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Business & Economy Briefs

Torrijos signs canal fund decree

On January 9 President Torrijos signed a decree setting up the Panama Canal Fund, which will receive $50 million per year from the revenues generated by the canal and spend them on school, water systems, health care facilities and other public infrastructure projects. Before the decree profits from the canal were deposited into the government’s coffers, from which projects of this sort are traditionally paid, so it’s not clear if this was a merely symbolic decree on the occasion of the Day of the Martyrs or if it represents a true increase in support for public infrastructure development and maintenance.

New public market

The move has begun from the old public market next to the muelle fiscal in San Felipe to a $1.8 million new facility between Avenida B and Avenida Balboa. The move isn’t popular among the vendors at the old place, which will be torn down to make way for parking and a plaza. The move is behind schedule because the installation of refrigeration facilities that the meat vendors need has been delayed.

FTA would bring big US retailers here

La Prensa reports that one detail that has been agreed between US and Panamanian free trade negotiators is that over a five-year period the Panamanian restriction that reserves retail business for citizens will be partially phased out. Those US retailers who invest more than $3 million would be allowed to set up shop here, but no American mom and pop merchants would be allowed. Several media have reported that Wal-Mart has already registered its name and trademarks here, in anticipation of entering the Panamanian market.

Longtime Bocas residents’ homes destroyed

Martín Torrijos’s island and beach development policy is off to a fast start. On orders from corregidor Ernesto Smith, the Isla Colon homes of four families who had been living in them for 50 years were torn down to make way for tourism developments promoted by Inversiones Bocas SA and Jas Properties SA. Panamanian law recognizes squatters’ rights and in the island and beach tourist development law debate the Torrijos administration promised that such rights would be honored.

Longtime Bocas residents stand to be evicted

Some 170 residents of Punta Robalo on the Bocas del Toro mainland are complaining that the government has issued titles to third parties for lands where most of them had lived for more than 20 years and some for more than 50 years. People who have been living on a piece of land and claiming it as their property for that long own the real estate by squatter’s rights under Panamanian law. The purported title to some 400 hectares was issued by the Ministry of Agricultural Development’s Agrarian Reform Office. But the residents claim that the title was obtained by bribery by people who had no relationship to the land, and that claim has been buttressed by a televised sting operation wherein employees at the office in question took $300 bribes to issue bogus land titles. The Agrarian Reform employees were fired, but have not yet been accused of a crime.

Panama-Chile free trade talks to start again

Free trade negotiations between Panama and Chile are set to take place here between February 2 and 4. The negotiating process has been proceeding slowly for a long time, and the sticking points on this end are farmers’ concerns about cheap food imports and professional groups’ opposition to letting Chilean competitors work here. The farm issue probably won’t be as big a problem as it is for US-Panama trade talks because Chile is mainly a temperate country so there is not as much overlap between our produce and theirs as is the case with Panama and the United States, and because the Chilean government does not subsidize its agriculture like its US counterpart does. The big Chilean industry is mining, which plays a tiny factor in the Panamanian economy, but Panama’s main industry, the canal, is a concern to some Chilean exporters who use its services to get perishable crops to markets in eastern North America.

COPA expands Brazilian alliance

COPA Airlines continues to expand its hemispheric network, this time with an expanded ticketing alliance with GOL Linhas Aereas Inteligentes, a Brazilian company. The new arrangement opens up joint ticketing for air services between Panama and the cities of Sao Paulo and Rio de Janeiro. Essentially it means that COPA, through this joint venture, will offer more flights to those two destinations in Brazil.

Training for traditional healers and midwives

There just isn’t very much standard medical service in the Ngobe-Bugle Comarca and along the adjacent and remote north coast of Veraguas. Babies get delivered by midwives and illnesses get treated by traditional herbalists more often than such work is done by officially qualified doctors. Recognizing these realities, the Panamanian government, with assistance from the European Union, has announced a plan to train and certify 470 midwives and 200 traditional practitioners in those areas. The idea is not only to improve the skills of those who currently provide services, but also to bring them into a formal relationship with the Ministry of Health, as exists between traditional healers and the ministry in other comarcas and remote areas. What happens when such relationships work well is that traditional practitioners continue to do what they do best, and do triage for the ministry, sending patients to standard facilities when indicated, and help out with public health education programs to fight infectious diseases through more sanitary practices.

Bond exchange part of increased public debt

On January 18 the government offered holders of bond to expire between 2023 and 2034 new 30-year bonds in exchange. The new bonds would pay 2.3 percent more than whatever the United States Treasury is paying for its 30-year notes at the time. Panama is able to sell bonds at lower interest than it has in a long time, which is the advantage to the government of that swap. But meanwhile it would extend the national public debt, which has risen about 14 percent since the Torrijos administration took office in 2004.

Battery recycler reopens, closes

Despite a Health Ministry order to cease operations, the PAMETSA car battery recycling plant resumed operations on January 18. The company is accused of introducing lead fumes into the environment around its Juan Diaz plant and giving its neighbors and its workers elevated blood levels of toxic lead. But not for long. Health officials returned, served the management with a permanent --- subject to the final word of the courts, no doubt --- closure order and padlocked the place.

Donald Lamb claims Colon

It’s a matter of historical fact that a number of shareholders were cheated in the financial maneuvers by which the United States government acquired the French canal company and the Panama Railroad in the early years of the 20th century. The smaller shareholders in these two enterprises in many cases received nothing, and records were then destroyed. In recent years one Donald Lamb has come along, purporting to represent shareholders in the old Panama Railroad and on that basis claiming title to vast parts of the former Canal Zone and filing many nuisance suits that in the long run have not prospered in Panama’s courts. One major reason for Lamb’s notable lack of success is that the 1977 Torrijos-Carter Treaties had as their main subject matter the ownership of the former Canal Zone and arguably supersedes all prior laws and assertions of legal rights with respect to the real estate. But Lamb persists, and recently he’s been serving businesses in Colon with notices that the Panama Railroad’s lease of what is now the city has expired and that people there now have to start paying rent to him. This is a bit different than the other cases, in that ownership of the city of Colon was not at issue in the treaties.

Unions present minimum wage positions

The labor – management – government negotiations for the periodic revision of the minimum wage have come down to crunch time. The moderate CONATO labor federation has proposed a basic monthly minimum wage of $526, while the militant SUNTRACS construction union’s proposal is $638. The employer groups at the talks have yet to present their positions, and the government has not played its cards either. In case no agreement can be had about the minimum wage, President Torrijos has the power to set the level by decree. The last two times that the minimum wage has been reviewed, nominal increases were granted. Since then, however, Panama has had a spike in inflation and the labor movement wants the minimum wage to keep pace. Management, however, warns that a lot of small businesses will go under and inflation will get worse if the minimum wage is raised very much.

ACP report for first quarter of FY06 upbeat

The Panama Canal Authority’s (ACP’s) fiscal year begins October 1, and on January 18 the authority issued its report for the first quarter of 2006, which corresponds to the last three months of 2005. The report says that the average time that it takes a ship to transit the waterway is down 16 percent, from 24.51 to 20.57 hours. Those times include the wait in line outside the canal’s entrances --- it typically takes around eight hours to actually pass through the canal. The ACP also says that the tonnage of cargo passing through the canal in the first quarter of this fiscal year was up by about 1.3 percent.