Panama City-based marketing CEO Bob Adams identifies the sources of recent economic success in the Central American nation. Chief among them: the commitment to a free-market system.

The real story of Panama in the 21st century is a story of a rapidly developing economy that has nothing to do with offshore anything. For more than a decade, Panama’s GDP has averaged annual growth nearing 8%, with a few double-digit years. Even at the depth of the financial crisis in 2009, it booked a respectable 4% GDP growth, while nearly everyone else in the hemisphere booked red ink. …

… WHY PANAMA? What changed? Can we learn something from this? The nation and its canal have been there for more than a century. Consider three lessons.

Panama’s economy is based on free enterprise. The government and the people of Panama have a commitment to free enterprise that is rare in Latin America. In the 2014 presidential elections, two candidates with a socialist perspective took part in the televised debates and ran campaigns, but barely collected 1% of the vote between them. Due to the emphasis on private enterprise, the government has the income to provide benefits to the poor that can exceed those of Latin American nations that claim to be socialist. You are not likely to meet a Panamanian who would prefer to live in Venezuela.

The immigration issue has been dealt with intelligently in Panama. When Panama’s dramatic economic growth began a decade ago, Panama’s small population and inadequate public-education system left the nation in a bad spot. The challenge was to handle growth while improving the skills of their people.

A big part of Panama’s answer was to use relocation instead of immigration. Relocators can be residents and workers, but not citizens. Panamanian relocators include American retirees, but also other Latin Americans, especially from Colombia and Venezuela. …

… Debate among the leaders can be very partisan, but they have one important thing in common: When it comes to economic growth, they pass the ball, they don’t drop it.

All the major projects supporting economic development have continued under each president. Each makes some changes here and there, and they may agree on little else, but they have proven their dedication to continuing economic growth to Panamanians and the international investment community.