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5 Facts About Poverty in Panama

Poverty in Panama
In the past decade, Panama’s economy has been one of the fastest-growing among its Latin American counterparts, its growth largely due to the expansion of the Panama Canal in 2016. Yet, the growth of the economy does not translate to the prosperity of the entire country. According to a CIA analysis, Panama’s income distribution is the second-worst in Latin America. This means that even with a growing economy, poverty in Panama is still a significant issue with many Panamanians living under the poverty line.

Though the Panamanian government allocates funds to education and social programs, poverty continues to be a significant issue in Panama. Poverty is more significant in certain areas of the country, highlighting the economic inequality within Panama. Factors such as ethnicity, income level and education level all hold influence over one’s access to basic services and opportunities such as education and health care. Here are five facts about poverty in Panama.

5 Facts About Poverty in Panama

  1. Panama’s urban and rural areas have a large wealth disparity: According to the World Bank, 31.94% of the entire population of Panama lived in rural areas in 2019. These areas rarely see the benefits of the recent boost in economic activity, as 27% of the rural population lives in extreme poverty in comparison to 4% in urban areas.
  2. The national poverty rate is decreasing, but it is still high: In 2005, the national poverty rate of Panama was 38.3%. In 2016, the figure dropped to 22.1%. Although the poverty rate is seeing a downward trend, it is important to put these figures in perspective: over one in five Panamanians is living in poverty.
  3. Poverty affects indigenous people in Panama in particular: Seven indigenous groups exist in Panama and the government often overlooks their rights, such as the rights to their territories. Poverty is especially dominant in rural areas that include mostly indigenous populations. In fact, 86% of the indigenous population lives in poverty and more than 90% cannot meet basic needs.
  4. There is a significant gap in health care access: Rural areas often lack the resources to give Panamanians equal access to health care. As indigenous people largely populate rural areas, they often have 11 fewer years in life expectancy than the overall population, at 67.75 years and 79 years respectively.
  5. Some cannot easily obtain education: Because of better access to resources and job opportunities, urban populations are the most educated and enjoy comparatively affluent and healthy lives. Meanwhile, non-indigenous rural poor are more likely to escape poverty through labor migration from rural to urban areas. However, rural areas lack the schools and resources (such as internet connection) to educate their children. According to the World Bank, the gross enrollment rate at primary schools in 2017 was about 87% of the figure in 2007.

The COVID-19 Pandemic and Unemployment

There is a sharp difference between the rich and the poor in Panama. In 2017, the top 20% of the population generated 54.2% of the income, while low-income communities had high poverty and unemployment rates. One such community is Colón, a coastal city in Panama that has a 50% unemployment rate. There, inhabitants struggle to pay rent as a result of Panama’s building boom.

Panama’s economy relies heavily on global trade through the Panama Canal as well as its service section, which makes up 75% of the country’s GDP. Both saw a sudden drop in activity as a result of the ongoing COVID-19 pandemic. As a result, the country expects to see a rise in unemployment and poverty rates, reversing the Panamanian government’s push to improve poverty rates.

Reducing the Poverty Rate

Though expectations are that Panama’s poverty rate is going to rise due to the COVID-19 pandemic, the overall trend appears to be positive. From 2010 to 2018, the percentage of the population living under $3.20 USD per day halved, dropping from 10.7% to 5.2%. There has also been an increase in secondary education among rural and indigenous communities. Panama’s $326 million portfolio oversees five active projects that push to improve social protection, governance, disaster risk management, wastewater management and support for the Indigenous Peoples Plan. With economic growth and government policies, Panama has made progress in reducing poverty in recent years.

The government hopes that its continued and further investment in infrastructure and social programs will foster prosperity within the general population through increased opportunities in education and jobs, improving the overall poverty rate of the country and among the poor, rural population.

SOS Children’s Villages International

SOS Children’s Villages International is a nonprofit organization that operates in Panama, fighting poverty through assisting children. At each of its four locations – Panama City, Davíd, Colón and Penonomé – the organization supports the youth population by providing daycare, education, vocational training, playgrounds and sports facilities. In the case that children do not have a home to stay at, the organization provides families for them to stay with. By providing these means of assistance, the organization hopes to decrease the child labor that is prevalent in the region as a result of extreme poverty. With education more accessible and families less financially burdened, the organization provides crucial resources to improve poverty in both rural and urban areas of Panama.

SOS Children’s Villages International has been operating in the capital city of the Chiriquí province, Davíd, since 1999. Davíd is a city with 180,000 inhabitants and its population is mostly reliant on its agricultural sector. However, 34.6% of the population lives in poverty, more than 4,000 children in the province engage in child labor and 58% do not attend school. The organization has helped the children in this province by providing 13 SOS houses for them to live in, assisting them with education and other basic necessities.

While poverty in Panama is a significant issue, it has managed to reduce it in recent years. With continued attention by Panama’s government and organizations like SOS Children’s Villages International, the country should be able to continue its progression in making poverty a thing of the past.

– Mizuki Kai
Photo: Flickr

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Reducing Poverty in Malawi Through Irrigation

reduce poverty in Malawi
In 2016, about 51% of Malawians lived in poverty, an improvement from 65% in 1997. Still, with 76.9% of the population employed in the agriculture industry, frequent droughts and floods are major issues that devastate farmers and Malawi’s economy. Keep reading to learn how irrigation projects are working to reduce poverty in Malawi.

Flood Control and Irrigation Systems

Flood control and irrigation systems funnel floodwater into areas of storage for future use. One system is diversion canals, such as the Red River Floodway in Winnipeg, Canada. The diversion canal prevented 10s of billions of dollars in damage since 1968 and is the second-largest earthmoving project after the Panama Canal. Diversion canals are artificial floodways that send floodwater to ponds, rivers, reservoirs and irrigation systems. Most farmers do not relocate unlike the displacement that a dam causes to locals in the dam’s region. Although the Red River Pathway is a highly ornate design, a basic diversion canal helps indirectly reduce poverty in Malawi and benefits those that crop-damaging floodwaters affect.

The pathways direct flooded water away from homes and crops so that it flows into rivers, ponds and artificial lakes. The pathways directing floodwater that destroy homes and land are a long-term solution to floods and droughts. The downside to these pathways is the unknown cost of infrastructure necessary to accomplish this system as no one, including Malawi, has proposed or implemented major developments in the country.

Infrastructure Development

A prerequisite to water management is infrastructure development to provide stored water from floods to irrigation systems. Pipes allocate water to farmers, whether above or below ground and irrigation systems, such as surge flooding, bring a simple solution to irrigation for a country where only 9% have electricity. Surge flooding is a system of gradually releasing small amounts of water into the land. This allows for better infiltration and less runoff.

Malawi relies heavily on charities and countries for aid, and developmental progress has been slow. The country ranks as one of the least developed countries. Investment in the county’s infrastructure could reduce poverty in Malawi, help the economy grow and diversify into other areas besides agriculture, such as the energy, telecommunications, banking, manufacturing, information technology and tourism sectors. Dr. Saulos Klaus Chilima has been Vice President of Malawi since 2014 and stated a need for change in not only investment in infrastructure development, but also many other areas that are undeveloped. He understood that half of all Malawians, particularly women in rural regions, are in extreme poverty and that an emphasis on development is the key to the country’s future success.

Climatic Effects on the Economy

Climatic changes frequently affect Malawi, though it receives support externally. Recently, the World Bank donated $70 million to Malawi to help it recover from Cyclone Idai, yet external aid is simply a short-term solution. Improving infrastructure to combat climatic changes, such as cyclones, floods and droughts, supports the people of Malawi that have crops that natural disasters easily damage. Floods and droughts destroy crops that more than 80% of Malawians rely on for food and a meager income. One solution to reduce the cycle of flood, drought and famine is through an intelligent design implementing irrigation and flood control across Malawi.

– Lucas Schmidt
Photo: Flickr

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10 Disturbing Facts About Poverty in Panama

poverty in panama
Panama has one of the fastest-growing economies in the world and has made great strides in reducing poverty. However, some have called it a dual economy where some urban areas feel the benefits of trade and commerce but not its most vulnerable populations, including its indigenous peoples. Here are 10 disturbing facts about poverty in Panama.

10 Disturbing Facts About Poverty in Panama

  1. Panama has the second-worst income distribution in Latin America: Although the country is rapidly growing in wealth, not everyone feels prosperity. According to the CIA World Factbook, approximately one-quarter of the population lives in poverty. The richest 20% of the population controls half of the country’s wealth while the poorest 20% control only controls 12% of the wealth.
  2. Poverty in Panama is largely divided along urban and rural lines: The Panama Canal and its related sectors bring in more than 30% of the country’s annual economic growth through port activities alone. The total internationally-focused service sectors account for more than 60% of the overall GDP. However, 21% of the population still makes its living in agriculture and does not see wealth that internationally-focused services generated. Indigenous people who have limited access to resources and basic services largely inhabit rural areas. The Panama government, though, is working to improve access in these areas. Panama’s World Bank portfolio is $435.59 million USD, which includes seven active projects on social protection, governance, sustainable production, disaster management, wastewater management and indigenous peoples protection.
  3. The average life expectancy is much shorter for indigenous people: There is an 11-year difference in life expectancy between indigenous people and the general population. While the average life expectancy for the overall population is 79 years of age, the life expectancy for indigenous men and women who live in their original territories is 67.75 years.
  4. Location largely determines access to health care: Rural areas often lack medical infrastructures such as access to doctors and hospitals. This, as well as extreme poverty, takes a toll on the health of indigenous populations. Infant mortality rates among indigenous people are four times higher than in urban Latino populations and 75% of Panama’s malnourished indigenous and non-indigenous children live in rural areas. To combat this, the Panama government has deployed its Coverage Extension Strategy by sending out mobile medical units providing basic care to 149,028 people from 47 poor rural communities. According to the World Bank, by 2014, 96% of children under the age of one received full vaccinations compared to 26% in 2010.
  5. The maternal mortality rate is much higher for indigenous women: The rate of maternal mortality for indigenous women living in their territories is five times higher than the national average. Nationally, the maternal mortality rate is 80 per 100,000 births, but for indigenous women, the rate is 462 per 100,000. Panama’s Coverage Extension Strategy has also been providing maternal health care with its mobile units by increasing access to prenatal controls. In 2010, only 20% of poor rural women had access to prenatal controls. By 2014, the number jumped to 86% of pregnant women in these communities receiving health care.
  6. Rural Panamanians largely lack access to education: A lack of infrastructure in rural areas makes it difficult for its largely indigenous population to gain access to a good education. While, in the year 2000, approximately 5.5% of non-indigenous adults could not read, 37.7% of indigenous adults were illiterate. School attendance is also lower, with 78.7% of indigenous children in school compared to 96.8 non-indigenous. However, according to the CIA World Factbook, there has been an increase in secondary schooling led by female enrollment in rural and indigenous areas, which will likely help to alleviate poverty.
  7. Region largely determines access to information and communications technology (ICT): Access to communications technology such as computers and the Internet can be vital in improving education and opportunity. However, private companies that see little profit in creating the infrastructure that remote and impoverished regions need often pass rural areas over.
  8. Indigenous people’s rights are at risk: According to the International Work Group for Indigenous Affairs, in 2016, Interior Minister Milton Henríquez told the leaders of all the country’s indigenous congresses and councils that the country would only recognize the five original comarcas, or tribal regions, preventing the leaders of 30 indigenous territories from advocating for themselves in further consultations and negotiations.
  9. Indigenous tribes’ territories are being encroached upon: The Barro Blanco hydroelectric plant in the Ngäbe-Buglé territory is undergoing implementation without the tribe’s consent. Communities experienced forcible eviction from the project area, which then flooded homes, farmland and sacred sites. Additionally, many tribes have begun using drones to keep an eye on their rainforest territories and prevent illegal logging and mining on their land.
  10. The need for water in sustaining the canal often supersedes the needs of the rural poor: The Panama Canal requires the release of approximately 52 million gallons of freshwater daily. The water comes from two reservoirs, which also provide water for the city. The prioritization of water for the canal ignores the need of farmers, who, beginning in the seventies, were viewed as threats to the canal instead of partners in watershed management. Though improving water management is important, the poor have reaped few of the benefits and many of the negative consequences of these policies.

Looking Ahead

Although Panama is a wealthy nation, not everyone feels prosperity. Rural and indigenous people often lack access to education, health care and political efficacy.

While this list may look grim, Panama has done much to fight poverty. From 2015 to 2017, poverty in Panama has declined from 15.4% to 14.1% and extreme poverty has decreased from 6.7% to 6.6%. According to the CIA World Factbook, from 2006 through 2012, poverty overall decreased by 10 percentage points.

Although Panama has made great strides in reducing poverty, this list shows that there is always room for improvement. Overall, the country has the potential to bridge the income inequality gap and make itself an equitable society for all, regardless of class, region or ethnicity.

– Katharine Hanifen
Photo: Flickr