Regarding policies to mobilise domestic resources for development and improve fiscal conditions, Panama has made significant efforts to foster an investment-friendly environment characterised by historically low tax rates. This approach aims to attract investments while acknowledging challenges like chronic fiscal deficits and limited fiscal space for social inclusion policies. The country has prioritised economic growth and resilience through partnerships with national development banks, aligning these efforts with Panama's National Development Plan. Investments are strategically directed towards critical sectors including infrastructure, renewable energy, and climate resilience, supported by international funding from entities like the World Bank and the Green Climate Fund. In parallel, Panama has launched initiatives such as the Indigenous Peoples National Development Plan and the National Adaptation Plan, which aim to diversify the economy, promote sustainability, and tackle ongoing social inclusion challenges. With support from the Development Bank of Latin America, Panama is strengthening implementation of the National Financial Literacy Strategy.
Regarding policies to advance a robust, inclusive, and sustainable financial market, Panama has strategically implemented several initiatives. A USD 40 million World Bank project is enhancing public financial management systems over five years in the aim of improving fiscal sustainability and expenditure efficiency through the consolidation of the Panama Public Financial Management Information System. The World Bank Group's new Country Partnership Framework (2024-28) emphasises priorities such as job creation, economic diversification, inclusion and resilience to natural shocks and climate change, with a particular focus on finance of small and medium-sized enterprises and public investment management. Panama's banking sector is undergoing digital transformation, driven by fintech innovations that promote financial inclusion. The Digital Agenda, launched in 2020, aims to transform the state administration, reduce inequality, and enhance competitiveness. Panama is also making substantial investments in infrastructure projects such as the Panama Canal water management system, the Gorgas Memorial Institute, the North Panama Hospital, and an electricity interconnection with Colombia. These efforts are geared towards enhancing public infrastructure and fostering national economic growth.
In terms of regional and international finance and partnerships to catalyse international resources, Panama actively participates in collaborative efforts aimed at advancing the sustainable development goals and enhancing economic resilience. A United Nations initiative, “The Unpostponable Agenda for the Sustainable Development Goals in Panama”, was launched to guide national development plans to address persistent inequalities, particularly in critical sectors such as food systems, energy, digital connectivity, education, jobs, and social protection. Developed with the Electoral Court ahead of the May 2024 elections, this initiative underscores Panama's commitment to accelerating sustainable development through comprehensive policy frameworks aligned with Agenda 2030. Panama has also established partnerships with the European Union under the Global Gateway Investment Agenda. These collaborations prioritise green and digital transitions, health, education, and sustainable economic recovery. They aim to harness international funding and expertise to enhance Panama's climate resilience and achieve climate neutrality by 2050. Initiatives like the Sustainable Finance Taxonomy are instrumental in aligning financial flows with climate objectives, reinforcing Panama's commitment to sustainable development and global climate goals.