business & economy

Also in this section:
The economic uncertainties about expanding the Panama Canal
Mayday parade highlights splits in the labor movement and the left
Davis Export Processing Zone: many fewer jobs than promised
Business & Economy Briefs

Remember those 20,000 jobs that would be created at Fort Davis?
photos and article by Eric Jackson

The Torrijos administration and the Panama Canal Authority are variously predicting that the Panama Canal expansion project will create between 40,000 and a quarter-million jobs. There will be only some 7,000 to 8,000 jobs involved in actually building the third set of locks and deepening the canal channels, but the government is saying that there will be a "multiplier effect" as the spending of some $5.25 billion ripples through the Panamanian economy.

It is Martín Torrijos's luck that the person who has been most prominent in responding to skeptics by pointing out the multiplier effect is banker and former President Nicolás Ardito Barletta. The projected job numbers have been left to an assortment of press flacks, who are generally making the most outlandish claims to foreign journalists, whose reports in media abroad get picked up here. Barletta, who briefly occupied the presidency as the result of an election fraud engineered by Manuel Antonio Noriega, might be expected to shy away from grandiose predictions. You see, he's been burned that way before.

In 1992, under the Endara administration, Panama passed a law allowing the creation of export processing zones with special tax incentives within the former Canal Zone. The subsequent PRD administration of Ernesto Pérez Balladares asked for and received legislation creating one of these at Fort Davis on the Atlantic side, with help from the government of Taiwan. During the assembly debate members of the PRD administration and legislative caucus were predicting 20,000 jobs at Davis, which would have been a major boost for economically depressed Colon province.

Once the legislation was passed, the Davis Export Processing Zone came under the control of the Interoceanic Regional Authority (ARI), which during the Pérez Balladares administration was run by Nicky Barletta. Ground was broken in 1986, with ARI revising the job creation prediction down to 12,000 at that time.

A year later, the administration building, customs office and security gate were done and the ribbon was cut. The predicted factories, however, with very few exceptions weren't there. At the inauguration ceremony Barletta emphasized his predictions for the former Canal Zone as a whole. He said that the Davis industrial park "could" create 10,000 jobs "in the coming years" and that a dozen businesses were "interested in" locating at Davis.

Today the Davis Export Processing Zone still exists, but a stroll through it is like a walk through a ghost town. The impressive hilltop administration building is the workplace of a single administrator and a maintenance chief. There is around-the-clock security, just a few people guarding a handfull of businesses and many more vacant buildings and empty lots. There is a Taiwanese-owned plastics manufacturing company that has been there since the start and stayed on after the government of Taiwan withdrew its backing from the project. A Colombian company processes glue. Another company makes packaging material. There are fewer than 100 jobs at the Davis Export Processing Zone, about half of one percent of what had been predicted at its inception.

Most of the Davis Export Processing Zone is vacant, and so is most of the old Fort Davis

It's an impressive building, especially considering that only two people work there

Were this Honduras, they'd need extra security to keep the glue sniffers away from these barrels

This stone lion stands guard over a little factory that makes plastic crates and chairs

There's plenty of space, and the utilities are in. Actually, the utilities are one of the reasons for the Davis Export Processing Zone's failure --- Panama has very high electric rates and that's deadly for most manufacturing businesses. We also have a hard time competing with cheaper labor in Central America.