Assignment 1 module 3

Globalization in Panama.

1- Resources that Panama has to offer to the global market

Panama is a country that is full of resources to offer the global market, which is why it has led to
one of the greatest economic growth in the region in recent years. Firstly, the logistics and
commercial role is strongly oriented towards services, which represents more than 70% of the
GDP and 50% of employment is attributed to this sector. It also has important financial and natural
assets, which the latter, with the passing of years it is strengthening itself as an emerging tourist
destination.

Panama's logistics assets such as the Canal, the trans-isthmus railway, the Aeronautical Hub of the
Americas and the portfolio of Special Economic Zones are part of the range of offers that the
nation has for the logistical and commercial development of the global market.

Panama is no longer only considered a commercial country that moves merchandise from ocean
to ocean, it is a platform that facilitates commercial and operational activities of various industry
sectors.

2- Globalization in its beginnings in Panama and its development to the present moment

Talking about Panama is talking about the “Bridge of the World, Heart of the Universe”
and just because they are just a few phrases, they do not carry with them a level of responsibility
that the country has worldwide. This is why we must know the role that the country has played
due to its geographical position, turning it into a transit point from the north to the south.

The ITSMO was the initial nucleus of the conquest and colonization of the colonial era.
Becoming a transit and transshipment bridge for wealth from the Spanish colonies. Its beginnings
date back to 1532, where Panama became the transit site for manufactures that came from Spain
to its colonies throughout America, significantly influencing the economy of this country.

Subsequently, the discovery of gold mines in California during the 1850s had an impact on
growth since one of the highest-income engineering projects for the time was carried out, such as
the ITSMO Transisthmian Railway, which presented an important challenge since that the weather
conditions, yellow fever, malaria among other limitations, but that the planned 77 kilometers that
passed through mountains, lakes and more than 300 bridges were completed. Consequently, this
would be of great help for the construction of the Panama Canal, where work began in 1881, once
again facing challenges that would cost the lives of hundreds of thousands of people, being
stopped and resumed on November 18, 1903 at the time of sign the Hay-Bunau-Varilla treaty.
Resulting in August 15, 1914 when the “Ancón” steamship officially inaugurated the Panama
Canal.

Since then, Panama begins the globalization process with the opening of the Canal,
therefore, it begins to position itself as an attractive country for national and foreign investment
thanks to its privileged location and tax, migration and labor incentives offered by its economic
zones. Today, ITSMO has become one of the main economic capitals of the world, thanks to its
development and sources that allow it to be one of the most developed countries in Latin
America.

3- Advantages of Globalization

The advantages of globalization are given by a process that has encouraged and promoted the
integration of societies through different activities that have been a boost in human development.
They will then be segmented to be explained in detail.

Economic:

 Free trade of goods and services worldwide.

 Reduction in production costs.
 Greater business competitiveness and product quality.
 Technological development that favors production levels and speed.
 Greater job offer in developing countries, since multinationals strategically establish
themselves in them because raw materials and labor are cheaper.

Policies:

 Legislation has been modified at the national and international level in order to encourage
trade, cooperation plans, legal certainty, commercial security, new public policies, among
others.

Cultural:

 Greater cultural exchange thanks to various communication channels.

 Incentive of tourist activity.
 A large number of universal values are shared that transcend borders.

Social:

 Human relationships have been strengthened and have been able to overcome various
limitations, such as distance, thanks to technological development.
 Greater accessibility to exchange and access information of national and international
interest.

4- Disadvantages of Globalization

The disadvantages that stand out as a result of globalization are those that are generating
difficulties in various areas of human development and limiting its momentum, these areas will be
explained below:

Economic:

 Developed countries with great potential and economic scope have prevailed over
developing countries with smaller economies. This generates a great economic imbalance.
  In developed countries, unemployment increases because multinational companies open
headquarters in developing countries, where labor and raw materials are cheaper.
 Economic inequality between citizens of a country, since large companies have greater
benefits and financial capacity than those of smaller size and power.
 Depletion of natural resources and raw materials in production processes.

Policies:

Globalization has been a challenge that national and international politics has had to face.
In some cases, the measures taken have not been the most appropriate and, on the contrary,
greater social, cultural and economic inequality has been generated.

Cultural:

 National identity can be negatively affected as a result of developed countries

superimposing their cultures on those of developing countries, through a large commercial
and media drive.
 Minority languages are lost.
 As time passes, many of the native traditions are modified by incorporating new customs,
generally from other countries.

Social:

 Social inequality has limited access and use of various educational, technological and
economic resources in many social groups in poverty.
 Increase in the number of confrontations between social groups that seek to vindicate
their social, religious and cultural values, in the face of those that have been implemented
through globalization.

5- Resource Weaknesses in Globalization

6- Strategies developed by the Country to face Globalization.

- Free trade agreements with the main powers (USA, Europe, China among others)
- Establish strong Government-private company ties, to encourage foreign investment in
the country.
- Better development of communications, implementation of new technologies that allow
the growth of the country at a technological and economic level.
- Development of communication routes, whether maritime transport, railway transport,
among others.

7- Main achievements achieved in the economic, social and financial sectors.

Economic:

Panama has developed different sectors of the economy thanks to the influence of globalization,
among which are:
 - Construction: important investments have been made at the infrastructure level, among
which are the expansion of the Canal, the cleanup of the bay, the expansion of ports,
expansion of road infrastructure such as the metro line, as well as growth of constructions
such as office buildings and urban complexes.
- Transportation and communications: thanks to globalization, Panama has become the Air
Hub of the Americas, led by its main airline such as COPA Airlines, the railway, maritime
transport thanks to the Panama Canal and the technological development of the
telecommunications, since many companies have established their operations centers in
the country.
- Tourism: It is one of the sectors with the greatest exponential growth in recent years,
generating important economic benefits to the nation, thanks to its natural resources, the
growth of the COPA Hub that has allowed the connection of different cities with Panama.
On the other hand, the trade carried out in the Colón Free Zone has allowed the arrival of
foreigners to do business within the country.

Social:

The social development of Panama with globalization has been important, thanks to various
factors such as cultural diversity due to the number of foreigners who have arrived in the country,
which has allowed the population to have contact with different customs, allowing for expanded
knowledge and human development. The educational level has increased due to the creation of
educational institutions as a result of globalization. Today, there are schools and universities with a
greater diversity of languages, careers and study models that benefit citizens. On the other hand,
there is an increase in jobs, salaries and insurance for workers, due to the increase in foreign
investment, the number of companies that reside, and the projects that currently exist, generate
social well-being.

Financial:

The financial sector has benefited from the amount of foreign investment that has arrived in
Panama and the benefits that the country offers in terms of legal security, dollar as the main
currency, investment grade, and permanent economic growth. As well as, its banking system has
become one of the most modern in all of Latin America, offering economic well-being to people
who wish to invest.

8- Current scenario in the face of the challenge of Globalization and scenario of current
activities that allow us to be prepared for a globalized world

At the level of globalization, Panama faces a very important agenda at the level of
competitiveness, which is translated into challenges for not only its current situation, but also
positively affects the future of the nation. This is why among the challenges that arise are:

- The commercial integration of countries, this is because 80% of world trade occurs
between North America. Asia-Pacific, Europe and Oceania.
- Clean production and commitment to the environment, which currently, developing
countries put aside global warming and its prevention, therefore, world powers try to
adhere to those nations where their commitment to caring for the environment be
your flag.
 - Technological development appears as the most determining factor in the face of the
challenge of globalization.
- Adequate education and training, the precarious situation at the educational level has
influenced the development of the country in terms of globalization, since panama has
been in the situation of looking for foreigners due to the low level of qualified labor,
on the other hand, There is no important stimulus for the development of young
people once they finish their secondary education.
- External problems, the case of the Russian invasion, has presented a latent problem
not only in world events, but also nationally, since the repercussions of this tragic
situation have been reflected in the well-being of the population.

9- Conclusions from the Analysis and what recommendations would you make in the face of
these challenges?

To conclude, globalization is a clear description of the current dynamics of the international

economic system, however, this concept brings with it various factors such as the economic,
political, social, technological, environmental and cultural sector, which present both advantages
as disadvantages. Therefore, it is up to the governments to establish legal measures, tariff reforms
and stimuli to develop the aforementioned sectors, and obtain the greatest benefit from them.

Panama at an international level is very well positioned geographically, since the role it has played
in recent years has led to the greatest growth in the region and has directed ITSMO in new roles to
adapt to modern needs, which allow it to strengthen In a certain way, its logistical contribution
and global trade, additionally, in areas such as innovation, emerging technologies, science,
environmental conservation, tourism, among others.

Although, it presents challenges that in one way or another could affect the stability of its main
asset, which is the Canal, but that can be solved with the application of various strategies that help
face these challenges. Among which it is recommended:

- The establishment of free trade agreements or economic relations and political ties
between southern countries, with solid blocs or countries with strong economies,
could be used to expand a broader market, stimulating the local economy, which could
improve employment and obtaining greater tax revenues, on the other hand, among
the positive effects would be foreign investment.
- Foreign investment not only helps the economic development of the country, but also
its technological development, since today modernization is evolving every day and
Panama must be at the forefront of new advances, in order to remain as a globalized
country.
- Environmental conservation plans, among the government's country projects or plans,
should be the creation of programs against the fight against global warming that
would allow the support of developed countries to increase operations within
Panama, as well as stimulate the economy with the ecological tourism, that thousands
of tourists a year are willing to preserve nature and the resources it offers us.
 - At the educational level, the government must thoroughly examine the student
curriculum and adapt it to new trends, allowing the development of young
professionals who will become the qualified workforce and those in charge of leading
the country in the future. Therefore, they must be sufficiently prepared and have all
the necessary resources to adapt to the new technological era and the change
produced by the pandemic that arose in 2020.

In conclusion, Panama has the characteristics of a globalized country, it only needs to correctly
exploit its potential, implementing new business models, platforms for innovation and technology
in continuous improvement, modernizing logistics and commercial activities among others, which
will help the country to safely confront globalization and what it represents.