Employment generation impact of investments in Panama

July 13, 2010

El Panamá América

Unemployment in Panama is about 6%, however there are many who contend that greater efforts to achieve more trained professionals in various fields.

Construction work is emerging as one of the most active industries in the coming years.

Panama is breaking through into the big markets because of its connectivity and financial stability. Major multinationals could be adding to the business park in the country, representing more places of employment for Panamanians.

According to a study conducted by the Ministry of Labor and Workforce Development (MITRADEL), approximately 21,000 jobs will be generated between 2010 to 2014, which will be concentrated mostly in the work on the Panama Canal Expansion and the Panama Pacifico Special Economic Area.

It is in this special area of Howard, where more multinationals have the opportunity to locate as a result of Law 41.

Henry Kardonski, general manager of London & Regional Panama, explained that Law 41 has created prime conditions to attract investment and thus, new jobs.

He noted that the effect is already evident in new investment, reflected in the employment generation taking place in the area.

Kardonski said that major industries are looking at Panama as a logical place to make their investments, and among them are those dedicated to high technology, the maritime industry and regional distribution centers for major companies.

He remarked that the Panama Pacifico Special Economic Area is being built with the right infrastructure, such as warehouses and offices where construction staff are being used to build electricity, plumbing, and telecommunications systems, and interior finishes.

Similarly, investors are bringing in machinery and hiring engineers and mechanics, as well as other new professions which will require training of future personnel in Panama.

For 2009, London & Regional Panama reported a total of 2.673 direct and indirect jobs at Panama Pacifico. Over the next five years, that figure will rise to 3.582 jobs, and in 10 years, increase to 11.382 jobs.

In 20 years, it is anticipated that number will double to 22.270 jobs, and at full build-out approximately 35,000 new jobs will have been created.

The Panama Canal Authority (ACP) has documented more than 6,000 Panamanians working as part of the expansionsince the start of construction in September 2007. They announced they would be requiring the same amount for the second phase, which would total approximately 12,000 jobs.

According to the authorities of the ACP, the needed positions are throughout the project include those in civil engineering services, industrial, electrical, electromechanical, surveyors, mechanics, owners, carpenters, welders, construction workers and security officers, among others.

In the latest report from Manpower (industry leader in Human Resources worldwide) for the third quarter of 2010, employment growth expectations are conservative for Panama.

The results presented show that 22% of employers surveyed anticipate increasing their workforce in the next three months. 6% said they will decrease, and 72% do not expect any change, resulting in a Net Employment Trends rating of +16% for the Republic of Panama according to Manpower. These figures compared with the second quarter of this year indicate a relatively stable trend.

Contribution. Oscar Kam, an engineer at 3M Company, located at Panama Pacifico, stated that they have hired about 30 people to work in their manufacturing operations. He expects the company will continue to expand both local and labor workforce at the location in the near future.

“The bulk of our new jobs have included positions in high technology manufacturing and operations, and most of them are Panamanians. We have had good fortune with these hires,” he said.

He added that the company pays for some employees training in other markets outside Panama, and then locates them in the locally to implement what they learned.

Carmen of the multinational company, Wartsila Pitti, also located in Panama Pacifico said the greatest number of their local workforce is Panamanian. Some of those have been sent to places like Switzerland, Finland, Norway and Holland to train for their positions. Wartsila´s onsite operations have started with about 40 employees. They estimate that by 2011, that could increase to 60.

Finally, Bolivar Patiño, general manager of Yermont Enterprises, another company Panama Pacifico added that to date they have employed about twenty people – mostly welders and electricians.

Most people agree that the opportunities for professional positions in the country are growing, but workforce is advised to continue to focus on additional training opportunities which will widen the individual’s marketability in the job market.