Social Impacts
Panama’s Window of Economic Opportunity
Panama’s economy has experienced explosive growth since the country regained sovereignty of the Panama Canal in 2000, resulting in a doubling of the country’s income per capita over the last decade.1 This reduction in poverty is largely attributable to farmers from rural areas relocating to Panama City for unskilled labor jobs in the construction industry.2 Shockingly, construction accounts for 36% of Panama’s economic growth between 2005-2015, and 44% of all growth between 2010-2015.3 The unskilled construction job opportunities in Panama City provide, on average, a five-fold increase in income over the low-productivity fishing and agriculture work in which these workers were engaged prior.4 However, unskilled construction work does not lend itself to career advancement and overall economic development. Rather, this short-term employment of an unskilled work force to construct the infrastructure for a modern economy provides only a window of opportunity for Panama’s impoverished citizenry to rise above the entrenched poverty endemic of Central America. But that window of opportunity is closing. Growth is decelerating and international trade sanctions have reduced trade volumes passing through Panama’s Colón Free Trade Zone.5
“The key challenge for Panama is to identify what drivers of growth will take over as the spearheads of the economy once the current boom subsides.”6
Now that the task of constructing the infrastructure of a modern economy has been largely been accomplished, the modern service sector operating on that infrastructure demands highly-skilled workers rather than unskilled laborers. This shift in job opportunities threatens to roll back the significant social progress achieved in Panama over the past two decades.7 Numerous studies have been conducted to identify the optimal paths for transitioning the construction growth boom into sustainable economic growth by promoting more complex economic activities across all provinces of Panama.8 These studies confirm that a diversified economy is a strong economy and that diversification is achieved through building upon the capabilities already possessed by the population.9 A 2016 study of Panama’s economy conducted by Harvard University’s Center for International Development analyzed the productive capabilities of each province and identified fishing as the top-ranked activity for industrial diversification in Colón Province – the ideal location for PanaSea’s aquaculture facility.10 Moreover, production of sea cucumbers is, by far, the most economically productive aquaculture endeavor in the world.11:
- Sea Cucumber (Badionotus) (dry weight at 7% of wet weight) – US$ 132–358 / kg 11
- Sea Cucumber (Badionotus) (wet harvest weight) – US$ 9.24 – 25.06 / kg
- Cobia – US$ 8.62 / kg 12
- Salmon – US$ 6.90 – 9.97 / kg 13
- Bighead Carp – USD 0.60-0.90 / kg 14
Crucially, sea cucumber production is environmentally regenerative/restorative rather than destructive.15 And, sea cucumber hatchery work requires specialized training, enabling local fishers to increase their work value through provided training. The economic opportunity that sea cucumber hatcheries along the Caribbean Coast would provide for local fishing populations is substantial and Panama is the ideal place to start. PanaSea will be the first open-ocean commercial hatchery in the western hemisphere and currently holds the only concession in Panama.
The undeveloped Caribbean coast of Central America provides an ideal arena for sea cucumber aquaculture. Sea cucumber hatcheries and processing plants along this coast can provide a lucrative alternative livelihood for coastal communities, a much-needed upgrade to the existing low-value fishing trade. Specifically, an internationally workshop investigating the status of sea cucumbers in the Caribbean hosted by INFOPESCA in 2014 identified the four-sided sea cucumber, Isostichopus Badionotus, as “the most promising candidate for aquaculture in the Caribbean given its high market value, natural densities in the wild, and the wide range of habitats it occupies. In addition, its reproductive biology has already been studied and hatchery-reared juveniles have been consistently produced under controlled conditions in Mexico.”16
Sea cucumber cultivation provides an ideal opportunity for Caribbean coastal fishing communities to sustainably transition out of poverty by adding to workers’ existing fishing knowledge and producing a higher-value product while restoring the marine ecosystem. And, the Colon Province of Panama is the ideal location along the Caribbean coast for initial development of sea cucumber aquaculture cultivation.
1-3, 5-7 – Panama beyond the Canal: Using technological proximities to identify opportunities for productive diversification, Page 2, October 2016 (Revised March 2017), web-link
4 – Appraising the Economic Potential of Panama: Policy Recommendations for Sustainable and Inclusive Growth, Page 11, May 2017, web-link
8-9 – Appraising the Economic Potential of Panama: Policy Recommendations for Sustainable and Inclusive Growth, Page 11, May 2017, web-link; Special Economic Zones in Panama: A Critical Assessment, October 2016 (Revised January 2017), web-link
10 – Panama beyond the Canal: Using technological proximities to identify opportunities for productive diversification, Pages 49-54, October 2016 (Revised March 2017), web-link
11 – Market price trends of Latin American and Caribbean sea cucumbers Inform fisheries management, December 2017, web-link
12 – Economic analysis of cobia (Rachycentron canadum) cage culture in large-and small-scale production systems in Brazil, September 2015, web-link
13 – Price volatility continues to affect farmed salmon sector as new records are breached once again, October 2018, web-link
14 – Cultured Aquatic Species Information Programme, January 2004, web-link
15 – These Bizarre Sea Creatures May Help Save Coral Reefs—If They Survive, February 2018, web-link
16 – Global sea cucumber fisheries and aquaculture FAO’s inputs over the past few years, March 2015, web-link