business

Mireya Moscoso’s tax, rent and revenue sharing breaks and land grants for private ports in Colon have been a major controversy, but it seems that the easier part of the argument has been settled. The government and the proprietors of Manzanillo International Terminal (Stevedoring Services of America) and Colon Container Terminal (Evergreen) have reached an agreement whereby the companies will invest $500 million in expanding their facilities, spend $2.75 million on community projects in Colon, and after the work’s done pay 50 percent more per container in taxes to the government. Some 750 construction jobs and more than that number of permanent jobs are expected to be created. The agreement does not include Panama Ports, the subsidiary of Hong Kong-based Hutchison Whampoa, which runs the ports of Cristobal and Balboa.

The container ports in Balboa and Colon are by no means the nation’s only seaports. Most of the rest of the ports, however, principally serve navigation among points within Panama and they are in many cases seriously neglected. After a study of the situation by the Japan International Cooperation Agency, the National Maritime Authority has decided to seek bids for private concessionaires to renovate and run the ports of Bocas del Toro, Coquira in Chepo and La Palma in the Darien and to build an entirely new container port to serve the Baru Free Zone in western Chiriqui province.

The Standard & Poors bond rating service has upgraded its perspective on Panama’s debts from negative (BBB) to stable (BB). S&P is impressed with the Torrijos administration’s tax reforms and budget restraint, and thus raised its estimate from the negative that had been in place for about two years.

Inter-American Development Bank president, after a recent meeting with President Torrijos, told La Prensa that Panama deserves the respect of the international community for the steps it has taken to get its financial house in order. The banker said that the recent fiscal reforms and other measures passed or contemplated by the new administration are putting the country on the road toward modernization.

The Civil Aeronautic Authority (AAC) has approved hikes of $2.50 to $5 for passage on Aeroperlas’s and Turismo Aereo’s domestic civil aviation flights. Domestic flights are still pretty cheap compared to fares in many other countries, but the authority cited increased fuel prices that the air carries must pay as its justification for the increase and said that the new fares would apply for at least six months.

Although they are in Chapter 11 bankruptcy reorganization, US Airways is expanding its services to the region and as part of that has begun flights to Panama. Tocumen International Airport has been getting busier of late not only because existing carriers have been adding flights (like the increased COPA service to and from Bogota), but also because new players are coming to and from this country. Direct flights between Europe and Panama are part of the trend and are sure to affect the established US to Panama carriers.

Restrictions on imports of US beef products that began with an absolute ban but were gradually eased have been eliminated. The measures were taken by the Moscoso administration after the discovery of a single animal affected by spongiform bovine encephalopathy --- mad cow disease --- in North America. Panama was by no means the only country to impose such a ban, but the restrictions here were prolonged in large part at the insistence of local beef producers, who are both afraid of a mad cow outbreak and in any case glad to see any restrictions on foreign competition.

The US Department of Agriculture has found that the Azuero Peninsula is free of Mediterranean fruit flies. These insect pests have a particular fondness for citrus fruit and the Americans prohibit all imports of products from infested areas that might carry them. For that reason, Panamanian citrus fruit has long been banned from the US market. That won’t really change, because our principal citrus growing area, the Chiriqui highlands, still does have medflies. But some fruits and vegetables grown in the Azuero that in the past could not be exported to the USA --- tomatoes, peppers, mangoes and papayas, for examples --- would now qualify to get past American agricultural inspectors once the finding is officially certified.

The nation’s three principal gasoline vendors, Texaco, Delta and Petrolera Nacional, have been fined $15,000 apiece for violating a 2003 law that requires them to maintain a 10-day fuel supply at all times. The law was designed to avoid sudden acute energy crises, but to those companies the fines are insignificant.

The Panama City mayor’s proposal --- or according to Mayor Navarro’s spokesman the city treasurer’s proposal made through the mayor --- to hire a private company to collect debts owed to the city has been withdrawn from the city council’s agenda. That doesn’t mean that a collection agency won’t be hired, but the proposal to hire one particular firm without a competitive bidding process has been quashed and the mayor says that he’ll be submitting a proposal to put a debt collection contract out for bids. Over the course of the economic slide that began in 1998 and bottomed out in 2002, with a slow recovery since then, many businesses closed their doors without notifying the city or stopped paying taxes and on paper the revenue shortfall is a nine-figure sum. However, much of that debt is either imputed or uncollectable, or both.

The nation’s perennial second place sensationalist tabloid, El Siglo, has had a change of administration. Ebrahim Asvat, the former Christian Democrat national police chief who now serves as President Torrijos’s cabinet chief, has stepped down as El Siglo publisher and handed the job over to Nivia Rossana Castrellón, who served as Vice-Minister of Foreign Relations in the Moscoso administration. The rest of the editorial staff and the gory cover photos remain unchanged.

There are a lot of kiosks on Avenida Central and in El Mercadito in Calidonia --- some 900, by the city’s count. Due to congestion and complaints by business owners that entrances to their stores are blocked, the city wants to reduce that to about 250 and more than 100 of the permits that the city is willing to issue have already been taken. Thus many of the booths in the neighborhood sport “No to the Dislodgement” posters, and it seems that a major confrontation between the city and the vendors looms. In the past there have been massive evictions and demolitions of the kiosks, which have then been replaced by new ones in short order. The city is seeking new places to put the vendors it wants to oust, but has yet to come up with anything specific.




Also in this section:
Tax reforms panned, defended at USMA forum
Chicken wars?
Business & Economy Briefs

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