business & economy

As this issue was uploaded a seventh round of free trade talks between the United States and Panama were underway in Washington. Unresolved from earlier rounds were a range of agricultural issues, and some of the sticky points raised in this round are the US request for Panama to drop its laws reserving retail sales business for its citizens and the Panamanian request for goods reexported from the Colon Free Zone to be treated as products of Panama rather than of the countries that produced them.

The negotiating processes for free trade agreements with other countries in the Americas have been carried out under “fast track” rules, which basically hold that once an agreement is made, it can be ratified or rejected but not altered in the ratification phase. But with the already negotiated but unratified Central American Free Trade Agreement (CAFTA) the Bush administration, at the behest of pharmaceutical industry interests, is insisting on a change: Guatemala must repeal its generic drug law. The administration probably has the votes to do whatever it wants in the US Congress, and may be able to impose its will on Guatemala. However, the change in procedure is likely to affect other free trade negotiations and the possibilities for a Free Trade Area of the Americas.

While the Public Services Regulating Board has raise Panama’s already high electric rates by an average of about 8.5 percent , President Torrijos has announced a $5 million program to subsidize the electric bills of households and small businesses that consume less than 200 kilowatt-hours of power per month. The president said that with the subsidy some 77 percent of residential consumers will not see any net increase in their bills.

At the end of December gasoline prices at the pump dropped by 15¢, to $1.95 per gallon for premium. It was the first time in a long time that the price has dipped below $2.

The Supreme Court has struck down a fine imposed by the National Securities Commission (CNV) imposed on one Carlos de la Guardia, a director of the defunct Grupo Adelag, for making false statements to investors. The decision attacked the powers of all regulatory agencies to impose sanctions for such acts, which in turn drew strong protests from the nation’s Banking Superintendent Delia Cárdenas, who argued that she would not be able to do a proper job of overseeing the banking system without the power to act against fraudulent statements on the part of bank officials.

Panama Ports Company, the local subsidiary of Hong Kong-based Hutchison Whampoa, has told La Prensa that in 2005 it plans to spend $100 million to expand the Port of Balboa and adjacent container handling facilities. There will be new landfills to set the stage for new piers, and Pier 15 will get three new cranes. The company also plans to add two new piers and six new cranes at the Port of Cristobal, an investment of some $200 million.

The duty-free “special economic zone” at and around the former Howard Air Force Base will have liquor distilling executive José Ramón de Jesús Varela Cambra (Hermanos Varela) as its first administrator. On the board of directors will be broadcasting and cable exec Emanuel Arturo González Revilla Lince (MEDCOM - Multi Holding Corporation), businessmen Simón Hafeitz Homsany, Fernando Lara, Rolando Pérez, Severo Sousa and Félix Brandon Maduro, and, purportedly as a labor representative, former legislator and former taxi syndicate boss Vicente Magallón. The appointments were approved by the legislature shortly before its 2004 session ended in December.

National Environmental Authority (ANAM) director Ligia Castro de Doens says that in 2005 her agency will give closer scrutiny to the environmental impact statements that developers and others must submit in order to get permits for various projects. She added that in order to meet this goal, from top to bottom every ANAM employee would have to play the role of educating the public about what’s required.

The Office of Patrimonial Responsibility (DRP), a dependency of the Comptroller General’s Office that was created after the 1989 invasion to receive and dispose of assets seized from those who had looted the public trust, is to be replaced. Recent constitutional changes have authorized the creation of a new court to deal with these types of actions and Comptroller General Dani Kuzniecky says that the DRP’s functions will be transferred to that tribunal, which will be under the aegis of the justice system rather than his office.

Ah, but let us not cast aspersions upon the city fathers by way of the late Frank Zappa’s nastiest lyrics. In this case the municipality of Dolega, which has for some years been storing things at the farm in Potrerillos that was expropriated from former dictator Manuel Antonio Noriega after the 1989 invasion, plans to make better use of the property. One of the new uses will be the nation’s first orchidarium, now under construction and to be maintained by the Chiriqui Orchid Conservation Association (ACOCHI).

The Interoceanic Regional Authority (ARI), which was created to manage and dispose of the assets that came into the government’s hands by way of the 1977 Panama Canal Treaties, will be disbanded at the end of this year. Created in the wake of the 1989 US invasion, the authority has always been a political patronage dumping ground, with plentiful corruption. But when the Torrijos administration took over it neither repeated the wholesale process of replacing activists of the outgoing faction with patronage appointees of the incoming parties, nor accepted recommendations that the authority’s statutory lifespan be extended. The initial changes were only at the top, where, for example, the nephew of Mireya Moscoso’s late husband was replaced as ARI director. But now a number of contracts that expired at the end of December --- including those of most of the 47 lawyers who worked for the authority --- have not been reviewed, and there have been dozens of layoffs. All told, about 300 people were let go between President Torrijos’s inauguration and the end of 2004. A further wave of layoffs is expected in March, as ARI gradually downsizes to nothing by the end of next December.

For nonperformance of the agreed investment within the stipulated period Jean Figali has been stripped of the concession to build a “California Gold Rush Fever” theme park on the Amador Causeway by the Interoceanic Regional Authority (ARI). Figali, whose given name is Jean Feghali Waked, was one of the most favored developers under the Moscoso administration. However, his Figali Convention Center, also on Amador, was opened unfinished --- it’s basically a just high-ceilinged hall, without the balconies, booths, installed seating or other planned amenities --- and he owes back rent to ARI for the property. (Figali is also submerged in litigation with building contractors over the convention center project, the latter claiming non-payment, the former claiming inferior work.) Figali still has a concession to build a “High Fashion Avenue” project on Amador, but it does not appear that much progress is being made on that work, which by contract must be done within two years.

The biggest single debtor to the Social Security Fund (CSS) has paid its arrears. That, of course, would be the national government, which owed some $129,610,000 that was supposed to have been paid into the system after having been deducted from public employees’ paychecks during 2003 and 2004. The former administration, however, had other priorities. Payment was made in the form of negotiable treasury bonds.

The Social Security Fund (CSS) board of directors has elected construction executive Héctor Ortega as its new president. Ortega, who served as Minister of Public Works for two years under the Noriega regime, replaces Mireya Moscoso’s cousin Erasmo Muñoz. He told La Prensa that he was surprised and unprepared for his election, but added that the CSS board is a collegial body and the work that needs to be done is a job for the whole board and not just its president.

Arriving at the scene of a January 2 fire at a public housing project in Panama City’s corregimiento of Calidonia, Housing Minister Balbina Herrera expressed her disgust at finding out that almost none of the residents were paying rent and many of them were stealing electricity through illegal hookups. Rejecting some residents’ complaints that the government owed them jobs because they supported the PRD in the last campaign, Herrera said that the culture of free housing would end and that while those who paid would be relocated in new apartments, those who didn’t would have to get by in homeless shelters.

The Bocas Fruit Company, a subsidiary of Chiquita Brands, has decided to pull up the rails of the 95-year-old railroad it owns and transport its bananas by truck instead of rail. The decision has been criticized by historic preservationists in the province, who argue that the railroad is an important cultural asset.

Jailed “offshore asset protection guru” Marc Harris’s former employees may get one last paycheck after all. Harris and his former lawyer Gilberto Boutin had been fighting for years over a large amount of money that the latter had frozen, purportedly to cover legal fees that Harris owed. But meanwhile lawyers for several dozen ex-employees have convinced a judge that their clients’ claims to the money may have priority over those of both Harris and Boutin and thus an order has been issued to continue the freeze on the money --- some $800,000 --- until priorities are sorted out. Extra complications could arise if some of the people who say that Harris stole the money they invested through him also come to court looking for a piece of the fund.

The Ministry of Commerce and industry, taking cognizance of the environmental damages caused by sand and gravel mining in two major rivers, the Pacora River on the eastern edge of Panama City and the Changuinola River in Bocas del Toro, has banned the extraction of material from those sources. Sand and gravel mining has long been a highly politicized issue, with plenty of pirate operations, lots of bribes paid to public officials for improperly granted permits and the occasional violent confrontations between beachfront property owners and people coming in trucks to take away the sand in front of their homes. Another alternative, taking sand from the sea bottom, runs into environmental objections and yields a product that, if the salt residues are not removed before it is mixed with cement and water, results in flaking or crumbling concrete.







Also in this section:
Ecuador, Chile and the world shipping industry pan PanCanal container toll hike
Venezuela-China economic agreements may affect Panama
The proposed environmental crimes law
Business & Economy Briefs

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