Restoration of the reputation of the financial center remains a tall order
- Mellibeth González
- - Actualizado: 03/10/2016 - 11:27 am
Economists hold little hope for the report being prepared by a committee of experts named by the government to evaluate the practices of the financial system in the wake of the international scandal known as Panama papers.
The document, which should be published this October, has has had its validity already cast into doubt as a result of the resignation of two of the most prominent members of the committee heading it: Nobel laureate for economics Joseph Stiglitz, and Swiss criminologist Mark Pieth.
Indeed, during a Forum of World Leaders at Colombian University, which vice president Isabel de Saint Malo attended, Mr. Stiglitz refuted the notion that there could be a report on transparency that itself was not transparent, directly challenging the Panamanian foreign minister present in the room.
In spite of this, the authorities remains sanguine about "the good image of the country' an the strength of a local economy growing at a healthy rate, underpinned by low inflation and low unemployment.
In recent declarations, Economics and Finance Minister Dulcidio de la Guardia, highlighted the markets';confidence in our instruments', referring to Panamanian government bonds as well as to foreign direct investment.
According to the administration, the Panama papers scandals only represents a reputational damage that has to be mitigated.
Such optimism is not shared by many Panamanian economists. They fear the cumulative effect of the scandal brought about by disgraced law firm Mossack Fonseca (the source of the 'Panama Papers'), the case of businessman Abdul Waked as well as the implicit condemnation levelled at the country’s reputation and image by the twin resignation of Stiglitz and Pieth.
According to Juan Jovane, the exercise of cleaning up the image of the Panamanian financial system, specifically through the committee's report, has been compromised by multiple declarations made by its two most famous former members. Mr. Stiglitz resigned from his position on the committee in protest for its lack of transparency.
Economist Maribel Gordon echoes that view, fearing that the very public condemnation of these two international experts may have diminished the reports credibility on issues of transparency.
According to the president of the college of economists, Olmedo Estrada, the content of the report will be seen as highly questionable. 'We have enjoyed a solid financial system, but these problems have damaged it and continue to do so', he declared.
The deterioration in the image of the country represents a worry for economists, especially because it is occurring right at the moment when other economic sectors are shrinking, employment is increasing as is informal labor, capital is fleeing and Panamanians are losing their purchasing power.
Unemployment went from 4% to 5.6% under the current administration; agriculture fell 1.4%; fisheries are down 11.9%; and manufacturing has shrunk 2.3%, while exports are down 7.7% and imports 4.6%, respectively.