Who wants Seguro's pension fund?

The Social Security Fund was created in 1941and since then has become the country’s largest enterprise. It receives in the form of payroll deductions more than one billion dollars annually.

According to the judgment of private interests, this is too much money to leave in the hands of an autonomous organization whose owners are its contributors, the Panamanian workers.

Naturally, not all of the Social Security Fund (CSS) is interesting for the private interests. To provide health care to the most impoverished strata of our society would not be very profitable. However, to administer the savings of the working sector that receives the best salaries is an appetizing morsel.

According to their plans, the first step would be to divide the CSS, separating health care on one side and the pension system on the other. The private insurers would sink their teeth into the latter, turning into those who administer between $1.5 and $2 billion.

It would be a good snack!

In the world of international finance, the private pension fund market is one of the most productive businesses. The International Association of Pension Associations, which brings together the businesses in charge of administering pension funds in 22 countries, says that it unites more than 82 million affiliates who have in their individual savings and capitalization accounts more than $217 billion.

In Latin America, the countries that have begun the privatization of their pension systems are Argentina, Bolivia, Colombia, Costa Rica, Chile, El Salvador, Mexico, Peru and Uruguay. In the process of this change are Brazil, Ecuador and the Dominican Republic. All of this means the administration of the savings of some 43 million workers, to the tune of $88 billion.

The principal finance corporations that benefit from this business in Latin America are:
• BSCH (Spain) - $6.4 billion in business volume
• BBVA (Spain) - $17 billion in business volume
• CitiBank (USA) - $14.2 billion in business volume

In Panama, the banking groups have taken stock of the the opportunity for some time. Some 72 percent of the money that moves through the Bolsa de Valores de Panama is concentrated in five enterprises: Empresa General de Inversiones (EGI), Primer Banco del Istmo, Grupo Financiero Continental, Multi Holding Corporation, and Grupo ASSA.

ALL FIVE ARE SHAREHOLDERS IN ONE OF THE TWO PRIVATE PENSION FUNDS THAT PUBLICIZE THEMSELVES AS “THE ALTERNATIVE TO THE CSS CRISIS.”

PROFUTURO

This is CitiBank’s door by which pension funds go into busines in Panama. This North American corporation has a presence in 10 Latin American countries through Colfondos Colombia, Habitat Chile,Confia Costa Rica, Confia El Salvador, Siembra Dominican Republic, Garante Mexico, Capital Uruguay, Garantia Paraguay and ProFuturo Panama.

Its principal Panamanian partner is Banco General, which belongs to Empresa General de Inversiones (EGI), the biggest company in Panama, which controls Petroleos DELTA, the biggest gas station chain in Panama. We find among the directors of this economic group:
• Federico Humbert, president of Banco General and publisher of La Prensa
• Emmanuel González Revilla, president of Multi Holding Corporation, owner of MEDCOM (RPC, Telemetro), and major shareholder in BellSouth Panama
• Guillermo Quijano, owner of the principal construction company in the country, SUCASA
• Juan Lacalle, not only a member of the board of directors of ProFuturo, he has been the National Council of Private Enterprise (CoNEP) representative in the National Dialogue that was seeking “solutions to save the CSS.”

Among the other partners of this business are Banco Continental (which belongs to Grupo Financiero Continental) and Grupo ASSA, the leading insurance company in Panama. In both companies we repeatedly find the names of the Motta family, Lorenzo Romagosa (owner of Cafe Duran) and Vicente Pascual (Productos Alimenticos Pascual).

PROGRESO

This is BBVA’s door by which pension funds go into busines in Panama. This Spanish group has a presence in 10 Latin American countries. Its funds in El Salvador and the Dominican Republic are called Crecer; in Ecuador, Genesis; in Bolivia, Prevision; in Peru and Colombia, Horizonte; in Chile, Provida; in Argentina, Consolidar.

Proof of its position is that the chairman of PROGRESO’s board of directors is Félix Pérez Parra, the general director of BBVA-Panama.

Its principal partner is Banistmo, the leading national bank which is moreover the leading financial group in Central America, with a banking presence in Honduras, Costa Rica and El Salvador. In 2002 its profits were $59.2 million and its capital $450 million. The leading names on its board of directors are:
• Samuel Lewis Galindo --- a little while ago he temporarily resigned as the bank’s president to concentrate on electoral activity as president of the Solidaridad party, which is the principal backer of the Endara candidacy
• Alberto Vallarino, vice-president, Lewis Galindo’s brother-in-law
• José Raúl Arias, “temporary” president, partner of Arnulfista presidential candidate José Miguel Alemán in the law firm of Arias, Alemán and Mora
• Jaime E. Alemán, brother of José Miguel Alemán

The CONASE insurance company is a partner of PROGRESO, and also belongs to the Banistmo Group.

Also participating as partners are the Grupo Aseguradora Mundial and its Banvivienda subsidiary. The principal names in this group are Orlando Sánchez Avilés (illustrious member of the Panamanian Business Executives Association --- APEDE --- and named “Executive of the Year” for 2003; Jorge Rubén Rosas (one of the leaders of MOLIRENA and minister of labor under Endara); and Manuel José Paredes (who was president of the Chamber of Commerce).

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opinion

Who wants to eat the Social Security cake?