business

Panama’s approach to regional economic integration may have taken a decisive turn on August 6 in Buenos Aires, when President-Elect Martín Torrijos announced that he’s interested in a free trade pact with the South American MERCOSUR trade bloc, whose twin pillars are Brazil and Argentina. Throughout much of Latin America there is growing support for an alternative to the US NAFTA-based approach to a Free Trade Area of the Americas, to be pursued through a Latin American collective bargaining effort led by MERCOSUR. Under the Moscoso administration Panama’s relations with most of South America --- with the notable exception of Colombia --- have been given low priority, while ties to the Central American banana republics have been emphasized. However, culturally, economically and historically Panama has been much more of a South American country than a Central American one and the PRD has usually paid more attention to relations with its fellow Bolivarian countries than to Central America.

In the first four months after a Panamanian-Taiwanese free trade pact went into effect, Panamanian sales to Taiwan shot up 183 percent, according to a report in La Prensa, which was in turn based on figures obtained from Taiwan’s embassy here. The major Panamanian exports to the island nation were fish meal, beef, scrap metal, paper products and antibiotics.

The Moscoso administration had hoped to close a free trade deal with Singapore before leaving office, but that now looks unlikely. A second round of talks with the Singaporeans ended on July 28 with no agreement on several undisclosed points. The head of the Panamanian negotiating team, Romel Adames, said that 95 percent of all issues were resolved.

On August 6 the Ministry of Agricultural Development announced a gradual lifting of sanitary restrictions that have kept US beef off of the Panamanian market for the past seven months. The restrictions were imposed after it was discovered that several years before a single cow with spongiform encephalopathy --- mad cow disease --- had been imported from Canada and marketed in the United States. The disease is highly contagious among ruminants and can jump from cattle to humans, with results that are frequently fatal. The prions (molecular life forms) that cause the disorder concentrate in the brain, nerves, marrow, fat and connective tissues. At the moment Panama is only allowing the importation of American beef taken from cattle that are 30 months old or younger, which has been boned by hand and contains none of the higher-risk tissues, and which have not been fed bone meal or other animal products. The ministry’s plans to gradually ease these restrictions are probably irrelevant, as the current administration has less than one month remaining in its term of office and all of its policies will be subject to review and change.

Just about the time that the Interoceanic Regional Authority (ARI) is set by law to go out of business, it will be holding a bidding competition to choose a company to manage the new duty-free “special economic area” that’s being created with the former Howard Air Force Base. ARI director Alfredo Arias told La Estrella that the final details of a process that’s expected to culminate in February of 2005 are being worked out with the International Finance Corporation. Although ARI’s organic law is nebulous on the point past practice would indicate that by then the nephew of Mireya Moscoso’s late husband Arnulfo Arias will not be in charge of the authority, whether or not the incoming PRD government decides to prolong its existence.

In a no-bid proceeding the Interoceanic Regional Authority has given the concession to run the fuel tank farm at the former Howard Air Force Base to a company called Suplidora Panameña de Combustible y Derivados SA (SPCODESA). Like all Panamanian corporations the company’s beneficial ownership is not a matter of public record. However, all of its officers and its legal representative work for the law firm of the director of the Judicial Technical Police (PTJ), Jaime Jácome. Although Jacomé denies that he owns an interest in the company, an investigation by La Prensa’s Mónica Palm uncovered a document in the Public Registry that indicates that the PTJ chief in fact owns a 50 percent stake in SPCODESA.

It’s abominable urban planning, but probably lucrative for certain individuals. The Interoceanic Regional Authority wants to turn the Amador Causeway, a popular bicycling and roller blading area, into a four-lane highway, and most especially to hand out the contracts before the Mireyista gravy train screeches to a halt on September 1. Thus bidding was held for the planning work for the contemplated road on July 22, and two companies submitted offers. As the specifications of the two offers were different, ARI has not yet decided which of the bids it will accept or if it will start the process over again.

In October the US National Aeronautical and Space Administration (NASA) will be opening a weather and climate research center at the City of Knowledge, which occupies much of the former Fort Clayton. NASA’s hope is to be able to better predict natural disasters in Mexico, Central America and Panama.

Former Banco DISA directors Joaquín José Vallarino, Rafael Endara Jiménez and Jorge Endara Paniza have been provisionally acquitted of bank fraud charges brought by another former director, Haralambos Tzanetatos, on behalf of his company Curacao Eximport Enterprises. In a separate civil case it was held that $10 million was improperly taken from the company’s accounts in a vain attempt to stave off the bank’s collapse, but in the criminal case magistrate Georgina Tuñón held that Tzanetatos knew what was going on at the bank and that there was insufficient evidence to support criminal convictions for fraud. Tzanetatos says he’ll appeal, and Vallarino says he’ll press criminal charges against Tzanetatos for filing the complaint. The Banco DISA collapse is noteworthy, among other reasons, because the bank was founded on US loan guarantees. Despite his history of political ties with the Noriega regime, Vallarino for many years did very well when US aid was passed out because successive American administrations presumed that anyone who holds the local Coca-Cola bottling franchise, as he did until its sale a little more than a year ago, is by definition respectable and a worthy recipient of US foreign aid.

The association of Japanese shipowners whose vessels sail under the Panamanian flag has apparently backed down on its threat to leave this country’s ship registry en masse, according to El Panama America. Panama’s maritime authority (AMP), which is headed by a woman whose principal qualification appears to be her family relationship with 1999 Mireya Moscoso campaign treasurers “Onassis” García, has adopted ISPS ship security procedures that grant a monopoly on approving anti-terrorist plans to an obscure little Florida company. The extra expense and red tape and probable corruption in the Mireyista procedure was not the Japanese shipowners’ main concern. It seems that for all the extra expense that the Mireyistas imposed, shipowners were not getting their certifications in a timely manner and several vessels were detained in US waters for not having their ISPS certificates before the July 1 deadline. However, it seems that the ships eventually did get certified, Panama is still a bargain for companies looking to avoid heavy tax and regulatory burdens on their ships, and Mireya’s crowd will be gone from the authority in a few weeks.

When the National Maritime Authority created a two-step procedure for ships to be certified under the ISPS international ship and port security code, the Moscoso administration argued that having one specialized company review the security plans and separate recognized ship inspection companies do the actual inspections was in keeping with the new code. Critics pointed out that other countries have neither bifurcated the certification process nor have they granted monopolies like Panama has, and thus owners of ships flying flags other than Panama’s have been able to obtain their certificates more quickly and at a lower cost than that required of ships registered in this country. But now, according to La Prensa, the expert opinion is in. One Frank Wall has criticized the Panamanian government for the way it has implemented ISPS --- and he’s the one who initiated the effort that culminated in the ISPS code’s adoption. Wall took particular aim at the monopoly over ship security plan reviews.

The Cabinet Council has approved an agreement with the US government and the Nature Conservancy to trim nearly $11 million from Panama’s foreign debt in exchange for granting protection to parts of Panama’s dwindling tropical rainforests that do not now enjoy legal protection from logging and other destructive activities.

Erstwhile Atlanta dot-com hustler Tom McMurrain infamously made the Internet sales pitch that on his Bocas del Toro noni plantations “Each plant will produce a $10 bill each year... just like an ATM machine, just add water." Not so, according to a report in La Prensa. It seems that the owners of hundreds of hectares of noni that were planted in Bocas del Toro province now find that it’s not just a slow market, but that there is hardly any market at all for the fruit. Nobody is buying for export, but you can find noni at some of this country’s farmers’ markets and roadside stands.

In order to protect its marine resources, this year’s second ocean shrimping moratorium will be in effect from September 1 through October 11. During that time river shrimp and crustaceans raised in tanks or ponds will be legal, but it will be against the law to catch, transport or sell ocean shrimp. The National Maritime Authority’s budget to enforce the ban hardly exists --- it has only one launch to patrol all of the country’s waters off of both coasts --- so it’s likely that efforts to compel compliance will be aimed at the commercial end of the business. This year there will also be a tuna fishing moratorium, from November 20 through December 31. This latter moratorium, however, does not apply to foreign vessels to which the Moscoso administration has sold fishing licenses, nor will it apply to boats less than 24 meters in length. The tuna moratorium, which the government will try to enforce by satellite monitoring, is the result of an international pelagic fish conservation treaty to which Panama is a party.

The Panama Canal Authority has announced that it has broken its single-quarter revenue record by bringing in $192.7 million from the beginning of April through the end of June. That’s about 18.1 percent more than the same period in 2003 and represents an increase in the number of ships passing through the waterway. The biggest increases in canal usage have been small oil tankers carrying crude oil to refineries around the world and busier cargo container traffic between Asia and the eastern part of the United States.




Also in this section:
Business & Economy Briefs
Creeping paralysis as the government lets its bills slide
Changing dynamics in free trade process

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