According to the Economic Commission for Latin America and the Caribbean (ECLAC), Panama is the region’s fastest growing economy. ECLAC predicts Panama will achieve a growth rate of 10.2% in 2012. If W.W. Rostow were alive, he would argue that Panama is between the third and fourth stages of growth (take off and drive to maturity, respectively). If you are not familiar with the Rostovian Take-off Model of economic growth, I encourage you to learn about it here.
Watch: Panama + City
I arrived in Panama City Friday night. Panama’s breathtaking skyline is the product of its impressive economic growth; however, you quickly begin to realize that there is a much different side to the city. Sunday morning I went to visit two slums, Curundu and Calidonia. It’s so strange that a place just a few blocks from the financial district seems like a completely different world. I talked with several community residents. Many of them are unemployed, sick, and uneducated. Marta, an unemployed mother of two, eloquently said to me “I dont believe in growth. I was poor before growth, and I am still poor. My kids and I will continue to be poor until we die.” Perhaps Marta is right… She may never be able to get out of poverty.
Jeffrey Sachs believes some ‘people, such as Marta, are poor, because they are poor.’ They have the potential to become rich, but they are stuck, they need a big push. Sachs claims that his Millennium Villages Project offers people the ‘big push’ they need to succeed. On the other hand, William Easterly points out that many people that used to be poor are now rich, and vice versa. He does not believe in poverty traps. According to Easterly, Marta could potentially find a job and get out of poverty without much help.
Watch: Inequality Traps Children in Poverty - The World Bank
Do you believe in Poverty Traps? Is Marta trapped in Poverty? Is there anything she can do? Does she need help? Watch ‘Inequality Traps Children in Poverty.’ What are you thinking?