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Business & Economy Briefs

Business & Economy Briefs

Free trade deal with Chile

Although all details have not been published and there is still a ratification process to pursue in each country, it seems that most tariff barriers between Chile and Panama are coming down. On February 3, after a decade of on again, off again negotiations, Chile and Panama announced that they had reached an agreement on free trade. The main sticking points had been coffee for Panama and financial services for Chile, and much of the service economy will not have free trade because for the most part the deal doesn’t allow the free movement of professionals between the two countries. However, Chile is looking to establish warehouse and distribution facilities for its products at the free zone that’s being developed around the former Howard Air Force Base. Chilean fruits and vegetables will get better access to our market, and our meat and coffee will get into Chile under better terms, so in each nation some farmers will feel threatened while others will see new opportunities.

Darien development projects

More asphalt on the road to Yaviza, an upgrade of the dock at Puerto Quimba and a new airport for Jaque were among the Darien development projects that President Torrijos announced in a February 4 visit to Santa Fe, Darien. The Pan-American Highway still won’t be paved all the way to Yaviza, but the stretch between Agua Fria and Canglon will be. The president also said that a new airport in Jaque will allow the police to move rapidly into the area, an important concern in the wake of the recent kidnapping of two Spaniards in that district.

Manzanillo International Terminal prepares for big ships

Manzanillo International Terminal, the port adjacent to the Colon Free Zone that’s run by Seattle-based Stevedoring Services of America, has received six Super Post-Panamax gantry cranes. Three of these machines, the largest port cranes in Latin America, will be able to work post-Panamax container ships that stack their cargo 22 containers across. The big cranes are part of a $250 million expansion project that will take five years to fully implement and which is expected to create about 400 new jobs. The cranes were made at the Zhenhua Port Machinery Company factory at the mouth of China’s Yangtze River and were shipped around the Cape of Good Hope aboard the post-Panamax ship Zhen Hua 10. The long way around had to be taken not only because the ship is more than 20 feet too wide to fit through the canal’s locks, but also because the cranes would not have fit under the Bridge of the Americas.

New canal tie-up station to increase capacity

Because Culebra Cut is too narrow for Panamax ships to pass each other in that stretch, the bigger ships moving through the canal have had to wait near Gamboa while the cut clears for passing, a delay of up to two and one-half hours. But not the Panama Canal Authority (ACP) has built the Cucaracha Tie-up Station just north of the Centennial Bridge, which because it’s closer to the Pedro Miguel Locks will shorten the wait for a big ship to pass by and thus allow the authority to juggle transit schedules in a way that increases the waterways capacity by one additional ship per day. The ACP also says that the new tie-up spot will increase safety in cases where ships have problems or when the cut is shrouded in fog.

RP sugar producers get temporary US break

What happens in the sugar market when between US domestic producers and countries with quotas to export sugar to the United States the Americans still run short on the sweet stuff? Well, other sugar producing countries are allowed to fill in the gap on a short term basis. That’s what’s happening now, because some of the countries with sugar quotas are falling short on deliveries due to hurricane damage to crops and other factors. That’s a short-term windfall for Panamanian producers, who are being allotted an extra 7,965 tons of sugar shipments to the United States.

Online tax returns

Panama’s Direccion General de Ingresos has opened a website that will allow taxpayers to calculate and submit their tax returns electronically. If you are interested in using that service, go to www.dgi.gob.pa and follow the links to the E-Tax feature.

Seguro backtracks taxing private pensions

In January Seguro Social announced that it would be taxing employer contributions to private pension plans as if they were ordinary wages. The move generated protests from most of Panama’s business groups not only because it’s an additional tax burden on companies but also because the measure was decreed by CSS director René Luciani rather than decided by Seguro’s board of directors. Now, La Prensa reports, the Social Security Fund has decided to scrap that policy change.

Foundation for Atlantic side colonial sites

The National Institute of Culture (INAC), with support from the Colon Free Zone and USAID, is setting up a semi-autonomous foundation to care for the ruined colonial era Fort San Lorenzo and the fortifications in and around Portobelo. San Lorenzo, a Spanish fort and prison that was first established above the mouth of the Chagres River in the late 16th century, then twice destroyed by invading British forces and twice rebuilt but abandoned after Panama’s liberation from Spain, will get a new visitors center and an improved access road. In Portobelo, an important 17th century commercial port where modern buildings have been erected among the colonial ruins, a master plan will be devised to restore the historical sites. In both places, a gradual process of restoration work is contemplated.

Amphibian research and conservation center for El Valle

With assistance from the Houston Zoo and the El Nispero nursery, Panama’s endangered golden frogs may be saved from extinction yet. A Center for Research and Conservation of Amphibians and Reptiles of Panama will be established in El Valle, and part of the facility’s function will be to conserve the animals in conditions free of the Critidiomicetos fungi that have already killed about half of the rare golden frogs living in the wild. The reasons why the fungi, which had long existed in the environment without harming frog populations, have become a serious epidemic among amphibians will be investigated, and insights obtained in that work may be useful in the understanding of other emerging diseases that affect human populations.

Business proposes 4% minimum wage hike

The National Private Enterprise Council (CoNEP) has proposed a four percent increase in the minimum wage, well below the rise in the cost of living since the minimum was was last negotiated. Organized labor is divided, with the moderate CONATO unions demanding a 20 percent increase and the militant CONUSI federation demanding 67 percent more, or $638 per month. The business and government negotiators are more or less pretending that CONUSI isn’t there, even though there militants have a larger following among Panamanian workers than CONATO, which is for the most part aligned with the ruling Democratic Revolutionary Party. If business and labor can’t agree on a new minimum wage, the president will set one by decree. That sort of impasse happened the last time around and Mireya Moscoso approved only a nominal increase.

New Andean Development Corporation loan

The Andean Development Corporation (CAF) has approved a $52.9-million loan to develop solutions to some of Panama’s urban transportation problems. Part of the money will go for the transition from owner-operated buses to a bus company whose ownership and management has not yet been disclosed to the public, part will be used to upgrade 22 intersections in the capital and the rest for a program to reduce and control motor vehicle emissions. The loan represents about 62 percent of the cost of these projects, with the rest coming from, as the CAF put it, “local contributions.” These latter might be in the form of Panamanian government spending, but also may include investments by a private contractor who gets the bus concession, user fees for those whose vehicles are tested for emissions and so on. The CAF had earlier approved a $60 million loan for improvements to two of Panama’s busiest and most dangerous roads, the Arraijan - La Chorrera Autopista and the Trans-Isthmian Highway.

Materials for slum rehab up for bids

Barrio Lindo, on Avenida Ancon in the Panama City neighborhood of Santa Ana, is anything but. It’s an awful slum that’s home to 96 families, most of whom would have nowhere to go if the standard technique of tearing down the old to make room for the new and higher-priced were employed. So the Ministry of Housing (MIVI) is fixing the place up with its own work crews assisted by the residents themselves, starting with the most egregious safety hazards and the plumbing but with the intention of doing a complete rehabilitation. The ministry expects to spend a bit over $200,000 on materials, but doesn’t kow for sure how much just yet because it’s putting the materials supply contracts up for bids. According to a MIVI press release at least half a dozen suppliers have expressed interest in bidding.

Chorrillo slum demolished

MIVI has relocated the residents of eight apartments and thrown the inhabitants of 11 others onto the streets to fend for themselves in order to demolish a dangerous wooden slum on Calle Pedro Obarrio in El Chorrillo. The wooden tenement was close to collapse, and actually parts of its balconies had fallen. Eight families were places in other housing situation, but according to the ministry “eleven women and men who live alone are looking for housing alternatives on their own, because the institution’s priority is to serve nuclear families.” This priority has increased the number of homeless people sleeping on Panama City’s streets, a problem that will grow as more and more people who become too old to work will find themselves ineligible for Social Security benefits under the Torrijos privatization plan.

SACA given ultimatum

The Servicio de Autobuses del Corregimiento de Ancon (SACA), a bus drivers’ co-op that provides service to Gamboa and the Pacific side parts of the former Canal Zone, has been ordered by the Land Transport and Transit Authority (ATTT) to come up with a plan to replace its buses, most of which have been allowed to deteriorate to the point that a lot of the people who depend on them have complained. In December more than half of the SACA buses were out of service, which caused many unannounced service cutbacks. The cooperative is in financial straits, and the ATTT has approached the Panamanian Autonomous Cooperative Institute (IPACOOP) to discuss possible alternatives.

Banistmo buys Salvadoran banks

Banistmo, the largest Panamanian bank founded on private capital, has made a $130 million deal to buy Inversiones Financieras Bancosal, a Salvadoran financial services conglomerate that runs banking, insurance, brokerage and other financial services in El Salvador. It is one more step in banker Alberto Vallarino’s steady expansion from his Panama base into much of Latin America.

Diablo residents don’t want seafood plant as neighbor

On February 6 some Diablo residents set up a picket line at the National Environmental Authority’s (ANAM’s) offices in Albrook. Their complaint was about Marpesca, SA, which was given a concession by the now-defunct Interoceanic Regional Authority (ARI) to set up a seafood processing plant in the residential neighborhood. The odors and the large trucks coming and going are not appreciated. However, ANAM says that there is no law against having a seafood processing plant in a residential area and that it can’t do anything about the problem.