Panama Sovereign Fund
Latin Americans seeking a stable place to deposit funds have for decades relied on Panamanian banks. Panama itself may soon become a lender to major borrowers at home and abroad, through the creation of a sovereign wealth fund.
Oil-producing countries typically create these funds, which let them lend excess earnings productively, when prices are high. Meanwhile, a sovereign wealth fund can act as a reserve, from which the country draws funds during times of low prices, instead of incurring debt.
Panama has no oil. But it expects to have annual revenues of as much as $6 billion, once the expanded canal starts operations in 2015. This would be around $3 billion more than the canal currently produces - and more than the government could effectively spend in a given year.
The International Monetary Fund is advising Panamanian Economics and Finance Minister, Alberto Vallarino, on the viability of the project.
- Financial advisors