Panama’s fixed-line teledensity is well below average for the region, and the number of lines continues to fall as customers adopt mobile-only solutions for making calls and for internet access. Competition remains limited in the broadband sector, where the incumbent CWP has resisted unbundling its local network and as a result has secured a virtual monopoly in the delivery of DSL access. The only cross-platform competition is from cable modem and WiMAX services. On the other hand, the mobile sector has flourished in recent years. The Autoridad Nacional de los Servicios Públicos (National Authority for Public Services) is the telecoms regulator in Panama.
Panama’s dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism and Panama is a center for offshore banking.
Panama’s transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $37 billion in 2016 because of excessive government spending and public works projects. Future growth will be bolstered by the Panama Canal expansion project that began in 2007 and was completed in 2016 at a cost of $5.3 billion – about 10-15% of current GDP. The expansion project more than doubled the Canal’s capacity, enabling it to accommodate high-capacity vessels.
Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.