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Vice-Minister of Economy and Finance Domingo Latorraca says that tax receipts for the first six month of this year are up $36.7 million (about seven percent) over the same period in 2002. He attributes the increase to the Moscoso administration’s tax legislation, but it may be more a matter of the economy picking up a bit over the past year.

The Free Competition and Consumer Affairs Commission (CLICAC) reports that the “canasta basica,” the price of a collection of household staples by which Panama measures its cost of living, went up 92¢ from May to June, from $184.41 to $185.33. The biggest increase was in the price of onions.

Reversing an earlier decision that left the control and taxation of billboards exclusively to municipalities, the Supreme Court has upheld a Moscoso administration decree that gives the Ministry of Public Works the power to regulate such outdoor advertising. The decision, which rejected Panama City’s appeal, could mean a major revenue loss for the nation’s local governments.

Legislator Sergio Gálvez, who wants Panama City Mayor Juan Carlos Navarro’s job and according to opinion polls stands a good chance of winning it, is known for his constituent services rather than his performance in the Legislative Assembly, whose sessions he rarely attends. One of his most popular enterprises is his series of fairs which he sells rice, beans and other staples at wholesale cost. However, the Free Competition and Consumer Affairs Commission (CLICAC) doesn’t see the fairs in the same light as those who flock to them to buy cheap food. They fined Gálvez $10,000 because the rice is sold in bags that don’t bear labels showing the weight, date of expiration or place of origin. Gálvez has complained that his problems with CLICAC, and complaints from the city about the large volumes of trash that he leaves behind after his fairs, are politically motivated. The commission, however, points out that Gálvez is but one of about 30 businesses recently fined for violating Panama’s food packaging laws.

The official organizing committee for the Miss Universe pageant says that it spent $10.8 million in public funds on the June 3 event, but it brought in $11.9 million and that’s not including what amounted to an 11-minute TV commercial for Panamanian tourism that was seen by an estimated 650 million people around the world. Critics from business and labor sectors --- and above all from the opposition PRD --- say that the economic benefit from the pageant was insignificant compared to what might have resulted if the money had been invested in other projects.

The Miss Universe pageant took place because the Figali Convention Center was built in record time, just in time for the event to take place. That entailed construction companies working around the clock, corners being cut, some detail work left undone at the time of the pageant, and a lot of the permit process being more or less ignored. As in the pageant and several other events at the center since then being held illegally, because the center has no occupancy permit. As in office space upstairs being unusable, because nobody bothered to install stairs or elevators that might allow people to get to and from the offices. As in 200 percent construction cost overruns. The project’s promoter, Jean Figali, stopped payment on several large checks to the building contractors. Ordinarily a builder’s lien would apply while the disputes were being resolved, but in this case the Ministry of Commerce and Industry intervened to prevent that, because it might have disrupted a pageant that President Moscoso considered important for her presidency. The Panamanian Construction Chamber (CAPAC) has offered to mediate, but Figali has rejected that and it seems that the matter is headed for lengthy court proceedings.

According to stories in La Prensa, Panama has an increasingly serious problem with early pregnancies, a phenomenon that usually contributes to a wide range of society’s economic, social and health problems. The daily reports, citing United Nations figures, that one in five births in this country involves an adolescent mother and one in 25 births is given by a mother between the age of 10 and 14. In absolute numbers, the UN says that some 12,600 babies are born to adolescent mothers every year in Panama.

The National Private Enterprise Council (CONEP) has called for an increase in retirement ages and payroll deductions in order to guarantee the Social Security Fund’s pension system solvent over the long term. The business group also advises that private retirement pensions should be encouraged. CONEP president Juan Francisco Kiener denies that this means that the council is for privatization of the Social Security system.

A week-long walkout by employees at the Casa de la Carne supermarkets and related wholesaling and food processing businesses was settled on July 17 when labor and management agreed on most issues and decided to submit their remaining differences to arbitration. In recent years there haven’t been many strikes because the economic situation has not been conducive to wage increases. This strike may be one small sign of an economic recovery of sorts.

Dell Computers has opened a bilingual call center here to service its Spanish- speaking computer customers’ service needs. A lot of the center’s work is expected to be with Latin American customers, with employees here sometimes serving as interpreters between Latin American computer users and English- speaking computer troubleshooters in the United States.

The Fort Lauderdale-based Spherion Corporation has opened a bilingual call center at the City of Knowledge. The company seeks to serve mainly Spanish-speaking consumers from the United States, paying its Panamanian workers substantially less than it would have to pay Spanish-speaking workers in the United States.

Cinthia Camargo, who heads Panama’s Privatization Coordination Office (PROPRIVAT), says that the eight-year, on-again, off- again process to privatize the ATLAPA convention center is off. A Brazilian company that had hoped to win the concession may be disappointed, but the stumbling block was the demand that those who work at the center, generally political patronage hirees of the IPAT tourism bureau, receive an indemnity as part of the deal.

Richard Busch, the American promoter of a pyramid scheme called The Millennium Fund and a Panama resident, may not go scot-free after all. He had promised investors a 15 percent annual return on their investments, but when the bubble burst he claimed that a partner had lost the money on Russian financial transactions. In March a trial court dismissed fraud charges against Busch, but prosecutors have decided to appeal that ruling. In general, the unstated policy for many years has been that fraudsters operating from Panama are not the concern of cops and prosecutors if their victims are foreigners. Most of Busch’s suckers were Americans, and the man is wanted by US authorities for securities law violations in connection with The Millennium Fund.

Panama’s small group of pharmaceutical importers imposed price hikes on at least 97 different medications when a sunset provision on a price control decree went into effect in April. There are arguments about how significant a fact that is, as there were about 7,000 medications subject to price controls. In any case, the government has announced that price controls on medicines will be reimposed.

The UNISYS cedula form scandal continues to generate controversy, even after the Electoral Tribunal replaced the vast majority of cedulas using the old Panama Canal photo form. Thousands of the forms for the old cedulas were diverted from UNISYS, some to Colombian racketeers for apparent immigration fraud, and many Panamanians suspect some for the purpose election fraud. After the diversion was discovered arrest warrants were issued for a couple of UNISYS execs (who fled the country before they could be served), the company’s contract was canceled by the Electoral Tribunal and 3M was hired to produce new cedula forms under stricter vigilance. However, some people have not updated their old cedulas, which are no longer valid as voting cards. Certain government offices, and many private businesses, consider cedulas on the old for invalid, period. One of the government agencies taking this position was the Passport Office, which held that a passport could not be obtained using one of the old form cedulas. That decision, however, has been countermanded by Government and Justice Minister Arnulfo Escalona. Thus it seems that people who bought bogus cedulas from Colombian gangsters might still use them to obtain travel documents. The use of illegally obtained Panamanian passports as part of the process of illegal immigration into the United States is an old story, so it’s not yet clear whether Escalona’s ruling will result in closer inspection of Panamanian passports by authorities in the US or in other countries.

These things don’t just happen in Old Testament Egypt or when Mormons are settling in around the Great Salt Lake. In recent weeks unseasonal rains over arid parts of Los Santos have prompted the mass hatching of locusts, which have swept across parts of the province’s El Corozal, La Laja and El Cedro areas, damaging crops and leaving little grass for cattle to eat on grazing lands.

The Cabinet Council has approved an agreement between the US and Panamanian government by which Panama will spend up to $10 million of the debt that it owes to the United States on the protection of endangered forests instead, and that amount in outstanding loan payments will be cancelled. This type of transaction is an increasingly popular form of foreign aid by wealthy countries to poorer debtor nations. When structured in terms of results shown --- as in satellite photography shows that the forest is still there --- these programs tend to work well, but sometimes when the deals are structured in terms of money spent for specific purposes they becomes either burdensome to monitor or susceptible to fraud.


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Lawyers ponder OECD assault on tax, ship registry competition
Marc Harris investigation grows in several directions

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