Business & Economy Briefs

RP off EU watch list
The European Union's Financial Crimes Enforcement Network has lifted its "special watch" status for transactions involving Panamanian financial institutions. The action was taken after Panama was removed from the Group of Seven industrialized nations' Financial Action Task Force blacklist of countries that don't cooperate in efforts to suppress money laundering.

MEDCOM gets one of SouthCom's channels
MEDCOM, which already owns two of Panama's three commercial television networks and Panama City's Cable Onda cable system, has won the bidding for Channel 7 in the capital, previously held by the US Southern Command. When bids were unsealed on July 10, MEDCOM's $3 million bested TVN's and two other bidders' offers. On August 21 Channel 9 in Panama City and Channel 10 in Colon, also formerly held by the US military, will be up for bids, with MEDCOM excluded from the process on anti-monopoly grounds.

Current and ex public workers can use retirement funds
On July 4 President Moscoso signed a law that allows present and former public employees to withdraw most of their money form the SIACAP retirement fund. Since the fund was created during the military dictatorship, there have been several waves of firings of public employees, and many former public servants now find themselves in financial straits due to the economic crisis. The legislation makes some $363 million of the $455 million fund subject to withdrawal.

Funds approved to fix Normal school
The Ministry of Education has announced that $5 million has been appropriated to repair the historic Juan Demosthenes Arosemena Normal School in Santiago. The building houses priceless murals by Panamanian diplomat and painter Roberto Lewis, which, along with the school's façade, are threatened. The ministry's goal is to begin work in August.

Aleman, anti-dams group meet
On July 1 the Coordinadora Campesina Contra los Embalses, a group of residents whose homes would be flooded by the Panama Canal's planned westward watershed expansion, met with canal administrator Alberto Aleman Zubieta and several other government officials in the town of Donoso, which is in the rural western part of Colon province. The two sides did not reach any agreement, but they did peacefully resume a dialogue that had been stalled for many months.

MICI rejects sand mining
The Ministry of Commerce and Industry has rejected the permit applications of several companies that want to dredge sand from the ocean floor off Farallon. The National Environmental Authority's acceptance of the companies proposed environmental impact studies had offended the local tourism industry. MICI says it won't permit sand mining within 8 kilometers of the shoreline near Farallon, but the companies say they'll appeal the decision to the courts.

Government pay freeze
Due to the economic crisis that has curtailed government revenues, Comptroller Alvin Weeden has announced a National Economic Council decision to freeze all government salaries and wages. The government is also curbing travel and other expenses by public employees.

Government buys back debt
The government has bought back some $160 million worth of bonds that would have come due in February of 2002. The buy-back is part of the Moscoso administration's policy of trying to reduce the national debt.

"Costs of representation" subject to Seguro Social withholding
A time-honored loophole for Panama's professionals and business managers has been closed by the passage of legislation imposing a 7.25 percent Social Security tax on payments for "costs of representation." Actual business expenses remain tax-deductible when properly documented but the non-itemized payments - often actually part of a professional's salary --- are now considered income for Social Security purposes.

Seguro to retain hospital employees
The national Social Security system, which recently bought the private San Judas Tadeo Hospital to expand kidney dialysis and other services to patients in the Panama City metropolitan area, has decided to retain the hospital's old employees. Seguro Social director Juan Jovane said that the workers had a good reputation and would be offered new contracts with the public health care system.

CNV hands out fines in ADELAG collapse
Panama's National Securities Commission (CNV, by its Spanish initials) has fined the principal owners, managers and accountants of the failed Grupo ADELAG for issuing incomplete and misleading financial reports. The commission referred the case to prosecutors for further investigation and possible criminal charges. Meanwhile, the Arthur Anderson accounting firm, which audited Grupo ADELAG and was fined $100,000, denies any wrongdoing and is appealing.

Prescriptions now needed
Though a new law regulating medications was designed by its proponent, legislator Balbina Herrera (PRD-San Miguelito), to lower costs to the consumer, in some cases it may effectively raise them. That's because some 6,000 medications previously available without a prescription will now require a visit to a physician and his or her written prescription. The costs related to acute illnesses where a patient consults with private or Seguro Social physicians won't be much affected, but it is feared that patients with chronic ailments will have to pay for at least transportation to a public facility and maybe a fee to a private health care provider to get prescriptions for medications they need. Herrera defends the stricter prescription requirements on the basis that many medications can be dangerous when improperly used. Some pharmacists say that the law will probably have to be modified to reduce the number of drugs requiring prescriptions.

Mercantil del Istmo buys ABN Amro Bank branch
Alberto Vallarino's banking empire is set to expand again, with the Mercantil del Istmo bank's purchase of the Panama branch of Dutch-based ABN Amro Bank. Banco Mercantil del Istmo is part of Vallarino's Banco del Istmo group, which last year became the region's biggest bank when in acquired Pribanco.

Vallarino disputes jobless figures
In a speech to students at the Chiriqui branch of the University of Santa Maria Antigua in David, banker and political activist Alberto Vallarino said that the government's unemployment figures are too rosy. While the official unemployment rate is 13.3 percent, Vallarino said that the true figure is 14.7 percent. Panama's jobless figures generally don't count the large sector of underemployed people, for example, those who sell things at traffic lights.

Arraijan squatters routed
On June 28 and 29 squatters at Arraijan's Cerro Castillo fought running battles with riot police, as cops and municipal workers moved in to evict some 300 families and demolish their shanties and bohios. The squatters fought with sticks and stones but the police won the day with tear gas and truncheons. About 50 people were arrested.

Amnesty on traffic ticket late fees
On July 6 the Transportation Authority announced a three-month amnesty on late fees for overdue traffic ticket fines. At the same time the authority named the 10 worst offenders, the most prolific of whom owes $16,833 in unpaid traffic tickets.

City vehicle emissions certificates
Although auto emissions tests have been a part of the mandatory annual car inspections for several years, from now on Panama City car owners will have to pay $13.50 to get their motor vehicles certified as sufficiently clean-burning. The city council approved the measure because the capital's air is highly polluted, mostly due to auto exhausts.

City approves ad contract
The city council and mayor Juan Carlos Navarro have approved a 15-year contract with Equipamientos Urbanos de Panama, SA, which gives the company an exclusive right to build and maintain city bus stops, vendor stalls, trash bins, benches and clocks, and to sell advertising on them. A company that used to have a concession to maintain billboards on public property is suing to have the contract set aside, claiming that it creates an illegal monopoly. The concessionaire will be required to invest at least $16 million, but stands to profit handsomely over the length of the contract. The city will be spared some expenses and will get some control over the proliferation of advertising on public right of ways.

Corredor Norte tolls up again
The financially troubled Mexican-based PYCSA consortium, which international bond ratings say traces most of its problems to Panamanian drivers' unwillingness to pay the tolls that it was charging on the Corredor Norte, again raised its tolls as of July 1. For cars, what used to be a 35-cent toll now costs 50 cents, while the maximum toll from any entrance to Madden or vice versa is now $2.50. Buses and trucks will now pay up to $6.

New pushbuttons for Penonome?
The Ministry of Commerce and industry has issued permits for two new "temporary lodging centers" in Penonome, which some neighbors and clerics allege will double the city's number of "pushbuttons," or motels designed for private amorous assignations and rented by the hour. Cocle's governor, Richard Fifer, denies that the new motels, which haven't been built yet, will be pushbuttons.