business

Also in this section:
Banco Continental and Banco General merge
"Latin America's tallest building" project collapses
Government withholds text of Free Trade Agreement
The Panama News readership figures
Business & Economy Briefs

Business & Economy Briefs

Tax receipts up in 2006

A preliminary report by the Ministry of Economy and Finance says that government tax receipts went up by 31.54 percent over 2005 last year. Mostly the increase was due to a stronger economy. There were also some large business transactions like the sale of BANISTMO to HSBC which, despite a special law passed to create a large capital gains tax break for the sellers, still amounted to relatively large amounts of cash coming the government's way.

Free Zone to expand

The Colon Free Zone is expanding. The duty free import/export zone plans to take over another 500 hectares of what used to be mangrove swamps over the coming two years.

Less bureaucracy to open a business

The legislature has approves a law designed to reduce the paperwork and speed up the time it takes to open a new business in Panama. There will be fewer forms and shorter waits to get business licenses and taxpayer numbers (RUCs), and municipal representantes will lose most of their powers to approve, disapprove or charge fees for the opening of new businesses in their corregimientos.

Unemployment down, but jobs aren't as good

The Comptroller General's office reports that unemployment went down by one percent in the 12 months that ended in August of 2006, but there's a down side to this good news. La Prensa reports a University of Panama study based on official statistics and other information that indicates that on the average Panamanians are working longer hours for lower pay and fewer benefits. Most economists say that official figures always understate unemployment by a few points, but agree that unemployment has gone down this past year. However, the government defines people who make their living by such pursuits as selling oranges at traffic lights as "employed" and some of the reduction in joblessness is a matter of people turning to such informal economic activities.

Bidding on medicines fails

The old and frequently corrupt system of direct no-bid purchases of medicines by the Social Security Fund (CSS), which also buys for the Ministry of Health, will apparently continue. Recently the government solicited bids for 102 different medicines, but found bidders for only 34 of these substances. Thus, the CSS purchasing director Jessica Rodríguez told La Prensa, the medicines will be bought from suppliers in no-bid procedures. Monopolistic practices in pharmaceutical sales to the Panamanian government are an old story, as is the corruption of public officials in this business. Whether and to what extent anti-competitive agreements among suppliers or manipulation of the bidding requirements by public officials may have affected this process is not clear. The medicine purchasing system bears the extra burden now of acquiring 24 medications that the CSS once produces at its drug production lab, which was closed in the wake of the scandal over the production and distribution of tainted cough syrups that claimed dozens of lives. The medicine purchasing system may also be affected in the event of a free trade agreement with the United States, but it can't be definitely stated how because the text of the agreement has not been published. In similar agreements, however, on the one hand Latin American governments have given up many of their rights to promote generic drugs and on the other hand have promised to eliminate those aspects of public bid rigging that prejudice US companies.

But the Japanese consider algae a delicacy...

Been getting a strange taste and a little cloudiness in your tap water lately? Not to worry, says IDAAN director Juan José Amado III, who is also a candidate for the PRD presidency. What happened is an algae bloom around the Gatun Lake intake pipe for the Miraflores water treatment plant, and the IDAAN water and sewer utility passed the algae along to residents of several Panama City neighborhoods. Amado dismissed complaints about it, noting that algae is "rich in protein and excellent for the diet."

City takes over Chorrera Fair

It appears that this month's Chorrera Fair is still on, but under different management and a slightly different name. The city council there decided to evict the fair's old organization from its fairgrounds and rename the event the Festival Comercial, Folcloico, Cultural y Agriola. There has been a long-running political and legal dispute between the city and the fair organizers.

Air Madrid strands passengers

A number of holiday travelers were left stranded, and others lost the price of the tickets they paid for, when Air Madrid collapsed on December 18. The Europeans who were left in Panama when their flights were canceled mostly got home by other means, but a lot of people who bought tickets have not had their money refund and possibly never will. Panama's Civil Aviation Authority has fined Air Madrid $15,000 for suspending service without prior notice but it's doubtful whether the fine will ever be paid.

Job opportunities in the US Armed Forces?

The Pentagon is in a tough situation. The Iraq War is turning out to be a nightmarish loss, military recruiting is way down, constant deployments are stretching the forces thin and exhausting the troops, a draft is politically untenable and there have been hundreds of embarrassing incidents in which National Guard and reserves members killed or totally incapacitated in Iraq or Afghanistan have been mailed call-up notices. So what to do? One of the options that the Boston Globe reports is under consideration by the Pentagon is the recruitment of foreign citizens into the US Armed Forces, with the possibility of obtaining US citizenship as one of the main lures. It may or may not happen, especially given that high levels of anti-immigrant hatred in some segments of American society have their political expressions. But over many years Panamanians were the beneficiaries of exceptions that allowed the offspring of people who worked for the canal or the US military to enlist, and many took those opportunities. It should be expected that if enlistment of non-resident foreigners in the US military is permitted, a lot of young Panamanians would sign up.

Not counting Cuba...

Because of problems with currency convertibility and its frequent treatment of economic statistics as state secrets, it's hard to truly and definitively determine Cuban economic trends. However, based on such data as are known, many economists around the world are saying that the Cuban economy grew by more than 14 percent in 2006, which is a remarkable performance even if it is based upon a low standard of living as a benchmark. So why is La Prensa, based upon figures from the International Monetary Fund, reporting that Panama had the greatest economic growth in Latin America last year, at some 6.5 percent? Maybe it's because the US-dominated IMF doesn't count Cuba.