The Legislative Assembly has passed and President Moscoso signed a law that will permit the spending of most of the money received from the privatization of state-owned companies during the Pérez Balladares administration. Most of the money will be used to pay down the national debt, with about $200 million of the $1.3 billion fund to be used for road, irrigation and urband water system projects. The law also allows the sale of what remains of the Canal Zone to finance the Colon-Panama autopista and a Panama City sewage treatment system.

The government of Vietnam has complained that the Panamamanian consul in Manila, Juan Carlos Escalona, is improperly offering to sell Panamanian seamen's papers to Vietnamese sailors. The sale of such certificates to unqualified persons has become an international scandal and has led to delays of Panamanian-flag vessels by coast guards around the world as Panamanian papers are subjected to special scrutiny. This, in turn, has led to several large shipping companies switching their ships away from Panamanian registry. The Moscoso administration, which has multiple members of the extended Escalona family on the public payroll, has steadfastly approved the practice. Foreign Minister José Miguel Alemán says that Vietnam's complaint about Escalona won't even be investigated.

On April 8, the US Embassy here changed the private security guard companies that guard the embassy. Out was the Panamanian subsidiary of United International Investigative Service, a California-based company whose managers left the country without paying the 80 now unemployed guards the $180,000 or so they were owed in wages and severance benefits. The embassy said that the company was responsible, the Panamanian subsidiary said that the California office was responsible, and the privatization of the defense of US territory in Panama has left a sour taste in the former guards' mouths.

Diving season is here, but recovery work at the site of an old ship that might be Christopher Columbus's Vizcaina is stalled. The Ministry of Economy and Finance has stalled for more than one year in processing a permit application by Investigaciones Marinas del Istmo (IMDI), the company that has been given the recovery concession by the National Institute of Culture. The Panama News has learned that last year an official at the ministry invented a new "tax" and demanded large weekly payments from IMDI. Essentially, what's happening is that now that the historical value of the old ship off of Playa Dama near Nombre de Dios is understood, various government officials are trying to make money off of it, either by extorting payments or by taking the project away and giving it to their own families or friends.

Employees at the nation's only oil refinery walked off the job from May 7 through 9 to protest Chevron-Texaco's plans to shut the facility, but suspended their job action as Panama's gas station got down to their final day's supply and the company offered a $27.5 million plan to save many jobs by converting the facility to fuel storage only and to compensate those who would be left jobless.

Graciana del Castillo, formerly head of the Standard & Poors economic analysis firm's Latin American office, says that Panama's economy will not grow and may very well shrink this year. At a conference on the future of the banking center, she urged Panama to reform the tax system, which the Moscoso administration says it won't do. She said that the "three-in-one" law to spend the Fiduciary Development Fund proceeds from privatizations during the Pérez Balladares administration, mostly on paying down the national debt, is a positive move but not enough to turn the Panamanian economy around. The entire fund represents between two and three tenths of a percent of Panama's Gross Domestic Product.

Virtually all of the concessions given for Panama's private seaports were accompanied by contract provisions that if another port received a tax break, subsidy or other economic benefit, they would also receive it. Starting with the CEMIS multi-modal center proposal for Colon, and now continuing with the renegotiation of Hutchison Whampoa's concession to run the ports of Balboa and Cristobal, Manzanillo International Terminal is now demanding that its economic package should be renegotiated in its favor. Evergreen, which runs a port in Coco Solo, is expected to follow suit. Hutchison is claiming that land and buildings that it was owed in its original contract have not been delivered, and wants compensation for that. The other companies are likely to claim that this is a subsidy and that they are entitled to comparable benefits. Hutchison's subsidiary here, Panama Ports Company, has resumed making its contractual payments to the Panamanian government while negotiations are in process.

2003 is shaping up to be a major national centennial party. The latest event to be added to Panama's calendar is the Miss Universe pageant, which is run by a company owned by Donald Trump. The event is tentatively scheduled for next May. Panama hosted the pageant once before, in 1986.

BellSouth is in court against TRICOM again, this time alleging that the latter company, which is based in the Dominican Republic and offers "trunk radio" phone services that are remarkably like cell phone functions, is violating its concession from the government by offering voicemail and text message services. The two companies are fighting a multi-front battle in the courts and before the Public Services Regulating Board.

The Moody's bond rating service has demoted TRICOM's commercial paper from a B3 to a Caa1 rating. The main reason was for increased debt load, and also because its long distance calling business in its base market of the Dominican Republic has not been as profitable as expected.

The government has approved the importation of 55,000 metric tons of rice. Though planting came a bit late due to delayed rains, this year some 71,000 hectares of the Panamanian staple have been planted, nearly six percent more than last year. The problem is that last year's drought has left Panama's granaries low until the next crop comes in.

The Central Azucarera La Victoria SA sugar mill in Santiago has been fined $10,000 for releasing waste products into the Cañazas River last February, causing a massive fish kill. The fine was imposed by the National Environmental Authority (ANAM), both for discharging into a waterway without a permit and for the damages that were caused.

On July 1, new electric rates approved by the Public Services Regulating Board will go into effect. However, the board won't say what the rates they approved in April will be, or even if they're going up or down. An announcement is expected at the end of May. Panama does have a new freedom of information law, but the board, like many other government agencies, is pretending that it doesn't apply because regulations haven't been written.

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