IT Financing
Overview
Currently, information and communications technology financing comes from two main sources: Foreign Direct Investment, and the government. The venture capital community is not very active in ICT sectors. FDI showed a dramatic increase in the first six months of 2003, and is expected to grow for the rest of the year. Also, the new government "electronic initiatives" are expected generate large investments. These investments are meant to develop a good ICT infrastructure, and generate greater awareness of ICT sectors in the country.
FDI 1998-2003 (in US$,millions)
FDI
The first half of 2003 generated a total of $585,000,000, which represents an increase of $530,000,000 from last year's figures. These figures include investments generated in the banking sector which generally tend to inflate FDI figures. If figures generated from the banking sector are deducted, the remainder FDI is about $313,000,000. This number is still a significant increase from 2002. It is estimated that by the end of the year, Panamá's FDI figures will reach a total of $1,000 million. The sectors that generate the largest percentages of FDI are tourism, and telecommunications. These have also been the most important economic sectors in the country for the past three years. (31)
Government Initiatives
The Panamanian government has developed a comprehensive plan, e-panama.gob.pa, that incorporates information and telecommunications technology, focuses on social and economic development, and seeks to increase participation of the population in issues of national importance. The e-panama plan includes e-government, e-education, e-economy, e-health, and e-democracy. The plan will heavily invest in the national ICT infrastructure, and will also increase awareness and encourage development of new technologies, and ICT sectors in the country.
Important Changes Necessary
There are two main factors that may limit the overall number of investments in Panamá. First, there is a general perception of widespread corruption in the country. The legal system is not lacking in laws that protect the business community (such as copyrights and intellectual property), however the judicial system is slow and bureaucratic. Changes in this area are of vital importance if the country wants to be more appealing to international companies seeking to enter a Latin American market. Second, the workforce is not well educated in areas that are crucial such as advanced knowledge of the English language and education in highly technical fields. Government initiatives are currently in development, and there are some already established programs. For example, the government is currently training 3,000 individuals in advanced English in a three month period. This program seeks to attract entities such as call centers. (http://biblioteca.prensa.com/contenido/2003/11/15/15-26anota1.html) Also, there is a plan that involves virtual training/distance learning in technical areas of study, for remote locations online. These would include plumbing, electricity, mechanics, electronics, gardening, dressmaking, etc. If these two areas are improved upon, Panamá will likely attract more FDI, and attract the interest of national businesses and venture capital investments in ICT sectors.