Business & Economy Briefs

Panama, which already has some of the world’s highest electricity rates, saw its bills go up between 2.6 and 7 percent on July 1, varying in different parts of the country. The increases were approved by the Public Services Regulating Board (Ente Regulador) because of the high world prices of petroleum, even though most of this country’s electricity comes from hydroelectric generation. The nation’s Ombudsman (Defensor del Pueblo) Juan Antonio Tejada has appealed to the Supreme Court to set aside the rate increase, arguing that the Ente Regulador acted in violation of the Transparency Law.

The Primer Banco del Istmo (Banistmo), the largest private bank based upon Panamanian capital, continues to build its Central American portfolio. Recently it upgraded its status as shareholder of the Banco BGA de Honduras from a minority position to ownership of 64 percent of the shares outstanding and in circulation. Banistmo has also acquired a 14 percent stake in El Ahorro Hondureño Compañía de Seguros, SA. These purchases follow acquisitions earlier this year in the Nicaraguan banking and financial services sector.

On a visit to Panama’s main municipal farmers’ market, accompanied by Panama City Mayor Juan Carlos Navarro and Minister of Agricultural Development-designate Laurentino Cortizo, President-elect Martín Torrijos said that an adjoining vacant property, where the Empresa Madrileña de Exportaciones (EMEX) used to do business, will be transferred to the city to create more space for the market. The market, which is somewhat crowded these days, plays a key role in the economic lives of many residents of the capital who live on low budgets and many small-scale retailers. To Torrijos, however, the main point is to improve the lot of the nation’s small farmers.

Panama’s specialty coffees are gaining unprecedented recognition and record prices on the world market. In June Casa Ruiz’s Cafe La Berlina organic coffee won the gold medal at a Paris coffee competition. Then, at a June 29 Internet auction of specialty coffees in which buyers from North America, Europe and Japan bid, Cafe Jaramillo Special sold for a record $21 per pound. In general world coffee prices are low, more than anything because a major increase in Vietnamese production has glutted the world market. That has led to great hardships in Panama’s coffee producing areas and lower overall harvests here. However, there is still a good niche market for specialty coffees, particularly organically grown ones.

It started when Costa Rican agricultural authorities blocked imports of chicken nuggets produced by Panama’s Grupo Melo, bound for McDonald’s restaurants in that country. The cited reason was that three nuggets had allegedly tested positive for salmonella in a Costa Rican health inspection lab. But a Panamanian laboratory had inspected the same chicken and found it free of the bacillus, as did the McDonald’s lab, leading agricultural authorities here to allege Tico protectionism based on a bogus sanitary claim. So Panama retaliated by banning Costa Rican poultry imports, causing a backup of some 160 refrigerator trucks headed into Panama. A truce was declared after about two days of this trade war, allowing Melo’s chicken back into Costa Rica and Tico poultry back into Panama.

A Panamanian fishing boat captain has complained of, and the National Maritime Authority says it has confirmed, illegal tuna fishing in Panamanian waters by the Ecuadoran tuna boats Carmen D. and San Mateo. The boats had obtained permits from the Moscoso administration to fish in parts of Panama’s national waters, but it seems that they were taking tuna in a restricted zone. If caught and found guilty, the Carmen D.’s owners would have to pay a $50,000 fine and the San Mateo’s $100,000, as the latter boat would be a repeat offender. In recent weeks there has been a great hue and cry, not only about illegal fishing in Panama’s waters but also because the Moscoso administration has sold a lot of permits to foreign purse seiners and longliners, many more than its critics say are compatible with conserving our nation’s fisheries.

The Kuna General Congress has taken up a number of economic matters in its recent sessions, including restrictions on commerce by Colombian commercial boats and a ban on barter transactions using molas. Most notably, it has protested the national government’s decision to make pension payments to individuals by debit cards. The problem is that these can only used at a single Banco Nacional de Panama branch in the Kuna Yala Comarca, the one at Nargana. This means that people, mostly women who qualify for small food subsidies, would have spend a lot of time and some of their meager funds to travel to and from that bank twice a month. The congress, which is the highest governing body in the semi-autonomous comarca, may challenge the payment method by filing a lawsuit in the Supreme Court.

According to La Prensa the Social Investment Fund is spending $338,000 to resurface the 5.5-kilometer road from the main highway serving Los Santos province to Playa Lagarto, and, apparently not coincidentally, to the presidential beach house at Punta Mala. After a most irregular bidding process in which the value of the improvements which the government made to the house were not made public, the property went to Mireya’s brother Franklin, who was according to the contract specifications probably not qualified to bid. Mireya has continued to use the house.

With less than two months remaining in office, Mireya Moscoso’s cabinet has noticed that the road between Colon and Panama City is crumbling and in some places sliding down the hill. Public Works Minister and Panama Canal Authority board of directors member Eduardo Quirós --- best known for his part in overseeing and attempting to justify the negligence that took the lives of three young San Miguelito boys in a Corredor Norte landslide --- says the cabinet will soon consider a special appropriation to repair the road.

It appears that the second bridge over the Panama Canal won’t be finished as planned before Mireya Moscoso leaves office at the end of August, and much less ready for traffic. (The bridge isn’t connected to any roads as yet and won’t be for some time.) So, instead of the usual inauguration ceremony for a public work, Mireya held a July 5 “pre-inauguration ceremony” in which she left her hand prints in the cement of the bridge’s surface and posed for photos with mostly scowling construction workers and executives.

In a series of contractual adjustments with Bilfinger-Berger, the German company that’s building the second bridge over the canal, additional work performed by the builders is mostly being paid for by the government’s assumption of some of the company’s obligations. The big one is that Bilfinger-Berger will no longer have to pay for insurance to cover incidental damages if the bridge collapses into Culebra Cut and disrupts canal operations.

Some 1,500 teachers who have not been paid since the school year began in March stopped showing up for work on July 6, arguing that since they haven’t been paid, they can’t afford to come to work. Education Minister Doris Rosas de Mata complained that the teachers have nothing to go on strike about because they will receive their regular semi-monthly paychecks in the middle of July. Of course, the demand by the teachers who got new school assignments this year isn’t just for half a month’s regular pay, but also four months’ worth of arrears. None of the more than a dozen members of the Rosas family who are in administrative positions on the Moscoso administration’s payroll have had any problems with their paychecks being delayed.

The cash-strapped University of Panama is considering a halt to research, cultural activities, library services and other functions that ordinarily continue when classes are not in session at the end of this academic year in December. Rector Gustavo García de Paredes said that certain laboratories, the veterinary clinic and the folks who keep track of grades and academic credits might be exempt from the closure to avoid harmful and costly disruptions, but that the general university closure could reduce the school’s $19 million operating budget. Also under consideration are charging the various private businesses and autonomous institutions that operate on campus for electricity and increases in various student fees.

Panama’s most prestigious university, the Jesuits’ Universidad Santa Maria la Antigua (USMA), is in a financial crisis and has petitioned the Labor Ministry for permission to lay off nine professors and 48 administrative personnel. The university has a student body of some 3,700, about half of what it was before the economic slide that began in late 1998 and bottomed out in the middle of 2002. As with many other Panamanian businesses and institutions, economic recovery has been slow for USMA and little of the ground it lost has been recovered.

Sixteen ad agencies will go on trial for monopolistic practices on August 16. The agencies, many with families ties to major political figures, the owners of Panama’s principal communications media or both, are accused of an anti-competitive agreement to use just one company to measure how many people an ad in a given medium reaches. (Of course, these agencies do not and never have considered The Panama News in any of their calculations --- only rabiblanco media need apply.) The case was brought after the company that used to have the contract, Controles de Inversiones SA, was dumped in favor of Ibope Time, SA. The defendants include Campagnani/BBDO Panama, McCann-Erickson, Boyd-Bárcenas, Publicuatro, Publicis Fergo, Comunicacion Integrada, Publicidad Interamericana, Mega Publicidad, Méndez y Diez, Quimica Publicidad, Punto Aparte Publicidad, J. Walter Thompson, Leo Burnett Panama, Insight Advertising, R. D. Nexos, Star Management Holding and Genesis Publicidad y Marketing.

A Chiriqui civil court has rejected a claim by one Luis Antonio Galán that he owns 80 hectares of the La Amistad International Park (PILA). The land that Galán claims had been confiscated from former Panama Defense Forces Colonel Alberto Purcell after the 1989 US invasion by the Office of Patrimonial Responsibility (DRP) and handed over to INRENARE, the predecessor of today’s National Environmental Authority (ANAM). Earlier this year it was discovered that Galán had registered the property as his and posted it with private property notices, and that prompted legal actions by ANAM and environmentalist groups. Private land grabbing, often assisted by public registries or the falsification of official maps and often at the expense of public parks, has been one of the salient features of Panama under the Moscoso administration.

Ten years after Coronado’s developers and private citizens complained about beachfront property owners fencing off the public beach in or adjacent to that gated residential community, government inspectors arrived on the scene to look at the situation and do the necessary surveys. It seems now that nine fences or walls will be demolished and the people who build or maintained them will be fined. Most of the offending properties are owned in the names of corporations. One such company, Rainfall Estates, SA, has been fined $137,733.75 for its illegal occupation of the beach. Under the Panamanian constitution, beaches are public property. There has been a long-running attempt by some wealthier Panamanians to build exclusive beach communities that in effect privatize the beaches, and in some places like the Bocas del Toro islands and the Darien community of La Palma there is a tradition of building on stilts over the ocean. Plus there are unscrupulous real estate dealers who sell beachfront land to foreigners, telling the buyers that their property extends down to the waterline. In one instance The Panama News has been told of an American resident of Bocas del Toro who regularly asserts his claim to the public beach with an assault rifle. Control and ownership of the beaches is not one of the issues being discussed in the special legislative session dedicated to constitutional reforms.

According to Chamber of Commerce president Raúl Delvalle, the national government’s arrears in payments to its members is about $80 million. Economy and Finance Minister and Panama Canal Authority board of directors member Norberto Delgado said that the arrears are only $35 million and it’s because the businesses didn’t present the proper paperwork to get paid for the goods and services they provided to the government. Vice-President Arturo Vallarino said that the chamber’s complaint is overly dramatic. Essentially the Moscoso administration went on a pre-election spending spree to boost its forlorn hopes to avoid humiliation on May 2, making many of its purchases on credit, and now it’s leaving the bills for the next administration.

Panama Information, Hotels of Panama - Executive Hotel
Panama Information, Real Estate in Las Cumbres - Villa Concordia
Panama Information - Online guide to information about Panama - www.panama-information.executivehotel-panama.com
Panama Tourism - Online info for the Tourist Panama - www.travel-to-panama.com
Panama Pictures - Collection of pictures of Panama - www.panama-pictures.com