PANAMA: EMPLOYMENT POLICIES, PRODUCTIVITY AND COMPETITIVINESS Summary of proposals Country Employment Decent Work P

1. 1 PANAMA: EMPLOYMENT POLICIES, PRODUCTIVITY AND COMPETITIVINESS  Summary of proposals Country Employment & Decent Work Policy ReviewBy Miguel Del Cid Seminar: Promoting Policy Integration at the national level Country Strategies on Decent Work (Turin, 9-11 july, 2003)

2. 2 Panama (Brief background) A small country with nearly 3.2 million habitants An economy historically very open and specialised in trade and services The U.S. dollar has been the legal currency since the start of the republic Progressive weakeness of agriculture and industrial sectors Concentrated, unstable and insufficient growth dynamics

3. 3 Panama (Brief background) A heterogeneous labour market where the informal sector and the peasant economy carry a heavy relative weight (45% of the labour force). High unemployment which increases over time (14% of the labour force) High underemployment (between 25 and 33% of the labour force) Gaps in the education of the labour force (33% of the labour force has completed not more than 6 years of education) Gaps in social security coverage Low salary purchasing power High poverty affecting 37% of households at the national level El Estado paname�o, as� como la mayor�a de los estados del mundo, se han comprometido en distintos foros (dentro y fuera del sistema de las naciones unidas) a dar prioridad a pol�ticas de empleo con miras a atender las necesidades de sus pueblos.El Estado paname�o, as� como la mayor�a de los estados del mundo, se han comprometido en distintos foros (dentro y fuera del sistema de las naciones unidas) a dar prioridad a pol�ticas de empleo con miras a atender las necesidades de sus pueblos.

4. 4 General aspects of the country employment policies and DW review Started as a country employment policy review (CEPR) The decent work dimension was incorporated later Was co-ordinated by the Ministry of Labour with the support of the Ministry of Economy and Finance Active participation of employers� and workers� organisations

5. 5 Strategic issues of policy proposals The basic macro-economic balances are not sufficient to accomplish higher investment, growth and employment objectives A high growth rate it�s very important as well as it�s capacity to impact different activities of the economy (agriculture, industries) Private investment: key in the process of economic growth and employment generation

6. 6 Strategic issues of policy proposals The State must play a pro-active role to encourage investment and growth The importance of social dialogue and respect for the democratic order

7. 7 Axes of Employment & DW Policies

8. 8 (I) PUBLIC INVESTMENTA rationalising effort is required in order to: Encourage a re-composition of public expenditure increasing investment More equal distribution of investment (between economic and social objectives) Extend de-centralisation process of the programming and execution of the public expenditure effectively start the execution of the investments budgets in January of each year

9. 9 (I) Public investment / Policies 1) Development of infrastructure in support of the peasant and indigenous economies 2) Credit, technical assistance and training to support small market-oriented entities 3) Land distribution and entitlements 4) Support to the organisation of agricultural producers (co-operatives, social enterprises) 5) Development of social rural infrastructure 6) Policies and programs in support to the modernisation of the informal sector 7) Labour � intensive Investment for promote employment, income and combat poverty

10. 10 (II) Encourage private investment 1) Development of infrastructure in support of tourism 2) Credit for the development of hotel infrastructure and related services 3) Investment in the modernisation of infrastructure to support exports (it is important at this point to prioritise non-traditional exports to places outside the metropolitan area 4) Encouragement of reorganization of the use of productive resources 5) Improve conditions for the promotion of private investments

11. 11 (III) improve labour force employability 1) Towards a pertinent and efficient professional training responding to the needs of the modern economy and promoting equity 2) Towards permanent encouragement of labour force retraining programs 3) Towards ensuring free basic education

12. 12 (IV) Development of institutional framework of the labour market 1) Modernisation and integration of employment services 2) General salary policy, protecting and improving progressively the purchasing power of minimum salaries 3) Minimum salary policy, protecting and improving progressively it purchasing power 4) Encouragement of harmonic labour relations and consolidation of the social dialogue

13. 13 Viability of policies and programmes Political viability High level of determination of social and political stakeholders in combating unemployment and poverty Economic viability (country�s resources) Level of national and per capita income. Financial resources available within the banking system. State resources in public enterprises. Facilities and areas recovered from the Canal. The Fiduciary Development Fund (US$ 1,200 million)

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