Overcoming Income Inequality in Panama

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By Oliver Kwai Ben

The income disparity between the rich and the poor can be seen from “Punta Paitilla” and “Boca La Caja.”

As I watch the local news, I visualize how income inequality has been amazingly rising in my country. Interestingly enough, Panama occupies one of the top positions of high-income inequality in Latin America. In fact, the small size of 31 miles from Pacific to Atlantic coast makes the contrast between the rich and the poor.

As an example, we can find that there is a notorious contrast between a wealthy and a poor town near the Bay of Panama. On the one side, we have “Punta Paitilla,” an affluent and exclusive sector surrounded by enormous skyscrapers, fancy shopping malls, and fine restaurants where you find the finest caviar. This sector is commonly resided by rich chief executive officers from top-notch companies and wealthy families that have acquired upscale properties.

On the other side, there is “Boca La Caja,” a nearby town where houses cram onto every available patch of land, bathrooms are built directly over the sea, and household waste of all sorts is dumped in there too. Homes are concrete blocks with zinc sheet roofs, some with metal sheeting under the thatch to keep the rain out. Despite the poverty, the residents of this town strive to be employed as carpenters, builders, and masons, housemaids, and cashiers.

The good news is that there are some signs of progress. The town has its own small hospital; several schools have been opened to offer education to local kids. Additionally, power has been also taken into account. For instance, the government has been installing electricity panels and water systems to supply the resource.

Finally, the World Bank recognizes that inequality in Panama is due to fall a little, partly thanks to new social programs including a $100-per-month pension for the elderly poor, and a universal scholarship for children.

The latter program might boost school enrollment in the suburbs, where in secondary school stood at about 30% according to a survey from a couple of years ago. Action is urgently required: the Bank says that in Panama’s indigenous areas, 85% live in “extreme poverty”, meaning they can’t afford enough calories for a normal diet. In other words, it is time for the wealth to be shared.

Works Cited

Gray, George. “Inequality Is Stagnating in Latin America: Should We Do

Nothing?” The Guardian. The Guardian, 25 Aug. 2014. Web. 24 Mar. 2015.

Watson, Thomas. “Inequality in Panama.” The Economist. The Economist

Newspaper, 17 June 2013. Web. 24 Mar. 2015.

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11 responses to “Overcoming Income Inequality in Panama

  1. I really liked how your article included a detailed visual description of the inequality plaguing Panama that allows readers to imagine the reality for the hundreds of thousands of impoverished people. While it is promising that such new social programs that you mention are being implemented, I think that it is important to consider the impact of external powers in prolonging Panama’s economic and social issues. For example, the United States has a controversial history of interference in the country which undoubtedly has impacted its development. Ultimately, a multi pronged approach must be adopted in seeking to aid Panama that addresses both internal and external factors at their core. Such a broad attack on inequality is difficult to execute, however, due to high levels of corruption and inaccurate information.

    Liked by 3 people

  2. Very interesting article with good comparisons, it is nice to hear from locals on how they visualize their country especially because online web sites and touristy sites only talk and show the good things and never mention the poverty, danger or other necessary information that people want to be exposed to

    Liked by 1 person

  3. This is harsh reality of growth countries. I hope it evens out over time as many due or at minimum raise the lower class up higher, even if they aren’t closer to the upper class.

    Liked by 1 person

  4. yangchang2015

    Income inequality is one of the biggest social concern nowadays and it should be solved as one of the essential step for development. If the poor can’t get ricer and improve their life, then the point of development isn’t that important after all.

    Liked by 1 person

  5. Oliver, great job on including so much information about Panema in such a short essay. I was amazed at how much information you included in the minimal amount of words. I was also pleased by your visual description of Panema. It gave me an insight about how Panema looked like and the picture included helped me a lot as well. It seems like there’s quite a bit of problem in Panema regarding income inequality. I know you have included some solutions which the government is working on but I’m curious if there are anything other than the basic benefits of building hospitals, giving education and providing electricity. What can you do at a personal level? Not trying to be critical, just curious! Other than that great job once again!

    Like

  6. husseinelsadek

    I think such income inequality and other similar economic issues, such as poverty, should be wholly credited to whatever economic system that country operates under. We should neither blame the poor, the corporations nor the people that work for them. As long as capitalism exists, there will always be some kind of economic inequality and injustice. “Development”, as I have learned in my Modern Africa History course, only serves the purpose of increasing production and means of profit to benefit the people who are powerful enough to steal such profits from those who deserve it.

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  7. Over the years of traveling around to different cities, I have noticed that this is a very common city structure. Governments should allocate more of their GDP to helping the parts of the city that are in need. The elderly pension rate and the scholarship for children are a good investment to the city of Panama. However, these subsidies are costly and should be funded by a sustainable source of income.

    Like

  8. lilyywx

    Different countries have already taken various actions to narrow the gap between wealth and poverty. American president Obama has already pay attention to the impact of technology, greater competition, slashed taxes on the rich, limited investment in public goods, a lagging minimum wage, and weaker unions.
    Similarly, Colombia has successfully shifted to less than a quarter of its labor force working on farms. Those who don’t and earn a high income get much of the country’s spoils. In this article, the author introduces how Panama overcome income inequality, which offers another example of narrowing the gap between wealth and poverty. In my opinion, every country should pay enough attention to the issues like income equality.

    Like

  9. Income inequality gap has been increasing, and there is no sign of it ending. But where are the issues people are facing in Panama coming from? I always try to look at world issues from a different angle. A great majority of the time the issues are deeper than income inequality. Politics, in most instances seem to be where the issues are traced back to. After all, politics who gets what, how much they get, and when they get it. I feel people are often too quick to blame the rich for not sharing their wealth, but in reality most countries’ economies rely on the monetary input that the wealthy people have. In addition most people that are millionaires, are self-made millionaires. The percentage of people who inherit a large amount of wealth is quite small. So why shouldn’t millionaires be rewarded for working hard? They worked hard so now they should be able to relax and live their lives the way they want to. I hope one day I will be able to have a quiet relaxing comfortable life, because I work hard, study hard, and I hope I will get to relax hard. I feel like most people invest in college and their education due to believing in the philosophy of hard work paying off, People who are able to achieve high-incomes should not feel guilty for their success. Income inequality is an issue but we need to make sure we are not quick to anger with the wrong people. People who make the key decisions of who gets what, how much, and when should be the ones who are held to a higher accountability for the policies they create and pass.

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  10. Dear Oliver,

    You have painted a deep picture of life in Panama. Within one picture, we can see so many different pictures and images of the same country. We could also see many similar pictures in other countries around the world. An important question is what can be done to reduce this great economic disparity?

    ~Professor Myra Chaudhary

    Liked by 1 person

  11. Dear Professor Myra,

    Thank you for your comment. I also think that we can see scenarios like this in many other nations, specially Latin American countries. Income inequality is indeed an issue that is affecting not only Panama but many developing and even developed countries around the world. This issue is mainly due to the big disparity in income between the rich and the poor. To alleviate this economic problem, I would suggest private companies and government to come to an agreement to promote more jobs. If more jobs are open, low-income individuals will benefit from having a job. They will be able to make some money and increase their living conditions. As I mentioned in one of my briefings, big and wealthy companies can provide raw materials/resources such as wood and metal to poor families so they can start their small business by selling goods, say furniture to make some money for their livelihood.

    Additionally, education plays a significant role in here too. Most people have difficulty finding jobs because they most likely don’t have the necessary knowledge to perform the job. For this reason, ministries of education from all countries with huge income disparities should incentive students to get an education in order to succeed in life. This can be done with local programs in small towns and communities, where most of the students drop out from school.

    Like

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