Business & Economy Briefs

Some questions will have to wait for the moment when the implementing regulations for the recent tax reforms are announced, but the Ministry of Economy and Finance wants to leave at least a couple of things clear as regards foreign retirees. First, the ministry said --- probably too broadly --- that "foreign retirees and pensioners who establish residency in Panama will not be taxed on their income, given that said income was not produced or generated in Panama." (So if you're a retired American soldier who was stationed here and came back with your Panamanian spouse to retire, does that part of your pension that comes from your time in Panama get taxed? Just asking.) Second, the ministry noted that interest earned on bank accounts will not be affected by the new law. Over the past couple of weeks it has been represented in emails circulated on the Internet that The Panama News reported that foreign retirees' pensions will be taxed, which is not what this newspaper reported. We did remark that the law wasn't well written and the general inclusion of pensions as taxable income could be subject to various interpretations --- which we gathered from the different opinions expressed by various lawyers as well as from reading the actual legislation --- but that it did not appear that the Torrijos administration intends to tax the pensions of foreign retirees. We stand by that.

Manzanillo International Terminal (run by Seattle-based Stevedoring Services of America) and Colon Container Terminal (run by Taiwan-based Evergreen) are set to expand. The two ports that have taken up most of Coco Solo have reached agreements with the government that will give them 30 and 39 hectares of additional land respectively. As part of the payment, the companies will invest some $2.7 million in community projects in Colon. Most of the jobs that are expected from the port expansion will be temporary or indirect, for construction and then services to the expanded facilities. However, about 500 relatively well paid port jobs will be created when the expansion is done.

On April 3 four members of the same family died from inhaling toxic fumes while cleaning a drain at Recuperacion de Proteinas SA, a Juan Diaz business that processes poultry feathers and offal. Luis Ernesto, Manuel Elías, Aníbal and Manuel Solís Fernández were killed in the accident and a fifth worker, not a family member, was hospitalized but is expected to recover.

The US strategy of negotiating bilateral or subregional free trade pacts in lieu of a Free Trade Area of the Americas has been beaten by the clock, or at least set back. Congressional fast track authorization has expired, and that seriously complicates matters. Under the fast track procedure, when the United States and another country or group of countries negotiate a trade deal Congress can ratify it or reject it, but can't make changes. The law ran out earlier this year with respect to the various talks, including bilateral negotiations between Panama and the United States. The US pharmaceutical lobby took advantage of that to insist that another provision be added to the Central American Free Trade Agreement, one that would repeal Guatemala's generic drug law. But the Bush administration hasn't submitted CAFTA to Congress, even though it has been ratified by several Central American countries. Instead the US president has asked Congress to renew fast track provisions for the various free trade talks. Free trade talks between Panama and the United States stalled out after eight rounds, mainly over agricultural issues, and no date has been set for their resumption.

Gasoline and diesel prices are at all-time highs and that has prompted a clamor among the bus and taxi syndicates, who work according to government-set fare schedules, for increased fares. The government has sternly warned against any unilateral raise by the drivers, but talks are underway that may lead to higher bus and cab fares.

The Land Transportation and Transport Authority (ATTT) has announced that some 400,000 people will have to get new driving licenses by the end of the year. In part it's a means to collect some $36 million in unpaid traffic tickets, but the new licenses will also be more difficult to falsify and will be computer scannable so that traffic cops can quickly determine if a driver has outstanding warrants. Along with the new licenses will come three new examinations, vision and hearing tests and a urine test for drugs, that must be passed in order to get a license.

According to reports in La Prensa, the Banco Nacional de Panama's assets diminished by some 88 percent from 2003 to 2004. That's because of a series of bad loans, the largest being $28.5 million to Maximo Haddad's fly-by-night PYCSA consortium and $19 million for the cooperative that took over Chiquita's banana plantations in Puerto Armuelles. Much of the $25 million loan portfolio for bus loans is also in trouble.

As a long investigation about a inside ring with some outside accomplices that stole at least $1.6 million from the National Bank of Panama (BNP), anti-corruption prosecutor Cecilia López has asked the court to dismiss charges against 14 of the 24 persons accused for lack of evidence against them. The scam operated by giving taxpayers bogus receipts for payments made at the bank and diverting the money from the national treasury into the pockets of individuals. It had been going on for at least several years when businesses that had paid their taxes were harassed by the Moscoso administration for non-payment and came forward with such bank receipts as they were given.

In August of 2003 BetPanam began an online sports betting business out of Panama, operating under an existing casino's gambling license. There was a $182 million bond posted, via Aseguradora Mundial. But the business went bust, owing nearly $500,000 to 83 bettors, and the Moscoso administration was not disposed to do anything to help. When the Torrijos administration came in Raúl Cortizo took over as head of the Gaming Control Board, which has finally ordered the bond paid. That benefits about half of the unpaid bettors, who accepted less than all of what they were owed, but still leaves some $281,000 still owing. There may be some litigation against the sponsoring casino company, Cyberprogramming Corporation, and its individual legal representatives over the remaining unpaid balance.

Panamanian truck drivers started blocking foreign trucks trying to enter Panama at the Paso Canoa border crossing with Costa Rica on April 2, and as these briefs were listed the blockade continued. The protest was called by the National Cargo Transportation Chamber because Nicaragua doesn't allow Panamanian trucks to cross its border.

Some 20 members of the SUNTRACS construction workers' union were arrested on April 1 when union representatives demanded that a company working on the Pan-American Highway in Chiriqui pay Seguro Social benefits for all workers employed on the project and use proper safety equipment. Scuffles broke out when some of the workers on that job opposed the union leadership, which in turn led the police to intervene and seize SUNTRACS vehicles, which in turn led to a rowdier confrontation. Two people were injured and a journalist was briefly detained by police in the incident.

The banana producing countries are historically short on unity, but Latin American governments have rallied their opposition to European Union banana import duties set to take effect at the beginning of next year. The latest phase of the long running battle between Europe and Latin American banana producing countries has been the latter's petition for arbitration by the World Trade Organization. Although the WTO is badly split over agricultural questions, it's likely that the Europeans will fare poorly before this forum on this question. Thus the European Commission issued a statement that it "laments the decision of those countries," but intends to defend its tariff plan in the arbitration process. Several years ago the WTO struck down a European banana policy that favored Caribbean and African countries, pursuant to a petition by the United States. The Americans don't produce many bananas but two US-based companies, Chiquita and Dole, dominate the world banana market.

Panama is advanced in certain medical fields like laser eye surgery, but generally lags behind the developed world in transplant surgery. A bit of that ground was recently made up at the Hospital del Niño, where a seven-year-old girl suffering from aplastic anemia received a bone marrow transplant, the first such operation on a pediatric patient here. This medical advance was unfortunately marred by the publication of the girl's name by La Prensa, an invasion of privacy generally condemned as unethical in both medicine and journalism.

Remember all of those ceremonies where former President Moscoso handed out property titles to homeowners? (True, The Panama News didn't report most of these political events as we judged that they were not newsworthy, but several times we mentioned them in passing because noteworthy announcements were made at them.) It turns out that thousands of the papers she issued on those occasions weren't really land titles. Former Banco Hipotecario director Ernesto Fernández now owns up to that and is recommending that those who were told that they had received titles hire lawyers to actually get their titles. The problem is, many of these people can't afford to hire attorneys.

Sand and gravel mining from the Pacora River has contributed to flooding, erosion, pollution and drinking water shortages, and thus the Torrijos administration has decreed a halt to the activity. While enforcing the ban, officials from the Ministry of Commerce and Industry caught one enterprise openly violating it --- the junta comunal of the corregimiento of Pacora, which is headed by PRD representante Hugo Henríquez. Henríquez was ticketed and could be fined, but he says that the sand was being taken for a community project that had the support of First Lady Vivian de Torrijos.

People who grabbed parts of the public beach at Coronado, after many long years of legal skirmishing, are getting their walls bulldozed by the government. People who grabbed parts of Parque Omar --- 3,063.89 square meters worth --- in similar fashion may face a different fate. It seems that while the law does not allow people to buy public beaches as at Coronado, Parque Omar does not enjoy similar protection. According to a statement that Catastro director Benjamín Colamarco made to La Prensa, those those who have built over their lot lines into the park may be given the opportunity to buy the land that has been taken. The problem has persisted for years, and many of the offending property owners bought their houses with the encroachments already existing. Upon her husband's assumption of the presidency, First Lady Vivian de Torrijos complained about it --- and then it was discovered that one of the offending properties was owned by the Second Lady. Parque Omar used to be a golf course that well before its conversion to a public park was surrounded by upscale homes, with lot lines often poorly demarcated.

No, US Armed Forces Radio and Television Service is not coming back to Panama. The television frequencies that AFRTS used to use were auctioned off in 1999 to the MEDCOM and TVN broadcasting companies, which at the time had enough problems selling ads that they had to cut back on their TV programming hours. That the two companies sat on these frequencies for all these years to keep out competition was thus added to the problems that the president at the time of the sale and his relatives owned an interest in MEDCOM and that newspapers that wanted to bid for the channels were excluded from the process. But at least the monopolistic practice of keeping television channels unused is on the way out. TVN is now using its channel as TVMAX, which will primarily broadcast sports and movies. MEDCOM will begin broadcasting on channel 7 next month as Tele 7, with children's programming the principal fare.

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