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USAID/Panama 

Operational Plan 

FY 2006 

June 15, 2006 
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Please Note: 

The attached RESULTS INFORMATION is from the FY 2006 Operational Plan and was assembled 

and analyzed by the country or USAID operating unit identified on the cover page. 

The Operational Plan is a "pre-decisional" USAID document and does not reflect results stemming 

from formal USAID review(s) of this document. 

Related document information can be obtained from: 

USAID Development Experience Clearinghouse 

8403 Colesville Road, Suite 210 

Silver Spring, MD 20910 

Telephone: (301) 562-0641 

Fax: (301) 588-7787 

Email: docorder@dec.cdie.org 

Internet: http://www.dec.org 

Portions released on or after July 1, 2006 
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Program Performance Summary FY 2005: Background: In 2005, President Torrijos, Panama's fourth 

president to be elected in 15 years of political stability, completed his first full year in office. During this 

period, his Administration initiated efforts towards meeting their electoral campaign promises to: combat 

corruption, modernize the justice system, tighten fiscal discipline, institute social sector reforms, expand 

free trade, and maintain the Panama Canal’s competitiveness in moving global commerce. The Panama 

Canal is vital to U.S. national interests and security as most of the 300 million tons of freight that transit 

the Canal annually between the Atlantic and Pacific oceans originates in or is destined for the United 

States. 

Significant achievements of the Torrijos Administration’s first year include: 1) institutionalizing a policy of 

“zero tolerance for corrupt acts;" 2) signing a Cabinet Decree annulling the regulation that prevented full 

implementation of the Panamanian Freedom of Information Act; 3) creating a National Anticorruption 

Council and endorsing its recommendations for combating corruption, thus raising private sector 

confidence; 4) signing the State Pact for Justice Reforms and creating the Commission on Justice 

Reforms that produced an agenda for critical reforms; 5) recognizing the legitimacy of civil society 

organizations to be a counterpoint to government authority; 6) raising the bar for government 

accountability; 7) implementing reforms in personal income and corporate taxation to eliminate disparities; 

8) completing feasibility studies for a third set of locks to allow vessels of a larger size to transit the 

Panama Canal; and 9) preparing for the ninth and final round of negotiations aimed at finalizing a 

bilateral free trade agreement with the United States. 

Challenges: Panama continues to develop its modern and prosperous service sector in parallel with a 

relatively less robust and protected agriculture-based economy. In 2004, Panama’s Gross Domestic 

Product was $14.0 billion and the annual per capita income was approximately $4,500. These economic 

indicators along with select social indicators, a high literacy rate (92%), a relatively low population growth 

rate (1.4%), and relatively high life expectancy rates that exceed 70 years, mask more serious underdevelopment and security issues which, if not addressed now, threaten Panama’s democratic institutions 

and political stability, and compromises its future development. 

Panama’s unemployment rate in 2005 declined to 9.6% from 11.8% a year ago, and approximately 30% 

of the labor force was underemployed. Also, Panama has the second worst income inequality in the 

region, with the wealthiest 20% of the population (600,000 people) accounting for 41 times the income of 

the poorest 20% of the population, and 1.2 million people (40%) of the population living below the poverty 

line. The economic and social well-being of many Panamanians, particularly those living on the edge, will 

worsen if the climate for increased investment and new economic opportunities, and income generation is 

not improved. A strong commitment to modernize the justice sector remains to be demonstrated. Uneven 

application of the rule of law continues to deter new domestic and foreign direct investments, spur 

protectionist tendencies in the agricultural sector, and slow the pace of Panama's participation in global 

trade. 

USAID programs in Panama aim to improve transparency and accountability in government, modernize 

the judiciary, improve trade competitiveness, support the smooth transit of world commerce through the 

Panama Canal, and reduce the potential for cross-border conflict. Discretionary application of the rule of 

law and corruption discourage new private investment flows for increasing economic opportunities, and 

boosting market-led development. Maintaining the integrity of the Panama Canal Watershed is critical to 

world trade and U.S. national security. USAID programs support the consolidation of democracy, 

environmental stewardship, community empowerment and trade competitiveness for poverty reduction 

and conflict mitigation. Programs are implemented through grants and contracts and leverage private and 

public capital for supporting policy reforms, best practices, community participation, and strengthening 

civil society organizations for advocacy and holding government accountable. 

Panama’s most pressing challenges in the decade ahead are to ensure the modernization and continued 

smooth administration of the Panama Canal, the bedrock of its predominantly service-oriented economy, 

establish the conditions for increasing trade and rural competitiveness while addressing widespread 

income inequality, consolidate democracy, modernize the judiciary, and fight systemic corruption. 
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The USAID programs support Panama’s efforts to address the above social and economic constraints. 

Program activities: 1) catalyze the process of improving transparency and accountability; 2) identify 

market niches for global trade competitiveness; 3) develop best practices for conserving the integrity of 

the Panama Canal watershed, essential for ensuring uninterrupted flows of water of adequate quantity 

and quality for the movement of world commerce through the Canal; and 4) reduce ethnic tensions that 

result from weak State and local government presence in the Darien, a remote underserved region, 

vulnerable to drug trafficking and the lure of illicit income generating activities. Further USAID efforts are 

needed to solidify our gains in the Darien which remains vulnerable to influence by criminal activities, the 

Fuerzas Armadas Revolucionarias Colombianas (FARC) and Colombian paramilitary groups. 

 

U.S. Interests and Goals: The United States Government has significant economic and strategic interest 

in Panama. It is important for those interests that Panama remains stable and an important ally. To this 

end, it is in the U.S. interest to assist Panama in its efforts to consolidate its democracy and reduce 

poverty. A more democratic and prosperous Panama, sharing the benefits of trade-led growth broadly 

among its citizens, will reinforce political stability in the region, and ensure the uninterrupted flow of 

international commerce through the Canal. 

Key Achievements: During FY 2005, the USAID Ruling Justly program continued to work with civil society 

organizations to strengthen their advocacy for reforms of the judiciary and improved governance. Seizing 

the day, USAID was the first donor to support the work by the Citizens’ Alliance for Justice, a coalition of 

15 civil society organizations. This assistance resulted in a popular call for immediate action by the 

Executive Branch to curb public corruption and malfeasance. In quick order, the National Anti-corruption 

Council was established, a State Pact for Justice was signed by the President and prominent legal 

entities, and a Commission on Justice Reforms produced an agenda for critical reforms. 

To facilitate market led growth, the Government of Panama will need to aggressively promote economic 

freedom, and increase the country’s productivity and competitiveness to take advantage of global trade 

opportunities. USAID is forging public-private partnerships to analyze constraints and identify 

opportunities for increasing rural and global competitiveness. To contribute to achieving U.S. national and 

strategic interests, USAID continued to solidify its cooperation with the Panama Canal Authority on 

managing the Canal watershed, and promoted integrated management in critical watersheds in 

impoverished areas. Resource leveraging through strategic alliances and nontraditional partnerships 

have become the mainstay of USAID's support. Dollar for dollar leveraging has become an important 

criterion for supplementing USAID's scare resources. 

To empower indigenous communities and help legitimize local government authority in the economically 

least developed province of the Darien bordering Colombia, USAID built numerous social and productive 

infrastructures. The benefits are helping to thwart repeated forays and efforts of Colombia’s drug 

traffickers to lure the Darien communities into the web of illicit activities. 

1. Ruling Justly: More Responsive, Transparent Governance. USAID developed effective working 

relationships with the newly appointed key counterparts in the Panamanian Government, for instance, the 

Solicitor General, the Controller General, and members of the Ministry of Economy and Finance, and the 

National Anti-Corruption Council. USAID support made possible the start up of seminal activities by the 

Citizens' Alliance for Justice Reform, a group of 15 civil society organizations that effectively advocated 

for fundamental changes in the justice system. Additionally, USAID supported the work of the 

Commission on Justice Reform and the resulting agenda for justice reforms. 

2. Economic Freedom: Open, Diversified, Expanding Economies. USAID support continued to raise the 

bar for environmental stewardship. The USAID watershed program led to major policy reforms and 

adoption, institutional strengthening, best practices in natural resource management for improved farm 

incomes, conservation of biodiversity, stakeholder participation, and empowerment in strategic subwatersheds in the Panama Canal Watershed and protected areas. Support for trade competitiveness is 

helping to prepare Panama to implement the anticipated bilateral free trade agreement with the United 

States, and identify sectors that show promise for new investments and employment creation. 
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3. Selected Darien Communities Strengthened: USAID support continued to result in watershed 

improvements in the quality of life and well-being of 64 participating communities (25% of the population) 

in the Darien region. This is an exceptional accomplishment given the large number of isolated 

communities within the largest province of Panama, that now benefit from social and productive 

infrastructure, and their incipient recognition of local government’s responsibility to provide essential 

services. The affected Darien communities are now speaking with one voice to articulate priority needs 

and areas for targeting new public-private investment. Beneficiaries are showing their readiness to 

identify development constraints and opportunities, and organizing themselves into production groups for 

entrepreneurial activities and maintaining social infrastructure. 

Gender: Gender mainstreaming is a prominent cross-cutting theme across USAID/Panama’s 

development assistance portfolio. Gender mainstreaming is embedded in the action plans of our 

implementing partners and counterparts. Implementation of best practices and recommendations that 

emerged from the Gender Assessment of April, 2004, started in FY 2005. Implementing partners for both 

the Economic Freedom: Open, Diversified, Expanding Economies, and Ruling Justly: More Responsive, 

Transparent Governance Programs are implementing Gender Action Plans for greater incorporation of 

gender issues. 

Within the Economic Freedom program, the prime institutional contractor for the Panama Canal 

Watershed component has completed a series of training for participating communities and subimplementing entities in the planning and implementation of integrated resource conservation techniques 

including best practices for farming and ranching. On average, women farmers and counterpart 

technicians accounted for 40% of the total enrollment. Gender roles were emphasized in order to 

maximize the respective contributions of both genders for ensuring sustainable income streams and the 

application of best resource management practices. 

USAID’s continuing support to the predominantly indigenous peoples of the isolated Darien region has 

improved the quality of life of women and their families. Impacts are clearly evident in improved family 

health resulting from potable water and sanitation systems, a marked decline in school absenteeism, the 

organization of female artisans into production associations, and development of value-added income 

generating enterprises operated by women. Also, the Darien program continues to assist women-owned 

and operated businesses to increase their sales and household incomes without having to stay away 

from their families for long periods. 

 

In the democracy program, civil society has assumed an important role in promoting the participation of 

women in policy analyses and decision making, improving access to justice for women, providing training 

for women judges, and promoting the role of women in the advocacy of improved administration of justice 

for all. The nascent trade and investment initiative and the democracy program are incorporating gender 

mainstreaming in all of their activities. The growing number of women holding key government positions 

illustrates the gender dynamic that exists within Government of Panama counterpart institutions. 

Furthermore, the current Attorney General, the first woman in Panamanian history, is very supportive of 

the USAID democracy program in Panama. 

In FY 2006 USAID will continue to advance the Gender Action Plan across the entire program portfolio to 

consolidate the gains in FY 2005, and further explore how gender associated strengths and attributes can 

work in harmony to improve the sustainability of our investments. 

Global Development Alliances (GDA), Partnerships, and Strategic Alliances: In FY 2005, USAID/Panama 

leveraged $6.6 million with $265,000 of scarce DA resources. This is equivalent to a ratio of 1:25, an 

exceptional achievement resulting from USAID intellectual leadership in forging partnerships with 

responsible private and public sector entities, and environmental NGOs, and USAID’s proven 

comparative advantages. Resource leveraging has become a key component of USAID/Panama’s tool kit 

for programming scarce resources. It serves as a criterion for assessing the potential of new activities for 

their sustainability once USAID support ends. Embodied in this principle, is that new program activities 

should be demand-driven as judged by the extent to which USAID’s resource will help cement 

sustainable private-public partnerships and alliances, measured by direct dollar for dollar leveraging, or 
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the partner’s demonstrated commitment to an in-kind contribution. 

This market-based approach to doing business in Panama is garnering much interest and buy-in by 

Panama’s well-developed and prosperous service sector. As more and more tourists choose Panama as 

their destination, and public awareness of the importance of conserving the country’s rich and diverse 

biodiversity, patrimony and coastal resources increases, USAID/Panama expects to forge additional 

partnerships in FY 2006. We document below several cases of new partnerships and alliances that were 

forged in FY 2005: 

With $235,000 in Global Development Alliance Incentive Funds, USAID/Panama leveraged up to $5.0 

million in private lending capital to establish the first student loan program in Panama for underserved 

students who can not afford the cost of a higher education. USAID forged a private-public alliance among 

Laureate Education Universities in Panama, BanVivienda, and USAID that makes available to the fastest 

growing demographic group in Panama loans for their professional training and development. This 

student loan program is essential for responding to a market imperfection as there is no financing 

available to help level the playing field between affluent and middle- to low-income families. Without 

access to financing, the skewed income distribution and socio-economic disparity will worsen. 

The alliance is led by Laureate Education, a global leader of accredited campus-based and on-line 

universities headquartered in Baltimore, Md. The two partnering Panamanian universities, “Universidad 

Interamericana de Panamá” and “Universidad Latinoamericana de Ciencia y Tecnologia” are part of 

Laureate Education. The program is structured in such a way so as to build a loan loss reserve that will 

continue to function long after the USAID loan guarantee ends. 

By facilitating the private-public alliance USAID is assisting Panama maximize its comparative advantage 

under the anticipated bilateral free trade agreement with the United States. Investment in human capital is 

essential for success of the free trade agreement because Panama’s comparative advantages are in 

services, banking/finance, and shipping/engineering-all of which depend on an educated and highly 

skilled workforce. 

In its efforts to increase the institutional capacity of Panamanian Environmental NGOs, USAID provided a 

grant of $30,000 to The Nature Conservancy (TNC) to assess their strengths and weaknesses of 

Panamanian environmental NGOs, and identify areas for assistance. USAID used the findings and 

recommendations at discussions with interested public-private sector groups. These discussions 

catalyzed the establishment of an alliance of NGOs for environmental awareness, monitoring and 

management, and leveraged $1.5 million. Alliance partners are: the Swiss millionaire businessman Stefan 

Schmittheine, Panama’s private sector, and the TNC, with each organization contributing $500,000. Also 

in FY 2005, USAID's efforts to promote eco-tourism in the isolated Darien province leveraged $60,000 of 

the Inter-American Development Bank's resources that supported the involvement of one additional 

indigenous community (to USAID's six), and two municipalities in eco-tourism promotion. 

Earlier catalytic efforts by USAID in FY 2004 under debt-for-nature swaps that involved the GOP, U.S. 

Treasury, U.S. Embassy, and The Nature Conservancy (TNC), continued to bear fruits in FY 2005 

through Chagres National Park Fund. TNC brokered the capitalization of a fund in the amount of $11 

million to be realized over a 14-year period. Under the Tropical Forest Conservation Act, contributions 

consisted of $4.8 million of Panama’s public debts, $5.0 million from the U.S. Treasury, and $1.2 million 

by TNC. This fund will finance implementation of conservation activities by Panamanian NGOs. Also, in 

the Darien, Panama’s last resource-rich frontier, USAID’s $6.0 million investment (FY 2003 - FY 2006) in 

community organization and empowerment, social and productive infrastructure, and improved 

environmental stewardship, catalyzed a public-private alliance that leveraged $1.2 million in the grantee's 

contribution. 

Furthermore, other previously established alliances in 2004 continued to make good progress in FY 2005 

in resource conservation and management. These include the $5.0 million (1:1) Incentive Fund between 

USAID and the Panama Canal Authority, and a second debt-for-nature swap under the Tropical Forest 

Conservation Act that established the Darien Fund at $10 million for managing the Darien National Park 
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and watersheds. 

In FY2006, USAID anticipates entering into several new alliances, primarily with Panama’s private sector 

to further replicate best practices in resource management and help develop the rapidly expanding 

tourism sector, a large generator of jobs, with emphasis on market niches that include eco- and 

adventure-tourism. 
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FY 2006 Program 

SO: 525-021 Ruling Justly: More Responsive, Transparent Governance 

Promote And Support Anti-Corruption Reforms 

Promote and Support Anticorruption Reforms: ($990,000 ESF). Building upon USAID support in FY 2005 

that helped operationalize the Government of Panama’s (GOP) National Anticorruption Council (NAC) 

and subsequently, assisting in developing an anticorruption strategy, USAID is providing technical 

assistance and training to: reinforce the institutional capacity of the NAC, the Controller General's Office 

and the Public Ministry to curb corruption as well as investigate and prosecute corruption cases; design 

and develop monitoring systems to identify areas that are vulnerable to corruption; and deepen and widen 

civil society capacity to conduct social audits. The U.S. firm, Casals and Associates, is the principal 

contractor. 

FY 2007 Program 

SO: 525-021 Ruling Justly: More Responsive, Transparent Governance 

Promote And Support Anti-Corruption Reforms 

Promote and Support Anticorruption Reforms: No funding is budgeted for this activity in FY 2007. 

FY 2006 Program 

SO: 525-022 Economic Freedom: Open, Diversified, Expanding Economies 

Improve Sustainable Management Of Natural Resources & Biodiversity 

Improve Sustainable Management of Natural Resources and Biodiversity:($4,137,000 DA). USAID is 

focusing on priority areas that protect the environment and create employment, while partners are starting 

to replicate the models demonstrated in previous years in other subwatersheds of the Panama Canal 

Watershed. USAID is also continuing to assist the partners with the formulation of policy reform to assure 

sustainability and replication of the joint efforts. The Mission is also continuing a partnership by buying 

into a USAID Central America and Mexico Regional Program and the Rainforest Alliance. The intent is to 

support a certification program to improve environment conservation for forestry and pineapple 

production. In protected areas within the Panama Canal Watershed, USAID will support technical 

assistance to encourage sustainable tourism. Activities include: policy reform, modifications of 

regulations, creation and implementation of new park administrative systems, and institutional 

strengthening to more effectively manage tourism. Also, technical assistance is helping authorities 

develop an environmental governance program for improving enforcement of environmental laws and 

regulations and participation by stakeholders in the management of key protected areas. These efforts 

require the formation of additional public-private partnerships to co-manage parks, promote ecotourism, 

and generate revenues for park maintenance. Principal contractor: Academy for Educational 

Development. 

Increase Trade and Investment 

Increase Trade and Investment: ($198,000 DA). USAID is focusing on funding short term technical 

assistance and training to build sector level capacity in support of increased exports and firm 

competitiveness. To this end, USAID supports demand led activities that enhance business development 

and provide business linkage support in key sectors with high potential to compete in the global economy. 

These include nonprotected agroindustry and teak, tourism services, and information technology. 

Principal contractor: Nathan Associates. 

FY 2007 Program 

SO: 525-022 Economic Freedom: Open, Diversified, Expanding Economies 
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Improve Sustainable Management Of Natural Resources & Biodiversity 

Improve Sustainable Management of Natural Resources and Biodiversity: ($3,180,000 DA) USAID plans 

to support select policy reforms, participatory and practical approaches to watershed management, and 

activities in environmental governance. USAID expects to continue funding technical assistance in the 

above areas in the Panama Canal Watershed (PCW). USAID may use funds to further support the 

development of sound policies at the local level, strengthen the foundation for stable funding to support 

and maintain the integrity of the PCW, and put in place field-based validation of systems, processes, and 

tools to improve management in the PCW. USAID intends to continue implementing activities that 

promote sound agriculture production and ranching enterprises, wastewater management, and clean 

industrial production. USAID also plans to fund technical assistance to build on-site capacity for improving 

the protection and management of protected areas. USAID anticipates continuing support of sustainable 

ecotourism services through public-private alliances. Additionally, it may support activities to develop 

clusters around tourist circuits, training of public officials, and private agents to better cater to the needs 

of tourists and better manage tourism activities. USAID aims to build on its successful experience with 

leveraging Panamanian private sector resources for new investments in tourism infrastructure. 

Implementers to be selected through a competitive process. 
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Results Framework 

525-006 Selected Darien Communities Strengthened 

Program Title: Rural Community Development 

 IR-6.1: Social Infrastructure in Selected Communities Improved 

 IR-6.2: Organizational Capacity of Local Governments and Community-based Organizations 

Strengthened 

 IR-6.3: Productive Infrastructure in Selected Communities Improved 

Discussion: This Special Objective (SpO) supports effective governance, community institution building, 

small-scale social and productive infrastructure, and income-generating opportunities. Program activities 

directed at achieving the three Intermediate Results generate synergies and linkages between the 

Intermediate Results. Local organizations and strategic alliances with private sector should be an integral 

part of this SpO. 

Intermediate Result 6.1 Social Infrastructure in Selected Communities Improved 

Focus of activities is on helping selected communities implement social infrastructure projects identified 

by the communities with an emphasis on local management, self-help, and sustainability. Projects are 

undertaken as a result of community consensus-building and in partnership with the community. Outputs 

include social infrastructure improved in selected communities; improved local management skills applied; 

self-help techniques in use; and sustainability conditions in place, including operations and maintenance 

by community residents. 

Intermediate Result 6.2 Organizational Capacity of Local Government and Community-based 

 Organizations Strengthened 

Support is provided to local authorities and community leaders in selected communities, working in 

partnership, to help them prepare and implement a plan to strengthen community organizations for the 

development of self-help sustainable activities. Outputs include organizational capacity of local 

governments and community-based organizations strengthened; communities learn-by-doing how to 

articulate their needs, participate in decision-making, develop and implement self-help activities; 

participatory consensus building processes, emphasizing grass-root democratic practices as core values, 

in use; and democratic leadership and organizational stills in indigenous, Afro-Panamanian and "mestizo" 

communities strengthened. 

Intermediate Result 6.3 Productive Infrastructure and Income Generation in Selected Communities 

 Improved 

Building on community consensus regarding productive infrastructure priorities and income-generating 

activities, projects should be developed in partnership with local authorities, private sector, NGOs, 

community organizations and other stakeholders. Outputs include productive infrastructure and income 

generation in selected communities improved; playing field for fair market conditions improved; increase 

income generated from environmentally sustainable market diversification, i.e., eco-tourism and 

handicrafts; and strategic alliances with private sector developed. 

525-021 Ruling Justly: More Responsive, Transparent Governance 

Program Title: Ruling Justly 

 IR 1.1: Strengthened Rule of Law 

 IR 1.2: Greater Transparency and Accountability in Government Improved 

Discussion: The Ruling Justly program supports activities that will first and foremost build a base of 

support for fighting corruption and demand for justice reform through civil society organizations that work 
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with agents of change in government, the media and others. If political will exists, the judiciary will be 

folded into the program. Support for transparency, accountability and rule of law reforms through civil 

society advocacy will be paramount during the first two years of the Country Plan. Key outputs include 

strengthened rule of law and greater transparency and accountability of the government of Panama. 

Intermediate Result No. 1.1 Strengthened Rule of Law 

Program will support activities that enhance participation by civil society, including business organizations 

and the media, to promote and maintain momentum for justice reform; advocate for greater access to 

prompt, fair and affordable avenues to resolve disputes; foster selected reforms; and increase 

government presence in at-risk communities of the Darien and elsewhere through the provision of local 

justice and governance activities. Key outcomes include strengthened capacity for effective, peaceful 

resolution of disputes and selected systems of administration of justice improved. 

Illustrative activities: 

- Support civil society organizations to advocate for justice reform and promote culture of 

 lawfulness and peace 

- Foster use of alternative dispute resolution methods 

- Support improvements of selected systems of administration of justice 

- Support access to justice at the community level 

Intermediate Result No. 1.2 Greater Transparency and Accountability of Government Improved 

Under this Intermediate Result, the program will promote political will to reduce corruption and increase 

greater transparency of government activities by strengthening civil society's ability to conduct social 

auditing/monitoring activities; increasing public access to information, strengthening investigative 

reporting; and developing a national anti-corruption strategy and action plan. Outputs include business 

involvement and responsibility in fighting corruption and trained journalists and non-governmental 

organizations to be more effective in conducting investigative journalism and reporting on corruption. Key 

outcomes will be more transparent systems for management of public resources by the national 

government and more opportunities for citizen participation in and oversight of national government 

decision making. 

Illustrative Activities: 

- Support development and implementation of a national anti-corruption strategy 

- Promote improved capacity of key public entities responsible for preventing and investigating 

 corruption 

- Support strengthening public sector entities in ethics and accountability 

- Support civil society advocacy in promoting and maintaining public focus on reducing corruption 

 nationwide 

- Support capacity building of civil society to carry out social audits 

- Promote oversight of good governance 

525-022 Economic Freedom: Open, Diversified, Expanding Economies 

Program Title: Economic Freedom 

 IR-2.1: Laws, Policies and Regulations that Promote Trade and Investment 

 IR-2.4: Improved Management and Conservation of Critical Watersheds 

Discussion: The Economic Freedom program supports trade capacity building efforts to reduce 

business constraints and increase competitiveness in order to take advantage of trade opportunities in a 

global economy. The program also provides support for an integrated approach to managing water and 

land resources in critical watersheds that improves environmental stewardship. This emphasis will help 
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Panama maximize its competitive position and ensure a constant flow of fresh water in quantity and 

quality to ensure the transit of ships through the Panama Canal and the supply of potable water for a 

combined population of 1.5 million in Panama City and the province of Colon, while ensuring healthy 

residents in the Canal Watershed 

Intermediate Result 2.1 Laws, Policies and Regulations that Promote Trade and Investment 

USAID's development assistance supports activities that promote trade capacity building efforts both 

during and after negotiations. As a result, Panama's readiness to take advantage of expanding trade 

opportunities will increase. Outputs will include increased competitiveness in the global economy and 

increased domestic and foreign direct investment and employment generation. 

Intermediate Result 2.4 Improved Management and Conservation of Critical Watersheds 

USAID's support will help Panama maintain the integrity of selected critical watersheds. Sustainable 

management and protection of the Canal Watershed is critical to assuring continued fresh water in 

quantity and quality for the operation of the Canal. Outputs that will foster better environmental 

stewardship include key policy changes, conserving biodiversity, ownership and empowerment by local 

communities and the private sector in sustainable resource utilization, improved natural resource 

management practices in critical watersheds for improved farm incomes.