The economic cost of water and its repercussions in Panama

Abstract

It is the most important natural resource that exists on planet earth, generator of life for human beings and nature as an indispensable element of production in all economic sectors, some on a large scale and others on a smaller scale but always present. Panama, a country with an exceptionally privileged position within the American continent, has the particularity of having hydrographic basins along the entire Central Mountain Range, with its many rivers that feed the vast majority of the most outstanding engineering work on the continent, the Canal de Panama. The process of reversal not only of the Canal but of the territories related to it, known as the Canal Zone, generated a change in the Panamanian economy that is promoting the creation of logistics centers through improvements and innovations in the management and movement of containers through growing multimodal transport, the inclusion of new free zones, generating new sources of formal and informal employment in the country. The foregoing indicates the importance of the water resource in the economy of the country in the form of an "S" lying down and again turns Panama into a phenomenon of study by basing the base of its income on a non-mineral good, on the contrary, we are based on the finite good of water as the basis of our economy. The Gross Domestic Product of our country (GDP) has been greatly impacted by the income from the oceanic route since, in compliance with the Torrijos-Carter Treaties, the United States cedes administrative control of the Canal administered by the Anglo-Saxon country since its construction in 1914. So much so, that the income from activities from the Panama Canal and the generated cluster represents a little more than 30% of GDP.