* Fast-growing economy has some of world's worst schooling
* Lack of skilled labor could prompt growth slowdown
* Tourism, other industries stressed by labor crunch
(Repeats story from Sept. 6 with no changes to text)
By Sean Mattson and Abraham Teran
CUCUNATI, Panama, Sept 7 Carlos Bacorizo begins
a half-hour jungle trek to school every day not knowing if
he'll make it to class. An oft-swollen river blocks his path.
Even if he crosses the 165-foot-wide (50-meter-wide) river
-- sometimes with books, shoes and uniform balanced on his head
-- all he gets is one of the worst educations in the world.
"Sometimes when it's high, we have to cross in our
underwear," said Bacorizo, 14. "It's dangerous."
Many Latin American countries struggle with poor schools --
but none combine greater wealth than several European nations
and almost double-digit economic growth with one of the worst
education systems in the world. Except Panama.
A global crossroads with 4 percent of global trade moving
through its canal, Latin America's two busiest ports and a
communications and financial infrastructure that draws global
investors, Panama is running out of skilled workers.
Decades of poor schooling has created the problem which
business experts say could soon slam the brakes on growth.
"Instead of growing 6-7 percent per year, we could grow 4-5
percent per year," said Nicolas Ardito Barletta, a former
president who runs the National Center for Competitiveness.
Panama, whose per capita gross domestic product in 2010 was
$7,600 -- beating the likes of Romania, Bulgaria and Serbia,
International Monetary Fund data show -- is expected to see
economic expansion of some 9 percent in 2011.
Growth is seen slowing to around 7 percent thereafter, but
that target will be in jeopardy if Panama cannot fill some
90,000 skilled jobs in coming years, Barletta says.
Heavy infrastructure spending -- like the $5.25 billion
expansion of the Panama Canal -- along with revenues from
ports, banks and free zone commerce have powered the economy,
80 percent of which is based on services.
The whole service sector is now exposed to the tight labor
market, said Felipe Chapman, a director at financial services
firm Indesa. He frets over the need for education reform.
"Yesterday was too late," he said.
Out of 139 nations, Panama's primary education ranks 129,
according to the World Economic Forum's "Global Competitiveness
Report" for 2010-2011. Its higher education is ranked 128.
Fixing the problem will determine whether the Central
American isthmus nation becomes a high-income country that its
leaders dream of or stagnates at middle-income, Chapman added.
Robust growth and rising foreign investment masks the
squeeze Panama is already suffering from the missing workers.
"The lack of skilled labor obligates businesses to bring in
foreign labor, which is more costly for them and of little
benefit for our country," said Raul Aleman, chief executive
officer of Banco General, Panama's biggest local bank.
In 2009, U.S. giant General Electric opted for Chile over
Panama for a project local media said would have required up to
1,500 English-speaking engineers and computer experts.
Panama's fast-growing tourism industry is most immediately
threatened. Thousands of new hotel rooms are due for completion
in coming years and hoteliers fret over filling jobs.
The educational prospects for schoolboy Bacorizo are
threatened by much more than a river. Cucunati's electrical
plant usually runs at night, leaving the computer lab dark by
day, and the closest senior high school is at least 3 hours
from his rural home.
Schools in the bustling skyscraper capital of Panama City
are little better. Children cram into creaky wooden seats in
sweltering run-down classrooms that are often mere staging
posts for the many teenagers who drift into drug running and
Teachers regularly strike. Recently, they held a two-day
stoppage to oppose the government's bid to reform a high school
curriculum that has barely changed since the 1970s.
"Every kind of study always puts us last," said Elizabeth
Petrovich de Molina, a University of Panama education expert.
"We are behind by more than 30 years.
Petrovich points to two major problems: every 5-year
administration tackles education's pitfalls from scratch -- if
it bothers at all -- then union opposition crushes reform.
Yet opposition could be waning. Despite strikes, 90 percent
of teachers handling the new curriculum went to a recent
training session, said Petrovich, suggesting President Ricardo
Martinelli's education reform efforts might outlast his term.
For the first time, the government has asked the University
of Panama to help. And private sector support is rising.
Schools are being better equipped under the reform, which
focuses on skills needed for tourism and technology, as well as
providing greater emphasis on languages, math and science.
Money has not always helped though.
The IMF says Panama spends more on education than Chile --
yet on the World Economic Forum's higher education ranking it
is still nearly 30 places below a Latin American peer where
students protesting for improvements have plunged Chile's
government into crisis.
Much of the funding simply goes to waste.
Wedged next to a five star resort near the Pacific mouth of
the Panama canal, the Cosecha Amistad is one school recently
kitted out with a smart air-conditioned computer lab.
But it hasn't had Internet since thieves stole the main
cable line three months ago. That didn't stop technicians from
the service provider coming to fix the problem in August,
unaware the cable had gone. They left shaking their heads.
In Cucunati, locals want a bridge. A budget has been
approved but officials in the area say it is not enough.
"The focus the government puts on infrastructure worries
me," said Jesus Cedeno, a local pastor. "Because we're always
left until the end, like the Cinderella of the country."
(Editing by Dave Graham and Kieran Murray)