Panama Wants to Surpass Costa Rica

April 27, 2007

Costa Rica’s neighbor to the south wants to surpass Costa Rica to become the second most competitive country in Latin America.

Nearly two years ago, Panama created an Innovation Secretary, a department that works closely with President Martin Torrijos to use technology to simplify or eliminate bureaucratic processes that tangle businesses in red tape. Innovation Secretary Gaspar Tarté recently told Costa Rica’s daily La Nación that the country plans to become the second most competitive Latin American country behind Chile in the annual World Economic Forum’s Global Competitiveness Report.

Panama, which attracted 32 new tourism projects worth $710 million last year, also hopes to surpass Costa Rica’s 1.6 million tourists it received in 2006.

In January, Panama’s Congress approved a law to speed up the opening of a business. The legislation eliminated the entire process of requesting permits prior to opening a business, and instead puts the business in charge of informing the government, via Internet, of the business’s opening and the company’s plans to meet requirements. The institutions are then responsible for visiting each business to make sure they meet the requirement.

According to the World Bank’s “Doing Business 2007” report released last year, it takes an average of 77 days to start up a business in Costa Rica – twice as long as it takes in El Salvador, Guatemala or Nicaragua. Costa Rica, which dropped five notches to 105 among 175 countries, trails behind Panama, El Salvador and Nicaragua in that report, which analyzes each country’s business climate (TT, March 16).

In Panama, which was home to $1.2 billion in new construction projects last year, citizens are able to take care of 2,200 bureaucratic processes online, from getting a driver’s license to Customs processes. Businesses there can also get contracts authorized online.

 

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