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business & economy

Also in this section:
The Embera basket business
Change in US tax laws affects many America expats
Protests continue against Clayton development
Business & Economy Briefs
 

Business & Economy Briefs

A free trade deal with Singapore

Panama and Singapore have signed a free trade agreement. It appears that the main results in the short term will be increased Panamanian agricultural exports to the Southeast Asian city-state, and Singaporean investments in port and dry dock developments in Panama.

Mexico taking Panama to the WTO over dairy products

A World Trade Organization panel is in the process of trying to resolve a Mexican complaint against Panama for restricting the importation of its dairy products. The dispute is in an arbitration phase at the moment, and if unresolved could be submitted to a tribunal for decision. When a country loses a case before the WTO and doesn't abide by the result, then the organization permits the wronged party to enact retaliatory trade measures.

Nicaragua-Panama trade war heats up

First it was Nicaragua banning Panamanian trucks from its roads. Then Panamanian truckers blocked the Costa Rican border at Paso Canoa in retaliation, and Panama slapped restrictions on Nicaraguan beef products. So Nicaragua has banned Panamanian chicken and beef products. It's really a tiny part of the Panamanian economy, but a step away from the policy of economic integration of Panama with the Central American republics that the Pérez Balladares and Moscoso administration had pursued.

Shipping lines hike canal transit surcharge

An alliance of 13 shipping lines has announced that it will be raising the per-container charge for goods passing through the Panama Canal from $50 to $165. The move comes in the wake of a steep increase in the ship tolls that the canal charges, and in light of severe congestion at US west coast ports that keep a lot of Asian shippers from choosing routes that avoid the canal. In the short term it's a windfall for the shipping lines, but it may result in port expansions on North America's Pacific coast and Asian companies using routes to the Atlantic coast that bypass the canal in the longer run.

Santo Tomas Hospital has money woes

Panama City's Santo Tomas Hospital, the place where patients without insurance go that's run by a foundation and backed by the Ministry of Health, is asking for $4 million to get it through this fiscal year. Construction has just finished on an impressive new addition to its structure --- Mireya cut the ribbon on the unfinished project before she left office --- but the funds to equip and run the new wards aren't there. The main problem, however, is structural rather than political. The Panamanian work force increasingly toils in the underground economy and Panama City is attracting ever more tourists and undocumented foreign workers, such that a dwindling proportion of the people who have a medical emergency in the capital are insured by Seguro Social or plans that will pay for care in Panama. In the cases of most tourists, the fees charged for care at Santo Tomas are ridiculously low by US standards and the individuals are usually willing and able to pay them. But those who can't pay aren't turned away and the growing number of such patients is making Santo Tomas's financial balance ever more negative.

Bocas land commission

President Torrijos has appointed an inter-institutional commission to study the various problems related to land tenure in the Bocas del Toro islands. The area has been a magnet for foreign retirees and tourists in recent years, and with them it has attracted a criminal element of both foreign and domestic provenance. Former Mayor Eladio Robinson is already behind bars for dispossessing longtime residents who held land by virtue of squatters' rights and then selling the land to foreigners. Although his San Cristobal Land Development company has been continued by accomplices who have taken on the name Tropic Star Properties (which has absolutely nothing to do with the renowned Tropic Star Lodge at Piñas Bay in the Darien), its founder Tom McMurrain is behind bars in Atlanta awaiting trial on dozens of fraud charges. On Bastimentos Island a number of foreign residents have been informed that land for which they have paid and received certain documents did not belong to the sellers to sell, and irregularities in various governmental offices having to do with land tenure are being probed by prosecutors. The National Assembly has before it a proposal to legalize many of the questionable land titles in the Bocas islands, which would also allow many who hold real estate by right of possession to upgrade their interests to full title, but it seems that the proposal, submitted by PRD legislator Benicio Robinson, is stalled in committee. The presidential commission may sort out the mess by unifying policies and backing legislation based on such a consistent approach by various governmental agencies. Although prosecutors might move against the real estate fraudsters, the presidential commission is unlikely to get into any of the criminal matters.

Gatun ferry service coming

The Panama Canal Authority says that starting in 2006 there will be a 24-car ferry shuttling back and forth just north of the Gatun Locks. As the canal becomes busier the lockages that close the swing bridge at the locks --- the only way most motor vehicles can travel between Colon province's Costa Abajo and the rest of the country --- more frequently and for longer times. Lockages that last a couple of hours are not all that uncommon. In the 1990s ARI land use plan there was supposed to be a bridge or ferry across the canal at about where the ferry is planned to run, but Mireya Moscoso decided that the second bridge over the canal should be in Panama province instead of Colon.

Grupo Melo's plants under the looking glass

After the April 3 deaths of four brothers while cleaning a waste collection tank at Recuperacion de Proteinas, a chicken byproducts plant in Juan Diaz that's owned by Grupo Melo, the company and several of its operations have come under increased scrutiny by members of the public and various governmental institutions. Homicide detectives from the PTJ are looking at the deaths from inhalation of toxic fumes and there is a possibility that prosecutors may file negligent homicide charges to accompany those that surviving family members say that they will privately press. The National Environmental Authority (ANAM) is investigating neighbors' complaints of vile odors from several Grupo Melo plants, and has ordered the closure of the factory where the brothers died and of a nearby slaughterhouse owned by another company. Grupo Melo's principal owner, Arturo Melo, is head of the PRD's Frente Empresarial and his holdings include real estate development, poultry, pet and garden supply, hardware and construction supply interests. The bad publicity of late is rare for Grupo Melo, as it has long enjoyed a good reputation for ethical dealings and responsible environmental practices.

No Seguro Social plan yet

It hasn't prevented leftist protests, nor has it avoided complaints from banking and insurance interests and the media that support them that the changes won't go so far as the privatization they want, but the Torrijos administration still hasn't unveiled any plan for changes in the ways that the Social Security Fund (CSS) is operated. Originally these were to have been subject to legislative debate and action in a special National Assembly session in January and February, then it was suggested that the matter would be at the top of the assembly's agenda at the start of its regular session in March. But with polls showing that the most likely reforms to put the hemorrhaging retirement fund in order are deeply unpopular, the government has repeatedly put off the announcement of its plan.

Smoking banned in public places

Guess Philip Morris won't be holding any galas for Martín Torrijos, like they did for Mireya Moscoso. President Torrijos has signed a decree banning smoking in virtually all indoor public places and some outdoor venues as well. There will be no more smoking in workplaces, bars and restaurants, except for those with outdoor sections, and even in stadiums. It remains to be seen how the decree will be enforced. Ever since the Moscoso administration brought Philip Morris into the public schools to tell kids that smoking's a grown-up thing to do the rate of smoking among young Panamanians has gone way up. But now the guy who ran for the presidency with posters of his dad smoking a big cigar behind him has proven no great friend of the tobacco companies, and a substantial amount of the government advertising one sees on Panamanian TV these days is in the form of anti-smoking propaganda.

City council demands investigation of steel recyclers

Panama City's representantes are sick of spending money to replace storm drain grates and sewer caps, only to have them stolen again. On April 5 they passed a resolution calling on police and prosecutors to investigate recycling companies to find out who's receiving the stolen property and calling on the citizenry to look out for people stealing these items and report them to police.

Pyramid scheme investors win chunk of Banco DISA assets

The multiple marathon litigation over the collapse of a bank that was founded on US government loan guarantees, Banco DISA, has taken a new twist. A judge has held that the $40.2 million that the bank collected from the Providencia/Estrellamar mutual fund must be returned. The latter outfit was a fairly classic pyramid scheme, promising investors 15 percent return on their money and paying those who put their money in early with funds deposited by later investors. The bank was one of the backers and just as the bubble was about to burst, it called in its loan and grabbed the fund's remaining assets. The circuit court decision, which complicates the possibilities of ordinary bank depositors getting their money back --- there is no bank insurance in Panama --- will likely be appealed.

Car registration rules to change

Starting next year car owners will be able to register their vehicles not only where they buy them --- which is mostly in Panama City --- but wherever they live, work or come from. It should reduce the lines in which people must wait for such services.

IMF: put Banco Nacional de Panama and Caja de Ahorros in order

No kidding. It seems that when there are multiple criminal and administrative investigations centering on misconduct in the state-owned Banco Nacional de Panama and Caja de Ahorros financial institutions, the International Monetary Fund might notice. In a recent report on Panama, the IMF did so, urging this country to reform the practices of those institutions. By ordinary practice the IMF might have been expected to demand privatization, except that Panama hasn't had an agreement with it in force for several years now and does not seem eager to start arranging its affairs according to the fund's free market dogmas. The Torrijos administration did allow the IMF to look at Panama's finances, and this rather obvious recommendation is one of the results. The IMF's report was generally favorable, noting good growth in the Panamanian economy but also warning that more needs to be done to confront rural poverty.

UXO in the bridge approach

Construction workers have recently encountered, and contractors for the Interoceanic Regional Authority have removed, several pieces of unexploded ordnance UXO from the path of the western approach to the new bridge over the Panama Canal. The area used to be the Empire Range, which was the target of decades of bombing and shelling by US military forces. The 1977 Panama Canal Treaties provided that the Americans would remove all hazards to the extent practicable, but it is the policy of the United States government that what ARI's contractors did was impracticable. The US refusal to comply with this part of the treaty has been a matter of dispute between Washington and Panama for years, but the Torrijos administration is downplaying the disagreement because the Americans won't budge and the argument is making it hard to negotiate other matters. Last year a man was killed by one of the mortar shells that the Americans left behind on the Atlantic side's Piña Range.

C&W ordered to charge in real time

Cable & Wireless, the much despised telephone utility that despite the law opening fixed line telecommunications to competition a couple of years ago has pulled political strings and managed to keep its monopoly more or less intact, has been caught in yet another scam against the consumers. As in by-the-minute phone charges in which C&W calculates a "minute" as 40 seconds. The Public Utilities Regulating Board has ordered the company to cease and desist with the practice and adhere to international norms of calculating time for telephone charges.