The Digital Ecosystem Country Assessment (DECA), a flagship initiative of the Digital Strategy, supports USAID Missions to better understand, work with, and support country digital ecosystems. The DECA looks at three pillars of a country’s digital ecosystem: (1) Digital Infrastructure and Adoption; (2) Digital Society, Rights, and Governance; and, (3) Digital Economy. The Panama DECA was carried out between May 2023 and November 2023. It included desk research, 81 interviews with a variety of stakeholders, and was guided by USAID Central America and Mexico's Regional Development Cooperation Strategy (RDCS) and the Department of State’s Panama Integrated Country Strategy (ICS).

Panama is positioned to be a regional digital hub, but structural constraints may limit the country’s digital transformation. Private sector actors and the Government of Panama (GoP) are modernizing the country’s mobile networks, including re-thinking the deployment of 5G. Publicly and privately funded digital literacy initiatives offer upskilling opportunities across the country. Over the past few years, the GoP has unveiled robust regulatory measures for public sector transparency, open government data, and personal data protection. The COVID-19 pandemic also accelerated the growth of digital financial services and e-commerce in Panama. Despite these improvements, bottlenecks remain. An outdated legal framework and bureaucratic roadblocks have restricted the evolution of the network. Poor interoperability challenges public sector digital transformation. Civil society and media freedom advocates have raised concerns regarding data protection. Access to finance, an underdeveloped logistics sector, and concentration of entrepreneurship in the capital challenge economic growth.