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

Business & Economy Briefs

Reforestation visas revived

Immigration director Ricardo Vargas has signed a decree allowing the issuance of reforestation visas to foreigners. Migracion had imposed a moratorium on issuing these last year, after a string of abuses and legislation that cut back some of the incentives for reforestation. Warning in La Prensa that people who invest in reforestation can't expect to start making money in five years, Vargas said that the visas are still a useful way for Panama to attract foreign capital on both small and large scales. To get a reforestation visa one must invest at least $40,000 in a genuine project. It can be done by purchasing $40,000 worth of shares in a recognized reforestation company. The visas allow investors to live in Panama. The announcement was made just as the ties between the Torrijos administration and the controversial Prime Forestry (of which Agriculture Minister Guillermo Salazar is one of the Panamanian subsidiary's directors) began to appear in some of this country's news media.

Median monthly salary $322.30 last year

In Panama, $400 per month is considered a solid middle class income. The Comptroller General has issued a report on the pay that those who worked for someone else in 2005 brought home, which found a $322.30 median monthly salary. Some 65 percent of Panamanian workers brought in less than $400 per month. Those who make less than $800 per month are not required to file income tax returns or pay income taxes, but this majority of Panamanians still pays a lot into government coffers via sales taxes and in other ways. By US standards most people here have a miserable standard of living, but by Latin American standards Panamanian workers are relatively well paid.

Hutchison out of megaport bidding

The National Maritime Authority has announced that Hutchison Whampoa, the world's largest ports company and operator of the ports of Cristobal and Balboa, won't be allowed to bid on the project to build and operate a big new seaport on a landfill adjacent to the former Howard Air Force Base. The disqualification was justified by the authority because it said that for Hutchison to control the new facility would be monopolistic.

Diablo rojo drivers out of new system

The government's plan to replace the current Panama City - San Miguelito urban bus system, which uses privately-owned former US school buses that are imported in used condition with larger new "articulated" buses in 2007 was officially released on May 3. It seems that owner-operators will be allowed in the new system (there had been rumors of the entire business going to one big corporate bidder) but in order to bid on a route a driver would have to show $50,000. That effectively excludes virtually all of the present owner-operators. The bus syndicates are threatening a strike, and say that they will work against a canal expansion referendum to show their rejection of the Torrijos administration.

Torrijos defends dole

Attacking unspecified "dehumanizing" critics, President Torrijos announced that he will continue his Red de Oportunidades program that gives some of the poorest families in economically depressed areas $35 per month stipends to help ends meet. He made the announcement during an April 29 political swing through the Bocas del Toro corregimientos of Changuinola, Almirante and El Empalme, in which he passed out some 1,300 such stipends. The $4.8 million program is directed at some 15,000 families in the nation's 26 poorest corregimientos. In order to qualify for the assistance, families must keep their kids in school and take them for checkups and vaccinations at public health clinics.

COOSEMUPAR seeks deal with Italians

Puerto Armuelles area banana workers of the COOSEMUPAR cooperative, which is running the plantations that used to be worked by Chiquita Brands subsidiary Puerto Armuelles Fruit Company, think that they have a partner waiting if they can get out of their exclusive marketing agreement with Chiquita. The freshplaza.com produce industry website reports that the cooperative is talking to Turin-based Ale Fruit. That company already imports bananas from Ecuador.

Panama and Guatemala talk free trade

On April 27 negotiators for Panama and Guatemala sat down for two days of talks here to start a free trade negotiating process. Guatemala and Panama have agricultural sectors that produce many of the same things, but beyond that they have more of a manufacturing sector than we have while we have a service-oriented economy that they largely lack. In 2005 Guatemala exported $105.1 million in goods and services to Panama, while this country did $83.7 million worth of business in the other direction. The talks are within an overall framework of free trade negotiations with all of the countries in the Central America region.

Panama - India maritime pact

On April 27 the Indian cabinet approved a memorandum of understanding with the government of Panama for cooperation in the maritime transportation and ports development fields. The two countries will share expertise in administration, environmental controls, infrastructure development and legal issues in the maritime sector, and develop relationships between Indian and Panamanian ports.

Direct flights to Maracaibo

On the economic front, the US government's policy of trying to isolate Venezuela from other Latin American countries isn't working very well. Panama is one of the countries where the region's "pink tide" has hardly touched, but meanwhile COPA airlines has announced that beginning in July it will offer six direct flights per week from Panama to the main city in Venezuela's oil producing region, Maracaibo. The expansion in service to Venezuela is part of COPA's overall increase in service to Latin American and Caribbean destinations, using Panama as its hub.

Melo protests pollution finding

On March 24, residents in the Ciudad Radial woke up to the stench of rotting chicken offal, skin and feathers that someone had dumped in the sewers serving the area. There were but two chicken plants in the vicinity. One is owned by Grupo Melo, which is headed by Arturo Melo, who among other things is the president of the PRD's Frente Empresarial and developer of Altos del Maria. The other business is the Planta de Procesos y Embutidos Arce Avicola. After several weeks the Ministry of Health found both companies responsible, saying that there had been a gradual accumulation of the material over some time, until it clogged the drains. Both companies protested that they didn't do it. Melo in particular noted that is plant is down the flow from the sewer line and that in any case its facility neither slaughters nor plucks chickens but only processes boneless chicken delivered from other plants, so doesn't create the byproducts found in the drain. Health authorities could fine Melo's company up to $1,000 and the National Environmental Authority (ANAM) could impose a sanction of up to $1 million. It seems, however, that Grupo Melo is a lot more concerned about its reputation as a responsible company --- which it has enjoyed for a long time --- than any fines. Melo and his company have protested with full-page ads in the daily newspapers and strong statements to reporters.