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Panama: health and education services

Monday, December 1, 2014

Nearly half of a big 2015 budget will go to Panamanian infrastructure projects and public services, especially health and education.

Much of the amount destined for social services will be spent on government employees.

But investment in education and health will also include construction of new facilities, purchases of equipment and materials, and outsourcing of specialized services.

The $19.7 billion budget, the first of the administration of President Juan Carlos Varela, represents an increase in government expenditures, which is nearly double the estimated growth of the Panamanian economy.

The government will spend 11% more in 2015 than this year, while GDP growth will be en estimated 6%.

A commitment to social spending was a major plank in Varela’s 2014 election campaign.

Varela was elected president in May of last year.

Panama during the past decade has had the highest growth rate in Latin America, with annual GDP growth, which – except for this year and the recession years 2009 and 2010 – never fell below 8%.

But Panama lags various Latin American countries, when it comes to social development.

Panama did not participate in the 2012 PISA test, after finishing 69th out of 74 countries in the 2009 exam.

The PISA program, administered by the Organization for Economic Cooperation and Development, measures competence in reading comprehension, mathematics and science among grade nine students.

By contrast, Chile, Mexico, Costa Rica and Uruguay finished between 20 and 25 positions above Panama.

Panamanian clients of the public health-care system for their part have in recent years protested what they say is poor quality of service.

When it comes to income distribution, Panama is one of the ten countries in the world with the lowest levels of equality, according to United Nations data.

The top 10% of Panamanians earn 50 times more than the 10%, with the lowest earnings.

This is more than the double the level of inequality of Mexico, Costa Rica, Peru or Chile, and nearly five times greater than that of Uruguay.