business & economy

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US Trade Rep's summary of US-RP free trade agreement
Bus confrontation looms
Roster of broadcast "journalists" who took money to slant toward the government
Business & Economy Briefs

Business & Economy Briefs

Noriega's Banco Nacional exec surrenders

After nearly 17 years living as a fugitive in Mexico Rafael Arosemena returned to Panama on his private jet and surrendered to authorities here on December 19. Arosemena was CEO of the state-owned Banco Nacional de Panama during General Noriega's dictatorship and who was subsequently tried in absentia and sentenced to seven prison terms for the embezzlement of some $13 million. The 73-year-old embezzler and father of PRD legislator Juan Carlos Arosemena is being held in El Renacer penitentiary near Gamboa while his lawyers appeal his convictions and talk to the Torrijos administration about the possibilities of a pardon.

National budget passed after secret debate

In January details of a budget passed 54-16 by the National Assembly on December 14 will start to manifest themselves as thousands of public employees begin to receive notice that they are losing their jobs. The budget was passed after secret committee debates and without being made available to the public in advance of its passage. The one thing that was publicized, the budget resolution that the Cabinet Council sent to the legislature, called for some 16,000 public employee job losses. The Panameñista caucus accounted for most of the dissenting votes, under the argument that while cutting public employees the budget increased allocations for politicians' travel and the rental of private office space from those connected with the ruling coalition.

Retirees get raises, end street blockages

Those retirees who have been blocking the streets for the past few weeks have settled their differences with the government. Those with the lowest pensions --- $201 a month or less, will get a $30 a month raise while people who make a little more will get smaller raises. Those whose pensions are more than $501 won’t get an increase.

PYCSA plans to raise tolls --- again

The insolvent PYCSA consortium that runs the Corredor Norte toll road will raise tolls again on January 2, according to La Prensa. The raise will be on the order of 30 percent on the Albrook - Tinajitas and Corredor - Madden segments. In June PYCSA attempted to raise tolls, but backed down under government pressure. At the time the Torrijos administration was pushing a canal expansion referendum and didn't want any public reminder of large construction projects that resulted in economic failures.

US, UK firms vie for Howard concession

It appears that the contest for the concession to run the former Howard Air Force Base as a special economic zone centered around a freight airport will come down to bids by the US-based Edward W. Easton Corporation and the British company London & Regional Properties. As is frequently the case, it has been an off-and-on bidding process from which a couple of other aspirants have dropped out. Bids are scheduled to be opened on January 26.

Government warns unofficial air taxis

The Civil Aeronautics Authority (CAC) has warned those who provide unlicensed paid air transportation services that they face fines and jail terms for doing so. They also warn that any pilot offering services for pay other than the six licensed air transportation companies will lose his or her pilot's license and the certification for the aircraft involved.

Air Madrid failure strands passengers

Before being rescued by charter planes, some 200 air passengers spent some anxious time in Panama after Air Madrid collapsed. There will be some litigation here and in Spain over tickets paid for and services not rendered.

City council blocks mayor's tax collection contract

Panama's representantes, all but one of them elected on the PRD ticket like the mayor, have rejected a contract to hire DSI Centroamerica SA as a tax collection consultant. Mayor Juan Carlos Navarro had proposed to hire the company to help collect all the oustanding debts for taxes, fees and licenses owing to the city. The city has had trouble meeting its payroll lately, but the mayor and council have had a hard time agreeing about what to do.

ACP outsourcing environmental impact study

The Panama Canal Authority (ACP) is looking for bids from companies to do the environmental impact study for the canal expansion project. According to regulations meant to prevent environmental concerns from affecting the project, the canal administrator will decide on the validity of any study and give the order to proceed with the project. During the course of the canal referendum campaign the ACP denounced the studies that it had commissioned about the matter of salt water intrusion into Gatun Lake due to the proposed water saving basins feature of the new locks.

Canal expansion may rekindle firing ranges dispute

The Panama Canal Authority is studying the cost of cleaning up that part of the third locks construction zone that overlaps the old Balboa West and Empire firing ranges. The 1977 Panama Canal Treaties required the United States to remove all hazards "insofar as is practicable," but the Americans left several ranges uncleared of deadly unexploded ordnance left over from many decades of war games with live ammunition. More than two dozen Panamanians have been killed over the years in mishaps with the old munitions. The Panamanian government has over several administrations claimed that the United States violated the cleanup provision in the treaty, which Washington denies. One possible legal strategy that Panama could use would be to do a cleanup and send Washington the bill, which if unpaid would set the parameters for litigation before the World Court.

Free trade with Chile ratified

On December 15 the National Assembly unanimously ratified a free trade pact with Chile. Chile mostly buys canal services from Panama, while we mostly buy fruits, vegetables and wines from Chile. The deal will probably mean a modest increase in Panamanian agricultural exports to Chile, but since most professional services were left out of the deal we won't see many Chileans or Panamanians moving to the other country to work.

More banking consolidation

Panama's banking district will have fewer companies with the acquisition by Citigroup of Grupo Cuscutlan. The latter is a banking company that began in El Salvador and also operates in Panama, Guatemala, Costa Rica and Honduras. The latter is based in New York, with Saudis holding the biggest block of shares.

Postage goes up

Panama's post offices (Correos) have raised the price of mailing things, sending telegrams and making postal money transfers by an average one percent, as of December 12. The increase was to offset an operating deficit in the services of that branch of government.

Fitch rates Panama BBB+

The Fitch bond rating service has rated Panama's government bonds BBB+ with a stable outlook. That's less than investment grade. The company warns that the biggest problem with confiding in Panamanian bonds is that the government is already heavily indebted.

Bus confrontation looms
Roster of broadcast "journalists" who took money to slant toward the government
Business & Economy Briefs