PANAMA: ECONOMIC INTEGRATION ALTERNATIVES, IMPLICATIONS, AND PERSPECTIVES
Francisco E. Thoumi
Membership in formal economic integration systems has been one of the development policies of Latin American and Caribbean (LAC) countries during the last 30 years. 1 + ̰ Panama has been the most notable holdout from the integration movements in the region. However, joining the Central American Common Market (CACM) has been a subject of debate in Panama during the last 40 years. Indeed, since 1952, Panama has frequently participated in various meetings that led to the formation of the CACM, and later on, in the meetings of the CACM as an observer nation. During the 1960s the CACM Secretariat (SIECA) funded studies of the feasibility and implications of Panama's participation in the CACM. Delgado, de Sola, and Lizano ( 1967) looked at this issue from the perspective of the CACM, and Tamames ( 1966) did the same from the perspective of Panama. Both studies arrived at positive conclusions about Panama's participation. SIECA also studied this issue more recently ( Noriega, 1989) and arrived at similar conclusions.
External political pressures on Panama to join the CACM during the 1960s were strong. SIECA's resolutions frequently invited Panama to do so, stating how convenient it would be for the region and for Panama ( Noriega, 1989, pp. 13-18). After surveying these declarations and Panama's frequent expressions of interest, Noriega ( 1989, p. 25) could not avoid asking in puzzlement "why Panama has not yet incorporated itself into the Central American economic integration scheme, in spite of the genuine efforts of that country and its Central American brothers, particularly during the 1960s." 2 + ̰ This chapter attempts to address that question.
The integration movement in LAC grew strong in the 1960s, encountered many problems during the 1970s, and floundered during the 1980s as the debt crisis induced the LAC countries to cut their imports. During the last few years, formal regional integration systems have been revived: MERCOSUR was