Problem: What problem is this project trying to address?
Panama, through sound economic management, has grown faster than almost any Latin American economy in recent years, and through a partnership with the International Bank for Reconstruction and Development (IBRD), the country is striving to ensure the benefits of this prosperity reach its poorest citizens. By relying on a flexible range of lending and technical support from IBRD, Panama was able to achieve results in areas as diverse as providing improved health and nutrition services to 400,000 families in rural areas to streamlining government procurement services and making it easier for Panamanians to start a business.
Panama, with a population of approximately 3.5 million, a world famous canal, a modern financial sector, and the economy of an upper-middle income country remained a nation of stark contrasts. Most notable was the high degree of inequality, perpetuated by educational disparities, differential access to basic services, and wide discrepancies in productivity and incomes. As the Bank approached a new Country Partnership Strategy for the fiscal years 2008-10, Panama continued to face the following challenges: keeping the economy growing at high rate; helping the poor and vulnerable participate in the economy and benefit from its strong growth; increasing the efficiency and transparency of the Government; and improving the lives of poorer Panamanians through better health, nutrition, and education.
Over 2004-2006, the Panamanian economy grew on average at 7.5 percent per year driven by a healthy global economy, and facilitated by internal reforms and macroeconomic discipline. The expectation in approaching the FY2008-10 support strategy was that it would continue to grow at a similar pace. The prospects for growth were underpinned by the decision to expand the Panama Canal, with investments close to 30 percent of gross domestic product (GDP). The challenge for the Government was to derive the greatest profit from these opportunities, generating income and employment, particularly for the poor and vulnerable.
The relatively high levels of poverty in Panama were not due to lack of social spending, but rather to inadequate targeting and the inefficiency of Government programs. Panama was spending 17 percent of GDP in the social sectors, above other countries in Latin America, but its outcomes were not in line with such levels of expenditure. Social assistance spending, around one percent of GDP, had historically gone to universal subsidies including price subsidies for electricity and piped water, services traditionally out of reach to the poor in Panama. In addition, rural poverty has and continues to put pressure on the country's natural resource base in unsustainable ways. The other challenges facing Panama included: providing and maintaining infrastructure, educating the population, supporting innovation, and regulating efficiently.
In addition to its partnership with the World Bank, the Government has been in close dialogue with multilateral and bilateral partners, such as the Inter-American Development Bank (IDB), the Andean Development Corporation, the European Commission, agencies of the United Nations, as well as bilateral agencies from the US, Japan, and Spain. The IDB and the World Bank are jointly supporting the Red de Oportunidades program. New operations such as the Metro Water and Sanitation Improvement Project will be implemented jointly and coordinated closely with IDB and Andean Development Corporation in the new Bank Country Partnership Strategy with the Government.
Solution: What is the proposed solution? Please be specific!
• Organize qualified small business owners to help grow their businesses.
• Create a targeted interactive program requiring their fully engaged participation for success.
• Encourage a heightened level of cooperation, collaboration and coordination between technical service providers, incubators and public- and private-sector entities, all sharing the goal of increasing successful contract results for small business firms.
• Advocate on behalf of small businesses as they seek increased contracting results within the public and private business sectors.
• Ensure that resources such as banking, financial and risk-related services, administrative, and the related infrastructure are made openly available to small business firms.
• Maintain complete transparency and accountability as we seek to better assess and evaluate what works and what does not relative to small business advocacy and outreach.