Business & Economy Briefs

Banana strike in Puerto Armuelles
Some 3,100 employees of the Puerto Armuelles Fruit Company (PAFCO), a banana-producing subsidiary ofChiquita Brands, walked off the job on August 20 and remained on strike as this issue of The Panama News was uploaded. The main bones of contention are job security and health issues. PAFCO has offered modest wage increases if they are related to improved productivity, but the workers are demanding the reopening of Mega 4, one of the company's farms that was purportedly leased to another company, resulting in several hundred job losses. The Labor Ministry has sided against PAFCO in that case, but the ministry's decision to prohibit the layoffs is being appealed. The union is also objecting to PAFCO's new fungicide-spraying techniques, which it and public health authorities say results in some workers inhaling toxic mists. Chiquita Brands, which in recent years has been hard-hit by European Union banana import regulations and low prices on the world market, is threatening to permanently shut down PAFCO. The union leadership rejects the threat as a bluff and vows to continue the strike until the workers' demands
are met.

Bus loan program stalled
According to the compromise that ended a week of violent disturbances over an urban bus fare hike earlier this year, the fare hike from 15" to a quarter was put off until December 15 and the National Bank of Panama created a $30 million fund for loans to repair or replace buses. Now the bank says that bus owners are trying to use the loans to pay off old debts, which it won't allow, and that there are relatively few takers on the loan offers. Meanwhile, President Moscoso is threatening not to give the bus owners their rate hike in December because there is no improvement in service, and on the buses themselves great and small defiances of the government have become commonplace. Most of the city buses are owned by their drivers, who are organized into syndicates, but some are owned by companies or individuals who directly or indirectly hold several permits. Some of the few takers on the loan offer have bought large new air-conditioned buses, which generally charge a 25" fare despite the legally mandated 15" limit. On the red devils - coverted old US schoolbuses - many driver/owners are installing sound systems, klaxons or other illegal noisemakers, and they're racing around and overloading in order to make a few extra dollars per day, while cutting corners on maintenance. The root of the problem is that the 15" fare does not permit proper maintenance and safe operating procedures, nor would it support the repayment of a loan to buy a new bus, and few bus owners trust President Moscoso to stand up to expected street protests and allow them a sustainable fare on December
15.

Tourism up
The government's IPAT tourism bureau reports that in the first six months of this year we have seen more than 18 percent more visitors than in the same period of 2000, that is, 329,499 compared to 277,991. The biggest part of the increase is coming through the ports, and reflects the rise of cruise ship tourism. The country's main entrance, Tocumen Airport, has seen a small rise, as has the Paso Canoa border crossing from Costa Rica. Traditionally most "tourists" have been business travelers, mostly going to the Colon Free Zone. However, with the increased popularity of conducting Free Zone transactions over the Internet and sluggish activity in the duty-free import-export zone, it appears that both the number and the percentage of vacationers coming into Tocumen are up, probably as the result of ecotourism's increased popularity.

Government revenue down
The nation's Comptroller General, Alvin Weeden, reports that in the first half of this year total government revenues fell by some six percent. The most drastic decline was in income tax receipts, which went down 17 percent. The decline represents a general contraction of economic activity in Panama, and supports the claims of those economists and government officials who say that Panama's economy is in a negative-growth recession rather than a mere slowdown of positive growth.

Mireya vetoes Social Security changes
President Moscoso has vetoed legislation that would subject payments of "costs of representation," generally made to business managers and professionals, to Social Security withholding taxes. She said that the law was "inconvenient" and argued that if it had been signed new forms of excutive compensation would be found to avoid the taxes. Her veto pleased most of the country's business and professional organization, and vexed Social Security director Juan Jovani.

Shift to public health care
The nation's Social Security system reports that it has seen a 40 percent increase in demand for health care services this year. Meanwhile, the demand at the nation's private hospitals is down about 50 percent, as the weak economy is sending people who used to pay for private services to the public system.

Torre Generali cancelled
The planned Torre Generali on Calle 50 and Via Brasil, which would have been Latin America's tallest building, is now just a memory and a big hole in the ground. Promoter Carlos Nadwani called off the project when he found that there would not be enough tenants to make the building profitable and that banks, taking notice of a Panama City office vacancy rate of at least 50 percent, aren't willing to lend money for office towers these days.

FAO opens office here
The Food and Agricultural Organization, a United Nations agency,has opened an office in La Boca. The permanent facility will lend technical assistance to agricultural, water and forestry projects, particularly in the Panama Canal watershed.

Government bond auction
On August 21 the Ministry of Government and Finance held a government bond auction, in which 26 bidders participated. The government sold $50 million in treasury bonds, almost all to banks or other private financial institutions, at an average interest rate of 4.54 percent.

$500,000 in fines for tree massacres
Panama City has imposed a $400,000 fine on Parque Gloria for cutting down 1,800 trees in and around the Corozal Cemetery without a city permit. The city also fined a subsidiary of the controversial Grupo Shahani development enterprise $100,000 for cutting down some 400 trees in the corregimiento of Ancon without permits. The record fines were imposed in part because the cuttings were severe enough to affect the Panama Canal watershed, and also because some of the areas that were cut down were among Panama's rare old-growth forests.

National Stadium faces bankruptcy
Professional winter ball is scheduled to come to Panama in November, but meanwhile the employees at its prime venue, the National Stadium on Cerro Patacon, are facing payless paydays. Due to the weak national economy, the stadium is not bringing in enough money to pay its payroll or its large electricity bills, and the promoters are looking for about $14 million in financing to tide the facility over until better times.

New car sales down
According to the Registro Vehicular, new car sales in Panama for the first six months of 2001 are down about 39 percent from the same period in 2000. The luxury BMW and Lexus lines show the smallest decreases, while the market for four-wheel-drive vehicles appears to be hit the worst. Panamas' top-selling auto makers are, in order, Toyota, Nissan, Mitsubishi, Hyundai and Isuzu.

TVN gets channel 9 in Colon
A subsidiary of TVN, which operates channel 2 in Panama and Colon, ended up as the only bidder in the contest for channel 9 in Colon, the remaining television channel that Panama received when the broadcasting rights formerly held by the Southern Command Network were abandoned pursuant to the 1977 Panama Canal Treaties. The other channel, channel 7 in Panama City, was previously auctioned off to MEDCOM, which runs the RPC and Telemetro national TV networks and the Cable Onda cable system. Telecomunicaciones Nacional, SA will pay $2,352,100 for its rights in Colon, and must begin broadcasting over its new channel within two years. At the moment Panama's commercial television networks have cut broadcast hours and eliminated more expensive programs such as Major League Baseball due to a sharp drop in advertising, so it may be awhile before any of the new channels begin operations.

La Prensa falsifies circulation figures
In an August 19 business section article about the government's advertising budget, La Prensa claimed that it has a circulation of 45,000. During the acrimonious campaign for control of the paper which put former foreign minister Ricardo Alberto Arias in charge, the figure 50,000 had been asserted as La Prensa's circulation. However, in an August 20 retraction, La Prensa admitted that its previous day's figure was inflated by about 20 percent, alleging that the paper's average daily paid circulation in the month of July was actually 37,367. Falsified newspaper circulation, television viewership and radio audience figures are common in the Panamanian advertising industry and are not specifically banned by Panamanian law, though arguably they amount to fraud. Meanwhile, the paper is suffering from lower ad sales like virtually all other Panamanian media, and thus publishes fewer pages that it used to do.

Veteran journalists return to El Siglo
El Siglo, the daily tabloid that was purchased from Jaime Padilla Beliz by a group headed by former Christian Democrat police chief Ebrahim Asvat earlier this year, had both before and after the sale experienced waves of layoffs, dictated in the first instance by the economic pressures of a smaller national advertising market and then by the new management's desire to impose different quality standards and a new political orientation. In recent days, however, two of those who had been let go have returned to El Siglo's pages. Photojournalist Carlos Navarro, who at times has been a contributor to The Panama News, is back on the job as one of the daily's regular photographers, and on August 23 reporter Marcelino Rodrmguez filed his first story in a long time from his old Panama Oeste beat.

Tiempos del Mundo creates RP edition
The Reverend Sun Myung Moon's Spanish-language newspaper, Tiempos del Mundo, has inaugurated a weekly Panama edition, which will contain six or seven pages of news about Panama. The local editor is Franklin Castrellon, who for many years was a publicist with the Panama Canal Commission while moonlighting for The Bulletin, Ted James's bilingual shipping industry weekly. Castrellon later served briefly as the editor of El Universal's weekly Mundo Maritimo supplement. Reverend Moon, the billionaire religious and political activist who claims to be the "Third Adam" sent by God to purify humanity's bloodlines after the alleged failures of Adam and Jesus Christ, also owns The Washington Times, the UPI news agency and extensive international investments in the seafood and cut flower industries.