Business & Economy Briefs

On October 25 a coalition of the Panamanian Business Executives Association (APEDE), the Panamanian Industrialists Syndicate (SIP) and the Panamanian Society of Engineers and Architects (SPIA) launched a campaign to make some major changes in the Public Services Regulating Board (Ente Regulador), which the groups accuse of bias in favor of electric companies to the detriment of the Panamanian economy. Panama currently has some of the world's highest electricity rates, which is one reason why we don't have much manufacturing here. Adding his voice to the protest, National Ombudsman (Defensor del Pueblo) Juan Antonio Tejada told La Prensa that since the start the Ente Regulador hasn't done the job that it was supposed to do. On November 17 and 18 the Ente Regulador will hold public hearings on an electric rate structure for the next four years, and the groups believe that all is fixed for the electric companies to get the still higher rates that they want.

In an October 21 press release the Panama Canal Authority ACP highlighted some of its fiscal year 2005 statistics. In the year ending September 30, the authority said, Canal Waters Time (the combination of time spent waiting in line and transiting the canal dropped 7.8 percent for ships overall but remained an average 16.4 hours for ships that had booked reservations in advance. The ACP claimed a new tonnage record of 279.1 million Panama Canal/Universal Measurement System (PC/UMS) tons of cargo, 4.5 percent more than last year's previous record. Also up were transits by ships 900 feet in length or longer. There was a small increase in accidents, but figures for that are suspect in the eyes of many in the shipping community, as it used to be that every slight bump or scrape was counted as an accident, but now only those mishaps in which a formal investigation of what happened is requested are counted.

The ports on the Pacific Coast of North America are working at near capacity, and railroad lines serving these facilities are even more jammed up. This for many Asian exporters the trade route from East Asia to eastern North America by sea to the West Coast and then east by land is largely theoretical --- the route through the Panama Canal is in many cases the most practical option. The Panama Canal Authority, which analyzes its customers' business trends, is predicting that traffic from East Asia through the canal to ports on the eastern side of the United States (not just East Coast ports, but also those along the Gulf of Mexico and Great Lakes) will increase by about 12 percent this year. The estimate was made on the basis of a survey of ship captains, shipping companies and shipping agencies.

There actually was an outbreak of the spinky mite rice pest infestation in Chiriqui. Thus the Moscoso administration established a special fund to compensate farmers who had suffered crop losses due to it. However, as one might have expected from that kleptocracy, it was riddled with fraud and now some unpleasant facts have come to light. As in, how some farmers who weren't actually affected received benefits, and how some who were got double payments. As in some of the beneficiaries of the fraud being relatives of Ministry of Agricultural Development (MIDA) functionaries in charge of the program. Jesús Guerra, who was the regional planning director and in charge of the compensation program, has been suspended. Abdiel Aizprúa, who was in charge of crop monitoring in the region and whose wife received benefits in irregular circumstances, has been fired. Four other lower level MIDA officials --- three inspectors who allegedly signed off on improper certifications and one person who worked in the regional office --- have also been fired, and one more low-level employee has been suspended. In all it seems that about two-thirds of the money disbursed was done so in irregular fashion, some of it just sloppily and some of it outright fraud. Some of the cases have been been referred to prosecutors and criminal charges seem likely.

The Seguro Social issue is about to come to a head again, with some changes from the deeply unpopular retirement pension reforms of the suspended Law 17 to be made. The changes are not likely to fully satisfy the labor unions and leftist and community groups that comprise FRENADESO, the National Front for the Defense of Social Security which led a series of strikes and protests in May and June that forced President Torrijos to back down and call for more dialogue. However, it's likely that whether or not there is a new round of troubles the issue will be resolved sometime around the end of the year. But even if the issue dies, it seems that FRENADESO will live. The group recently decided to keep its acronym but change its name to the National Front for the Defense of Economic and Social Rights and address a wider range of social and economic issues. Look for the group on the streets in the event of a free trade agreement with the United States or a canal expansion project that displaces small farmers.

The government's actions to block the importation of Peruvian turkeys on the basis of an agricultural disease that has not been found there seems to have been a watershed event for two groups that depend on imported food products. In full-page ads in the daily newspapers, the Association of Dealers and Distributors of Groceries and Similar Goods of Panama (ACOVIPA) and the Panamanian Association of Restaurants and Related Businesses of Panama (ARAP) have protested that their representations to the government about abuses of phyto-sanitary restrictions have fallen on deaf ears. The groups said that they are not against reasonable health regulations, but that agricultural quarantine officials are misusing these as a protectionist measure and that it's creating shortages that drive up their costs and prices to their customers. The groups accused the agriculture minister and the head of quarantine of having a conflict of interest, as they both own cattle ranches and made decisions based on a couple of mad cow disease cases in North America that banned all US beef imports for a time. They also alleged that the non-duty restrictions that are being imposed violate Panama's commitments to the World Trade Organization.

The eastern part of Panama Bay as part of the Western Hemisphere Shorebird Reserve Network's list of crucial bird habitats. The network, which brings together more than 200 organizations across the Americas (including the Panama Audubon Society and the National Environmental Authority down here), considers the site of international importance because it plays a big role in the migration of at least seven species of migratory shorebirds, most notably the Western Sandpiper. Several bird counts indicate that around two million shore birds stop off at the beaches and mangrove forests of eastern Panama Bay during their annual migrations. So why is this note in the business briefs? Because birding is an increasingly important economic niche in Panama's tourism industry, eastern Panama Bay already brings in birdwatchers from abroad, and its international designation is bound to boost the local tourism economy. Moreover, this designation is likely to make it more difficult for those who would cut down the mangroves or build on the beaches, because it will strengthen the legal and political arguments that environmentalists have to oppose such developments.

It's unclear whether the bidding is rigged with one winner already determined, but the public authority that runs Tocumen Airport has in effect decided that there will be a single duty-free shops concession and that the concessionaire will not be Panamanian. In the bid specifications the authority set a $10,000 application fee and required that bidders must have experience running running an exclusive duty-free shop concession with a foreign airport that handles at least 2.5 million passengers per year. The former requirement excludes most small businesses and the latter all Panamanian businesses. The specific Panamanian hopeful that has been written out of the competition is Grupo Motta, which is not small but whose several duty-free concessions around the Americas are not exclusive. The only bidder who is qualified under the specifications and appears interested in the concession is the US-based Falic Group. Bid rigging is a traditional form of Panamanian public corruption, and is generally done by writing specifications that only one applicant can meet. Just before leaving office Mireya Moscoso prevailed upon the airport authority to issue concessions to her family and friends, but these were not honored once the Torrijos administration took office.

Marc Harris, the “offshore asset protection guru” who's doing 17 years in a US federal pen for money laundering and other offenses, left behind certain assets when he fled to Nicaragua, from whence he was extradited to the United States. As in 15 upscale apartments and 11 luxury cars. Although former employees of The Harris Organisation have been trying to seize these assets to cover back pay they claim is owed to them, members of Harris's inner circle --- attorney and former PRD legislative candidate Maximiliano Hidalgo, attorney and court-appointed company representative Carlos Jones and so on, have been living in the apartments. Until recently Harris's top lieutenants, former US special operations man Larry Gandolfi and former South African consul Ken Darlington, had also been using some of the apartments, but they got raided, illegal weapons were found and Gandolfi and Darlington are now incarcerated on arms trafficking charges. Harris's erstwhile US Republican connections --- he was Florida campaign manager for Alexander Haig's ill-fated 1988 presidential campaign and for awhile the Panama correspondent for New York City Mayor Michael Bloomberg's Bloomberg News worked out of The Harris Organisation's offices --- don't seem to be very helpful to Harris, Gandolfi or Darlington. And now that José Antonio Sossa is the former attorney general, it seems that the Harris crowd has lost its clout with the Panamanian government. As in the bankruptcy conservator, Olmedo Arrocha, moving to cancel Jones's power of attorney and throw the Harris gang out of the apartments they're occupying. In the scramble for Harris's droppings along with Jones, Hidalgo et al and the former employees is attorney Gilberto Boutin, who is appealing his conviction for falsifying the documents that froze about $1 million in Harris's assets for a time. Then there are also a number of clients who say that Harris embezzled their money, and others who were taken but don't want to make waves because that might attract the unwanted attention of the US taxman.

Alberto Vallarino's financial empire has again expanded, this time via the acquisition of Inversiones Financieras BacoSal SA, a Salvadoran banking, brokerage and insurance combine with accounts estimated at more than $1.7 billion and more than 1,000 employees.

It started out when a group of Paitilla residents that includes former Presidents Guillermo Endara and Nicolás Ardito Barletta, concerned about possible traffic jams and other problems in the neighborhood, went the city building inspection office and asked to see the plans for a 52-story building in their neighborhood. They were denied the information, on the grounds that the plans were the private intellectual property of architects Ignacio Mallol and George Moreno. A habeas data suit was filed in a district court, but the city's contention that copyrighted material is not subject to public scrutiny was upheld. The case is now on appeal before the Supreme Court. The Transparency Law does not provide a specific exemption for architectural plans, but copyright laws may apply.

The nation's bar association, the Colegio Abogados, has petitioned the Supreme Court to impose sanctions against 46 attorneys whom it says have committed various ethical violations. The president of the Honor Tribunal that evaluated the complaints that form the subject matters of the petition, Miguel Antonio Bernal, is a law professor whose columns appear regularly in The Panama News. The Colegio also plans to post the list of lawyers it sent to the court on the Internet, but as these briefs were written it had not yet been posted.

Build a home in Las Cumbres with Villa Concordia --- http://www.thepanamanews.com/pn/site/pages/concordia.html
Make the Executive Hotel your headquarters in Panama City --- http://www.executivehotel-panama.com
Find the boat of your dreams through Evermarine --- http://www.evermarine.com
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