World Economy

Panama Papers scandal has zero impact on us: Panama’s vice-finance minister


The "Panama Papers" scandal has not hit investment in Panama or its economy, the country's vice-minister of finance said on Tuesday, as the investigative journalists behind the leak published further details of firms sheltering wealth overseas.

"The impact was zero and I think the impact is going to be continuous zero," Eyda Varela de Chinchilla said at a LatinFinance panel discussion in London.

Panama City skyscrapers
Rieger Bertrand | | Getty Images

On Monday, the International Consortium of Investigative Journalists published details of over 200,000 offshore entities in a searchable data base on its website.

The data were part of the 11.5 million files from Panamanian law firm Mossack Fonseca that were first published in April.

Varela said calling the leak the "Panama Papers" was a misnomer, because only 20 percent of the offshore companies named in the data were from the Central American country, with 50 percent associated with the U.S. or former British colonies in the Caribbean.

An activist clutching a suitcase stuffed with fake money demands greater transparency in new legislation on April 13, 2016 in Berlin following the first Panama Papers leak.
Panama Papers sequel reveals details of over 200,000 offshore entities

Arnab Das, head of emerging market macro at Invesco, appeared to concur, saying the huge scale of capital flight overseas was of greater interest that the singling out of Panama, or a particular Panamanian company.

"I think the real story was the stock of assets that have been expatriated from other countries," he said at the LatinFinance forum on Tuesday.

"I suppose if it hadn't been a Panamanian company it would have been some other firm in some other jurisdiction," Das later added.

Latin Americans are typically viewed as low proportional savers. However, Jorge Kogan, a senior infrastructure adviser at CAF, the development bank of Latin America, highlighted that large volumes of wealthier peoples' savings were secreted overseas.

"Maybe the Panama Papers can give some clarity … There is a lot of Latin American money that is being saved, but is not in the official sector," Kogan said at the forum on Tuesday.

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Panama's economy expanded by an annual average of 7.2 percent between 2001 and 2013, more than double the regional average, according to the World Bank. It grew by 6.2 percent in 2014 and 5.8 percent in 2015 and the World Bank forecasts expansion of 5.9 percent in 2016.

Varela told Tuesday's conference attendees that Panama had a diverse economy, to which no single industry contributed more than 20 percent.

"There are a lot of strengths that will maintain us with the same level of growth for the next five years," she said.

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