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businessAlso in this section: Business
& Economy Briefs Cell
phone numbers to get an extra digit As of August 7, you will
have to punch out eight digits to get connected to a
cell phone. All current cell phone numbers will start
with an extra numeral "6." The change was made
pursuant to an agreement among the two cell phone
service providers, Cable & Wireless and Telefonica
(Movistar), and the Public Services Regulating Entity. APEDE:
Seguro Social struggle trashed the economy The Panamanian Business
Executives Association (APEDE) estimates that the
strikes, street blockages, riots, bad publicity and
economic uncertainties caused by President Torrijos's
Social Security Fund reforms in May and June represented
a two percent decline in the country's economic growth.
The business group told El Panama America that had the
reforms and ensuing dispute never happened, the economy
would have risen at an annual rate of 5.5 percent by
now, but that it has been two percent less than that.
One of the biggest concerns is the possibility of
lingering damage to the tourism economy, because
foreigners who know little about the realities of
potential tourist destinations often presume the worst
and shy away from places where there is social turmoil. Court
holds government liable for sequestration The Supreme Court's Third Bench has issued a 2-1 ruling that holds the
Comptroller General's Office of Patrimonial
Responsibility (DRP) liable for the 2001 sequestration
of the assets of the Panahabanos Cigar Company, an
export-oriented tobacco company. Panahabanos had
received more than $2.3 million in tax indemnities, but
the DRP found that the company was actually eligible for
only $472,951, and thus seized the company's assets. But
in July of 2004 then Comptroller General Alvin Weeden
threw out the investigations of Panahabanos and other
exporters who had allegedly received inflated tax
credits, citing errors in the preliminary audits. The
company is claiming some $6.8 million in damages, but
the decision left the determination of the actual amount
that the government will have to pay to be determined by
further proceedings. In La Estrella
Comptroller General Dani Kuzniecky called the decision
"paradoxical." Court
stops ARI from pursuing Figali's debt The Supreme Court's Third
Bench has suspended the effect of a debt of more than $2
million that the Interoceanic Regional Authority (ARI)
says is owed to it by the Figali Group for the real
estate concession on which the Figali Convention Center
and other developments on the Amador Causeway are
situated. Jean Figali, a friend of former President
Mireya Moscoso and presiding Third Bench magistrate
Winston Spadafora, says that he should have been given
credit for the investments he made. Administrative
Prosecutor Oscar Ceville says he will appeal the
decision, particularly because it purports to cancel a
debt rather than overturn an administrative act. Foreign
investment down The Ministry of Economy
and Finance reports that in the first quarter of 2005
foreign investment in Panama went down 24.4 percent
compared to the same period in 2004. There are probably
several important causes for this. Last year there was
uncertainty about whether tax exonerations for new
construction would be continued at 20 years after year's
end, so a lot of building projects were speeded up so
that the developers would be assured of the two-decade
break. A lot of Colombian investors had their various
ties with Mireya Moscoso and members of her entourage
and are not similarly linked with the Torrijos
administration. Some investors in the United States are
for various psychological and political reasons reacting
to their country's international political isolation by
cutting back on investments abroad. And then there are
the effects of the Torrijos administration's tax
increase. Torrijos
announces part of his Colon development plan President Torrijos,
acknowledging that his announcement was not the complete
story, unveiled $24 million worth of details of his
development plan for Colon province. In a July 13 speech
at Colegio Abel Bravo he spoke of road improvements ---
particularly to the crumbling Trans-Isthmian Highway ---
new aqueducts, improvements to several different sewer
systems, dredging work on the garbage-clogged Quebrada
Fantasma, more patrols at the Chagres National Park and
the construction of a new community center. His
announcement didn't keep the protesters away during his
visit, nor did it much impress leaders of the coalition
of community, labor and unemployed groups that has for
years been clamoring for relief from Colon's economic
distress. It does seem, however, that at least some jobs
will be created in the province and that the president
has more announcements coming. Union
opposes application of US law to RP corruption SITIEPSA, the union that's
certified to represent workers at the nation's
privatized electric utilities, is protesting the
possible application of the US Foreign Corrupt Practices
Act (FCPA) against the parent company of Elektra
Noreste, Constellation Power Inc. The FCPA provides
criminal penalties for American companies that engage in
bribery and other corrupt practices abroad. SITIEPSA
maintains that it's a violation of Panamanian
sovereignty for US authorities to do anything about
corruption in Panama. Mexico
and Panama swap trade demands Mexico is asking Panama to
ease non-tariff restrictions on the importation of its
beef, poultry and vegetables, while in return this
country wants the Mexican government to take Panama off
of its financial transactions blacklist. In each case,
the country imposing restrictions has a certain amount
of justification, and the issues were raised --- not for
the first time --- at July 11 and 12 meetings in Mexico
City between the respective nations' foreign ministers.
Mexico imposes a special fee on financial transactions
involving Panama, which it justifies by the history of
money laundering and other financial crimes here whereby
the proceeds of Mexican political corruption and
organized crime tend to make their way down here and the
consequent need for costly extra vigilance of bank
transfers between there and here. Panama cites health
concerns about various Mexican food products. In each
case, however, there are also special interests in the
respective countries that back the restrictive measures
because they are forms of economic protectionism. Farmers'
Market reduces night hours From now on the Central
Agricultural Market in Ancon will be closing at 7 p.m.
rather than 10 p.m. Opening time will remain at 2 a.m.
Basically the problem is that the market is close to the
high-crime Hollywood neighborhood, which means that the
city has to spend a lot to keep the place secure from
the maleantes down the street. Because there isn't much
business at night, the city decided it wasn't worth it
to keep the market open between 7 and 10. Chinese
propaganda offensive The Chinese economy is
booming along with Chinese-Panamanian business ties, but
Beijing and Panama still don't have formal diplomatic
relations because this country maintains ties with
Taiwan that China wants severed before it will deal
formally with Panama. The Taiwan-China struggle has been
waged within Panama's Chinese community and within
political parties across the political spectrum here for
years. Lately China has been on a propaganda offensive,
particularly in the pages of La Prensa, which has
published a series of articles about the benefits that
would accrue to Panama if we change our China policy.
One argument that is now being made in La Prensa is that
Panama's banana exports to Europe, which are threatened
by proposed European Union fruit tariffs, would benefit
from relations with China because the latter charges
only a 10 percent duty on bananas.
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