Office of the Historian

248. Memorandum From the Under Secretary of Commerce (Hodges) to the President’s Assistant for National Security Affairs (Brzezinski)1

Washington, November 1, 1979

SUBJECT

  • (U) Report of Commerce-State Investment Mission to Panama

(U) Pursuant to your memorandum of May 15 (NSC 2866),2 attached is the report of the Commerce-State Investment Mission to Panama.3

Summary

(C) A Commerce-State Investment Mission visited Panama August 13–17 to examine the investment climate and evaluate prospects for a full-scale business mission at a later date. Although there is substantial investment potential in Panama, the government is currently faced with a number of important obstacles to increased investment. First, there is uncertainty whether the implementation of the new Canal Zone treaties will be efficient and peaceful. Second, the Panamanian Government is poorly organized to promote foreign investment and there is no strong central authority responsible for the facilitation of such investment. These steps are essential to convince investors that Panama is serious about investment. Third, there is a deep sense of disenchantment among the Panamanian business community with government policies and leadership that will seriously undermine the confidence of foreign investors in Panama’s market. As a symptom of the problem, there is little evidence of new investment or reinvestment in Panama by Panamanian Business.

(C) For these reasons, the mission members do not believe that this is an opportune time to send a full-scale United States Government-sponsored mission to Panama. The leader of the mission met with the Vice President of Panama at the conclusion of the mission and explained the views of the mission to him in detail. As stated in the report, the Vice President appeared to accept the Mission’s findings and recommendations. In the event that there is definite improvement in the business climate and treaty implementation is proceeding smoothly, [Page 595] the Mission recommends an investment mission to Panama be considered for late 1980 or 1981.

Luther H. Hodges, Jr.
Under Secretary of Commerce
  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Box 38, Brzezinski Office File Country Chron., Panama, 8–12/79. Confidential.↩
  2. See Document 226.↩
  3. Attached but not printed.↩