editorial

Short-term thinking, measures designed to benefit only a small fringe of society and ineptitude are the hallmarks of the Moscoso administration’s economic policies. What other conclusion can be reached about an administration whose policies are free trade with the rest of the Americas and high business costs that would make us sure losers in such open competition?

The new tax laws that went into effect on April 1 help a little here, hurt a little there, and add up to an overall tax increase for Panamanian society. The decrees to implement them take away most of the tax breaks given to small businesses by requiring additional legal and accounting bills.

In Panama it costs a small business 10 times as much to incorporate itself as is the case with a similar company in most of the United States. You can’t just fill out your forms and pay your fees --- lawyers are required and they charge a lot more than their North American counterparts.

Once in business, our phone and electric rates are among the highest in the world. Mireya’s relatives and ministers have seen to it that Cable & Wireless retains an illegal and expensive telephone monopoly. On the advice of ENRON execs and people who think like them, the Moscoso administration has given us both exaggerated light bills and constant brownouts.

If a business overcomes these obstacles, particularly if it is owned by foreigners or Panamanians who are not from powerful families, then come politicians and bureaucrats demanding payoffs. Bribery is a problem, but extortion is the deadly disease in our economy.

Our advantage is our location, but that alone is insufficient to make us the kind of commercial crossroads that can give us a decent standard of living. The modernity of our infrastructures and the skills of our workers are important factors, but also aren’t enough to get us to where we need to be.

Panama has to reduce the cost of doing business in order to increase employment and living standards. The recent tax increase may be annoying, but non-tax burdens imposed by law, government regulation and corruption add up to a far more serious impediment to economic progress.

The Moscoso nightmare will end in about 17 months. In the interim we’ll see some inconsequential economic demagoguery aimed at raising the Arnulfistas from third place in the polls. We won’t see the sorts of changes that Panama needs.

Meanwhile, all Panamanian voters should think about the period beginning in September of 2004, and look for candidates with realistic plans to get us out of our economic hole. Part of any such plan must be a major reduction in the overall cost of doing business here.

Since a politician never believes what he says, he is quite surprised to be taken at his word.

Charles de Gaulle

Our struggle today is not to have a female Einstein get appointed as an assistant professor. It is for a woman schlemiel to get as quickly promoted as a male schlemiel.

Bella Abzug

Madam, there is nothing so dreadful as a great victory --- excepting a great defeat.

Arthur, Duke of Wellington

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