Panama Business & Economy Briefs

Panama off another blacklist
The US Financial Crimes Enforcement Network has lifted its warning about transactions involving Panamanian banks and other financial institutions. The warning never had the effect of formal sanctions, but it caused US banks to spend more time scrutinizing any business that had a Panama connection and thus caused delays that made this country a little less competitive in global financial circles. The warning was lifted because Panama has tightened its money laundering laws and the network was satisfied that the new restrictions are being enforced.

Kaiser Bazán: progress on jobs, billion-dollar investment needed
Second Vice-President Dominador Kaiser Bazán, who has run a construction company for many years and is one of the administration's more respected economic analysts, has announced that the Moscoso administration has spent about $80 million of the funds set aside for emergency job-creating public works projects, which represents about 37 percent of the total program. However, he said that to get Panama's economy back into full stride about $1 billion needs to be pumped into the national economy, mostly by the private sector.

Massive loan arrears
The Panamanian Credit Association has told El Panama America that due to the economic crisis, payments on 31 percent of all loans in this country are delinquent.. The situation can be seen in various places around the country where fleets of repossessed vehicles are parked, and in the policies of Panama's biggest domestic lender, Banistmo, whose president Alberto Vallarino has called a moratorium on foreclosures of unpaid home loans because there aren't enough buyers to make such actions wotthwhile to the bank.

Isla Margarita fuel depot rejected
The National Economic Council (CENA) has rejected a proposed contract for a fuel terminal on Colon's Isla Margarita, near the break wall at the former Fort Randolph. Environmentalists, historic preservationists and Colon provincial and municipal authorities have been lobbying to save the site for its historic fortifications and its biologically rich mangrove swamps and lagoon. CENA complained that the $12.5 million project was approved without an adequate environmental impact statement, but the promoters, Colon Oil and Gas Service, argued that the National Environmental Authority (ANAM) had approved their environmental impact statement. Critics noted that ANAM's approval came despite the impact statement's failure to address effects on legally protected historic sites and superficial treatment of the area's ecological sensitivity. CENA also objected to the proposed contract's economic terms, which would have required the government to spend some $2.7 million to refloat and remove three wrecked ships, while the company would have paid only $3,000 per month rent for a $14.8 hectare site.

Evergreen complains of delays
The Taiwanese Evergreen shipping and ports company is complaining that the Panama Maritime Authority is delaying approval of a training center for sailors and officers and the expansion of its Coco Solo Norte port. Company vice-president Tsu Hoo-sun says that the papers seem to be lost in the bureaucracy, which has been wracked by scandals related to the sale of certificates for maritime officers of late. Authority director Jerry Salazar denies that there has been any delay in approving the maritime training center and says that the delay in the Coco Solo Norte expansion is Evergreen's fault.

Tocumen improvements approved
The Moscoso administration has approved $4.7 million in improvements for Tocumen Airport. The money approved by the Cabinet Council will go for concessionaire COPA airlines and construction contractor Waked International, SA to expand the duty-free shops and install new boarding areas and waiting solons at the terminal.

Consortium pulls out of Tocumen bidding
Accusing the Panamanian government of deceptive practices, the Consorcio Tocumen Siglo 21 that's led by the German-based Frankfurt-Hamburg airport group has pulled out of the bidding for the privatization of Tocumen Airport. The company cited four years of repeated delays in the privatization process and numerous changes in specifications.

Companies say they were forced out of Kobbe bidding
The Interoceanic Regional Authority's (ARI's) attempt to sell the Kobbe Beach area for recreational purposes may get down to a sole bidder, and foreign companies that were interested in the project think that it was planned that way all along. A US-Costa Rican consortium headed by the Miami Hilton was the latest to pull out, after ARI imposed requirements that all bidders must have built two tourist hotels within the last four years and must have agreed to a set purchase price for the land for sale at Kobbe before qualifying to bid. The consortium alleges that the requirements were imposed so that only one particular bidder would qualify. Bid-rigging practices by the Moscoso administration have led to the suspension of Inter-American Development Bank funding for the paving of the Pan-American Highway from the Bayano Bridge to Yaviza, scandals over several contracts made by the Ministry of Education and numerous complaints by foreign companies and embassies.

Seguro Social wants to buy Hospital America
The nation's public health care system, which has been burdened by an economic crisis that has driven patients from private to public medical services, is seeking to buy Hospital America, which recently closed all but its outpatient services due to a lack of patients. The social security system would like to use the hospital, which was built in 1994, for pediatric services. The Social Security Fund's board of directors has approved the general idea of purchasing the hospital, but negotiations about price are still ongoing.

Banana strike date set
On July 29 members of the Puerto Armuelles Fruit Company Workers' Syndicate approved an August 20 strike date in the event that there is no new contract agreement with the company, which is a subsidiary of Chiquita Brands. The union represents about 3,200 banana workers, including those who work in the fields and in the packing houses. The last time that the union went on strike, in 1998, the walkout lasted 58 days.

Proposed Bocas-Chiriqui railroad
A group of Panamanian and foreign investors has presented the Cabinet Council with a proposal to build an Atlantic-Pacific railroad with port facilities for post-Panamax freighters at either end to run from Bocas del Toro province on the Caribbean Sea to Chiriqui province on the Pacific Ocean. Most of the preferred route would run through the Ngobe-Bugle indigenous comarca, which could cause political problems if the project is negotiated solely with the national government. The biggest unanswered technical problem is posed by frequent but usually small earthquakes in Panama's westernmost provinces.

Fine for violating C&W monopoly
The Public Services Regulating Entity has fined the Hyette Corporation $250,000 for offering international calling services in violation of Cable & Wireless's exclusive rights in the international telephone calling market. Under the privatization contract that runs until 2003, the UK-based Cable & Wireless has a monopoly on international calls, and has been jealously guarding this against other companies that offer Internet calling or call-back services.

Teachers strike over pay delays
On August 9 the first cycle teachers at Aguadulce's Centro de Educacion Basica General walked off the job to support six of their number who have not been paid in more than three months. The Ministry of Education has been slow in issuing the paychecks of dozens of schoolteachers, mostly those who were added to the payroll after the start of this academic year, when many schools began classes with less than fully staffed.

Former street sweepers protest
On August 6 former San Miguelito street sweepers took over the municipal sanitation department, alleging that the city's decisions to privatize garbage collection and lay off sanitation workers violates the 1999 agreement which transferred the old Metropolitan Waste Department (MIDA) to the cities of San Miguelito, Colon and Panama City. San Miguelito's new private sanitation contractors took over the job in the middle of July and did not hire the street sweepers.

Doctors disciplined
The Social Security system has taken disciplinary actions, generally by docking pay, against 20 doctors who were not on the job during surprise inspections at the beginning of their work days. Social Security director Juan Jované said it was part of an ongoing crackdown against tardiness and absenteeism in the nation's public health care system.

Gatun Lake to grow tilapia
The peacock bass that displaced most of the snook from Gatun Lake may soon themselves be crowded out by a new introduced species. The National Maritime Authority and the Ministry of Agricultural development have approved a Taiwanese company's pilot project to introduce tilapia into the lake, raising the African fish species in floating pens. The tilapia will eventually spread throughout the lake, causing unknown and apparently unconsidered changes to its existing sports fishery.

Pharmacies closed
Since the new laws regulating pharmacies went into effect earlier this year, 11 small pharmacies, most of them in the interior, have closed their door. The Medicine Distributors and Representatives' Association says that the pharmacies closed because the new law imposes costs that smaller businesses can't afford.