Business & Economy Briefs

Mireya backs down on bus fares
After a week and one-half of widespread and often violent street protests against a 67 percent city bus fare increase, the Moscoso administration sat down with protesting labor union leaders and representatives of the bus syndicates and agreed to suspend the increase until December 15, with a promise of $30 million in government loans for bus owners. The compromise was met by sporadic strikes and other protests by bus drivers, who said that loans will resolve nothing because a 15¢ fare does not generate enough income to pay off any loans.

National budget to be slashed
The Moscoso administration, faced with a sharp decline in tax revenues due to the country's economic crisis, has ordered $187 million in budget reductions for this year, with about $100 million coming from operating expenses and the rest from capital outlays. As part of the reductions the president has ordered steep cutbacks in government officials' expense accounts, travel abroad and use of public vehicles and government funded cell phones.

New Panama Canal Authority directors
President Moscoso has appointed three new members to nine-year terms as Panama Canal Authority directors. The new appointees to oversee this country's most important industrial asset include Antonio Dominguez Alvarez, the son of a former immigration director; ex-housing minister Guillermo Elías Quijano; and presidential aide Mario Galindo.

Canal revenues surpass expectations
T he Panama Canal Authority reports that during the first seven months of the fiscal year 2001 (which began last October), it received some $4.2 million more than it had projected for ship transit tolls. Most of the increase is attributed to greater than expected use of the canal by Panamax-sized cargo ships. The authority reports that some 2.6 percent more tonnage of cargo went through the canal over the seven-month period than transited during the same period of fiscal 2000.

Port orders new cranes
The Port of Balboa, now run by Panama Ports, a subsidiary of Hong Kong-based Hutchison Whampoa, has ordered seven new heavy cranes. The new machines, by Germany's Noell Crane Systems, will each be able to stack containers in piles 12 high, in rows of six stacks. When the Panama Canal Railway gets its container operations underway later this year, Balboa will be handling container traffic to and from the Atlantic side ports of Cristobal, Manzanillo International Terminal and Coco Solo Norte, without any Pacific side port competing with them. Already the biggest container port on the Pacific coast of Latin America, Balboa will increase its volume and Panama's competitive edge as a container shipping hub. The cranes will cost $120 million and will be installed within the next year.

ARI hires World Bank affiliate to market Howard, Kobbe and Farfan
With the former Howard Air Force Base, Fort Kobbe and Farfan Naval Housing Area mostly vacant and costing money to maintain, the Interoceanic Regional Authority (ARI) has hired the International Finance Corporation, an arm of the World Bank, to market the former military base complex. Plans for the area's conversion to civilian uses were delayed for many years by the Pérez Balladares administration's expectations that the US military might have stayed on and paid rent, under the guise of a multinational anti-drug center, but talks for that project collapsed in 1998 and there was no backup plan. Next ARI promoted the area as a multimodal air, sea and land container port, but that plan proved impractical, particularly as there is no practical way to establish a rail link between the area and Panama's other container ports. The most likely fate for Howard is its conversion into an air freight terminal, but well connected real estate interests are resisting the placing of the housing units in the area onto the national market, as that extra supply would tend to drive the price of housing down. The World Bank's recommendation is that the three former bases should be sold separately, with priority going to a bidding process for Howard. Several multinational air freight companies have expressed interest in using the former air base as a hub for their Latin American operations.

El Siglo sold
El Siglo, the daily tabloid that has suffered serious financial setbacks during the current economic crisis, has been bought by a group headed by Christian Democrat activist Ebrahim Asvat. Mr. Asvat, who says that he is the only Christian Democrat among the new owners, says that he will maintain the paper's popular orientation and won't impose a partisan slant on its content. Supporters of the PRD and Christian Democrat alliance that controls the Legislative Assembly now control La Prensa, El Universal and El Siglo, while La Estrella is owned by Arnulfistas. El Panama America and La Critica are owned by the descendants of Harmodio Arias, the brother of Dr. Arnulfo Arias, after whom the Arnulfista party was named, but those papers are generally conservative yet not particularly aligned with any political party.

FATF to decide Panama's blacklist status on June 22
The Group of Seven industrialized nations' Financial Action Task Force (FATF) will consider whether Panama will remain on its list of countries that doesn't cooperate in efforts against money laundering at a June 22 meeting in Paris. It appears that it will be a close vote, with the US government having eased its stance against bank secrecy in both the FATF and the OECD with the change of administrations in Washington, but with France leading a more hard-line faction that wants to keep Panama on the blacklist until it shows that tougher money laundering laws that Panama has passed will be strictly enforced. The swing vote may be the United Kingdom's. The blacklist doesn't include many serious mandatory sanctions, but Panama's inclusion on it has meant heightened scrutiny and consequent delays in international banking transactions involving this country, and it has led several important Latin American countries, including Mexico, Argentina, Brazil and Venezuela, to impose adverse measures of their own.

Oil terminal back in operation
The Charco Azul petroterminal in Chiriqui, which hadn't been used since 1996, went back into use on May 11 when the Alster Ore dropped off 2.1 million barrels of Persian Gulf oil to be loaded onto lighter tankers and shipped to US refineries. The terminal's reactivation was mostly due to a shortage of storage facilities near North America's west coast refineries.

PYCSA wants out of Colon-Panama autopista contract
The Mexican PYCSA construction company, whose first big project was the Corredor Norte, says that the proposed toll road connecting Colon and Panama City can't be profitable. The company is losing money on the Corredor Norte, having found that many Panamanians will not pay the tolls they charge, and it does not have the financial resources or backing to finish the autopista, of which only a small portion has been built. PYCSA's delays, and now its apparently imminent default, have been the cause of many complaints from Colon Free Zone businesses and represent a major blow to the national construction industry.

Protesters heckle Mireya
A planned photo opportunity about the government doing something positive went awry on May 22, when President Moscoso went to Calidonia to hand out keys to new apartments in the Housing Ministry-subsidized Salomon building on Avenida 3 de Noviembre. The people who received the 20 apartments were happy enough, but a group of protesters from the neighborhood's Renta 5 slums showed up to complain that their housing needs were not being met, and to allege that most of the new apartments went to people from outside the neighborhood. The ceremony ended in shouting and shoving, and the president made a quick exit in her car.

Brinks strike resolved
On May 23 a union representing about 150 Brinks armored car drivers, security guards and other employees ended a brief strike. The workers walked off the job two days earlier in a dispute about overtime pay and lunch breaks, but compromised with management after negotiations.

Las Tablas electric company office sit-in
On May 22 about 200 protesters occupied the Union Fenosa electric company's Las Tablas office to protest frequent power outages. The protest started out as a peaceful march to the office, but when nobody from the company would meet with the marchers they entered the office and stayed all day. The protest ended without and injuries, arrests or property damages, but also without any dialogue between the company and its disgruntled customers.

ADELAG collapses, directors flee
Panama's National Securities Commission (CNV) and a group of creditor banks have moved to close down the troubled ADELAG group of companies, which includes the Triangulo department store, the Tecno Auto car dealership and several other businesses, and have forwarded the case to prosecutors for an investigation of possible fraud. Meanwhile, two ADELAG owners and directors, the brothers Aquilino and Carlos de la Guardia, have left the country. The de la Guardias have issued a statement through their lawyers that denied any wrongdoing and characterized their flight as self-defense.

Mangrafor loses McDonald's contract
Mangrafor, a company that imports meat and seafood products, has lost much more than the hefty fine imposed on it by health authorities for illegally importing Uruguayan beef. Now the company has lost its contract to supply Panama's 31 McDonald's restaurants with the beef fat in which the fast food giant's french fries are cooked. McDonald's cancelled the contract due to the bad publicity generated by Mangrafor's importation of beef from a country where there is foot-and-mouth disease among the cattle herd.

RP, CR to study border tourism
Panama and Costa Rica have signed an agreement to promote tourism along the border between the two countries. The effort will begin with a six-month study on ways that IPAT and its Tico counterpart can combine efforts and resources to more effectively attract visitors to the area.

More Nata church restoration
The Catholic church in Nata, the oldest church on the mainland of the Americas, will be receiving $100,00 worth of new renovations, mostly to replace wood that has been damaged by termites. The money is coming from unspent appropriations for restoration work at Fort San Lorenzo. The restoration at Nata is a work that has been in progress off and on for many decades.

"Paint Your City" campaign
Panama City mayor Juan Carlos Navarro has begun a "Paint Your City" campaign, pointing out a long-standing law that requires property owners whose buildings' exterior paint jobs are peeling, flaking or molding away to repaint them during the month of May. A number of the city's larger paint sellers are offering special sales for the occasion.

21st Century time warp?
A Texas company says that it's now doing business in the Canal Zone. Fort Worth-based Trident Technologies, Inc., a subsidiary of 21st Century Technologies, makes magnetic patches for damaged tankers, and in a recent press release said that it is "proud to welcome the Panama Canal Zone to the SeaPatch and ProMag family of Trident Technologies."