In 2009 global merchandise trade reached an estimated $12,178 billion and is expected to grow 13.5% by the end of 2010 according to the World Trade Organization. Panama's position in this landscape of world trade has been characterized as the number one central trade route, but the country currently ranks 51st in logistics performance. Clearly, the potential for Panama to achieve the status of Premier Trade Hub of the Americas is realistic, but will require leadership, knowledge, and coordinated action.
Helping Panama fulfill its destiny to become one of the largest trade hubs in the world is a vision that is shared by the Panamanian government, private sector and society alike. The impact of such a transformation will resonate globally, changing the order of world trade in the wake of doubled capacity of the Panama Canal after its expansion project is completed in 2014. With this new level of performance, the amount of cargo that will gravitate towards Panama will increase as will the potential for new trade opportunities, services and other value added operations.
In order to provide the scientific leadership necessary to catapult Panama to first place in logistics performance in just a few years, the Center in Panama operates following a model that includes close consultation with an advisory board populated by individuals directly involved in current public and private initiatives that could benefit from a carefully coordinated and informed strategy for country level performance improvement. Also, the Center established a National Logistics Council and several subcommittees with representatives of business and other commercial enterprises and all major public and private institutions. The NLC is chaired by Jose Domingo Arias, Vice Minister of Foreign Trade and is supported by Dr. Ruben Berrocal, Secretary of Science, Technology and Innovation. The interaction between the Center and the NLC is bidirectional, whereby the information gathered locally also allows for actions to be implemented with joint support.
In order to evaluate Panama's Logistics Performance, a suitable set of indicators must be defined, evaluated, and integrated into a systematic and automatic reporting system. This set of indicators varies in their scope ranging from the World Bank's LPI perception model, to lower level logistics components performance indicators that describe the operations of each asset individually and their interaction. The idea is to provide accurate information to companies and government about products and services in ways that they may improve their performance individually or collectively. The design and implementation of an appropriate logistics Portal requires gathering key logistics and trade information and business opportunities that could promote collaboration among local and international companies. Additionally, a number of applications developed especially to support decision-making activities for logistics and trade will be housed in the Portal as they are created by Center personnel.
Leveraging the above initiatives within an integrated framework will support a permanent activity to continuously monitor, analyze and improve Panama's logistics performance. Combining an understanding about the Panama Logistics Environment, knowledge about the local, regional and global trade opportunities, and application of the models and indicators, the Center will specify and conduct targeted research, development and innovation tasks that key in on the main inefficiencies and shortcomings that exist as well as take advantage of emerging insights about how obstacles can be overcome.
Strategically, Panama now faces a great opportunity to become the premier Trade Hub for the America's by strengthening local, regional and global collaboration. Optimizing this transformation process will be best generated by investing in technical and scientific initiatives that foster human capacity building, the consolidation of data and information repositories, and the development of tools that assist the government and the private sector in making sound decisions and increase performance and trade. The creation of the Georgia Tech Panama Logistics Innovation and Research Center is an important first step in that direction.