The Moscoso adminstration, which has added more than 9,000 employees to the public payroll on its watch and is faced with a serious budget deficit, has decided to get the nation's finances closer to a balanced state by postponing some $150 million in capital investments over the next year. The money will mainly come from housing, health care facilities and the public schools. The cutbacks have set a particularly bitter tone for the president's special legislative session, which she called to discuss improvements to the national education system.

On June 18 more than 700 striking doctors, some of whom had been off the job for more than a week, went back to work. An agreement that compromised on the issue of overtime pay and changed work schedules was accepted by a narrow majority of the physicians who had walked out.

On June 19 the Civil Aviation Directorate turned France Field airport over to the Consorcio San Lorenzo, a multinational consortium that has the concession to develop the CEMIS multimodal cargo handling, airport and industrial park project. CEMIS intends to start rebuilding the airport itself at once, as a spokesman for the project says that it has been allowed to deteriorate to the point that there are serious safety concerns with the airport as it currently is. CEMIS plans to greatly expand the old US Army airstrip and turn it into an international airport that handles cargo as well as passenger flights. Presently the airport is used for private aircraft and domestic commuter flights.

Construction work will start any day now on the second Pacific side bridge over the Panama Canal, which will span the waterway between Cerro Nitro near Paraiso and the explosive shell impact area of the former Empire Range. The bridge's location has drawn protests from the Panamanian Society of Engineers and Architects (SPIA) on safety, soil suitability and urban planning grounds, but the Panama Canal Authority has approved the plans for the $91 million project. The project's general contractor is a German company, Bilfinger Berger.

The Ministry of Economy and Finance's Estelabel Piad says that in April and May the national government's revenue increased some 13 percent over the amount collected in the same months last year. Piad takes this as a sign that the economy might be turning around.

The Legislative Assembly has rescinded a $30.4 million contract with HNTB Design-Build Panama, the local subsidiary of a US-based company, for a new assembly building. The contract had called for the company to finance, design, build and equip the new facility, which had tentatively been planned for a site adjacent to the Metropolitan Nature Park, and then rent the building and its contents to the government. The company had difficulty obtaining financing and did not get the project underway within the contractually specified time. The project was the target of criticism from environmentalists and anti-corruption activists, who considered it wasteful from several points of view.

President Moscoso has reneged on her promise to obey an international court decision handed down pursuant to a treaty to which Panama is a party, and that maneuver provoked a brawl between workers and riot police in June 28 on Via España. After years of legal proceedings, 270 former public employees who were fired for participating in labor protests in December 1990 won a judgment from the Inter-American Human Rights Court in February of 2001 that awarded them damages, the right to their jobs back and back pay and benefits with interest. After stalling for nearly a year and one-half, the Moscoso administration said that it was ready to pay, but when the time came workers found out that the government didn't intend to pay any compensation to 75 of the fired workers, would only pay benefits the time that workers who took lower-paying employment had no jobs at all, would pay no interest or compensation for lost benefits and would offer no re-employment. In order to get paid the unilaterally reduced compensation, the ex-employees were required to sign agreements not to sue the government for cheating them out of what is due to them under the court's judgment. Only 40 people accepted Moscoso's deal under duress, while dozens of others blocked Via Espa–a in protest. The riot squad was called in, scuffles ensued and 11 of the protesters were arrested.

President Moscoso has approved the conversion of 200 hectares of a protected forest area near El Valle into a sand mining pit. The government has labeled the strip mine that it approved a "tourist development." The Ministry of Commerce and Industry has barred public access to the permit applications for the project, and the Panamanian Mining Chamber is complaining that its members who had wanted to extract sand from the site were not allowed to bid for the rights.

La Prensa reports that during the first five months of 2002 the total amount of money spent on advertising in Panama went up by a little more than 10 percent as compared to the same months of the previous year, from $56,125,475 to $61,913,979. However, more than $7.49 million of the increase was for television advertising, while ad revenues in print media and the radio went down. The increasing share of the national ad market taken up by spam email was not considered, nor was Internet advertising in general.

John Bennett, an executive with the George F. Novey department stores, has been elected as th new president of the Panamanian Business Executives Association (APEDE), which is probably the most influential of Panama's business organizations. Bennett promises to continue the group's established direction, which is largely aimed at promoting a series of economic and political reforms that it believes would improve Panama's business climate. APEDE has advocated more transparency in both the public and private sectors, less bureaucracy and corruption, improved public education, an effort to increase social stability by reducing the worst extremes of poverty and a national strategy to emphasize economic sectors that show the greatest promise of growth.

The Moscoso administration's decision to exonerate most of the payments that the Panama Ports Company, a local subsidiary of Hong Kong-based Hutchison Whampoa, had been contractually required to make to the government for its concessions at the ports of Balboa and Cristobal is being challenged in a lawsuit brought by three legislators, PRD members Miguel Bush and Pedro Miguel González and the Partido Popular's Teresita de Arias. The deputies argue that the contract modification that lets the company out of paying $22 million per year in rent plus 10 percent of the ports' gross revenues was unconstitutionally done by way of a Ministry of Commerce and Industry decree, whereas it should have gone before the Legislative Assembly for approval or rejection.

When the Pérez Balladares administration privatized the state-owned telephone and electric companies, Panama retained large minority stakes in the new private ventures. Now that the Social Security Fund has suffered serious losses due to the present economic downturn and it is projected that the system could go broke in as little as 14 years, President Moscoso has suggested that the sale of Panama's shares in Cable & Wireless and the electric companies can make up the losses. The problem, however, is that it may be hard to find a buyer for the government's shares. Panamanian laws and customs are not very protective of minority shareholders, and Cable & Wireless is a particularly hated and mistrusted company, so independent buyers would be hard to find. Meanwhile, Cable & Wireless has said that it is not interested in buying the government's shares in its Panamanian subsidiary.

Constructora Urbana, SA, one of the Panama's biggest companies, won recent bidding for the rehabilitation of the Chilibre water purification plant, with its $52.5 million offer beating the second of three bidders by nearly $2 million. Now, however, the government is thinking about changing the specifications and putting the project out for a new round of bidding. The Panamanian Construction Chamber is crying foul, alleging that the Moscoso administration is trying to rig the process to favor its friends.

Citing an outbreak of swine fever, Panama has banned the importation of Costa Rican hogs and pork products. The Ministry of Agricultural Development has also issued a nationwide alert and called upon Panamanian pig farmers to inspect their animals with special care and report any suspected cases here. The disease is highly contagious among swine.

Rodney Carew, the only Panama native to make it to baseball's Hall of Fame, won't have his name affixed to the National Stadium. In a vitriolic Legislative Assembly debate, Carew was criticized for his West Indian ancestry, for moving to the Unites States and for not caring about Panama. The legislature dropped the idea of renaming the National Stadium after him. In 1941 Dr. Arnulfo Arias stripped the Carew family and all other Panamanians of West Indian ancestry of their citizenship, and the argument that the Afro-Antillean community "are not real Panamanians" persists among the rich and powerful. Other critics who have nothing against Carew or his race opposed the suggestion because they don't believe in naming things after living individuals.

The President Remon Hippodrome is to be replaced with a new horse racing facility that will be called the Hipodromo Amador. The decision appears to be based upon two factors: the land in Juan Diaz where the present track is located is more valuable if the facility is demolished and the real estated sold for housing development; and before he was elected as president General José Remón twice staged coups that overthrew President Arnulfo Arias, the late husband of President Moscoso.

Horoko Golf & Resort SA, which has not complied with its contractual promise to develop 62 hectares adjacent to the former US military golf course, has had its contract amended to reduce the rent owed and doubled from a 20-year to a 40-year term. The reason given by the Interoceanic Regional Authority (ARI) for this is to "equalize" the company's contract terms with those that Summit Golf & Resort SA received. Curiously, the boards of directors of Horoko Golf & Resort SA and Summit Golf & Resort SA are identical. The basic phenomenon is a wealthy elite dealing on favorable terms with their golfing buddies. ARI has shown no such understanding in cases of athletic facilities that those without wealth and political connections would use, and has destroyed many of the pools, playing fields and gyms that have come into Panama's hands under the 1977 treaties.

The Interoceanic Regional Authority has notified Panama's coast guard, the National Maritime Service (SMN), that it must stop using Rodman's Pier 3. The pier at the former US naval station was given to the US-Saudi Alireza Mobil consortium as part of the sale of the Rodman fuel tank farms.

Several Panamanian lawyers and several banks are being investigated for allegedly helping former Nicaraguan President Arnoldo Alemán launder the proceeds of bribery here in Panama, and some former Alemán administration officials are believed to be in hiding in Panama. The case is being handled by the anti-drug prosecutor on this end because it is alleged that Alemán made money from drug traffickers' bribes, but the more prominent case against the former Nicaraguan president has to do with skimming the proceeds from the sale of state-owned utilities.

The Dorian's stores in Plaza Edison and on Avenida Central have closed their doors after the Labor Ministry sequestered their assets to ensure that employees' back wages were paid. The company's owners say that they'll pay their debts, but that with their assets frozen they are not in a position to continue in business. The apparent bankruptcy is another sign of Panama's continuing economic woes.

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