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International Business and Culture

Research Paper –
The Economy of Panama.



Thesis: Panama’s economy has always been affected by the international trade going on around the county, and had only recently started improving by itself.


















The Economy of Panama

Panama’s economy has always been affected by the international trade going on around the county, and had only recently started improving by itself. Panama is located in a key geographic location, so it has a mixed-western economy mainly based on the services industry, heavily weighted toward banking, commerce, and tourism. Because of the Panama Canal, the nation's small geographic size, and small population, Panama's economy is centered on services. Panama's economy rests primarily on its well-developed services sector that accounts for nearly 80% of its GDP, which is a greater portion than in any other Latin American country. Services include the Panama Canal, banking, the Colón Free Trade Zone, insurance, container ports, and flagship registry, medical and health, and other business. The services have grown because of offshore banking and canal traffic.
Since the early 1500’s Panamanians have relied on the countries geography. Exploitation of this advantage began soon after the Spanish arrived in search of gold and silver. Panama soon became a crossroads for the trade between Spain and its colonies in Central and South America. The conquistadors used the Camino Cruces and Le Camino Real to transport gold and silver from Peru to Spain. Ports on each coast and a trail between them handled much of Spain's colonial trade from which the inhabitants of the port cities prospered. This was the beginning of the country's historical dependence on world commerce for prosperity and imports. (ITA –...