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Latin America Investment News on Viva Tropical

Shaky Foreign Markets Spur Panama to Revamp Laws to Invest in Itself.

Article Summary:

The turbulent international economic market had an adverse effect on Panama’s investments. The country saw a 2% loss on its annual returns, and the Minister of Economy and Finance is demanding reform to the Trust Fund for Investment laws. Current law requires funds to be sent abroad to be invested and Panama has 98% of its assets outside the country, making the country’s funding dependent upon international markets. The MEF wants to bring the country’s money back into Panama by revamping investment policies. Many critics say the FFD is becoming a Panamanian investment firm, bringing a significant increase in the size of the government to the economy.

Photo Credit: Martes Financiero

Original Article Text From Martes Financiero via Google Translate :


The way that the Panamanian government makes its investments is about to change drastically. In the Ministry of Economy and Finance (MEF) work in an amendment to the law governing the Trust Fund for Development (FFD), fueled financial tool since its inception in 1995 with money generated by the sale of properties in the reverted areas and privatization of public services initiated by former President Ernesto Pérez Balladares ”

The investment guidelines of the FFD are rigid, irrelevant and counterproductive. [Also] promote the fund to be sent abroad and make it difficult to invest in Panama, “said Diego Ferrer, deputy director of investments, concessions and risks of the state that commands funtcionario reform bill in the MEF.

According to data audited by the multinational KPMG, the fund’s assets at 30 June this year were $ 292 million thousand, 9 million less than the assets recorded in the same period last year. This money is not in Panama. In fact, 98% of assets outside the country. Of this amount, 34% fixed-term international banks and 64% is managed by three investment managers: Goldman Sachs, Morgan Stanley and Black Rock Financial. The volatility of international markets has been that over the months, the fund decreases. Proof of this is that this year the FFD had a gross return of 4.19% while last year this index was 6.02%.

The changes the face of a turbulent international economic context, the MEF has decided to take action on the matter and begin to work on a project to reform the current legislation (Law 20 of May 15, 1995). Changes in working the authorities revolve around four main axes: Allow the bottom put your money in joint ventures, develop infrastructure in the reverted areas that are still sold, invest in sectors considered strategic and modernize the investment policy in financial instruments.

The authorities hope to these changes resulting in a bill to be presented at the National Assembly during the first quarter of next year. To put these changes, some analysts say the FFD is becoming a Panamanian investment firm, bringing a significant increase in the size of government in the economy.

Link to Original Article:

From Martes Financiero

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