self-employed, unemployed, entrepreneur, shadow economy, labour, labor, unemployment,contracts,business, enterprise

Self-employed or Unemployed?

For the 5th consecutive year, Panama’s unemployment numbers are increasing – up to 7% – even in an economy which is touted as the highest growing in Latin America & the Caribbean.  Almost 50% of the unemployed are under 24 years of age, with more women unemployed than men.  School leavers typically only have a 50% employment rate.

However, these figures cited seem to hide a situation within Panama’s economy – the “self-employed” or casual labour that are not even counted in this 7%.  40% of Panama’s labour force – some 606,000 workers, are not counted as “unemployed” because they have casual labour or are “self-employed”.

So, for example, if someone loses their job and then goes back to subsistence farming – they are no longer counted among the “unemployed” – because “look – they have a job“.   If they are lucky enough to have a family with a little plot of land still in the interior of the country where they can live off the land – at least to somewhat make ends meet. Their alternatives are finding another job – perhaps with a lower salary or becoming “self-employed” or simply taking odd jobs as they arise.

Self-employed versus entrepreneurs

Don’t make the mistake of thinking that the self-employed in Panama are all entrepreneurs, either.  Only about 1% of the self-employed move from being self-employed to entrepreneurs – the rest are simply making the best of a bad situation. This is created by necessity, not by design.

For some, they actually manage to create a business and an income that was better than their employment.  But this is not the case for all of the self-employed.  For others, this means going back to work for the company where they were employed part time, as a contractor rather than an employee, and then taking whatever odd jobs they can get in their field to make ends meet the rest of the time.  And for many, this is simply a temporary solution until they are able to get a job again.

In total, only 4% of the self-employed in Panama consider themselves to be entrepreneurs.  Few of the self-employed are hiring others to work for them and creating and innovating.  Panama’s culture is typically risk-adverse – taught to seek job security.  Only 3% of the entrepreneurs make it past 3 years, with little support offered for entrepreneurship and small business.

Typically, AMPYME is supporting small businesses, such as hair-dressers, IT support companies, printers, etc.  These are backbone small businesses, but not entrepreneurs.

Economic Growth

According to published figures, Panama is still seeing economic growth.  The challenge is that this growth is in the ports, Panama Canal, public infrastructure projects (such as the building of the Metro 2 line),, & government spending.  None of these areas are high-employment.  Agriculture, industry, commerce, tourism, real estate, banking & casinos – all of these are showing “modest figures” – i.e. they are not in the red (yet).  Fishing & local services, however, are in the red.  This means that the industries which typically provide the most areas of employment in Panama are actually just getting by – and they are getting  by through “restructuring” – cutting labour costs.

This year, Panama has seen El Rey supermarkets cut back on their 24-hour service – closing at night and getting rid of an entire shift of workers.  The overnight sales represented only 2% of their gross income, and so in restructuring their hours, eliminating the shift, they are able to increase their returns substantially.

Add to this the increases in salaries that have been implemented over the past 8 years – which automatic increases happening every 2-3 years.  With these wage increases, Panamanian firms have restructured their labour forces, down-sizing and reorganising.  So, it’s no wonder that 40% of the work force is now “casual labour” or “self-employed” rather than employed with all the rights and regulations that this entails.

However, it also means that 40% of the workforce + 7% that is unemployed (47%) – are outside of the social security system – minimum health care and no pension plan!

This 47% has no coverage in the case of accidents on the job, no health care plan, no pension plan, and no holiday pay.

This 47% includes the accountant that is selling hotdogs on the street at midday, the lady that is baking empanadas daily to sell to her neighbours and goes out daily at 5am to sell at breakfast time, and the young banking employee that is now driving a taxi.  It’s the hairdresser that comes to your home to do your hair, because she doesn’t actually have a salon that she works in. It’s the lady that comes to your house once a week to clean & iron, because that’s what she does to make ends meet.

But, luckily for Panama – we only have 7% unemployment!

A global issue

Of course, the numbers are just representative of Panama. Colombia has 50% casual labour as do many countries in Central America.  Even in Argentina, the figures are higher than expected.  Within the US, some 25% of those who lose their jobs consider starting their own business, rather than continuing to look for a job. In the 35-44 year range, there is the highest number of start up businesses.  26 million people in the US are unemployed and these levels are expected to stay up at least another 5 years.

Solutions

Unfortunately, solutions need to be considered long-term!  1 in 3 companies in Panama has problems getting skilled labour for well-paying positions.  There is a disconnect between the current needs of companies – especially in technology & customer service – and the education and preparation that school leavers are given.

The typical skills that employers are looking for at any time are:

  • Communication.
  • Teamwork.
  • Problem solving.
  • Initiative and enterprise.
  • Planning and organising.
  • Self-management.
  • Learning.
  • Technology.

This, unfortunately, is not what is taught in Panamanian schools. While they do ask for “group work”, there is no actual teaching done of what team-work is and why doing the homework or assignment as a group will actually enable you to learn essential life skills.  Similarly, while baseball and football are very popular in Panama, there does not seem to be a lot of attention placed on how these sports can improve life-skills and ensuring that students understand the importance of working together.

Communication is not a skill that is taught in school – especially nothing like crucial conversations or difficult conversation, empathy or social skills that will allow a school-leaver to adapt to a work environment.

Self-management, planning and organising, initiative & enterprise are also not taught in schools – leaving school-leavers ill-prepared for joining teams where they are not constantly supervised and having to be self-starters!  Homework is still micro-managed in schools and students are simply expected to “do as I say”, rather than to think outside the box and come up with their own ideas.  Critical thinking and challenging the system is certainly not welcomed.

Panama needs, however, over 150,000 technically qualified staff for commerce, construction, logistics, tourism, industry & agriculture.  It needs a further 25,000 professionals in these areas!  Some of these are as basic a plumbers, electricians, carpenters, metal workers, and painters. But even these skilled labourers are not available.

Immigration

Like it or not – Panama needs more foreign immigrants.  But not just any immigrants!  If we look internationally – 14% of the US population is foreign-born, but 30% of US entrepreneurs are foreigners. For example, Elon Musk. In fact – Silicon Valley would not exist if the US only depended on locally-born talent! In New Zealand or Australia, 25% of the population is actually foreign-born.

For innovation & entrepreneurship to grow – Panama needs immigrants.  People that are willing to come & invest in the country – entrepreneurs with business ideas.  But in order to attract that kind of investment – Panama needs an education system that will provide the thought processes & creativity that are required for entrepreneurs to succeed.  Not employees that need to be micro-managed – but ones that will think independently and creatively -that know how to work in teams and brainstorm new ideas.

There’s still a long road ahead for Panama in moving from unemployment to entrepreneurship!

 

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Fighting the waste in Panama

As the tropical rain pours down outside, I am sitting here hoping that the tide is out. Otherwise, tomorrow morning we are going to wake up to news and images of the flooding throughout the lower parts of Panama City.

Unfortunately, Panama City has not done a great job of “city planning”, especially in respect to natural runoffs and areas of watershed. As the population and housing needs expand, the city has expanded. Encroaching on tidelands and mangrove forests. Though there has been a move now to curb the expansion into the mangroves, there has still been a lot of land-fill of the tidelands that were once the watersheds of the river basin. So, areas which were built 40-50 years ago, which have never flooded before, now flood regularly when the high tide and tropical rain meet.

Many people accuse the government of failing to deal with the issue of waste and rubbish blocking the sewage and storm water drains. But the issue is much bigger than this; there are

  • The typical issues of rubbish bags being opened by stray dogs, cats or vultures.
  • Failure to collect rubbish regularly (most weeks our rubbish is collected on a Sunday, or not). Sometimes we simply have to call and beg them to send a special truck to pick up because it’s been so long.
  • Homes here don’t have gardens and composting: and most people don’t even know what compost is anyway.
  • This is the tropics – you can’t just leave rubbish out for more than a day without it starting to turn rancid.
  • Re-cycling is virtually non-existent here and there is only a small culture of reuse and recycle.

I’m aware of this every Saturday when I go to the market with my own bags and I still have to refuse the offer of a plastic bag at each stall. I’m aware of this when I go to the supermarket and I see that most people are not carrying their own bags. And I’m aware of it when I see the rubbish on the sides of the streets.

This issue has not been addressed by recycling stations at the primary schools or outside supermarkets or gas stations.  Even trying to recycle paper and cardboard in Panama seems to be hard work! They don’t come and pick it up – you have to drive it over and drop it off. How many companies or homes are going to take the time to do that?

But I am even aware of it in my kitchen. Every maid so far has had to be trained not to simply throw away the peel and veggies that are “up to scratch”. They don’t realize that those ugly veggies that are not pretty enough for the salad can be used to make a fabulous vegetable broth!

And then they complain to me that I don’t have any bullion cubes for veggie broth! Really?  Admittedly, my cooked veggies from the broth that I then throw away (and keep only the broth) probably decompose much faster in the rubbish than the raw ones would have – they probably smell more as well.

But more than anything, I am appalled by the packaging at the supermarkets (not that I buy my veggies at the supermarket anymore) – the way that they individually wrap all in Styrofoam and glad-wrap! As if there wasn’t enough rubbish already.

But this is definitely a modern day problem, the same way that the floating island of rubbish is a problem in the middle of the Pacific Ocean and the plastic now found at the bottom of the Mariana Trench!

There are ingenious solutions found in a number of parts of the world, such as this solution to “flip-flops”:

It’s really easy to complain about the problem, it’s much harder to do something about it. Even on a personal level. I can make small choices:

  • a recycling bin in the yard (because I’m lucky enough to have a  yard)
  • the choice to take my own bags to the vegetable market and supermarkets and only buy fruit and veggies that are not pre-packaged
  • the conscious decision to hold onto the paper to take it to the recycling plant ourselves
  • metal / glass water bottles – which we refill regularly rather than buying bottled water

But the plastic bags, bottles and packaging issues need to be addressed on a massive scale if we are going to make any headway.  My little contribution is only a tiny grain of sand in the Sahara desert and that’s not enough.

Panama, business, money, entrepreneur, business index, economy, doing business, starting a business, economic indicators, ideal business environment, import, export, fintech, incubators, assistance

Panama’s money stories

Last month I saw this tweet regarding Panama’s money story:

In Panama, there are three types of money: old (from the grandparents), corrupt (from politicians and friends) and dirty (drugs, weapons, laundering, etc.)

Panama’s reputation as a country of carpetbaggers, “cocaine towers” (from the Tailor of Panama), the “home” of #PanamaPapers (even if most of the guilty parties were spread across the four corners of the globe), the country where Odebrecht continues to receive government and municipal contracts in spite of the scandals and admissions of guilt, and the general “juega vivo” precedes it.

But how true is this really? Is the only money in Panama really old money, corrupt money or dirty money?

In this post, I want to have a look at how Panama suffers from both a reality issue and a perception problem.  In my next post, I want to look at the opportunities that Panama offers, the free market, the incubators and technological advantages, as well as looking realistically at challenges (labour force, incentives for small & medium businesses) and close with a third post offering some suggestions for those living or moving to Panama that can make this country the land of opportunity that it really is: the “bridge of the Americas”, the “crossroads of the world”.

The strikes against Panama:

A history of #Pirates and #Carpetbaggers

Anyone in Panama can tell you the history of “Captain” Henry Morgan, the “privateer” who invaded Panama in 1671!  It is an extraordinary story in military history – the capture, sacking and burning of Panama City – especially when you consider that it wasn’t a military campaign. It was just plain piracy by an intrepid Welshman and his “men at arms”!  With 37 ships and possibly 2000 men, Henry Morgan set out for Portobelo, Panama, to pick up the gold that passed through from Peru on its way to Spain.

A few years earlier, he had asserted himself in Portobelo.  Instead of hitting the two fortresses that guarded Portobelo from the sea, where they would have been seen and expect, Morgan landed elsewhere and then marched his men through the jungle and attacked one of the forts from the landward side, in a surprise assault. They took the fortress over quickly, massacred the defenders and blew up the armaments!  The attack on the 2nd fort had many casualties, but was still effective.  Holding these two strategic points, Morgan sent a ransom demand to the Spanish governor of Panama: 100,000 pieces of eight – possibly some $12 million today.  At that time, he took his money and left.

Portobelo, Panama, ruins, pirates, Henry Morgan
Portobelo ruins

But now, set with some 48 cannons and more than 30,000 pounds of gunpowder, Morgan set out to attack Panama City itself (on the Pacific side, not the Caribbean Sea).  To do this, he had to take his men by boat up the Chagres river, so they first hit the Chagres fort. By luck, a shot from one of the pirates set fire to the Spanish magazine, with the resulting explosion devastating the fort and allowing the pirates to storm its walls.  Leaving a small garrison of men behind to guard the fort, Morgan lead some 1,200 men into the jungle to cross the isthmus on foot.

They almost starved to death, crossing the Isthmus, as the Spanish burned and stripped everything in their path, knowing they were coming. They were anticipated when they arrived finally in Panama City with a contingent of 3,600 Spanish troops, some of which were cavalry.  To Morgan’s advantage, the ground was boggy and the horses were unable to maneuver. They cut down most of the cavalry with accurate fire, and when the Spanish tried to stampede a herd of cows, they gratefully slaughtered and barbecued the beasts!  Seeing their cavalry cut down and their stampeded herd slaughtered, the Spanish infantry fled, clearing the way for Morgan’s assault on Panama City itself.  Morgan eventually returned to Portobelo with 175 pack animals laden with treasures. As history books go, the “pirate” Henry Morgan died as “Lieutenant Governor Sir Henry Morgan”, rich and respectable.

Panama City, ruins, pirates, attack, Henry Morgan
ruins of Panama Viejo

As history and geography would have it, the Camino de Cruces of Panama – the legendary trail across the Isthmus – lies between two rich colonial ports, with a history rich in gold and gold that was plundered by pirates!

Most people don’t know that the treaty “The Hay–BunauVarilla Treaty (Spanish: Tratado Hay-Bunau Varilla)”, signed on November 18, 1903, by the United States and Panama, was signed by a French-man with the United States.  This treaty established the Panama Canal Zone and the subsequent construction of the Panama Canal. History kindly refers to Philippe-Jean Bunau-Varilla as “the French diplomatic representative of Panama”, many Panamanian historians describe this treaty signing process a little differently (like how the Panamanian representatives were told to “shut up”).

Panama deals, Panama, carpetbaggers, taking advantage, pillage, raping the natural resources, scoundrels

It is said that Bunau-Varilla was an important shareholder in  Compagnie Nouvelle du Canal de Panama, which still had the concession, as well as certain valuable assets, for the building of a canal in Panama. He had not been in Panama for seventeen years at the time of representing Panama before the United States and never returned to Panama after the negotiations. For some reason, as part of the treaty negotiations, the US bought all the shares and assets of Compagnie Nouvelle du Canal de Panama for US$40 million (yeah, $40 million in 1903).  I’m not saying he was a carpetbagger: you can draw your own conclusions.

The “carpetbaggers” come down from “the north” seeking private gain in the underdeveloped “south”.  According to the Merriam-Webster Online Dictionary, a carpetbagger was an

“Epithet used during the Reconstruction period (1865-1877) to describe a Northerner in the South seeking private gain. The word referred to an unwelcome outsider arriving with nothing more than his belongings packed in a satchel or carpetbag. Many carpetbaggers were involved in corrupt financial schemes.”

Unfortunately, I have seen my fair share of foreigners coming into Panama with an idea to “get rich quick” and then making off with “the spoils”, leaving their investors (often other foreigners) high and dry.  There’s also some stories about Panamanians having done the same, such as the title dispute in Bocas over Hospital Point:

“Stephens, 75, an entomologist, came to the isthmus in 1959 to work for the fruit company. In 1970 he bought Hospital Point, two acres in area, with title dating from 1899. Later on, he bought possession rights to several acres south of the point. His neighbors are a Gnöbe Indian village and another American, Jon Nilsson, who bought possession rights to twelve acres south of Stephens and build a vacation home.”

But a guy showed up with a hand-drawn map, claiming his grandfather had left him that land. When his map was found to be faulty, “no problem”,  “My surveyors will fix that”.  The claim is going through the court-system.  For more on this story: http://laestrella.com.pa/panama/nacional/carpetbagger-hospital-point/23749723 

But most of the cases are like those of “Too Good To Be True” – foreigner on foreigner. Developments and investments where the developer has “gone bankrupt” or left the country with the purchasers money before finishing the project and delivering.  The best advice I read in that article was:

If it seems too good to be true, it most likely is. Panama has many flaws that will not be seen on a two week visit.

Due diligence is required for Panama to be right for you.

Even the late Lee Zeltzer warned in 2011 of a guy “doing the rounds” in Boquete, trying to get people to invest money in a marina project that he wasn’t the owner of!

#Corruption

Since 2016, Panama has been immersed in the “Lava Jato” scandal of Odebrecht.  So far, 43 people have been charged with corruption and related crimes and have been identified as having received money from the Brazilian giant.  News outlets world-wide have outed many politicians, and locally we read news articles that express the following:

  • “In Panama there is a feeling that many people of the current Government are involved in the Odebrecht scandal.”  “Despite of rumors and accusations against government officials involved in the Odebrecht case, no clear evidence has been laid on the matter.”  “Fernando Migliaccio da Silva, executive of the Brazilian construction company, responsible for paying the bribes of the company and close friend of Marcelo Odebrecht, said that two people associated with the company, Luiz Eduardo Soares and Rodrigo Tacla Durán, repeatedly traveled to Panama to avoid the government’s cooperation with the investigation.”   http://www.panamatoday.com/special-report/odebrecht-corruption-scandal-has-left-traces-panama-4624
  • “Odebrecht has become the largest government contractor in Panama in the past decade, with contracts totaling upwards of US$500 million, including one for the construction of a subway line in Panama City.” In these cases, there is $59 Million identified as having been paid out/received by the 43 implicated and charged.  “Although a number of defendants in the case have remained anonymous in order to preserve “the principle of presumption of innocence”, according to a statement from the Roland Rodriquez, spokesperson for the Prosecutor’s Office, some of the high profiles charged with bribery are ex-president of Panama Ricardo Martinelli and his children, among other well known officials.”  https://www.telesurtv.net/english/news/Suspects-in-Panama-Odebrecht-Corruption-Probe-Rise-to-43-20170727-0010.html
  • “Third witness says Varela {current President of Panama} took money from Odebrecht”  “Now the specific allegation is that his party’s 2009 campaign — which was dropped after an alliance with Ricardo Martinelli was formed at a meeting at the US ambassador’s residence — got $700,000 from Odebrecht via a US foundation.” “In the October 30 online edition of La Prensa, it was reported that former Panamanian ambassador to South Korea and Panameñista Party activist Jaime Lasso told anti-corruption prosecutors that the Brazilian construction conglomerate Odebrecht gave $700,000 to President Varela’s 2009 presidential campaign.”  http://www.thepanamanews.com/2017/10/third-witness-says-varela-took-money-from-odebrecht/

Lava Jato, Odebrecht, corruption, stadiums, World Cup, scandal, investigations, politicians, corrupt businessmen, kickbacks, kick back, bribes

On the other hand, almost 1/3 of Brazil’s current ministers of government are under investigation.  In Colombia a former senator and the former vice-minister for transport have already been charged.  In Venezuela a number of people were implicated, all the way up to the President Nicolás Maduro. Peru has two ex-presidents under investigation, and even the opposition leader Keiko Fujimori has come under investigation.  (more at http://www.bbc.com/news/world-latin-america-41109132) This is considered to be one of the biggest corruption cases in history!

#Dirty Money

After all that history of Panama’s money stories, how much more can I say about the dirty money in Panama? Almost thirty years ago when you mentioned “Panama”, everyone responded with “Noriega”. If you were lucky, someone had heard about the Panama Canal and that would be the topic of conversation, rather than Noriega and the 1989 invasion!  Twenty years ago you mention “Panama” and everyone is talking about John le Carré’s book “The Tailor of Panama”, the cocaine towers, and his own description of how he”was drawn by the obvious corruption of Panama and the wonderful collection of characters you meet there”. Ten years ago, you mention “Panama” and every one says “oh, the canoe lady“, referring to the Anne Darwin case of the missing canoeist who showed up alive and well in Panama, alleging “amnesia”.  Role on 2016, twenty years after Le Carré’s publishing of The Tailor of Panama and you get the #PanamaPapers!

Panama, Darwin, canoeist, missing, scandal

A 2003 examination of tax havens by Jeffrey Robinson quotes a US Customs official as saying:

[Panama] is filled with dishonest lawyers, dishonest bankers, dishonest company formation agents and dishonest companies registered there by those dishonest lawyers so that they can deposit dirty money into their dishonest banks. The Free Trade Zone is the black hole through which Panama has become one of the filthiest money laundering sinks in the world.

Of course, Robinson’s book then goes on to say:

It is a path that leads ultimately to the dealing rooms of New York, the vaults of Zurich and the plushest boardrooms of the City of London.

But most people get stuck on the first quote.  And this perception of Panama is shared by all the publicity on #PanamaPapers, which focused on “The Secrets of Dirty Money“. Of course, the name itself fails to remind readers that most of those secrets were because Mossack Fonseca had “offices in more than 35 locations around the globe” and that most of the referrals of clients were from “first world” countries – bankers, lawyers and other professionals.

PanamaPapers, Panama, money, dirty money, scandal, challenges

On the other hand, there are issues that Panama is tackling in the non-financial institution sectors.  As highlighted in Open Democracy:

the task force identified nearly 730.000 Panamanian businesses considered to be at “high risk” of participating in money laundering. The group found that supervision of these entities is low, and that most of them are still active.

Nevertheless, in 2016 and 2017, Panama took some significant steps in legislating and implementation to clear up those areas of business which were previously unregulated or unsupervised:

The final challenges – perception & development

I can remember speaking with a client on the phone in 1996, who would be visiting Panama for the first time, and he asked me what kind of clothes he should bring and how far out of town the airport was.  I don’t know what got into me that day, but I told him to wear his khakis, and that we would have a white land-rover at the airport to pick him up, and that he shouldn’t worry too much about the accommodation, because we had managed to put air-conditioning in our “huts” in “town” with generator electricity. When he arrived in our office a few days later, he was livid at me! He’d only brought khakis and taken everything I had said seriously!

Image result for caesar park  hotel panama cityHe really did think that he would “walk down the steps” off an airplane at a “jungle airport” where a driver would pick him up in a white land-rover and drive him into “town” which was basically huts. When he got through the airport and the driver ushered him into a sedan and took him to the Caesar Park hotel, he realised that I had been pulling his leg!

In my defense, I was young, with a sense of humour! But those are the images that he had in his head of what he was coming to in Panama!

Some rustic huts, sitting on the beach, perhaps?

Panama, development, challenges, infrastructure, perceptions

It really is all about the perception!

And Panama continues to battle with the perception of how life is in Panama – “Banana Republic”.

 

But, I disagree with Ursula Keiner – I think there is a lot of room for money to be made in Panama by honest, entrepreneurial investors.

Education in Panama – hopes and dreams

Last week was the first week of school for public schools in Panama.  Universities typically finished their “summer holidays” at the end of January, but primary and secondary schools still have a three month summer vacation.

And after seeing headlines in Panama in late February, I’ve been asking myself: What has happened during these three months of school holidays? What efforts are made to ensure that when students return in the new year, the teachers will be better equipped as well as the schools in a better state?  And what can we do differently?

Panamá Bilingüe:

I was stunned by the news a few weeks ago that of 5,200 teachers sent abroad to study, only 1.5% (70) teachers were “certified”. Of course, it turns out that headlines sell newspapers, but don’t tell you the whole story!

During these summer months, about 1,000 Panamanian teachers and 500 students traveled from Panama to the US, England, Canada and Barbados for full immersion English classes through the program “Panamá Bilingüe”.  The Panamá Bilingüe program has a budget of over 100 million dollars for the five year period it is intended to run, and costs about $8,000 – $12,000 per teacher for training, airfares and accommodation costs.

When this program started in 2015, it was slated to be the beginning of a new era of education in Panama.  Unfortunately, if you look at the quality of the translation on the President’s website, you may be forgiven for thinking there’s not much hope for the future if this is the best that can be done for the President!

During the 5 year program (2015 to 2020), some 10,000 teachers are slated to receive instruction both in English and educational classes to improve the quality of the education received in Panama in public schools and at public universities.  A further 20,000 high school students and 30,000 primary school students are expected to also benefit from this program.

Teacher Training:

  1. national – before they are given any opportunity to study abroad, all expenses paid, the selected teachers are given training in Panama, in order to reach a certain level in English (Private & Public).  They are then given an exam (such as TOEFL or Cambridge) to see the level of their English before they go.
  2. international – 10,000 are being sent overseas. They will not only study English, some will also be studying in science and Education. Of these 10,000 teachers that are slated to go overseas before 2020, 5,200 have already completed the training internationally.  When they are sent overseas, they are expected to work (side-by-side) with teachers internationally (some 25-35 hours per week), as well as study at their designated University.

Unfortunately, the initial (and badly explained) results that came in February 2018 were not very promising. Of the 5,200 teachers who have traveled internationally so far in this program, only 70 (1.5%) have  obtained the Cambridge certification in English. However, what was important to note is that the certification in question was a certification to become examiners in Panama of students in English (i.e. it was not whether they had attained or not a proficiency in English, but whether they had a proficiency and the additional certification to be an examiner in Panama).  Five hundred teachers volunteered to participate in the courses for certification, of these 389 have a level of proficiency that are certified, and 70 have actually received the Cambridge certification as examiners.  So, while it sounds terrible that only 70 of 5,200 got certified, I had to read more to understand what they were getting certified in. Not half as bad as the headlines sounded!

In the explanations given by the Ministry of Education, they indicate that in terms of the English levels of the 5,000 teachers sent overseas to study, only 5% have completely failed to reach the levels of proficiency required (according to where they are at the time they start the course), and in these cases the teachers involved will be required to pay back the cost of the studies from their salaries.

What does concern me, however, is that the minimum level required is High Intermediate English. This means that the English teachers in our primary and secondary schools is possibly only Intermediate English.  These are not teachers who are speaking fluent English. So, if they are at intermediate level, how will our high school students reach anything higher than just intermediate?

Kids program:

In addition to the training for teachers, Panamá Bilingüe also offers classes for kids.  And this is for kids all around the country, not just in Panama City. Some of the kids will be from different regions, such as the Guna in San Blas, the Ngobe in the Ngöbe comarca between Chiriqui and Bocas del Toro. Of the 13,000 that started in the program, some 8000 children that have been participating in Panamá Bilingüe for the first three years were tested and 82% have reached Intermediate Level (as gauged by the TOEFL exams).

School buildings: Gazebo schools

Of the 1,080 gazebo schools (escuelas ranchos) found to exist in July 2014, the Ministry of Education has only been able to replace 504 so far with school buildings (some still under construction).  As expected, this project is taking longer and costing more than the current administration anticipated: they are half way there with only little more than a year left before elections (5 year term).

Although the numbers mention 1,080 “schools”, this really means buildings or class rooms, rather than the entire school.  So, for example, in 2018 they are undertaking 16 projects for 69 properties, which will eliminate 209 gazebo schools.  The new school properties will include dormitories for the teachers (as some are in remote areas), as well as play courts (with roofs) which can be used for assemblies as well as for exercise and gym class.

One of the biggest difficulties being faced is the remoteness and access of the regions where these gazebo schools exist.  Many contractors are not interested in bidding for the projects in these areas, because of the transportation issues (materials as well as workers).  So, the Ministry of Education puts out the details of the public bid, and no one responds.  And the Panamanian Ministry of Education does not seem to have its own maintenance and building division for these particular cases.

In these regions, the debate continues to be over school buildings, with no debate being entered into regarding the quality of the education that these children are receiving.

How do we combat poverty in these regions without any infrastructure to speak of?

Public Schools not ready

In addition to the issue of Gazebo schools, which is gradually being addressed and faced, every start of the school year, we hear of schools that simply are not opening for the first day of school because basic maintenance work has not been done.  So, for example, on March 5th we read that some 20 public schools were not ready and a further 32 schools were opening, but with either infrastructure issues or not having enough teachers.

Of these 20 schools, 10 are simply not opening and ready, and a further 10 are using alternative properties for the school year while their schools are being maintained. Once again, we’re talking about whether there WILL be any education, not what the quality of that education will be!

What makes for a first world education system?

When we look at the question of education, obviously these are very basic issues that Panama is facing.  Quite unlike the kinds of issues that you would face in say New Zealand or the Netherlands. Panama says that it aspires to be like Singapore, and yet Singapore often comes out as the best education worldwide!   If we look at the World Education Rankings, Panama doesn’t even make it onto the graph! Even the articles that criticize the US education system, providing graphs that include our neighbors Costa Rica and Colombia, completely ignore the existence of Panama.

How did (or does) Singapore make it to the top? For starters, education spending makes up about 20% of the annual national budget! Yes, you read that right: TWENTY percent.  Panama spends only 3.5% of its budget on education!  We get what we pay for!

English is the first language in the education system (since the 1960s), meaning that all children are fully bilingual, usually reaching fluency in primary school.  Admittedly, during the 1950s and 1960s, Singapore adapted their “survival driven” system into one which could provide a skilled workforce for their industrialization. They have also adopted the requirement that throughout primary and secondary school, all children must participate in one after school program (performing arts, clubs, sports, etc.).  Maybe these children aren’t perfectly well-rounded, but they are at least socialised and with some leadership skills.

Upon completion of secondary school, Singapore offers vocational education (since 1992), Polytechnics and Arts Institutions, Junior Colleges (2 years, pre-University), and Universities.  It also offers other alternatives, and encourages students to pursue further studies even after completing their Polytechnics or vocational training.

This strong focus on education in Singapore should be a shining example to Panama, as like Singapore, we lack natural resources (other than the Canal) and we need to develop our human resources and manpower to build a knowledge-based economy.  Obviously, there’s a lot more we could look at in Singapore’s system: meritocracy, investment and the priority that it has been given.