Final evaluation : report on Investment Council of Panama

External mid-term evaluation covers the period 1983-85 and is based on document review and interviews with Government of Panama (GOP), USAID/P, ICP, and business representatives and ICP clients. ICP"s performance has been unsatisfactory and is far from meeting the project purpose and targets. Reasons for this lack of success relate to a combination of factors, both internal (e.g., poor management, lack of market research) and external (e.g., the Panamanian political situation). ICP has failed to adhere to project design and to comply with TA and training plans, and has shown a tendency to view the Project Agreement as illustrative rather than definitive. ICP is currently in a state of institutional disarray, having failed to establish a viable organizational structure and a stable, professional management team. For example, although GOP contributions increasingly fell short of those planned, the fact that even A.I.D. funds remained largely unspent points to management problems. The original project design was faulty in many of its assumptions crucial to project success. For its part, USAID/P failed to insist on compliance with plans from the start and was lax in its monitoring functions in that it failed to insist on remedies when it identified problems. Contrary to the larger achievements it has claimed, ICP"s impact on investment in Panama has been minimal. A survey shows that it has attracted only four companies, representing investment of $1.6 million and creation of 160 jobs, though other firms already in Panama were also helped. Neither ICP"s Research and Development Office (RDO) nor its Investment Promotion Office (IPO) has organized itself to carry out its tasks, and those activities which they have carried out were ill-conceived and have had very limited success. However, the Investor Services Office (ISO), though not conforming exactly to plans, is providing information and servicing investors diligently and effectively, despite being hampered by its reliance on the other departments" products and services. Investors rated the ISO services as good to excellent. It is recommended that the project be placed under "review" for one year, during which time ICP can be reorganized, strategic studies can be completed, and negotiations can proceed with the GOP. The reasons for choosing this option are that the original idea remains valid (an official investment promotion agency is necessary), and despite ICP"s many shortcomings, many of the elements needed for success already exist within the ICP structure.