Representatives of the political parties, business groups and labor unions have reached a partial agreement about the use of the Fiduciary Development Fund created from the proceeds of the sales of state-owned enterprises during the Pérez Balladares administration. By consensus, it has been agreed that some $200 million will be spent to widen the Pan-American Highway all the way to Chiriqui, upgrade metro Panama City's water and sewer systems and develop irrigation and other agricultural infrastructures. The fund, which has more than $1.25 billion deposited mostly in banks and mutual funds the United States, was set up so that the government could use the interest it earns for social development projects but not touch the principal. President Moscoso, who wants to use most of the principal to pay down the national debt, created a National Dialogue to try to reach a consensus about the fund's use, in order to gain the consensus that would be needed to gain approval in a Legislative Assembly that is controlled by the opposition. Labor's representatives are absolutely opposed to using the fund to pay debts and are wary of some of the government's proposed development projects, and the PRD representatives have proposed a national referendum about using the fund to pay debts. Some of the projects that the Moscoso administration had once suggested that the Fiduciary Fund be used to finance, such as the new bridge across the Panama Canal, the metropolitan light rail mass transit system and the Albrook government city development, are now being contemplated with funding from other sources.

The National Environmental Authority (ANAM) has suggested a series of alternatives to the development plan submitted for the Multimodal Service and Industrial Center (CEMIS), an ambitious development project that has as its centerpiece the expansion of France Field airport into an international facility designed mainly for air cargo. Many environmentalists and the Smithsonian Tropical Research Institute had complained that CEMIS's original plan for the project would endanger the fragile ecosystems around the Galeta Island research station, which include one of the world's top birdwatching locations. The CEMIS promoters have 90 days to respond to ANAM's suggestions, and if no agreement is reached the authority could kill the project by rejecting the promoters' environmental impact statement.

Despite fewer exhibitors taking part this year, the 2002 EXPOCOMER trade fair generated a lot more business than the 2001 event, the Chamber of Commerce reports. At this year's fair $111.6 million in transactions were reported, as compared to $90.7 million in 2001. The chamber says that some 41,233 people walked through the turnstiles at this year's trade fair.

In an unusual and hard fought election contest, José Javier Rivera was elected as the next president of the Chamber of Commerce, Agriculture and Industry of Panama, along with most of his slate of nominees for other chamber offices. The chamber has 1,233 affiliates, mostly from the nation's larger businesses. In the past few years a declining economy, infighting and the ties of many of its members with a discredited political class have combined to make way for other business groups, particularly the Panamanian Business Executives Association (APEDE), to take the leadership role in speaking for the business community.

The government of El Salvador has lifted national ownership restrictions on banks with respect to Panama. Salvadoran law had required that 50 percent of the capital of any bank doing business in El Salvador must be Salvadoran, but as part of the recently signed Panama-El Salvador free trade pact Panamanian banks will be able to buy controlling interests in Salvadoran financial institutions.

La Prensa reports that Attorney General José Antonio Sossa has asked the nation's Financial Analysis Unit for details of all transactions involving $10,000 or more that have taken place in Panama since this past October. Citing an unspecified money laundering investigation, Sossa wants to see tens of thousands of records, most of which have no relationship to any criminal activity. The request has drawn criticism from legislators on both the government and opposition side, and may have the intended effect of reducing the business community's support for investigations of legislative corruption.

Chevron-Texaco, which owns Refineria Panama, the nation's only petroleum refinery says that it wants to end its contract with the Panamanian government and cease its refining operations at Bahia Las Minas in Colon province. The company says that it wants to continue to use the tanks at Las Minas as a storage center. Up to 165 jobs could be lost if the refinery closes. The government has not said whether it is willing to agree to the contract cancellation, but some in the business community say that such a move would actually be good for Panama's business climate because it would liberate the country from contract provisions that keep our fuel costs higher than they might otherwise be.

The price of gasoline at Panama's retail pumps has risen 14¢ or 15¢, depending on the octane grade. The increase is due to a hike in the world price of petroleum.

Venezuela's state-owned oil company, PDVSA, recently sent a delegation here to explore the possibility of building a petroleum product storage facility and an oil pipeline in Panama. Venezuela is Latin America's largest petroleum exporter, but has been restricted with regard to the business it does here due to exclusive provisions in the government's contract with Refineria Panama, a subsidiary of US-based Chevron-Texaco. Those restrictions would evaporate if Chevron-Texaco cancels its contract with the Panamanian government, as it says it wants to do.

The Comarca Ngobe-Bugle, a semi-autonomous and desperately poor indigenous commonwealth that encompasses much of the provinces of Veraguas, Chiriqui and Bocas del Toro, has few public roads, but the authorities there have decided to charge tolls for anyone who uses such roads as there are. Drivers are charged 50¢ upon entering the comarca and another 50¢ when leaving. The new tolls have elicited protests from some non-indigenous residents who live in or near the comarca, and the UK-based Cable & Wireless phone company has announced that it will no longer maintain phones in the Veraguas part of the comarca "to protect the safety of its employees."

Panama City is now publishing information on its budget, revenues and payroll on the Internet. The move complies with the recently passed national Freedom of Information Law and goes a bit further than that which is legally required, but the city is not publishing details about the payrolls of the city council, the neighborhood councils, or the semi-autonomous treasurer's office and public works and sanitation departments. To find city financial information, visit http://www.municipio.gob.pa .

On March 19 pilots for Panama's domestic air carriers staged a nine-hour work stoppage to protest plans to move the Marcos Gelabert Airport, which was moved to Albrook from Paitilla two years ago at great expense, to the former Howard Air Force Base. The Moscoso administration wants to use the present airport site for a Governmental City project, wherein the government would sell the land to private developers, who would build offices and rent them to the government. The scheme is considered inconvenient from the point of view of many air commuters, and corrupt and wasteful by most independent analysts who look at its Governmental City aspect.

On March 23 members of the National Association of Nurses and Aides (ANPAE) picketed in front of the old Hospital Oncologico. They complained that the government is not paying nurses and nurses' aides for overtime, as specified in their labor contract. The protesters also criticized the government's decision to close the Instituto Nueva Vision in David.

On March 7, shareholders at La Prensa re-elected current directors who were up for re-election, and on March 22 the paper announced the composition of its new board of directors. Missing from the lineup was former director Roberto Brenes, who is also a member of the National Securities Commission. Brenes's position on the La Prensa board was in conflict with his position on the commission, as La Prensa's shares are traded on the Bolsa de Valores that the commission regulates. La Prensa has never explicitly mentioned the controversy over Brenes's dual membership, which was raised by Javier Romero, a semi-retired businessman who published the online business newsletter El Inversionista.

La Prensa and Eric Jackson, the editor of The Panama News, have reached an out-of-court settlement over the latter's copyright piracy claims against the former. Last year La Prensa used three of Jackson's photographs, which it scanned out of his book "9°N," without permission or payment. After Jackson filed criminal copyright violation charges against La Prensa's publisher, former Foreign Minister Ricardo Alberto Arias, editor Daniel Domínguez and reporter Errol Caballero, prosecutors working under Attorney General José Antonio Sossa, a political ally of Arias, threw out the charges against Arias and stalled action on the case. La Prensa then appealed on its front page and to international journalism and human rights groups, listing Jackson's charges as a violation of their freedom of the press. Jackson appealed to businesses and institutions with which La Prensa has important economic ties, one of which promised to look into the matter and said that it would not continue doing business with a newspaper that engages in brazen piracy. The dispute was settled by La Prensa paying Jackson for the use of the photos without acknowledging any wrongdoing. Another copyright piracy claim against La Prensa, by photographer Carlos Guardia, is still pending in a civil case. Criminal copyright piracy charges that Guardia brought against La Prensa for the unauthorized and unpaid use of one of his photos of former dictator Manuel Antonio Noriega were dismissed, but that decision is being appealed. As with Jackson's case, prosecutors are siding with La Prensa against Guardia. La Prensa publisher Ricardo Alberto Arias has said that he wants to be president of Panama.

Panama's copyright office is part of the Ministry of Education, a fact the means little of practical consequence for the country's musicians and composers, who are almost never paid any royalties for the commercial use of their work. The Panamanian Society of Authors and Composers (SPAC) has been trying to change that, and toward that end they have a contract with Recaudaciones Corporativas Directas SA (RECORD) to monitor and collect on behalf of the artists that SPAC represents. Now, however, Education Minister Doris Rosas de Mata is demanding that SPAC cancel its contract with RECORD, first because RECORD stands to receive 38 percent of the royalties they collect and second because RECORD's contract is "against the interests of the authors and composers whom SPAC represents." RECORD is also not owned by members of Rosas de Mata's MOLIRENA party.

Autofinanzas, the financing affiliate of Motores de la Guardia, has a massive fleet of repossessed cars, few buyers and a big debt as the result of the ongoing economic crisis. Like several other troubled Panamanian businesses, Autofinanzas is asking bondholders for a restructuring of its debt. The company has lost $2 million and owes bondholders $4.5 million. The company has offered three options, which combine later payment dates and lower interest payments. It may not be in creditors' interest to insist on payment as agreed, as that could push Autofinanzas into bankruptcy liquidation that would yield very little for creditors.

Law 27 of 2001, passed to protect Panamanian culture, prohibits the importation of foreign-made molas or other reproductions or depictions of national culture. The law is getting its first test after El Machetazo and the Centro Oriental were raided for selling Taiwan-made dolls wearing polleras and montunos. The stores were fined $500 each and the offending merchandise was confiscated and destroyed, but if foreign manufacturers care to press the point before the World Trade Organization, the Panamanian legislation may not withstand an appeal.

The Ministry of Economy and Finance is studying Panama City's pricey Calle 50 area with a view to reassessing its real estate for tax purposes. That has raised the hackles of the Real Estate Brokers Association (ACOBIR), whose leaders warn that if assessments go up, owners will tear down the area's buildings and turn Calle 50 into a ghost town of vacant lots. ACOBIR has in recent years been quite successful at political manipulations affecting the real estate market, most notably with respect to houses on the former US military bases, whose prices have been kept artificially inflated in order to maintain higher urban rents and real estate prices than supply and demand would ordinarily dictate.

Comptroller General Alvin Weeden complains in a report that the government has been paying for insurance on cars that have been sold or abandoned. Weeden also says that the government pays insurance for planes that don't fly. It seems that the main problem is that the government neglects to inform insurance companies about changes. Meanwhile, the government is behind on payments for many of its insurance policies, which has led a number of insurance companies to stop doing business with the government.

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