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Holding that electric rate hikes that went into effect on July 1 were illegal because they were granted by the Public Utilities Regulating Board (Ente Regulador) without the proper public notice or hearings, the Supreme Court’s administrative bench has struck down the rate hikes of between 2.6 and 7 percent. The challenge to the rate hike was filed by the nation’s Ombudsman (Defensor del Pueblo) Juan Antonio Tejada, who argued that the Ente Regulador’s procedure violated Panama’s Transparency Law.

The aggressive expansion of Alberto Vallarino’s banking empire is no longer confined to Central America. Now the Primer Banco del Istmo (Banistmo) has bought out Lloyd’s TSB assets in Colombia and Banistmo will in an instant be the second-largest bank in that country. Vallarino told La Prensa that he had been working on this acquisition since 1998. Once the deal is complete, Banistmo’s assets will be around $6 billion.

The Panama Maritime Authority (AMP), until September 1 a semi-feudal fiefdom of the extended Onassis García family, is claiming success because “only” 21 Panamanian-flag ships have been detained by US authorities for failure to meet the new ISPS ship and port security regulations since the Americans began enforcing them on July 1. According to a Lloyd’s List report based upon US Coast Guard statistics, some 25 percent of Panamanian-flag vessels that have come into American waters were out of compliance with ISPS. The authority adopted the costly, time-consuming and unusual procedure of requiring a two-step ISPS certification procedure whereby a ship’s security plan must be approved by an obscure Florida company that has been given a monopoly on such work for Panamanian-flag ship, and then the vessel must be inspected by one of the established international maritime safety inspection firms. The Japanese Association of Owners of Panamanian-Flag Vessels is threatening to switch away from the Panamanian registry en masse due to the delays, costs and aggravations of the shakedown. AMP director Bertilda García says that it’s only natural that Panamanian-registry ships would present more problems, because Panama’s is the world’s largest ship registry.

The Panamanian government measures the cost of living here by the price of a collection of basic food staples and other household necessities called the “canasta basica.” The Free Trade and Consumer Affairs Commission (CLICAC) keeps those data, and reports that in June the cost of the canasta basica went up slightly, from $186.49 in May to $187.38 in June. The increase was attributed to higher fruit and vegetable prices.

The latest United Nations Development Program human development rankings are out. These ratings are based not only on per capita Gross Domestic Product, but also on things like average life expectancy, literacy rate and educational standards. By the UN’s figuring, Panama ranks number 61, just barely in the top half of countries in the Latin America and Caribbean region. In the last report, in 2001, Panama was rated number 59. While we posted slight gains in most of the categories surveyed, the study found that the graduation rates of Panamanian students have declined in recent years. The most prosperous country in the region, according to the study, is economically troubled Argentina (34th in the world), while Haiti has by far the most miserable quality of life in the Western Hemisphere with a world ranking of 153.

Yes, he can assign blame elsewhere, and maybe with good reason. However, because Comptroller General Alvin Weeden did not sign a contract with Constructora Nova, which the Moscoso administration has hired to repair a part of the Trans-Isthmian Highway south of Sabanitas that has been washed away, the company was not paid and stopped its work. Meanwhile, heavy seasonal rains are beginning to erode the temporary detour and traffic between Colon and Panama City has been slowed. The basic problem, evident with many stalled public works projects all around the country, is that Mireya Moscoso blew the national budget in a futile pre-election spending binge and is now coming up with excuses and delays so as to dump the mess in Martín Torrijos’s lap when she leaves office at the end of August.

Panama’s Foundation for the Welfare and Dignity of Persons Affected by HIV/AIDS (PROBIDSIDA), along with groups of cancer, transplant and kidney dialysis patients, has filed suit against the Ministry of Health and the Social Security Fund, alleging that these institutions are cutting costs by ordering cheaper medicines that do not serve the purposes of patients’ prescribed treatments. These same groups have also for some months been complaining of the lack of medicines, and of bureaucratic obstacles that have been interposed to in many cases prevent patients from receiving any treatment at all for several months. AIDS patients were previously caught up for more than one year in a feud between Comptroller General Alvin Weeden and former Seguro Social director Juan Jované, in which the former refused for about one year to approve purchases of the anti-retroviral drugs used to treat HIV infections.

In a dispute that arose over the Panamanian government’s failure to turn certain real estate over to the Mexican ICA construction company and the latter’s claims for payment for added costs due to contract modifications, the government and ICA found themselves before an arbitration panel with the latter demanding more than $143 million. The arbitrators gave ICA only $17.934 million. As part of the contract, the government also had to pay ICA’s attorney fees for the arbitration, which came to half a million dollars. The big winner appears to be defeated Mireyista candidate José Miguel Alemán’s law firm, which is being paid $1.5 million for its work on the arbitration process.

Attorney General José Antonio Sossa has signed a contract with Spain’s Genomica-Ibadesa SA for the latter to create a DNA lab to be used by Panamanian cops and prosecutors. A previous attempt ran afoul of partisan bickering about who would get to control the contract, technical qualification issues, and conflict of interest suspicions due to the involvement of Sossa’s brother-in-law in the contracting process with a US firm. The lab would do both paternity tests and the more complicated mitochondrial DNA work used to identify human remains and link physical evidence to suspects. Given Sossa’s ties with the Partido Popular, the junior partner in the incoming government coalition, the partisan bickering over political patronage spoils is unlikely to be a factor when the next legislature considers whether to ratify or reject the contract.

More as a protectionist measure than for any bona fide health or sanitary reason, Panama has been maintaining a ban on the importation of US beef products since the discovery earlier this year that a single cow from Canada had been infected with mad cow disease several years earlier. So into Tocumen Airport came Panama’s controversial former consul in Miami, Manuel Cohen Salerno, bearing more than 30 pounds of various cuts of American beef. His ties with Mireya Moscoso were of no avail as far as the agricultural inspectors were concerned. The meat was confiscated and the Ministry of Agricultural Development is pressing charges for the attempted quarantine violation. This problem adds to Cohen’s woes, in the wake of being named in Florida’s Hamilton Bank scandal and in allegations of massive vote-buying in San Miguelito during this past May’s elections.

While trade negotiations with the United States dominate the business headlines here, another round of talks aimed at a free trade pact between the Asian city-state of Singapore and Panama have also been underway here. Singapore is an insignificant agricultural producer but does process a fair amount of food produced in nearby counties, and thus some Panamanian farm groups have expressed concerns about cheap Singaporean imports harming this country’s agriculture.

Five sick cattle from a ranch in Chiriqui Grande were recently destroyed at the insistence of authorities and in Dolega there was a tense standoff when a rancher tried to keep agricultural inspectors off of his land at one ranch and 60 cattle were ordered destroyed on another. The problem is brucellosis, the cattle disease that has been a problem in western Panama since 1997. The Ministry of Agricultural Development estimates that about 8.5 percent of the country’s cattle ranches are affected by the disease.

At the beginning of July, hundreds of public school teachers who have not been paid since the school year began in March stopped coming to work. In the following two weeks, all of the teachers at several schools in Kuna Yala and the Darien walked out in solidarity with their unpaid colleagues. As the Ministry of Education had still not paid the teachers who have been unpaid by the middle of the month, teacher union leaders are now threatening to call a nationwide strike that would close the entire public school system.

Panama has a two-tiered educational system, with a highly politicized and in recent years often corrupt public school system that will be a Rosas family fiefdom until September 1 and private schools that run the gamut from awful to excellent. Among the better private institutions are the La Salle schools, run by the brothers of the Catholic order of San Juan Bautista De La Salle. There are several La Salle schools around the country, with probably the best known located in El Cangrejo and serving a mainly middle class student body. Now celebrating its centennial, the order plans to open a new school in Tocumen, at which tuition will not be charged. The La Salle school emphasize modern education, of which the teaching of English plays an important role, as well as the propagation of the Catholic faith.

Federico Humbert has stepped down as publisher of La Prensa, a post which he has held since September of 2002 when he replaced Ricardo Alberto Arias. Humbert and Arias were leaders of a shareholder revolt in which members and supporters of the PRD and the Christian Democratic Party (now Partido Popular) ousted followers of founding publisher I. Roberto Eisenmann Jr. The persistent rumor is that Humbert will be appointed to a post in the incoming Torrijos administration, but no official announcement has been made about that.





Also in this section:
Business & Economy Briefs
US-RP free trade talks: if not much light, a bit more heat
US consulate's advice on Panamanian real estate and commodities

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