business & economy

Business & Economy Briefs

Cost of living up in August

The government has announced that its measure of the cost of living was up 1.5 percent, or $2.96, in August over July. Dairy products, meat, beans, rice and cooking oil all went up, while fish, vegetable and fruit prices dropped.

School year extended

The school year for many of Panama’s public secondary schools has been extended until January to make up for days lost in the recent teachers’ strike. Some other public school will make up the lost days by holding classes on Saturdays.

Banana developments

Panama’s banana industry is facing pressures that in many cases push and pull it in different directions. On the international relations front, the European Union has put off any decision about the import tariff dispute until next year. (Latin American banana producers, including Panama, had successfully challenged Europe’s old banana import rules and duties before the World Trade Organization, but the dispute has still lingered.) Meanwhile, although world banana prices fluctuate but are generally up Chiquita Brands, which monopolizes Panama’s production and marketing, is losing market share in Europe. Thus Chiquita has been cutting back its purchases from independent producers but insisting on its rights to exclusive marketing of their produce. The Torrijos administration is siding with Chiquita, but promising banana workers and independent producers some unspecified relief. Meanwhile in Bocas, Chiquita is trying to lower workers’ pay through new piecework rules and the union is having none of it. In Puerto Armuelles, the union that represented banana workers at the Chiquita subsidiary there before it was devolved into a dependent cooperative with an exclusive marketing relationship with Chiquita has endorsed the “yes” side in the October 22 referendum in exchange for continued subsidies, while the Bocas banana workers’ union is campaigning for a “no” vote.

Gatun Lake full

In the first week of September the Panama Canal’s lakes reached full capacity. That means some water to spare for electric generation and the probability of opening gates on the Gatun Spillway in the event of more heavy rains, which we usually get between now and mid-December.

Bio-diesel plant here?

An American company, Texas BioDiesel Corporation, says it’s going to set up shop in the Puerto Armuelles area to open oil palm plantations that will employ more than 300 people, with the hope of setting up a factory to convert the palm oil into diesel fuel.

Dairy agreement with Costa Rica

In long running talks aimed at an eventual free trade agreement, Panama and Costa Rica have made a deal about dairy products. Duties will be phased out over a 12-year period and will be replaced by a quota system. The existing 340 metric tons per year skim milk quota will be maintained, and a 125 ton quota for powdered whole milk will be established. This will mostly accrue to the benefit of Costa Rican dairy producers.

So why the delay?

Why is the Alemán Zubieta family’s CUSA construction company taking so long to finish a repair job on Tumba Muerto? In response to a question from La Estrella, they blamed it on cement suppliers, who keep running out of material for days and weeks on end.

$3.1 million in office rentals

Actually, the government owns ample empty office space, particularly on the former US military bases. However, there are political hacks and illustrious families to reward, so on September 13 the Cabinet Council approved several contracts worth a total of $3.1 million for the rental of private spaces for public offices. Some of the contracts, however, were renewals of older leases at lower rents.

Partido Popular / AMP image makeover

The Panama Maritime Authority (AMP), feels a need to improve its image. Under this administration it’s a Partido Popular (former Christian Democrat, and current junior partner in the governing coalition) patronage fiefdom. Just so everyone knows that it’s a Partido Popular operation the authority has hired the Genios Publicidad and M.C. Henríquez & Co., SA consortium, headed by former Christian Democrat legislator Milton Henríquez, to be its publicist. The nine month contract is for $100,000.

Legislature desists from no-bid laptop buy

The legislators still plan to give themselves a new perk --- a new laptop computer for each of the 78 deputies. However, after much public criticism the no-bid contract to buy these for $101,352 from SONITEL has been scrapped. Normally one pays less than the per unit retail price when one buys dozens of computers at one time, but in this instance they would have paid more. Assembly president Elias Castillo says that on the next attempt there will be transparency in the purchasing process.

STRI signs peace deal with neighbors

The Smithsonian Tropical Research Institute (STRI) had been complaining about the construction of a marina next to their Marine Exhibition Center on Amador’s Naos Island. All the dust and noise and burial of crab holes and fish habitats by Naos Harbor Inc. did not go over well with the Smithsonian. Now, however, the company and the institute have signed an agreement whereby the adjacent hotel, apartment, shopping center and marina complex promises to keep the noise down at night, not disturb any more animal habitats, eliminate pollution and establish a green buffer area between the development and STRI. In exchange STRI will keep the company advised of its activities on Naos and provide information for tourists using the new complex.

Veterinarian purge

Minister of Agricultural Development Guillermo Salazar, also a director of the Panama subsidiary of the mafia-connected Prime Forestry scam, has fired three of the ministry’s veterinarians, telling La Prensa that it was about their “attitudes.” One of those who was fired had worked at the ministry for 25 years, and all of them are appealing their firings, asserting that they had civil service status and could not be fired without cause.

Government orders PYCSA to resume work

Máximo Haddad’s insolvent PYCSA construction company, which holds the contract for both the Corredor Norte and a Panama - Colon toll road, has been ordered by the government to resume work on the incomplete Corredor Norte starting no later than January. A source close to the situation told The Panama News that most likely this is a prelude to PYCSA’s replacement and that it appears that a Brazilian company is being groomed to take over the contract. It’s hard to know the details of such things because of Panama’s corporate secrecy laws, but PYCSA has been in default of its contractual obligations all along and there has long been speculation about why it was not declared in default by the Pérez Balladares or Moscoso administrations.

Large informal economy

A study by the Comptroller General reported on in El Panama America says that nearly half of Panama’s economically active labor force, 46.6 percent, works in the informal economy. Economists argue among themselves about which of these should be counted as employed, unemployed or underemployed, as the informal sector ranges from middle class professionals to the people selling things at traffic lights.

No land lines for Las Uvas

After repeated telephone wire thefts, Cable & Wireless has told its customers in the San Carlos corregimiento of Las Uvas that the wires wouldn’t be replaced and the their phones are cut off indefinitely. Cable & Wireless, which is partly state-owned, wasn’t supposed to have a land line monopoly by now but has maneuvered to keep competitors out so that no company can move in and take over such market segments as they are abandoning.

Cayman Islands disaster center here

El Panama America reports that the government and private sectors of the Cayman Islands, which are frequently in the way of hurricanes, are planning to open a backup center here. The plan is that when disaster strikes the islands, offshore financial services and other Cayman businesses will stay in operation by sending key personnel to work out of emergency offices here.

Also in this section:
Teachers lose pay dispute, go back to work
The ACP's scandal plagued consultant, Parsons Brinckerhoff
Influence peddling alleged in BANISTMO Law
US child labor report criticizes Panama
Business & Economy Briefs