent higher than Costa Rica, Chile or Uruguay in April last year.

For this reason, the expert suggested some measures, such as improving the skills of the workforce and revising unemployment insurance.

The forum was divided into three blocks: Realities and Threats, Growth Prospects in Strategic Sectors, and Key Strategies to Stimulate the Economy.