Without a prepared workforce, no economy can sustain its growth in the long term. Although some deny the importance of economic growth, the data shows the opposite: countries that grow the most tend to be less unequal because more people manage to integrate into the production process. A clear example is the large number of protected careers and an unattractive immigration policy, which hinders the arrival of foreign talent and human capital. This excess of bureaucracy costs the country more than 4 billion dollars annually, generating an asphyxiating interventionism that has caused many companies to close, move abroad, or refrain from investing. In short, economic growth is not an end in itself, but it is a necessary condition to improve all social indicators. Panama needs to maintain that dynamism if it aspires to join the group of developed countries. And if the country does not act decisively, it risks losing its demographic window of opportunity and its ability to sustain growth. Economic growth depends not only on GDP figures, but also on the quality of institutions, economic freedom, and the strength of human capital. An urgent reform of education, labor, and regulation is needed to restore dynamism and competitiveness to the Panamanian market. Otherwise, we will continue to see how a country with so much potential stagnates due to political decisions that prefer control over progress, and protectionism over freedom. The author is a member of the Libertad Foundation. Within the models of economic growth, human capital plays a fundamental role, especially when combined with the use of capital goods (machinery, equipment, infrastructure) and technology. Although the country is not yet facing a demographic crisis, it does suffer from the consequences of a deficient and centralized public education system, which controls over 80% of primary and secondary education. However, the current problem of employability and human capital threatens to thwart that goal. In summary, it is a poverty trap. Panama is going through a sick labor market, with evident symptoms: youth unemployment, growing informality, loss of productivity, and brain drain. Hiring a recent graduate has become expensive and risky in a stagnant economy. The costs of formalizing a company or hiring personnel are so high that Panama has ceased to be an attractive destination for doing business. The consequences are already visible. The most worrying thing is that 70% of the unemployed have secondary or university studies; that is, we are educating young people for unemployment. Faced with a lack of opportunities, many end up in the informal sector, where incomes are low and unstable. Government after government, procedures, regulations, and protectionisms have multiplied. A system that, instead of preparing for the future, seems anchored in the past. To this structural problem is added another: state bureaucracy. In 2024, the average income of an informal worker was 600 dollars per month, but 17% earn less than 100 dollars, and only 1.3% exceed 1,500. According to the National Institute of Statistics and Census (INEC), for September 2025, the country registered an unemployment rate of 10.4% and an informality rate of 47.1%. In addition, informality implies the absence of a contract, pension contributions, access to credit, or labor stability. Furthermore, growth allows expanding access to public services—water, energy, telecommunications—improving efficiency in resource use, raising environmental quality, and increasing life expectancy. Of the unemployed, 44.5% are young people between 15 and 24 years old, precisely those who should be building the new productive generation.
