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Although the Supreme Court ordered a rollback of the hike in electric rates that went into effect July 1 while it considers national Ombudsman Juan Tejada’s lawsuit based upon allegations of improper procedures by the Public Services Regulating Board (Ente Regulador), the board is ignoring the court’s order and rates have not been rolled back.

According to La Prensa, the government’s Fiduciary Fund for Development, into which the proceeds from the privatization sales of state-owned companies have been invested, brought in only $37.4 million in interest and dividend revenue for the first half of this year, and the Moscoso administration projects that the fund’s total income for 2004 would be $72.4 million. If that projection holds, it would mean a $22.1 million revenue decline compared to 2003.

On August 9, after repair work on a washed-away stretch of the Trans-Isthmian Highway near Quebrada Lopez in Colon had been halted for several weeks due to the government’s failure to pay the contractors, and in turn heavy rains began washing away the temporary detour, repair work resumed on that stretch of road. The road is the principal transportation link between Colon and the rest of the country, and the government’s slow and partial response to the landslide had been the subject of many protests, especially from Colon Free Zone businesses that depend on the road being open.

A group of French investors has sued the Land Transit and Transportation Authority (ATTT) for $36 million, alleging that a 2002 contract that they had to build a new bus terminal for Colon was taken away from them and given to a Panamanian group that includes Colon’s governor, Gassam Salama. The Panamanian courts have in recent years upheld a number of contract grabs for the benefit of people who have influence with the Moscoso administration, but it seems that the Supreme Court may be changing early in the coming administration and moreover, France and Panama have a treaty to protect French investors, under which the final word would not be up to this country’s courts. The ATTT defends its actions, claiming that the French group had failed to properly identify the land on which the terminal was to be built. For his part Salama, a Mireya Moscoso appointee, denies that his political influence had anything to do with his group getting the contract.

On August 12, a week into the second semester of the current academic year, some 400 public school teachers received their first paycheck for this academic year. The Ministry of Education proffered the excuse that these were mainly educators in remote areas. However, the ministry has been run as an extension of the MOLIRENA party subsidiary of the Rosas family business for the past five years and the least desirable teaching assignments have gone to those who have failed to pay dues to MOLIRENA and support Jesús “Maco” Rosas in his bid to maintain control over the party despite his having led it to disaster in the recent elections. Many of these teachers had walked off the job, and in some schools their colleagues went with them, so the payment effectively ended a teachers’ strike affecting many schools in the Darien and the indigenous comarcas. That leaves only a few teachers who have not been paid since the school year began in March.

Following the lead of its rival Iberia Airlines, Air Madrid will offer twice-a-week direct flights between Panama and Spain beginning October 13. Demand for flights between the Americas and Europe which bypass the United States has increased due to visa restrictions and other inconveniences that the Bush administration has imposed on Latin American passengers traveling to European destinations by way of flights that make stops at US airports.

The JP Morgan investment bank is advising its clients to “reduce holdings” of Panamanian government bonds. That advice was given in light of increases in the public debt, which now stands at about $9 billion. Throughout his election campaign and during the transition period President-elect Martín Torrijos has repeatedly assured bondholders that will meet all of Panama’s financial obligations. In light of the debts and unpaid bills that the outgoing administration is leaving him, that probably means that the first budget passed by the new government will be an austere one.

On August 9 as lightning strike near a power line caused a half-hour blackout across most of Panama and Colon provinces. The power grid was vulnerable to that sort of disruption because on August 1 a safety line that is supposed to guard the tranmission lines by absorbing such electrical discharges fell down where the lines cross the Panama Canal at Culebra Cut, and the state-owned ETESA power line company took its time making repairs.

Mireya Moscoso’s elaborate dedication ceremony for the second bridge over the canal, which is not connected to roads that go anywhere, has been the occasion for much ridicule. However, it has also been an opportunity for reporters to ask embarrassing questions about the project. As in a query by El Panama America to Public Works Minister Eduardo Quirós about changes to the bridge’s lighting system. The original specifications that his ministry adopted, Quirós said, didn’t take into account the fact that the bridge passes over the Panama Canal, and that the lighting could affect visibility for pilots trying to safely navigate ships through Culebra Cut.

The stretch between Yaviza in the Darien and Rio Sucio in Colombia, about 160 miles in length, is the missing link in the Pan-American Highway that runs from Alaska to the southern tip of South America. At the August 15 dedication ceremony of the second bridge across the Panama Canal, Colombian President Álvaro Uribe was the guest of honor and he used the occasion to call for the construction of a road to close that gap. Local indigenous groups who would rather not see their land invaded by outsiders, enviromentalists who believe that a road would spell the end of the Darien jungle and cattle ranchers who don’t want to see the natural barrier between the area affected by hoof-and-mouth disease and aftosis-free Panama breached have all registered their opposition to the idea. The US Embassy has also registered its opposition, citing the same concerns. One of the controversies about the possible road has to do with security issues --- would a road make it easier for Panamanian police and Colombian soldiers to get to the now-remote border area and impose order, or would it just open a new drug and gun smuggling route, and allow invading Colombian insurgents to quickly penetrate deep into Panamanian territory? The chances of the road being built anytime soon are remote.

During last year’s protests sparked by the firing of former Social Security director Juan Jované, the demonstrators claimed that a couple of groups in which Panama’s most powerful banking and insurance interests are represented --- the Pro Futura and Progreso consortia --- were angling to take over the fund and run it privately on a for-profit basis. At the time the mainstream corporate media here --- which have interlocking directors or economic ties with these consortia --- treated the claims as leftist fantasies. Now, however, the directors of each of these groups tell La Prensa that they are willing and eager to take over management of the fund.

Earlier this year the Supreme Court essentially banned the construction of buildings more than 12 stories tall, including those that were already being built. This stalled well over $100 million in ongoing projects, throwing hundreds of construction workers into the ranks of the unemployed. After talks among building contractors, municipal officials, construction workers and legislators, it appeared that an agreement had been reached on legislation to rescind the court decision. However, in the Legislative Assembly the Mireyistas inserted an implementation schedule that effectively maintains the stoppage with respect to partially completed buildings and the industry is not very happy about that. Both outgoing Housing Minister Miguel Cárdenas and his designated successor Balbina Herrera are urging President Moscoso to veto the legislation, but in any case it will be up to the next legislature and administration to sort out the problem.

One of the most criticized economic moves of the Moscoso administration was a contract revision that reduced the taxes and rents payable to the Panamanian government by Panama Ports, the local subsidiary of Hong Kong-based Hutchison Whampoa. Over the 50 years of the concession, Panama would stand to lose more than $1 billion in direct revenue, and because the other private ports have contracts specifying that they will receive comparable benefits if any competitor gets a subsidy or tax break, the losses to the Panamanian treasury have been considerable. Now a legal challenge to the contract revision is before the Supreme Court and there are various rumors floating about to the effect that the magistrates are about to cancel the deal. Even if the court does not strike down the revision, Martín Torrijos has promised to rescind it when he takes office.

The National Environmental Authority (ANAM) has announced a new fee schedule for entry, camping and anchorage in Panama’s terrestrial and marine national parks. Admission fees for university students will be $1 for either type of park and free for children and retirees. Adult citizens will pay $1.50 to get into land parks and $2 for water parks, while the fees will be $3.50 and $10 respectively for foreigners. Camping and anchorage fees will from $3 to $18 per day. depending on age, occupation and nationality. Fees for nature guides, filming permits and other park services are also going up.




Also in this section:
Business & Economy Briefs
Last minute smash and grab time for Mireya and her followers
Still waiting on a canal expansion plan
Canal's 90th birthday

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