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Environmentalists continue battle against Colon development

Though the process by which the contract was approved has become the center of bribery allegations, President Moscoso went to Colon and signed the deal with the Consorcio San Lorenzo. Still, there is the matter of an environmental impact permit from the National Environmental Authority (ANAM), and opponents registered their opposition at public hearings about the environmental impact. The Smithsonian Tropical Research Center's Stanley Heckadon said that if the destruction of mangroves contemplated in the concession is allowed to proceed, the rest Limon Bay's mangroves would also cease to exist within a decade and the area around the institute's Galeta Island facility would be seriously affected. Part of the area slated to be developed, along Galeta Road, is world-famous among birdwatchers and this is being promoted as a reason to deny the permit application. Assuming that they get their permit from ANAM and the bribery allegations don't affect the deal, Consorcio San Lorenzo has a renewable 30-year concession to expand France Field into an international cargo airport, link up the neighborhood's seaports, railroad and airport into an efficient "multimodal" container cargo handling center, and develop adjacent areas for industrial, warehousing and commercial ventures.


Belgian-French consortium to design third locks

The Panama Canal Authority has granted the contract to do the conceptual design for a third and larger set of locks to a consortium that includes Tractebel Development Engieering, Coine-et-Bellier, Technum N.V. and Compagnie Nationale du Rhone. The authority will pay $1.5 million for the job, which will be part of a preliminary plan that is expected to be the basis for a national debate on whether and how the canal should be expanded to accomodate post-Panamax-sized ships.


Tax data sharing gets chilly reception

Though all there is to debate at the moment is an agreement form used in pacts between the United States and the Cayman Islands and the Caribbean nation of Antigua and Barbuda, opposition to the idea of a US-Panamanian tax information sharing treaty is growing. Lawyers, bankers, accountants and the "offshore" financial sector, all of whom stand to lose business if the deal is approved, are the most vocal opponents. Though some people in the business sector are beginning to talk about what Panama's finance industry might be able to do in order to survive an era when there is little or no banking or corporate secrecy, there is a general apprehension that the Moscoso administration is about to accept US terms that will drive most of Panama City's banks and offshore corporations away. The only public defenses of a tax agreement are the US Embassy (which argues that for some reason a treaty of this type would promote tourism), and Moscoso administration officials, who argue that Panama must accept a deal or else remain on international banking blacklists that will slowly strangle our financial services sector.


University cuts vacation pay

Most of the University of Panama's faculty are part-time employees who pursue professional careers outside of academia, and the cash-strapped university has chosen these professors to bear more of its economic burden. Although contracts and past practices dictate that the nearly 3,000 part-time professors should get paid during the three months of university vacations, the administration has decided to pay the profs for only one month. The policy could mean a late start to the 2002 academic year, as the faculty's union leaders warn that they may call a strike over the pay cut.


Shrimp moratorium starts February 1

The Panama Maritime Authority has announced that the annual ocean shrimping moratorium will begin on February 1 and run through April 11 this year. The moratorium does not apply to river shrimp or crustaceans raised in tanks or ponds, but the catching, sale or possession for sale of shrimp from Panama's part of the Pacific Ocean or the Caribbean Sea will be strictly prohibited, and anybody caught fishing those waters with a net that has a mesh of less than 3 1/2 inches will be subject to a fine, the confiscation and destruction of the net, and the impoundment of the boat until after the moratorium is over. It is expected that as in most years, the combination of the shrimping moratorium and an increased public demand for seafood during Lent will temporarily drive fish prices up.


Lack of transparency affects Panama's business ratings

On the January 13 edition of RPC's Enfoque talk show, the former local director of Standard & Poors, Boris Segura, attributed much of Panama's bad reputation on Wall Street to the government. He said that while the Pérez Balladares administration had done many things to modernize the economy, the Moscoso administration has taken backwards steps and has not been forthcoming with timely, complete and accurate information about government finances or the state of the national economy.


Amador cruiser port gets its first big test

The new Amador cruise ship port got its first major test on January 13, when the Rotterdam and the Queen Elizabeth II called there at the same time. The ships carried a combined 4,799 passengers and crew members and Panama City was awash with tourists for the day.


Free trade pact with El Salvador

Overcoming impasses over financial services and dairy products, negotiators for Panama and El Salvador have reached agreement over a free trade pact between the two countries. The deal must be ratified by both countries, where people who have economic interests that may be adversely affected are likely to urge their legislators to reject the deal.


Banks closed

The superintendent of banks has closed two of Panama's banks in recent days. The local branch of the Miami-based Hamilton Bank was quickly shut down after the US Comptroller of the Currency cancelled the mother bank's license for a series of problems with bad record keeping, illegal transactions and insufficient reserves. A few days later the superintendent ordered the liquidation of JJ Vallarino's Banco DISA, which had insufficient reserves to continue and was bogged down in a number of major lawsuits.


More than one-third of credit references negative

El Panama America reports that more than one-third of credit references requested in Panama show that the person investigated has overdue debts. The rate of negative credit reports has been climbing as Panama's economic woes have continued and people and businesses have depleted their assets.


Bern restructures, changes PR tactics

Upscale real estate developer Herman Bern has been obliged to make some adjustments due to the weak economy. He recently surmounted one hurdle when bond holders in his Gamboa Rainforest Resort agreed to a restructuring forced when low occupancy rates at the hotel made it impossible to make payments as planned. The resort is now trying to sell time share units at the resort. The various Bern enterprises have also been trying to attract buyers for its Panama City luxury apartments by email spam advertising and a recent open house at their sales office on Avenida Balboa. The open house did not attract much of a crowd, but only one or two buyers would have made the event profitable. Several Bern projects are under construction despite the difficult market conditions, which is a reflection of the long-term thinking that characterizes the developer's planning style.


Fotokina restructures its debts

Grupo Fotokina, a photography and electronics retail and wholesale business, has reached an agreement with its creditors to restructure a debt of about $55 million. Due to non-payment on a loan from HSBC, the bank moved to sequester one of Fotokina's Colon branches, and that prompted the restructuring.


Coca-Cola de Panama sold to Colombians

The shareholders of Coca-Cola de Panama, which is 52 percent owned by Cerveceria Baru, have agreed to sell out to the Grupo Bavaria, a Colombian consortium that recently bought both Cerveceria Nacional and Cerveceria Baru. The transaction is under review by the Free Trade and Consumer Affairs Commission (CLICAC), which must determine whether Grupo Bavaria's acquisition of Panama's brewing industry and much of its soft drink bottling business amounts to an illegal monopoly.


Supreme Court voids part of arbitration law

Holding that parts of a 1999 lame duck PZ&Mac255;rez Balladares administration law that established an arbitration system to keep some business disputes off of crowded court dockets violates the constitutional provision requiring an independent judiciary, the Supreme Court has crippled the contemplated alternative dispute resolution system. The ruling came as the result of a constitutional challenge mounted by the Mexico-based PYCSA consortium that built and runs the Corredor Norte but has defaulted on its commitment to build a Colon-Panama toll road. PYCSA's economic woes have caused it to default on many commitments and have prompted much civil litigation of the sort that the arbitration law was supposed to speed up.


Union rejects PAFCO's early retirement offer

The Puerto Armuelles Fruit Company (PAFCO), a subsidiary of Chiquita Brands, has seen complications in its efforts to reduce its operations there. The company is trying to lay off workers and transfer farms to cooperatives that would be run by former PAFCO workers. The workers' union suffered a serious
defeat in a strike last August and September, has won a few rounds before labor tribunals, but is largely unemployed. The union recently rejected an early retirement offer that the company made to 200 workers whom it had laid off two years ago. The workers aren't getting their jobs back, and the company won't be settling litigation that could be prolonged and costly.


Fitch lowers Bladex's rating

The Fitch bank rating service has lowered the ratings for the Panama-based Banco Latinoamericano de Exportaciones (Bladex). For long-term obligations the bank went from a BBB+ rating to one of BBB, while for short term obligations Fitch demoted Bladex from F2 to F3. It seems that a major factor for Fitch was that Bladex maintains a large portfolio of investments in Argentina, where the economy is in a severe crisis.


Sears closing for good in March

The Sears store on the Transistmica closed its doors on January 14, with signs on the door referring to an inventory. The definitive order to close came after Sears headquarters in Chicago pulled the Panama City store's franchise, and after an inventory is finished there will be a final liquidation sale and the business will be wound up some time in March. The Panamanian franchise, which started in business in 1997, was owned in equal shares by the Tzanetatos family and the Grupo ADELAG. Due to the slow economy Grupo ADELAG collapsed in 2000 and its remains continue to be the bone of legal proceedings related to alleged improper accounting procedures. Haralambos Tzanetatos resigned from his positions with the company in the middle of last year. Meanwhile, banks in Panama are owed some $29 million, the Sears Corporation hasn't been paid its percentage of the action. Though it had been Panama's largest retail store, Sears was plagued with management problems and paying six-figure salaries to executives who turned out to be ineffective in the present business climate.

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