THE ECONOMIST:Yet another Singapore wannabe

Panama’s smart banks, open economy and long queues of boats at its ports have caused many to compare it to Singapore. Panama’s president, Ricardo Martinelli, made his country’s first state visit there in 2010 and later said, “We copy a lot from Singapore and we need to copy more.”

 The “Latin Singapore” remains deeply un-Singaporean in many ways. In indigenous areas, 85% of people cannot afford enough calories for an adequate diet – even as the champagne flows in the capital’s casinos. In education, Panama’s spending has not yielded good results. The PISA study, a test of 15-year-olds, places Panama 63rd out of 65 economies. Singapore comes fourth. More serious are weak institutions. Singapore is reckoned one of the world’s least corrupt countries. Panama, in contrast, is not even the cleanest in Central America. Doubts about the rule of law have already hurt the country. Some foreign construction firms did not bid for the Panama City metro contract, fearing the tender was rigged.

 In June a posh part of Panama City, where Donald Trump is building a 70-storey hotel and residential complex, was flooded with sewage because planning laws had been ignored. The biggest long-term worry is that the Panama Canal Authority, an autonomous state agency admired for its efficient operation, could be captured by the government and run as a short-term cash-cow.

 Unless Panama cleans up its government, it runs the risk of becoming the next Mexico rather than the next Singapore.