The Colon Free Trade Zone

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PANAMA- OUTLINE I. Background A. Summary 1. One of the fastest growing economies in Latin America over the past decade. 2. Panama economy has improved in the most recent years. 3. Panama is developing highly in the services sector. The services sector influences 75% of their overall GDP. 4. Panama Canal strongly influences strengthening of overall economy. 5. The Colon Free Trade Zone (CFZ) also has a strong influence on the strengthening of the overall economy. 6. The main cash crops produced in the country are bananas, corn, coffee and sugar. B. Economic Expansion and Formation 1. 1980’s they had political instability, economy was slow and had large public debt and fiscal deficits. a) International institutions provided…show more content…
Polices A.Economic Policies 1. Government promoted economic growth over last decade. a) Used open market policies. b) Supported free trade. c) Encouraged foreign direct investment 2. New policies implemented to boost economy. B.Monetary Policies. 1. Panama’s currency is called Balboa. 2. No central bank or issuing of paper currency. a) Cannot adjust exchange rate. (1) Government cannot control inflation. 3. Inflation growth lead to Panamanian government minting own coins to keep public spending. C.Fiscal Policies 1. Fiscal reform packages signed. a) Goals (1) Simplify tax collection, Increase revenue, and attract investment. (2) Broadened tax base, reduce number of tax brackets, lowered income rates. b) Outcome (1) Provided funds
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