Report on Poverty Eradication Efforts in Panama and Alignment with Sustainable Development Goals (SDGs)

Introduction: Economic Growth and Persistent Poverty

Panama, a significant global trade hub centered around the Panama Canal, demonstrates a paradox of economic prosperity alongside substantial poverty. This report analyzes the nation’s efforts in poverty eradication, with a specific focus on their alignment with the United Nations Sustainable Development Goals (SDGs). While economic indicators are strong, significant disparities exist, particularly impacting rural and indigenous populations. The national poverty rate in rural areas stands at 41.4%, compared to 11% in urban centers, with 32.8% of children experiencing multidimensional poverty. This analysis frames Panama’s strategies and challenges within the context of SDG 1 (No Poverty), SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).

Progress Towards SDG 8: Decent Work and Economic Growth

Panama’s economic expansion has been a primary driver in its poverty reduction strategy, directly contributing to the objectives of SDG 8. The nation’s economic growth has significantly surpassed regional averages, fostering improved labor conditions and employment opportunities.

Key Economic and Labor Market Achievements (1990-2019)

• The economy grew at an average annual rate of 5.8%, compared to a regional average of 2.6%.
• Mean hourly real wages increased by 60%.
• The national employment rate rose from 48% to 63%.
• Women’s participation in the labor force increased from 34.1% to 55.5%.

Direct Impact on SDG 1: No Poverty

This sustained economic growth has led to a remarkable decrease in the national poverty rate, which fell from 50.2% in 1989 to 12.9% in 2021. These gains illustrate a direct correlation between achieving SDG 8 and making progress on SDG 1.

Social Protection Programs and SDG Contributions

The Panamanian government has implemented innovative social protection programs to address poverty and inequality, aligning with multiple SDGs.

The Universal Educational Social Assistance Program (PASE-U) and SDG 4 (Quality Education)

Launched in 2020, the PASE-U program is a strategic initiative designed to achieve SDG 4 by providing financial incentives to students to combat educational attrition. Its primary objectives are:

• Prevent school dropout.
• Increase school enrollment and attendance rates.
• Strengthen academic performance.

The program provides annual government allowances of 270 PAB for primary students, 360 PAB for pre-secondary students, and 450 PAB for secondary students.

The Panamá Solidario Program: An Integrated SDG Response

The Panamá Solidario emergency program was a critical response to the COVID-19 pandemic, designed to support multiple SDGs simultaneously. By prioritizing the purchase of goods from local producers, the program stimulated the economy while providing essential aid.

• SDG 1 (No Poverty) & SDG 2 (Zero Hunger): The program delivered over 6 million bags of food and distributed 2.1 million physical bonds and 4.7 million digital vouchers, providing a crucial safety net for over 1.6 million Panamanians.
• SDG 8 (Decent Work and Economic Growth): It sustained local economies by ensuring continued demand for products from agribusinesses and agricultural producers.

Challenges in Achieving SDG 10: Reduced Inequalities

Despite progress, Panama faces profound challenges related to SDG 10. The country’s income and geographic disparities remain among the most severe in the region, hindering equitable development.

Income and Geographic Disparity Statistics

• Panama ranks third in South and Central America for income disparity.
• The poorest 20% of the population earns only 1.2% of the total labor income.
• The wealthiest 20% of the population claims 32.7% of the total labor income.
• Poverty is heavily concentrated in rural areas (41.4%) compared to urban areas (11%).

Vulnerability of Indigenous Communities

Indigenous communities are disproportionately affected by poverty and inequality. A staggering 69.4% of the indigenous population lives in poverty, with limited access to basic services. This reality undermines progress not only on SDG 10 but also on SDG 1 (No Poverty), SDG 3 (Good Health and Well-being), and SDG 4 (Quality Education) for this segment of the population.

Future Directions and Strategic Recommendations

The World Bank Group’s Poverty and Equity Assessment for Panama provides a clear roadmap for addressing the structural barriers to shared prosperity. Achieving the SDGs requires a concerted focus on policies that promote equity and resilience.

Policy Priorities for Sustainable Development

1. Expand access to essential services, including health care and education, particularly in rural and indigenous territories.
2. Improve the quality of jobs and ensure fair wages to translate economic growth into improved living standards for all.
3. Enhance human capital by investing in education and skills training relevant to the modern economy.
4. Promote household resilience to protect vulnerable populations from economic and environmental shocks.

Addressing the structural challenges that perpetuate inequality is essential for Panama to transition from economic growth to shared prosperity and fully realize its commitment to the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on poverty eradication in Panama addresses several Sustainable Development Goals (SDGs) by discussing the country’s economic progress, social programs, and persistent challenges with inequality. The following SDGs are relevant:

• SDG 1: No Poverty – This is the central theme of the article, which focuses on Panama’s efforts and challenges in poverty eradication, citing specific poverty rates and programs designed to alleviate it.
• SDG 4: Quality Education – The article mentions the Universal Educational Social Assistance Program (PASE-U), which directly aims to improve educational outcomes by preventing school dropouts and increasing enrollment.
• SDG 8: Decent Work and Economic Growth – The article extensively discusses Panama’s rapid economic growth, job creation, rising employment rates, increased wages, and higher labor force participation for women as key drivers of poverty reduction.
• SDG 10: Reduced Inequalities – The article explicitly highlights the significant income and geographic disparities in Panama, noting the large gap between the rich and poor and the higher poverty rates in rural and indigenous communities.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the information provided, several specific SDG targets can be identified:

1. Under SDG 1 (No Poverty):
   • Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions. The article supports this by stating that the poverty rate in Panama “plummeted from 50.2% in 1989 to 12.9% in 2021,” which is a reduction of more than half. It also mentions that “32.8% of children grow up multidimensionally poor,” highlighting a specific dimension of this target.
   • Target 1.3: Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable. The article details two such systems: the “Universal Educational Social Assistance Program (PASE-U)” and the “Panamá Solidario emergency program,” which supported “more than 1.6 million Panamanians.”
2. Under SDG 4 (Quality Education):
   • Target 4.1: By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education. The article describes the PASE-U program, whose objectives are to “prevent school dropout, raise enrollment and school attendance rates,” directly contributing to this target by providing financial incentives for students from primary to secondary school.
3. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances. The article notes that Panama’s economy “grew at an average rate of 5.8% annually” between 1990 and 2019, significantly outpacing the regional average.
   • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. The article points to progress in this area by citing that the “employment rate rising from 48% to 63%,” “mean hourly real wages increasing by 60%,” and “women’s labor force participation increasing from 34.1% to 55.5%.”
4. Under SDG 10 (Reduced Inequalities):
   • Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average. The article highlights the challenge related to this target by stating that “the poorest 20% earning just 1.2% of the total labor income, while the wealthiest 20% claim 32.7%.”
   • Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status. The article points to the need to address this target by describing geographic and ethnic disparities, where “poverty rates being higher in the rural areas” and “Indigenous communities face even greater challenges, with 69.4% living in poverty.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several quantitative and qualitative indicators that can be used to measure progress:

• For SDG 1 (No Poverty):
  • Proportion of population below the national poverty line (Indicator 1.2.1): The article provides specific figures: a decrease from 50.2% in 1989 to 12.9% in 2021. It also gives disaggregated data: 41.4% in rural areas versus 11% in urban areas.
  • Proportion of children living in multidimensional poverty (related to Indicator 1.2.2): The article states that “32.8% of children grow up multidimensionally poor.”
  • Proportion of population covered by social protection systems (Indicator 1.3.1): The article mentions that the Panamá Solidario program supported “more than 1.6 million Panamanians” and delivered “more than 6 million bags of meals.”
• For SDG 4 (Quality Education):
  • School enrollment and dropout rates (implied indicators for Target 4.1): The PASE-U program’s objectives to “prevent school dropout, raise enrollment and school attendance rates” imply that these are key metrics for its success.
• For SDG 8 (Decent Work and Economic Growth):
  • Annual growth rate of real GDP (related to Indicator 8.1.1): The article states an “average rate of 5.8% annually” between 1990 and 2019.
  • Employment rate and labor force participation rate (related to Indicators 8.5.2 and 8.6.1): The article provides data showing the “employment rate rising from 48% to 63%” and “women’s labor force participation increasing from 34.1% to 55.5%.”
  • Average hourly earnings (Indicator 8.5.1): The article mentions that “mean hourly real wages increasing by 60%.”
• For SDG 10 (Reduced Inequalities):
  • Income share held by the lowest and highest quintiles (related to Indicator 10.1.1): The article provides data that “the poorest 20% earning just 1.2% of the total labor income, while the wealthiest 20% claim 32.7%.”
  • Poverty rates by location and ethnicity (implied indicators for Target 10.2): The article cites poverty rates of 41.4% in rural areas, 11% in urban areas, and 69.4% among indigenous communities.

4. Summary Table of SDGs, Targets, and Indicators

Source: borgenproject.org