Theoretically based upon the temporary spike in world oil prices caused by the Iraq War, the Public Services Regulating Board has announced that Panama's electric rates, already the highest in the region and among the highest in the world, will go up on July 1. The board won't say how much the increase will be. President Moscoso, who by law has little control over the matter, said that it would be a "crime" to raise rates now, and meanwhile in the Legislative Assembly there were noises about legislation to change the board, which is widely perceived as being dominated by the utilities that it is supposed to regulate.

Despite a slow world economy, the Panama Canal's toll revenues for the first half of this fiscal year (October 2002 through March 2003) are up 14.6 percent over the same period in the previous fiscal year, a rise of about $43 million in absolute terms. A toll hike and a small increase in cargo tonnage are the factors behind the increase.

Panama's medical interns and residents ended a nine-day strike on April 29, after the Legislative Assembly passed on third and final reading legislation that would among other things limit the overtime that doctors in training must work. The legislation also for the first time recognizes interns and residents at public health care facilities as public employees.

On Mayday Panama's fragmented labor movement held a united march through Panama City and its various components held smaller celebrations of their own afterwards. The most frequent demand seen on banners and placards and heard in labor leaders' speeches was for the government to make its long-delayed decision about minimum wage levels. According to the law, the minimum wage is to be revised every two years and a process of business and labor negotiations is set up for that purpose. However, business is against any increase in the minimum wage, labor insists, and thus by the law the decision is up to the president. Mireya, however, has let the matter slide for several months.

On April 29 the Sindicato de Trabajadores Agricolas, which represents some of the Darien's farmworkers, blocked the Pan-American Highway in Aguas Frias for 13 hours, blocking 30 trucks loaded with hardwood and all other traffic. The union members complain that most of the lumber was cut illegally with the connivance of public officials who are supposed to suppress illicit logging, and that the heavily laden lumber trucks make the road nearly impassable to other traffic, including trucks that would bring the products of the union members' labor to market in the city. The blockade ended with the government's promise to establish a weigh station to keep overloaded trucks off the road.

The Panama City- based Latin American Export Bank (BLADEX) has sold most of its loan accounts and bonds in Argentina. Nominally, the assets were worth $166.5 million, but the bank sold them for much less than that. BLADEX shares are traded on the New York Stock Exchange and thus the bank has to comply with much more rigid regulations and be more transparent in its reporting than is the case with other Panamanian financial institutions. The retreat from financially troubled Argentina was a matter of BLADEX cutting its losses and solidifying its asset base.

Bancolombia, one of Colombia's main banks and a player in the Panamanian banking district for several years, says that it's expanding the international services at its branch here. The branch, which has some $1.7 billion on deposit, will be financing Colombian companies' exports and looking for offshore business from around the world, but won't be offering local banking services in Panama.

On April 29 police stopped a truck laden with thousands of dead chickens on the Chorrera-Arraijan Autopista. Chicken farmer Carlos Salcedo had planned to dump the birds at the entrance to the Union Fenosa electric company's offices at Albrook. A prolonged power outage the previous day shut down Salcedo's ventilation system, killing all of his 25,000 chickens. The power companies pay nominal fines for power outages that are found to be their fault, or when power is not promptly restored after blackouts for which they can't be blamed. However, they don't pay damages to customers for things like dead chickens or lost work time when brownouts make computer monitors dysfunctional.

Second Vice- President Dominador Kaiser Bazán, a Colon resident and a professional developer, has told El Panama America that he's optimistic that legal obstacles will be surmounted and the CEMIS multimodal container handling and airport expansion project will get underway before the Moscoso administration's term is up. Financing by the Inter-American Development Bank is on hold until allegations that bribes were paid to gain the Legislative Assembly's approval of the project, and the legal proceedings are being delayed until after the start of the 2003-2004 legislative session in order that President Moscoso's allies can maintain their tenuous control over the assembly. Add a fight among the Rodin family wherein father Lew Rodin and brother Peter Rodin would like to wrest control from promoter Martin Rodin to the mix and the project finds itself snarled in paper. CEMIS is the keystone that would tie container-handling operations among the ports of Colon Container Terminal (Evergreen), Manzanillo International Terminal (Stevedoring Services of America), Cristobal and Balboa (Hutchison Whampoa), the Colon Free Zone and the Panama Canal Railway (Kansas City Southern) into a unified system, adding a France Field airport expanded into a major international freight terminal into the mix. In addition to the corporate interests involved, in Colon there is substantial public demand for the project to proceed because of the jobs that would be created. Renegade PRD legislator Carlos Afú alleges massive bribery in the Legislative Assembly, but Attorney General José Antonio Sossa, a political ally of the PRD, has gone through the barest pretense of an investigation and wants to charge just Afú and CEMIS promoter Martin Rodin and former exec Stephen Jones with bribery in the case. However, the matter is before the Arnulfista-dominated Supreme Court, which is taking its time in light of the Arnulfistas' need to keep Afú and other renegade PRD legislators in the assembly in order to maintain control.

Judge Melquiades Adames Gómez has rejected Attorney General José Antonio Sossa's recommendation to drop fraud and forgery charges against a group of Panama's most powerful businessmen, DISA SA and Banco DISA directors J.J. Vallarino Jr., Rubén Carles, Gabriel Diez, Jorge Nicolau, Rafael Stanziola, Carlos Araúz, Laurence Berger, Fernando Eleta A., Raúl Arango, Ricardo Lince, Haralambos Tzanetatos, Ricardo Brin, Renato García, José Chirino and Jorge Endara Paniza. The men were accused by investors in what appears to be a pyramid scheme, The Providence Corporation and Estrella Mar funds that promised investors 15 percent annual returns on their money. These funds did their banking at and received secured investments from Banco DISA. As the bubble was about to burst, Banco DISA seized the investment funds' assets, and then itself went bust. Several of the DISA directors who are co-defendants in this case are on opposite sides in civil and criminal cases arising from the Banco DISA collapse. The judge criticized the prosecutors' work and ordered them to investigate the case more diligently. He also consolidated complaints by the National Securities Commission (CNV) and the Banking Superintendent with the case brought by Estrella Mar and Providence investors. DISA has its origins in US government loan guarantees back in the 1960s and its directors played important roles in every Panamanian government since then.

The City of Knowledge, touted as an educational and research complex at the former Fort Clayton, has been getting a lot of publicity in the daily newspapers and on television lately because a large percentage of the housing that it owns is being rented to tenants who have nothing to do with either research or education. Although it has done a bit better on the corporate research side of its operation than it has as an educational institution, the City of Knowledge has not met expectations. Part of the problem is the slow global economy, but other parts are the high prices that the institution demands of schools and businesses that would locate there, the institution's role as PRD political patronage enclave under the University of Panama's domination, and inane promotions like calling itself a center of the "New Economy" well after that slogan had been discredited. There is nothing illegal, however, about the institution renting its property, a practice that both brings in money and prevents its real estate assets from deteriorating. It seems that part of the outcry --- for example, Comptroller General Alvin Weeden's pledge to investigate --- is just Arnulfista mudslinging against a quasi-public institution that the Moscoso administration does not control. However, the questions were first raised in La Prensa, a daily whose board of directors is dominated by supporters of the PRD-Partido Popular alliance.

The respected economic analysis firm LatinSource has a mixed message about Panama. On the down side they warn of an increasing public and private debt, which they say was up to 69.3 percent of the Gross Domestic Product in 2002 and is rising as the government's recent accounting changes allow it to expand the public deficit. On the up side, LatinSource predicts about three percent economic growth for Panama in 2003, which is more than double last year's figure.

The Interoceanic Regional Authority (ARI) has granted the Colombia-based Decameron hotel chain a concession to build a 21-hectare, 60- room "ecological hotel" development at Devil's Beach at the former Fort Sherman. The size implies the "ecological" destruction of a substantial part of the forest surrounding the small beach, and the stated $5 million investment price added to the area's underdeveloped infrastructure likely means that the government would be footing the cost of the water and sewer utilities. ARI director Alfredo Arias said the development wouldn't affect the area's ecosystem.

The Moscoso administration has, as had been previously authorized by legislation and a cabinet resolution, created a state-owned private company to run Tocumen Airport. Aeropuerto Internacional de Tocumen SA will be run by a board of directors with representatives of companies that do business at the country's main airport and of the government. Adding directors' pay and perks to their ministerial salaries will be Government and Justice Minister Arnulfo Escalona, presidential aide Eduardo Quirós and Economy and Finance Minister Norberto Delgado. Also on the board are businessmen Manuel Cohen Salerno, Jack Betesh and Jorge García Icaza, and a representative of airport workers yet to be chosen. Julio Ernesto Córdoba De León, a presidential appointee, will be the new company's chief executive.

Also in this section:
Business & Economy Briefs
Bocas noni scheme, part 2 of 2
The Panama News readership statistics

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