Business & Economy Briefs

Cincinnati-based Chiquita Brands has rejected an offer by the the SITRACHILCO banana workers' union to buy usufructory rights to 3,000 hectares of the Puerto Armuelles Fruit Company's (PAFCO's) plantations for $21 million. PAFCO is a Chiquita subsidiary, held indirectly through another subsidiary, the Chiriqui Land Company. The plantations are on government land that PAFCO has the right to farm. Chiquita wants $39 million for the plantations, and says it might accept a lesser amount only if the buyer agrees to sell fruit only through Chiquita. The union has been thinking about taking over the farms and marketing the fruit through a German company. Chiquita says it's negotiating a deal with "independent cooperatives" of laid-off banana workers, who would be obliged to sell through Chiquita. However, the company insists that when it's not buying fruit from the co-ops, the Panamanian government would have to bear the cost of supporting the banana workers.

It took just an hour to run up the principal on Panama's public debt by $275 million. The Moscoso administration recently received that amount from the sale of bonds, which which will be repaid over the course of 24 years at an 8.875 percent interest rate. Under the accounting system that the government used until recently, the sale could not have taken place because the government's operating budget deficit was at the two percent of Gross Domestic Product limit. However, by commingling the Panama Canal's budget surplus with the national government's budget deficit, the government able to avoid unpopular austerity measures and leave the debt for future administrations to pay.

Standard & Poor's has downgraded Panama's public bond rating from BB with a stable outlook to BB with a negative outlook. While the Ministry of Economy and Finance dismisses the move as insignificant and Government and Justice Minister Arnulfo Escalona is alleging a conspiracy to destabilize Panama, the bond rating service said that it took its action because, if the previous method of calculating Panama's public deficit is used, the Moscoso administration's budget is raising the deficit from around two percent to between 3.5 and 3.75 percent of the Gross Domestic Product. By including Panama Canal figures in the calculation, the Moscoso administration says that the deficit remains at about two percent. However, S&P says that whatever the merits of the government's new way of figuring the deficit, the bottom line is that the deficit is up and that makes Panama less credit-worthy.

Part of the controversial Standard & Poor's report on Panama's government finances criticizes the deterioration in the Social Security Fund's finances. During the past few years of economic crisis, many Panamanian businesses have been closed and many others have been forced into a semi-underground economy by inability to pay social security or other government taxes and fees. Social Security Director Juan Jované says that S&P and other bond rating companies are in part responsible for Panama's economic malaise, and qualified the recent report as a "cynical" effort to force this country to adopt such neo-liberal economic policies as the privatization of the public pension and health care systems.

On March 12 Panama Canal Authority employees marched to the Legislative Assembly to protest a suggestion by assembly president Carlos Alvarado to modify the Panamanian Constitution in a way that would curg the canal's legal and financial autonomy. While the Ministry of Canal Affairs is a political patronage dumping ground, it only has 50 mainly superfluous employees. The canal authority itself is shielded from President Moscoso's nepotism policy and other forms of political patronage. The Coalition of Canal Unions marched to oppose the suggested constitutional change or any move to privatize the canal. Panama Canal Authority administrator Alberto Alemán Zubieta issued his own statement concurring with the workers' opposition to the lifting of the authority's autonomy.

Panama's Supreme Court has granted a request by Guatemalan prosecutors and lifted the protection of bank secrecy from Guatemala's President Alfonso Portillo and several of his close political allies. Last year press reports here and in Guatemala told of massive transfers of funds by Portillo, directly and through intermediaries, to Panamanian banks. Portillo says that he doesn't have an account in Panama and never has had one. Panama remains on several Latin American countries' money laundering blacklists due to our traditional role as a place where corrupt politicians from other countries keep their ill-gotten gains. During the Pérez Balladares administration Panama signed and ratified the Inter-American Anti-Corruption Convention, which bans bank secrecy in cases of public corruption and provided the legal basis for the Supreme Court's order. Shortly after taking office President Moscoso attempted to abrogate the ban on bank secrecy in such cases, but this led to Panama's inclusion on the industrialized countries' Financial Action Task Force list of nations that don't cooperate in the fight against money laundering and the president was forced to back down.

On March 10 some 600 farmers blocked the Pan-American Highway at Divisa, Herrera for an hour and one-half to press a list of 25 demands. Most of the farmers' grievances were directed at changes made by the new minister of agricultural development, Lineth Stanziola, whom they accuse of freezing programs of benefit to the agricultural sector, improperly extending her personal powers and failing to enforce legal restrictions on the importation of agricultural commodities. Stanziola appeared at the protest briefly but did not negotiate with the farmers.

At the beginning of the 2002 school year, more than 2,000 teaching assignments were vacant and more than 60 school buildings were in such bad condition that they could not be used. The 2003 school year is starting with fewer than 500 unfilled teaching positions and only a few buildings unfit for use. However, two of the country's most important public schools are opening with parts unusuable --- at the Instituto Nacional renovations are not done on 39 classrooms and part of the Santiago Normal School is similarly out of service. The problem at those two schools is that the Ministry of Education delayed payments to contractors who were doing renovations at those facilities, and that caused work stoppages. Conditions at the Instituto Nacional are likely to affect traffic in Panama City, because students at that school tend to manifest their grievances with the education ministry by blocking the Avenida de los Martires.

Panama's bus syndicates, squeezed between increased oil prices largely caused by US and British threats to go to war in the Middle East and a fare structure established by law, are threatening an imminent work stoppage if they don't get some relief. The syndicates, generally composed of people who own the buses they drive, want the government to roll back fuel taxes for them. The government, already short of cash, is not disposed to do so. Negotiations ceased after a Carnival truce was agreed, but after the party talks between the government and the syndicates reached an impasse again.

Panama is suffering from a dry season drought, to the extent that many rivers are almost dry. Particularly affected is the eastern part of Panama province, whose Pacora, Tocumen, Cabra, Mañanitas and Villalobos rivers provide some of the water for the Panama City - San Miguelito metro area. Laurencio Guardia, the director of the state-owned IDAAN water and sewer utility, warns that if substantial rains don't come soon then water rationing is likely to begin in May. IDAAN is calling on people and institutions to conserve water now.

The Colon coastal community of Nombre de Dios went without running water for most of February when the pump on the town's water system broke down and the local government didn't have the money to fix it. Electricity rate hikes have more than doubled the cost of running the pump, to the extent that there was no money to do repairs when it broke down. Water service was finally restored when Colon Free Zone director Jorge Fernández paid to have the pump fixed.

Traditionally, people in some of Panama City's poorer neighborhoods celebrate Carnival by opening fire hydrants so that children can play in the water. This year on Carnival Monday people in the Santa Cruz area of Panama city's Curundu corregimiento did that, but the apparently defective hydrant hiccupped and an air bubble in the water line burst a 20-inch main. Water service to Santa Ana, San Felipe, El Chorrillo and parts of Curundu was out for more than 24 hours, and while repairs were being made on Carnival Tuesday homes in Ancon and Hollywood along the main above the rupture also went dry. The IDAAN water and sewer utility is threatening those who opened the hydrant with criminal prosecution, but it seems that neighbors are reluctant to turn anybody in for the customary practice.

On March 11 several dozen residents of the Los Santos district of Guarare blocked the area's principal road, which connects Las Tablas with the rest of the country, to protest a water shutoff that had lasted three weeks. The blockade lasted for more than one hour. Las Tablas takes its water from a deep well in Guarare, which is running low. Most of the well's production is directed to Las Tablas, leaving little or not water pressure for Guarare. Abilio Barrios, the regional director for IDAAN, said that water shortages are part of the problem, but that some Guarare residents make it worse by illegally irrigating crops whenever the water and sewer utility gets service to the area functioning.

Three employees of the National Maritime Authority are behind bars and another is in hiding after charges were brought for a scheme to illegally sell Panamanian seamen's certificates for between $3,000 and $5,000 each. The racket has been operating for some time. Earlier in the Moscoso administration, after a British maritime union official bought a first mate's certificate from the Panamanian consulate the Juan Carlos Escalona runs in Manila, former National Maritime Authority director (now Canal Affairs Minister) Jerry Salazar suspended several employees. In this latest incident, a messenger was allegedly encouraged to pilfer the forms for the certificates and allegedly paid $100 apiece for them by his superiors at the authority.

In the wake of the disappearance of nearly 100 vials of the expensive anaesthetic Seborane from the Hospital del Niño's pharmacy, a hospital employee found the folders from a number of surgical patients' records discarded in an unused hospital bathroom. The charts themselves were missing, and thus Judicial Technical Police (PTJ) investigating the disappearance of the Seborane won't be able to easily determine how much of the drug was used in the hospital's operating rooms. In the course of their investigation of the missing anaesthetics, the PTJ arrested a hospital employee who was walking out the door with 60 vials of antibiotics. The apparent cover-up of a drug theft by the theft of medical records compounds the crime not only with another peculation but also can put some of the young patients' lives or health in danger.

The Legislative Assembly's Budget Committee has approved a $19 million appropriation to pay the bill for the legislators' phone calls. Each legislator gets $600 per month to pay for three phone lines, while each legislative suplente gets $150 per month. There has been an outstanding balance on the assembly's phone bill since the days of Cable & Wireless's predecessor, the state-owned INTEL telephone company.

The SUNTRACS construction workers' union has paid the last $75,000 of an old debt it owed to the Social Security Fund, dating back to the economic crisis that preceded the 1989 US invasion that deposed dictator Manuel Antonio Noriega. The militant union's leader, Genaro López, said that the bill was some $200,000 when he took office but that for more than a decade SUNTRACS has been paying down its debt. In the current economic crisis many SUNTRACS members have had less work and income, but the union has not fallen behind in Social Security payments for the more than 30 people who work for the organization.

The Interoceanic Regional Authority has issued a press release saying that the use of the two large public parking lots at the former US military base is not available for those who attend events there, unless the promoters of those events pay ARI for the privilege. The new policy carries with it the promise of parking nightmares as promoters pass on this cost to people attending their events and people seek to avoid paying for parking by leaving their cars wherever they can find a space.

Fifteen people were arrested and 213 dislodged on March 11 when police moved in to end a land invasion in Las Lomas, Chiriqui. The invaded land belonged to the Corporacion Financiera Nacional (COFINA), which had acquired it in the foreclosure of a bankrupt company. Especially as an election approaches, Panama tends to be tolerant when squatters invade public lands, often at the urging of construction material vendors. When private lands are taken and the owners show title and complain, as COFINA did, the police usually move in.

When it bought the Cerveceria Nacional and tried to also gain control of the country's other main brewery, Cerveceria Baru, the Colombian- based Grupo Bavaria said that it planned to use Panama as a regional beer exporting center, thus creating new jobs in this country. However, Bavaria's takeover of Cerveceria Baru was blocked by the Free Trade and Consumer Affairs Commission (CLICAC) pursuant to anti-monopoly laws. Cerveceria Baru was instead bought by an international consortium headed by Heineken, and now Grupo Bavaria says that without a monopoly in the Panamanian beer industry it won't be exporting from here.

The Panamanian Insurers Association (APADEA) and the Panamanian Chamber of Construction (CAPAC) have withdrawn from the National Council of Private Enterprise (CoNEP), and groups representing Colon Free Zone merchants and the nation's banking industry are threatening to do likewise. Earlier, the Panamanian Association of Business Executives (APEDE) and the Chamber of Commerce, Agriculture and Industry also left CoNEP. There is a mix of disputes in play, including rivalries between small and large businesses that have different interests on matters of taxation and international trade, traditional powerful families competing for influence and resentments between those who have been favored by the present government and those who have not. The fragmentation among the various business groups has also been accompanied by power struggles within many of them.

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