Comptroller General Alvin Weeden says that Panama's unemployment rate was 13.2 percent in August, down from 14 percent in the same month of 2001. This has set off a storm of criticism, essentially accusing Weeden of falsifying economic statistics for the purpose of political propaganda. Gabriel Castillo, the secretary general of the CONUSI labor federation, called Weeden's figures "deceptive" and noted that the International Labor Organization, a United Nations agency, has condemned the methodology that the comptroller uses. Chamber of Commerce president José Javier Rivera, while not questioning Weeden's motives like the labor movement does, said that the real unemployment figure is between 15 and 15.5 percent. Meanwhile, the Colegio de Economistas de Panama announced a study that showed per capita income going down this year from last and continuing to fall, and Social Security Director Juan Jované, also an economist, pointed out that payroll payments to the fund that he manages are way down, indicating that employment is also down. Weeden, who is conducting a media campaign to get Jované fired, claims that though people are moving from regularly paid jobs to the informal economy that includes selling things on the street, actual unemployment is going down. According to official figures Panama's exports, construction starts, Colon Free Zone re-exports and Panama Canal toll receipts are all down this year. Former Comptroller General José Chen Barría estimates that the country will be lucky to see a one percent growth in Gross Domestic Product for 2002 --- which is less than the population growth --- while the former president of the Panamanian Association of Business Executives (APEDE), Carlos González Ramírez, told La Prensa that Panama "has to fight corruption and lack of coherence in our economic policy." A Dichter & Neira poll commissioned by La Prensa found that 64.7 percent of Panamanians believe that the comptroller's office under Weeden's leadership is corrupt.

The president of the Legislative Assembly, PRD dissident Carlos Alvarado, says that a new legislative palace is a priority again. In recent years proposals for such projects have been abandoned after they ran into environmental objections because they involved the destruction of park lands, fell through when a would-be contractor became embroiled in a scandal in the United States, fell victim to partisan differences between the administration and the legislature, or were simply unaffordable given budget constraints. Now Alvarado is offering two plans, to be financed by way of the sale of real estate in the former Canal Zone. Plan A is to build a 10-story annex behind the present Palacio Justo Arosemena. Plan B is to build an entirely new legislative palace somewhere in the Reverted Areas. Sluggish real estate sales by the Interoceanic Regional Authority may pose a major financial obstacle to Alvarado's plans, and the legislature's unpopularity with the general public may be a political stumbling block.

The Moscoso administration's 2003 budget almost entirely eliminates scholarships for needy Panamanian students, no matter how talented they may be. In 2001, 19,936 students received scholarships amounting to some $7.8 million. The 2002 budget will provide for only 500 scholarships, amounting to a total of $985,000. All educational assistance for the handicapped, orphans, indigenous people learning Spanish as a second language, prisoners and ex-offenders and the poor will be eliminated. The only scholarship program will be for honor roll students, but there won't be nearly enough for all those who achieve academic honors. If history is any guide, family and political connections will be required along with good grades to get one of those scholarships.

El Panama America reports that while at this time last year the nation's private schools expected to lose 6,000 students to the public schools due to the weak economy, only about half that number made the switch. Now, according to unidentified private school sources cited by the daily, the private schools are expected a slight increase in enrollment for the 2003 school year.

On November 5 the government held its last bond auction of the year, reaching the legally imposed borrowing limit for 2002. There were $25,640,000 worth of treasury bonds sold at prices only slightly under the government's goal, bearing interest rates of 7.508 percent.

The Ministry of Economy and Finance has agreed to put most of the funds it intended to cut from the Social Security Fund and Health Ministry back into the 2003 national budget. There's a catch, however. The budget proposal that didn't have those items was approved by the Cabinet Council and sent to the Legislative Assembly. According to Panama's Constitution, any changes that the legislature makes to the Cabinet Council's proposal are subject to a veto by the comptroller, and Comptroller General Alvin Weeden is feuding with Social Security Director Juan Jované.

On November 6 the Cabinet Council approved a free trade treaty with the Central American nations, which would eliminate most import duties and ease the cross-border flow of capital, but which would not greatly affect the possiblities for working people to move from one country to another within the region. Though the Moscoso administration's strategy for negotiating a Free Trade Area of the Americas is incoherent --- sometimes they say they will deal with Washington bilaterally, sometimes as part of the Central American regional block --- in either case there is growing public criticism for the process. The labor unions have long been opposed to regional integration, as have most farmers and certain business and professional sectors. Now the traditional difference in the PRD's and Arnulfistas' orientation toward Latin America is coming into play, with the former more inclined to align Panama with the Andean countries' larger and more diverse markets and the latter finding the social and economic orders of the Central American banana republics more to their liking. Despite this opposition, however, the general notion of free trade is more popular in Panama than is the case in many other parts of Latin America, mainly because our principal industry, the Panama Canal, benefits from increased international commerce.

The Panamanian government has promised the International Monetary Fund that it will reform the nation's tax structure in order to bring in more revenue, and the Moscoso administration, whose proposals toward this end have been dead on arrival at the Legislative Assembly in the past, is trying again. Her series of proposals would get rid of many tax incentives, remove the income tax on people making less than $10,400 per year but make expense accounts subject to tax, increase the scope of the sales tax and hike luxury taxes on things like alcohol and tobacco. However, virtually all business groups have opposed any significant tax reform, with Panamanian Association of Business Executives (APEDE) president John Bennett making a representative prediction that if the proposed changes pass the government will strangle a lot of economic sectors and end up collecting less than before. In what may or may not be an organized campaign, Panama's news media are reporting on a nearly daily basis that one sector or another --- melon growing and export, for example --- will shut down if it loses special tax breaks. Tax reform is likely to be the truest test of the strength of the president's control over the Legislative Assembly.

The Foreign Ministry and the government IPAT tourism bureau have complained that the Panama Canal Authority's restrictions on bunkering --- the taking on of fuel by ships --- have prevented several cruise ships from stopping at the marina and cruiser port on the Amador Causeway, and that cost Panama City a lot of tourist dollars during the Independence Day and Flag Day celebrations. The authority had imposed a ban on bunkering at the Fort Amador Resort and Marina, which it only announced at the beginning of cruise ship season, on the basis of vaguely explained compatibility problems. The marina's contracts, which are with the Panama Maritime Authority and the Interoceanic Regional Authority, do not mention the Panama Canal Authority's compatibility restrictions. After a November 7 meeting among the various authorities and government agencies concerned, the blanket ban on bunkering was lifted. However, it does not appear that the turf war between the Panama Canal Authority and other public entities has been fully resolved in this particular case or in general.

Panama Ports, the local affiliate of Hong Kong-based Hutchison Whampoa that has the concessions to run the ports of Balboa and Cristobal, has purchased five giant new cranes that will be capable of loading and unloading post-Panamax container ships that are too large to fit through the Panama Canal. The cranes, to be installed at Balboa, will be able to stack or unstack containers that are lined up in rows 19 abreast.

Carlos María Ariz, the Catholic bishop of Colon, is pleading for an end to the delays in construction of the CEMIS multi-modal transport and industrial park project. The CEMIS developers recently received the keys to the project's centerpiece, the France Field airport, and on the weekends they are repairing the decrepit runway. However, a lot of the project's major financing is on hold while a series of lawsuits and counter-suits among the Rodin family wend their ways through the courts and while allegations that bribes were paid to gain legislative approval of the CEMIS contract are unresolved. Attorney General José Antonio Sossa has put off the bribery investigation until at least next January, and the Inter-American Development Bank won't disburse loans for the project until the allegations are resolved. Ariz said that he's not for toleration of corruption, but called upon the legal system to pursue the case and punish anyone who's guilty so that CEMIS can proceed and give Colon an economic stimulation that it needs. The project would expand France Field into an international airport (mostly for freight but also for passengers); create a container-handling interface among the Panama Canal Railroad, the airport, the Manzanillo International Terminal and Coco Solo Norte seaports and the Colon Free Zone; and develop warehouse, industrial and commercial projects on the periphery. It has enountered opposition from environmentalists and support from labor unions and community groups. Martin Rodin is one of the development's key promoters, and his father Lew Rodin and brother Peter Rodin have spun a web of lawsuits and criminal complaints designed to either kill the project or put them in a position to take it from Martin. Dissident PRD legislator Carlos Afú claims that bribes were paid to secure the Legislative Assembly's unanimous approval of the CEMIS contract.

The Panama Canal Authority says that in fiscal 2001 and 2002 they saw a 40 percent decline in accidents from fiscal 1999 and 2000, achieving the canal's safest two-year period since 1922 and 1923. If one compares the amount of traffic between 2001-2002 and 1922-1923, there is reason to claim that the Panama Canal has been safer than ever under Panamanian control. However, when the American administration ended the Freedom of Information Act went with it, such that it is now much more difficult to obtain information that the Panama Canal Authority does not care to publish. Thus doubters continue to question the authority's pronouncements and careful journalists report them as claims rather than facts.

The hydroelectric generators at the Gatun Dam and the Madden Dam used to power the Canal Zone and its complex of military bases, and power sales have long been one of the canal's revenue sources. However, Panama's privatized power generating companies are crying foul about this, and demanding tax-free status to be "equalized" with the canal authority. Under the current organization of Panama's electrical industry, private distribution companies buy from generating companies that bid to provide power at the lowest rates. In a recent auction by the Elektra Noreste distribution company, Elektra CEO René Van Hoorde, who came to the company from the Panama Canal Commission, then ENRON Panama, then the division of the Ministry of Commerce and industry that regulates ENRON, disqualified the low-bidding Panama Canal Authority. Van Hoorde's reasons were almost certainly ideological, but the official excuse was that the Panama Canal Authority didn't certify that it is in the power generating business. The Public Utilities Regulating Board is looking into the process.

The Public Utilities Regulating Board's president, Alex Arroyo, told La Estrella that the electric rates that consumers pay will be going up, but he won't say when or by how much. Under Arnulfista-dominated Supreme Court's decisions, just because people will have to pay for a decision made by a public entity like the utility board doesn't make them "interested parties" who have a legal right to this information or any details about the processes by which such decisions are made.

The National Maritime Authority ended its second shrimping moratorium of the year on November 1, after a ban that lasted through September and October. For many years there has been an annual shrimping moratorium to conserve the endangered resource, but this year shrimp populations got so low that the government took the unprecedented step of imposing a second season when shrimping isn't allowed. The measure affected wild ocean shrimp, but not crustaceans raised in ponds or tanks.

A month ago they shut down traffic on the Pan-American Highway, to protest taxis and vans providing transportation between points in Arraijan, La Chorrera and Capira where few buses go and Panama City. The government agreed to suppress the pirate taxis and vans, but the president called for more bus permits so that the 100,000 or so people who commute from Panama Oeste into the capital to work can be properly served. Then, on October 31, Transito police stopped and inspected the buses whose drivers had been complaining about illegal competition. Of 90 buses inspected, only one passed without a ticket being written for equipment violations. The police took 44 of the buses off the road, mostly for driving on bald tires. The crackdown may have been poetic justice for the previous disruptions, but it followed a day after a particularly gruesome morning rush hour accident in which a bus skidded off the Arraijan-Chorrera autopista, crossed the dividing median, smashed into three cars, rolled over and exploded. Five people were killed in the accident, which was caused by a blown-out tire on a bus driven by a man with 24 moving violations in the past eight years.

The Supreme Court recenty ruled that people who have paid into the Social Security Fund and reach retirement age can collect benefits whether or not they're still working. However, the fund's board of directors has passed and published in the Gaceta Oficial a new regulation, which like the one thrown out by the court requires people to leave their jobs in order to qualify for Social Security benefits. It's a fight over the long-term solvency of the retirement fund, but Social Security Director Juan Jované has presented it as an issue of inter-generational justice, arguing that older workers should step aside and give younger people a chance.

Besides the outright sale of certificates to unqualified persons, one of the lucrative practices in effect in the Panamanian consulate in Manila is the requirement that applicants for seamen's papers must have a physical examination by one of two clinics designated by consul Juan Carlos Escalona. It appears to be a kickback scheme, but under the Arnulfista-dominated Supreme Court decisions, the public has no right to know if it is. Now that same system is being applied in Colon, where most of the applicants are Panamanian rather than Filipino or Indonesian. Rafael Rapallo, the secretary of Merchant Marine Workers' Syndicate, complains that the Panama Maritime Authority branch in Colon has broken with the long-time practice of allowing physicals to be conducted at the free Seguro Social health care facilities and now requires applicants to use one of four private clinics, which charge up to $250 for the service. The authority claims that the doctors at these clinics attended a one-day seminar that makes them experts in occupational health, which Seguro's physicians are unqualified. Panama Maritime Authority Director Jerry Salazar has answered Rapallo's allegations by maintaining that he is not a crook. Salazar did not, however, specifically deny Rapallo's complaint.

On October 28 riot police used tear gas to disperse about 100 members of the Sea Workers Syndicate, who were blocking the road into the port of Vacamonte in support of a strike for a new contract. After 17 arrests and a three-hour running battle between sailors and police, the road was reopened. On October 31 workers at the ports of Balboa, Cristobal and Manzanillo International Terminal also walked of the job, this time peacefully, to likewise demand new labor contracts.

The Ministry of Public Works has dispensed with bidding procedures and given the contracts to build the approaches to the new bridge over the canal to Constructora Urbana, SA (CUSA) and Consorcio Centenario de Panama, both of which are Panamanian companies rather than local subsidiaries of foreign businesses. Public Works Minister Víctor Juliao said that by negotiating rather than having a bidding contest and by chaning the specifications, the government will save $10 million. The western approach to the bridge may have an unusual safety problem, in that it runs throught the impact area of the former Empire Range, where there is an undetermined amount of buried unexploded ordnance, some of which is still dangerous.

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