business

Business & Economy Briefs

CLICAC: medicine prices up

The Free Trade and Consumer Affairs Commission (CLICAC) reports that in a survey of the nation’s private pharmacies the prices of 1,066 different medications are up. Panama’s partly socialized health care system provides free or lower cost medications for many people at the Social Security Fund pharmacies, but many times the drugs that people who qualify for these subsidies need are simply not available at those facilities. Panama more or less lets the multinational pharmaceutical companies set its medicine prices, which is one of the reasons behind the popularity of this country’s thriving herbal medicine markets. Given that nearly half of Panamanians live below the poverty line and that $400 per month is considered a good middle class wage, and given the subsidized CSS pharmacies, the multinationals have nevertheless found that our market will not bear prices quite as high as those that they impose in the United States.

 

Growth projection downsized

The INDESA financial consulting firm, whose estimate that Panama’s economy would grow 9 percent this year was much publicized by the government when it was released last month, has adjusted its figures. Now the consultants say that it’s more likely that the economy will grow 7.1 percent. The adjustments were made on the basis of a Comptroller General’s report that the economy grew at an annual rate of 6.8 percent in the first quarter of 2005. On the streets and in public opinion polls, however, Panamanians tend to believe that the economy is more sluggish than either version of the INDESA estimate, with higher taxes and Social Security withholding most often being pointed to as the brakes on the nation’s economic growth.

 

8,000 public sector layoffs, more to come

Since taking office Martín Torrijos has pared the public payroll by some 8,000 positions. Comptroller General Dani Kuzniecky told La Estrella that this represents a monthly saving of some $5.4 million and that more such cuts are coming. The public payroll grew during the Moscoso administration, much to the displeasure of international financial institutions, and when President Torrijos took office there was a stack of unpaid bills and not enough money to pay them in the public treasury. Getting the nation’s finances in order has been one of the current administration’s first priorities. However, the cap on the number of government workers that was part of the Torrijos tax reform and all the public sector layoffs have not set well with some of the PRD rank-and-file members, who expected that they would be repaid for supporting the party in last year’s elections with government jobs.

 

Free trade talks with Chile

On May 30 negotiators for the governments of Panama and Chile began talks aimed at a bilateral free trade treaty. There had been prior negotiations during the Pérez Balladares administration, but those were suspended in 1998 and never reopened during the Moscoso administration. Panama imports a lot of fruit and vegetables from Chile, while Chile is a major customers for the Panama Canal and other services that this country offers. During the earlier talks one of the great sticking points was Chile’s bid to allow its architects, accountants and other professionals to legally work in Panama, which was strongly resisted by the influential professional groups here.

 

Tree trade with the USA: more support than opposition

According to a CID/Gallup poll commissioned by El Panama America, 37 percent of Panamanians were somewhat or very opposed to a free trade agreement with the United States, while 49 percent were somewhat or very supportive. The hardcore supporters and detractors were roughly equal in number 19 percent for the former and 22 percent the latter. What the poll probably means is that if and when a free trade deal is reached, public opinion may be very volatile depending on the contents of the treaty. At the moment talks between the United States and Panama are in a lull after eight rounds that failed to produce an agreement, the main sticking point having been agricultural questions. Even if they haven’t been big stumbling blocks in the negotiations, important issues like intellectual property, the ability of professional and managerial people of one country to work in the other, educational standards and the services sectors are likely to come into the public discussion when there is a draft treaty for people to see. None of this may happen, though, if the US Congress fails to ratify the Central American Free Trade Agreement, or CAFTA. It isn’t clear whether George W. Bush will be able to muster the votes for ratification of that treaty, which has already been approved by most Central American governments, sometimes in the face of bloody rioting against it.

 

Albrook overpass may be ready to use this year

The vehicular overpass near the Albrook airport, built during the Moscoso administration on insufficiently strengthened foundations over what was once a mangrove swamp, began to sink and crack before it was done and has never been opened for traffic. After months of studies, soil tests and negotiations between the government and the general contractor, it has been decided that the structure can be shored up with two new retrofitted pylons and El Panama America reports that the Ministry of Public Works expects that it will be open for traffic later this year, possibly in as soon as four months.

 

APEDE: economy grew, productivity shrank

A report by the Panamanian Business Executives Association (APEDE) says that between 1991 and 2001 the nation’s Gross Domestic Product grew by just a bit more than 4 percent, but in that decade the productivity of the Panamanian work force shrank by some $668 per worker per year. Although one might expect the figures to form part of the context for a pending debate about higher education reform, the proposal that the legislature is taking up has little to do with the productivity of our economy.

 

Overload for kidney dialysis patients

A kidney patients’ group, the Asociacion Nacional de Pacientes con Insuficiencia Renal Cronica y Familias, complains that dialysis patients who have no Seguro Social coverage and thus depend on Santo Tomas Hospital are facing a deadly situation. The hospital has only 14 machines, which are enough to maintain 54 patients on a proper dialysis schedule, but there are about 400 patients in line to use the machines. In the Moscoso administration one of the president’s key advisors was Álvaro Antadillas, a non-physician who owned the country’s only private dialysis clinic, and on several levels the administration dragged its feet on equipping both Ministry of Health and Social Security Fund facilities with dialysis machines. Moreover, hospitals that tried to buy machines found that Panama’s two importers of dialysis equipment --- both of which had hopes of public sector contracts --- wouldn’t sell to them.

 

Metal stripping at Galeta, Randolph, France Field and Gulick

The Interoceanic Regional Authority (ARI) says it has discovered that dozens of Colon residents have been systematically stripping metal away from the former US military bases at the northeastern extremity of the Panama Canal. Using picks and shovels, the scrap metal collectors dug up and removed three kilometers of piping from the US Navy’s former Galeta communications station and the US Army’s former Fort Randolph, much of which is now a Smithsonian Tropical Research Institute marine biology lab. Others have been combing the areas around France Field, and the former Fort Gulick, which for decades was used for army war games, for brass bullet shells and other military detritus. Were ARI doing its job of watching the property entrusted to it this would have been discovered much earlier, but authorities learned of what’s going on as the result of a police watch on Colon scrap metal dealers, aimed at suppressing the widespread theft of sewer caps and drainage grates. ARI, hoping to defraud potential investors by way of concealment, has never admitted it, but somewhere around France Field the US Army buried a huge cache of chemical shells and barrels of military toxins just before World War II and if scrap collectors dig into this the mustard gas would still be extremely dangerous.

 

Aggies donate training ship

Texas A&M University has donated a ship, Clipper II, to Panama for the anticipated creation of a new international maritime university here. Over the years the university has maintained a close relationship with Panama, to the point that there is now an annual Aggie Muster in Panama which attracts many Texas A&M graduates. Most prominent among this country’s Aggies is one Martín Torrijos Espino.

 

C&W reports $95 million net profit

Cable & Wireless Panama, the phone company in which the Panamanian government owns a 49 percent stake, reports that in its 2004-2005 fiscal year that ended on March 31 it made an after-taxes net profit of some $95 million. The gross revenue was reportedly about $135 million. The former colonial phone company for the former British Empire, the Cable & Wireless family of companies has in recent years been caught up in various accounting scandals around the world, so the figures given by its Panamanian subsidiary should not be taken at face value by prudent investors.

 

Gas wars

One of the alternatives that the government has been promoting in the light of high world petroleum prices is a conversion of some of the nation’s motor vehicles to cheaper natural gas. Ah, but there are various kinds of gas fuels, and this has sparked a dispute between the country’s two gas companies, Panagas and Tropigas. (For those who want to look for political implications, understand that Panama City Mayor Juan Carlos Navarro’s family owns Tropigas.) Panagas wants to use HD-5 grade propane gas as the national standard for gas-run vehicles, while Tropigas has proposed a mixture of propane and butane. The government’s choice, which is being challenged by the competition, is HD-5 propane.

 

Schoolhouse for sale?

Bocas del Toro real estate racketeering has gone one step beyond, with hustlers offering the land on which the elementary school in Buena Esperanza sits for sale to foreigners. Years ago the land was donated for use as a school, and by continual use the state’s ownership rights would be perfected even if the donation wasn’t in strictly proper order. But all across the Bocas islands old land titles that have long been voidable due to intervening squatters’ rights have been asserted by the heirs of former owners, which is what’s happening in this case. Land grabs in Bocas, often at the initiative of or with the connivance of corrupt judges, lawyers and public officials, have been a growth industry in the area for several years. Former Bocas Mayor Eladio Robinson is in jail for just such a scam. The Bocas land boom and all of the corruption, conflicting land claims, frauds and improper evictions that have gone with it are now the subject of an effort by an inter-agency governmental task force’s efforts to clean up the mess.