Business & Economy Briefs

The Ministry of Labor Development (MITRADEL) says that Panama’s jobless rate is down to 11.8 percent, the lowest it has been for more than a decade. The figures are based on a Comptroller General household study that counts people who sell things at traffic lights, live off of their gardens or otherwise scrape by outside the formal economy as employed. Former Panamanian Business Executives Association (APEDE) president John Bennett, however, told El Panama America that the government’s claim is at odds with reality. The general consensus among Panamanian economists is that the official figures given by this and the past several administrations have understated unemployment by some three to five percentage points.

The Panama Canal Authority (ACP) board of directors is set to choose the next canal administrator, who will serve a 10-year term, at an August 16 meeting. The two most-mentioned names are the current administrator Alberto Alemán Zubieta and Economy and Finance Minister Ricaurte Vásquez, who serves as head of the ACP board and by law would have to leave the cabinet and the board to get the job. The administrator is hired for a 10-year term.

Government figures for the number of people entering Panama through Tocumen Airport reflect a bright spot in the Panamanian economy. In the first quarter of this year 282,772 came in that way, which was 15.4 percent more than in the same period of 2004. For the most part that means more tourism, by people who stay a bit longer and spend substantially more money here than those who arrive on cruise ships.

The Torrijos administration has declared Veraguas a tourism development zone, which gives its natural, historical and architectural features certain legal protections. The cabinet has also earmarked $4.6 million for renovation and restoration work at one of the province’s cultural treasures, the Juan Demóstenes Arosemena Normal School in Santiago, which is home to priceless murals by the early 20th century artist and diplomat Roberto Lewis. Also underway in Veraguas are restoration efforts at the 17th century San Francisco de las Montañas church.

President Torrijos has extended the temporary reduction in gasoline and diesel taxes at the pump, which he decreed earlier this year when confronted by high world oil prices and threats of a public transportation shutdown by bus and taxi drivers who are being squeezed between higher fuel prices and stable government-set fare schedules. The president notes that because Panama neither produces oil nor sets world petroleum prices there are limits to what he can do about the situation. Higher fuel prices have rippled through the national economy, causing relatively sharp increases in the prices of food and other necessities.

Cable & Wireless Panama, the thuggish phone company that throughout the Moscoso administration repeatedly cheated its customers and engaged in illegal monopolistic practices in ways that turned out to be profitable even after fines were paid, has finally been nailed with penalties it doesn’t care to accept. The Public Utilities Regulating Board (Ente Regulador) has ordered the company to repay customers for overcharges that systematically appeared on monthly phone bills between January of 2003 and May of this year. The company is appealing the decision to the Supreme Court.

According to the law that allowed such institutions to be created, an official neighborhood association (junta communal) that the representante of a municipality’s corregimiento heads is financed by donations. In most places a city won’t approve a liquor permit unless the junta communal approves and few neighborhood associations will give their blessing without a substantial contribution. In many places anybody opening a business of any sort is asked --- or told --- to make a contribution of a specified amount. Quite frequently foreigners or Panamanians of certain ethnic groups are hit up for discriminatory higher payments. Generally the funds collected in these ways are used for various public or charitable purposes. The system lends itself to abuses, as there is no standard procedure that regulates the collection, use and documentation of donations. Now, after a series of La Prensa stories about disparate practices in Panama City’s various corregimientos and a few complaints about by business owners or would-be investors who think that they have been improperly treated, Comptroller General Dani Kuzniecky has ordered an audit of all neighborhood associations and warned that the Ministry of Economy and Finance and his office must be notified of all donations.

Cristobal representante Matilde Ávila Rocero has filed a complaint against Colon mayor Antonio Lattif III, alleging that the latter abused his power by selling pipes and cables buried around Galeta Point, France Field and the former Fort Randolph to a metal recycling company. The representante claims that the proceeds from any such contract legally belong to the junta communal that she heads, and that in any case the money has not been properly accounted for. The mayor claims that as head of the municipal government he has the right to act on the local government’s behalf to dispose of scrap metal that the city possesses.

The Program for the Promotion of Educational Reform in Latin America and the Caribbean (PREAL), which has for several years been monitoring the quality of education that kids between the ages of five and 15 get in schools in many parts of the Americas, gives the Panamanian schools a bad grade. Unlike most of our Central American neighbors, this country does a relatively good job of offering all children a free public education. However, PREAL says that the quality of instruction here is low and there are very serious problems in the elementary grades for the poorest kids. There has been little argument to the contrary from the Ministry of Education or the nation’s teachers’ organizations. However, University of Panama rector Gustavo García de Paredes --- the self-styled “Rector Magnifico” whose school was not evaluated by PREAL --- has a different take on the report. He told El Panama America that the poor grade that PREAL gave to Panamanian education is part of a campaign to discredit the university. Earlier this year, with some 500 university administrators cheering in the gallery, the National Assembly approved legislation increasing the rector’s power. Since then a review for the purpose of cutting back or eliminating university departments that train people for professions that are “saturated” has been undertaken and it appears that the education school is likely to be reduced because it is said that Panama already has too many teachers (but not too many university administrators, so it seems). PREAL, on the other hand, recommends among other things that countries in the region set aside five percent of their Gross National Products for education.

Negotiations continue without result between the Torrijos administration and the Panama Ports Company, a local subsidiary of Hong Kong-based Hutchison Whampoa. The Moscoso administration granted the company huge breaks on the payments it owed under the contract it negotiated with the Pérez Balladares administration and this became an issue in the 2004 presidential campaign. The Torrijos administration has insisted on a renegotiation, and in the latest developments in the talks the government has rejected as too low the company’s figures for the value of the ports of Cristobal and Balboa at the time Panama Ports assumed control of them in 1997. Given that the two sides are far apart on the basic numbers to serve as a starting point for bargaining, this negotiation process may be prolonged.

Convicted Canadian child molester Ronald Kelly, a former Catholic priest who is alleged to have skimmed millions from a union pension fund and was found by a Bahamian civil court to have committed what amounts to money laundering here but who has nevertheless been permitted by the Panamanian government to live on a large estate on the road to El Valle, sits on one less corporate board of directors. In the wake of renewed scandals about Kelly that have been the stuff of headlines in Toronto newspapers the Roman Corporation, a Toronto-based company in the cardboard packaging business, has accepted Kelly’s resignation from its board.

Arraijan’s failed experiment in the privatization of solid waste management was recently underscored when the Social Security Fund auctioned off the assets of CREDESOL, the company that got the garbage collection contract, to collect a debt the company owed to the institution. The proceeds of the auction were insufficient to pay the debt. The only beneficiaries of the 2001 privatization turned out to be Arraijan’s rats --- CREDESOL would only pick up garbage from those residents and businesses who had paid their fees, so people who couldn’t or didn’t want to pay ended up putting their trash on their neighbors’ piles or along the roadsides, which led to a sanitary crisis. With less income from collection fees than it had projected, CREDESOL became unable to meet its obligations and the city ultimately cancelled its contract.

Oakland, California-based Clorox is closing it manufacturing facility here, which makes Clorox bleach and the PineSol and Mistolin lines of disinfectant products. The move is part of a regional consolidation that will shift production to a plant in Costa Rica.

When a subsidiary of Chiquita Brands pulled out of the Puerto Armuelles banana plantations, the farms were devolved to a workers’ cooperative, which employs some 2,800 people but has proven to be a financial bust. Part time work, short paychecks, hunger and privation are the lot of the banana workers these days, and while the government explores more definitive solutions the cabinet has approved $850,000 to be spent mainly to feed the banana workers and their families through the end of the year.

Faced with a threat by Nestle to get cheaper raw materials elsewhere, some 230 Azuero tomato producers have turned to the government for help. The Torrijos administration, in turn, has offered a package of subsidies that would make up the difference between local and world tomato prices for about three-quarters of the farmers and help the rest switch to other crops. The government hopes that the plan would in addition to helping the farmers would save the jobs at the Nestle processing plant.

It has long been well known in Panamanian journalism that the government of Taiwan will pay for journalists to visit the island and report on it. It’s a part of the the Taiwanese effort to reduce its isolation in a world in which only 29 countries, one of them Panama, give the country diplomatic recognition. But it’s also a conflict of interest, and would be an embarrassing one for La Prensa, which has taken editorial stances critical of Taiwanese aid that was apparently diverted to the pockets of members of Mireya Moscoso’s inner circle. Thus, although La Prensa used to accept free travel, meals and hotel accomodations from Taiwan, it has announced that it will no longer do so.

Editor’s note: Although this publication is concerned about the corrupt uses of aid from Taiwan and would like to see Panama have better relations with the People’s Republic of China, it is the editorial position of The Panama News that this country should maintain its diplomatic relations with Taiwan. That said, we have arrived at this conclusion on the basis of Panama’s right to choose its own friends regardless of what third countries think, without ever having taken anything, except in one case permission to use a photo, from the Taiwanese.

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