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The Moscoso administration has proposed a national budget of $5.29 billion for 2003, 17 percent less than this year's $6.422 billion. Although the budget document itself calls for about 22 percent of its spending to pay the national debt, when "off-budget" spending is taken into account most of Panama's public expenditure for next year --- 51 percent --- will go for payments on the public debt. According to analyst Jan Dehn at Credit Suisse/First Boston, the International Monetary Fund is likely to be pleased with the budget and grant new loans to Panama. The government says that its budget will be flexibly based upon actual revenues, but according to Dehn "this is not a cash budget in the strictest sense... we expect the government to manage cash flows using Treasury bills."

In a visit to Cerro Escopeta, Kuna Yala, President Moscoso said that her proposed 2003 budget will get the nation's economy moving and put "money on the streets." Mireya was in the indigenous community inaugurating an $843,500 rural aqueduct project.

A study released by the Social Security Fund shows that of 252 banana workers examined, 47 percent had chronic health problems associated with the toxic chemicals used in their workplace. Cincinnati-based Chiquita Brands, the parent company of the Puerto Armuelles Land Company (PAFCO) and other subsidiaries in Panama, is threatening to close down its operations here unless unionized banana workers agree to give up a number of their benefits, including some of the protection that they currently have against workplace toxins. The Ministry of Agricultural Development (MIDA) says that it intends to tighten up national restrictions on the use of farm chemicals.

Legally mandated minimum wage negotiations between Panama's business organizations and labor unions have stalled, with organized labor calling for a raise and management sternly resisting it. Although union members did stage a September 24 protest march against management's refusal to consider an increase, the poor state of Panama's economy and the government's hostility to the labor movement make any significant minimum wage hike unrealistic at the moment and that fact is reflected in the lack of talk about strike actions on labor's part. Under Panama's labor law, the month in which business and labor representatives had to negotiate a new minimum wage scale has passed so any adjustments will be made by presidential decree. Two years ago, when the unions were pressing much harder for a significant raise and there was a similar stalemate, President Moscoso decreed a nominal minimum wage increase.

Though representatives of shipping companies and of several countries filed their objections to the recently passed Panama Canal toll increases at public hearings on the matter and some Panamanians questioned the wisdom of the move, in this country opinion has been nearly unanimously in support of the proposition that Panama has the right to set tolls as it sees fit. However, that may or may not be so. Ecuador has filed a complaint about the increase before the World Trade Organization, alleging that the toll increase amounts to an illegal non-tax barrier to free international trade. The Panamanian government has scornfully dismissed the Ecuadoran complaint, but the WTO will take up the matter and might rule in Ecuador's favor.

The City of Knowledge will be come home to the Universidad Maritima Internacional de Panama. On September 17 an agreement among the University of Panama, USMA, Texas A&M and the University of Texas to create the new educational institution was announced.

On September 28 the Celebrity Cruise Line's Millenium called at the Port of Cristobal, marking the start of the current cruise ship season. The ship carried some 2,000 North American and European passengers, most of whom disembarked to shop or go on various tours.

Negotiations for a free trade agreement between Panama and Taiwan are set to begin on October 3 in Panama City. Taiwan joined the World Trade Organization earlier this year, but due to pressures from China, which considers the island that has been self-governing since 1949 a renegade province, Taipei only has diplomatic relations with 29 countries and is not part of any bilateral or multilateral free trade agreement. Although the goal of a Free Trade Area of the Americas by 2005, the Bush administration is trying to negotiate separate accords with the hemisphere's weaker or more compliant governments and the Moscoso administration has expressed its willingness to break ranks with the rest of Latin America and reach a bilateral deal. If Panama gets duty-free access to the US market, and Taiwan has a free trade deal with Panama, that would tend to give many Taiwanese businesses better access to the American market "through the back door."

The country's principal east-west traffic artery, the Pan-American Highway, was shut down for most of September 25 when bus drivers from Arraijan, La Chorrera and Capira parked their vehicles in the road to protest illegal competition from taxis and mini-buses on routes in and out of Panama City. The existing bus routes leave little or no service to many new neighborhoods in the growing metro area, and "pirates" have moved in to meet the demand. In talks that ended the standoff, the government agreed to review the whole question of public transportation in Panama Oeste and to crack down on illegal service providers.

ETESA, the publicly owned company that remained in charge of the power lines bringing electricity from one set of private generators to another set of private distributors after the old IRHE public power utility was privatized, wants to shed 223 of its 450 workers. The company is proposing early retirements, a plan to which the employees' union objects. The plan has to be approved by the Public Services Regulating Board.

With the end of its fixed wire service monopoly approaching, UK-based Cable & Wireless has signed its first interconnection agreement with a competitor. Galaxy Communications Corporation, under the trade name CLAROCOM, will start offering services in January. Talks between Cable & Wireless and a number of other companies that seek to compete remain stalled.

El Panama America reports that Eletra Industrial Ltd, a Brazilian company, has signed a deal to assemble electric/internal combustion hybrid buses in Panama. The contemplated assembly plant would employ up to 600 workers and produce mainly for export.

The US Agency for International Development has awarded $31 million in grants for communities in the Panama Canal watershed and in the Darien near the Colombian border. The watershed area grants are to improve government efforts to monitor activities that can affect the environment. In the Darien the aim is economic development, with the hope that a better way of life and more modern infrastructure for villages there will make the area a "buffer zone" against "drug trafficking and violence" coming this way from Colombia.

In a sweep of Bella Vista, police and immigration authorities have closed down dozens of food stands and other street vendors that were being run by non-citizens. Panamanian law reserves the retail trade to citizens and Panama City ordinances similarly deny street vending permits to foreigners.

On September 17 Hospital San Judas Tadeo, formerly a private institution in Panama City which the Social Security Fund bought and refurbished, reopened as a public health care facility. Work is well underway at the Hospital America, another private hospital that Seguro bought, and that facility should be open in a few weeks.

Panama City and the National Heritage Directorate have issued new rules for signs in the historic Casco Viejo neighborhood. All signs will need prior approval by the Direccion Nacional de Patrimonio Historico and glass, plastic, acrylic and neon signs are prohibited.

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