Panama Business & Economy Briefs

Comptroller General Dani Kuzniecky is threatening to withhold the paychecks of public officials who haven’t submitted the declarations of assets that many of them are required by law to file. During the Moscoso administration this requirement was not enforced, which in turn made it impossible to enforce laws against inexplicable enrichment while holding public office for those years. (And of course, using public offices for the unexplained collection of illicit wealth was the whole point of the Moscoso kleptocracy.) But it seems that the rules of the game are different in the Torrijos administration.

The Interoceanic Regional Authority (ARI) has signed a $32.5 million concession agreement to allow a company called Naos Harbour Island Inc to build a hotel, shopping center and apartment building complex on Naos Island, which is along the Amador Causeway. Most of the Amador developments for which ARI has granted concessions have never materialized, but some have. Of those projects that have been built, most of the concessionaires are in arrears in contractual payments to ARI. The authority is slated to go out of business in less than three months and which governmental entity will take over the relationships with Amador concessionaires is not set. It is likely, however, that after ARI’s demise the Panamanian Institute of Tourism (IPAT) and the Ministry of Economy and Finance will inherit most of the functions that ARI has played at Amador, with public spaces possibly being absorbed by Panama City’s municipal park system.

The National Institute of Culture (INAC) has withheld its approval of a hotel in the Casco Viejo designed for the Colombian-based Decameron Group by renowned Panamanian architect Ignacio Mallol. INAC’s stated reason was that the modern architecture would not fit in with the predominantly 19th and 20th century mix of styles of the surrounding neighborhood. The 85-rooom building is contemplated for the site of the old Club Union and on an adjacent landfill to be made, across from the Take Five Wine Bar and not far from the Teatro Nacional and Plaza Francia. Mallol’s drawings are of a relatively low, rounded building atop broad stilts, with lots of glass. It would be a contrast with anything that exists in Panama, including the Casco Viejo. The old club is far too ruined to be restored, and then the question arises whether it’s economically worthwhile to build something in a non-contrasting 19th or early 20th century architectural style like the nearby buildings. The plans contemplate parking below the building, but it seems that traffic issues, which are important for the old neighborhood with its narrow streets, have not played much of a role in the controversy.

The Ministry of Agricultural Development has lifted its ban on the importation of beef products from the United States, except from animals more than 30 months old and in the case of meat taken from the heads of cattle. The ban was imposed on July 5 after a reported case of mad cow disease in the United States.

The Colon Free Zone reports that in the first eight months of 2005 $7.45 billion worth of merchandise passed through the duty-free import-export zone. That’s some 14 percent more than in the same period of 2004. It seems that the main reason for the increase is China’s growing trade with Latin America and the Caribbean. The Colon Free Zone is the wholesaling and warehousing district for much of China’s commerce with the region.

The government says that in the first eight months of this year some 399,000 tourists visited Panama. That’s an increase of 18.8 percent compared with the same months of 2004.

In recent days government inspectors have visited about a dozen people who are allegedly offering real estate other than their own for sale in Bocas del Toro province, primarily looking to shut down those who are in that business without possessing a license. Many of the people being investigated are foreigners. So far there is no word of any arrests or deportations.

Since the mid-90s there has been a program of “granjas sostenibles” --- “sustainable farms” --- in poverty-stricken rural areas in many parts of the country. These projects typically take deforested land, plant fruit trees, raise animals, poultry and fish, and recycle wastes, and for the most part are overseen by the Patronato de Nutricion, a government-subsidized charitable foundation. But the Social Investment Fund (FIS) has been conducting an audit of the various projects and claims that a lot of them are badly planned, badly run, are now abandoned, never got started in the first place or have been taken over by families or individuals and no longer serve the people whom they were supposed to. The foundation protests that FIS is too harsh in its judgment, and it does seem that in many cases the main problem is that campesinos haven’t kept the sorts of records to please CPAs. In any case FIS is taking the position that it will no longer subsidize those granjas sostenibles that have not been shown to be successful. That means that support for about 340 of the projects is being cut.

On October 6 thieves cut some two kilometers of fiber optic cable off Maria Chiquita in Colon, apparently thinking they were made of copper that could be sold for scrap. Cable & Wireless, which maintains the lines, automatically switched the traffic to other cables but resulting overloads affected several call centers and Internet services. As these briefs were written nobody had been apprehended for the crime.

The National Assembly has passed on third and final reading a law to legalize hunting and set the price of hunting licenses at $100 for Panamanians and $200 for foreigners. The legislation also regulates sports fishing in protected areas. The measure would need to be signed by the president to become law, and then the regulations about seasons, species and take limits would have to be issued by the National Environmental Authority (ANAM). Among Panama’s traditional game animals are counted iguanas, caymen and crocodiles, sainos (peccaries), ñequis (agoutis), conejos pintados (pacas), white-tailed and red deer, tapirs and a number of species of birds. But some of these are endangered and their hunting won’t be legalized. In most places legalized hunting provides funds from the sale of licenses that allow governments to hire fish and game wardens and protect or restore habitats, such that the populations of hunted species actually go up. However, history also has plenty of examples of species hunted to extinction.

In raids on a Colon Free Zone warehouse and a Panama City apartment, police arrested two Panamanians, a Colombian and a Guatemalan and nearly $7 million in bundles of $20 bills, along with a few assault rifles. It is believed that the money represents the proceeds of drug trafficking and the four men are being held pending a money laundering investigation.

If you are a legislator, a government minister or a high court judge, you will be well paid, and those aren’t the only plums available in the public sector. However, a recent report by the Ministry of Economy and Finance claims that some 11.22 percent of government employees make less than the minimum wage of $264 per month.

The Torrijos administration says it intends to ease restrictions on tourism transportation, allowing hotels, tourism agencies and other promoters in the industry to hire any bus that meets standards. This would end the monopolies that certain transportation associations enjoy in some provinces, and allow buses from outside Colon to work in that economically depressed province. The bus syndicates that hold the monopolies are not happy about the proposed change.

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