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Free Trade Agreement "divulged" --- except for what it says
Odebrecht officially takes over Colon-Panama toll road project
Business & Economy Briefs

Business & Economy Briefs

Canal excavation to begin in March

Although the environmental impact study has yet to be done and there has been no public notice of construction contracts being awarded, Panama Canal Authority (ACP) administrator Alberto Alemán Zubieta has announced that digging for the canal expansion project will begin in March, west of the Pedro Miguel Locks. That would mean the first of some 6,000 construction jobs to be created by the project. Known environmental issues affecting the digging at that part of the project include some archaeological sites and an old geological fault in the proposed channel's path. However, in the campaign for the October canal referendum the ACP promised to rescue anything of archaeological value and denied that the fault, which has not been seismically active in recorded history but runs right under the proposed locks, poses a substantial earthquake hazard. The biggest part of the digging will be on the Pacific side, as the plan is to use the Third Cut that the Americans made in the late 1930s for the new locks' Atlantic entrance.

Vice taxes to fund health system changes

The Torrijos administration plans to use higher taxes on alcohol, tobacco and gambling to finance a new National Health Services Authority (ANAS) that would combine the health care services currently provided by the Social Security Fund and the Ministry of Health. The plan was released in a commission report that was released on January 23, but which was written by the Torrijos administration rather than the commission. Due to that procedure the labor unions that had been represented on the commission walked out, and three of the remaining 13 members, those representing universities, refused to sign the report. The labor/left FRENADESO coalition and a number of other critics alleged that the new health authority is just one more step toward the privatization of Panama's public health care system. The conservative National Private Enterprise Council, joined by the docile CONATO labor federation, criticized the plan for being made without a broad consultation with the different social sectors. For their part, tobacco companies complained that higher taxes will only promote a black market in contraband cigarettes.

Gas pipeline project back, bigger than ever

Venezuela's state-owned PDVSA oil and gas company says that long-delayed plans for building a gas pipeline that goes from Venezuela into Colombia and then underwater from Cartagena to Colon is not only still in the works, but that the pipeline will then be extended under the Caribbean Sea from Panama to Nicaragua.

Tourist spending grows faster than numbers

A report by the Comptroller general says that in 2006 the number of tourists coming into Panama went up 15 percent over 2005. The even better news was that once here, the visitors spent more, 20.1 percent more than the previous year. Some of the latter increase is due to inflation but it does seem that tourists are spending more time and money in the country.

Vehicle inspections to be done by a foreign company

The 112 shops now authorized to do the vehicle inspections required in order to get license plates may lose that part of their business to a single company, which under the bid specifications will not be Panamanian. The Land Transportation and Transit Authority (ATTT) is putting vehicle inspections up for bids for a single company that would have a monopoly and that company would have to specialize in vehicle inspections. Critics say that the bid specifications more or less uniquely describe the Spanish company IVESUR. Rigging the requirements to submit bids so as to steer a contract in a predetermined direction is a traditional form of government corruption in Panama. Felipe Ariel Rodríguez, the spokesman for the industry association of auto shop owners, complained in La Prensa that the creation of a monopoly would drive up the cost of inspections for which drivers must pay.

Lewis Navarro expects free trade to pass US Congress

Vice President and Foreign Minister Samuel Lewis Navarro, coming back from a lobbying trip to Washington, said that he expects that the Free Trade Agreement with the United States will go into effect by the middle of this year. US ambassador to Panama William Eaton concurs, downplaying the various reports that the change in congressional leadership from Republicans to Democrats will much affect the question.

State-owned company wants to build power plants

The new Empresa Estatal de Generacion SA (EGESA) that was formed after the Torrijos administration decided to scrap the Moscoso administration's policy of getting the government and Panama Canal Authority out of the business of generating and selling electricity is proposing to build three new power generation plants. The one for which plans appear farthest along is a 200-megawatt coal-fired facility on Telfers Island in Colon, adjacent to the old coaling station there. (It's about a mile from the central Colon city on Manzanillo Island, however, and some local residents and public officials are complaining about the prospect of increased air pollution.) The move to build more plants is prompted by dry season shortfalls of hydroelectric power that cause brownouts, the private utilities' power to dictate electric rates in times of shortage and the prospect of selling energy generated here abroad through an interconnected regional power grid at a profit to the government, which owns the power lines. The limiting factor is that we have few fossil fuel resources of our own.

ILO criticizes RP labor situation

The UN-affiliated International Labor Organization (ILO) has criticized Panama for too frequently ignoring its own labor laws and treaties on workers' rights to which this country is a party. The ILO's Latin America regional director Jean Maninat came here for a two-day visit with public officials, business leaders and representatives of the government-friendly CONATO labor federation (but not the militant CONUSI federation) and said that despite the labor laws and treaties unions have a difficult time getting due recognition in this country and criticized Panama for having a weak system of mediating labor disputes.

Private schools sue over last year's teacher pay hike

Recall that last year when the teachers' salary negotiations came up, PRD supporters created the Teachers Unity Coordinator (CUM), a government puppet confederation of mostly non-existent organization with which the Torrijos administration negotiated in lieu of the genuine educators' unions. After a "settlement" with CUM granted a $90 per month salary increase to the public school teachers, the government broke the ensuing strike by unions allied in the Teachers Action Front (FAM). The pay raise, granted by an executive decree, was also supposed to apply to the teachers in the private schools but as a practical matter it mostly did not. Now the Union of Private Educational Centers says it will sue to have the wage hike struck down, alleging that it was excluded from the "negotiations" between the government and its creation and that the wages that they are required to pay are properly covered by the minimum wage laws and not last year's teacher pay decree.

New dodge around environmental laws

In the legislative scramble at the end of December the National Assembly did not end up taking action on a proposal to allow fishing fleets into the protected underwater park around Coiba Island. But while environmentalists were distracted by that proposal, a recently created Panama Aquatic Resources Authority (ARAP) voted to give itself the powers to grant commercial fishing licenses in the park and, notwithstanding international treaties to which Panama is a signatory, to permit the capture of dolphins to be used in a San Carlos amusement park that La Prensa insistently refers to as like Disney World. Environmental groups are considering what to do, but it appears that any grant of Coiba park fishing permits, which have been demanded by the Asian-dominated international tuna fishing industry, or dolphin capture permits will trigger lawsuits. For now the authority has just purported to give itself the power to issue such permits but has not yet exercised them.

New dodge to give protected areas to developers?

The government's plans to allow a cable car and tourism development in the national park on Ancon Hill and to allow residential developments in the Soberania National Park are tied up in the courts for the time being, but the Torrijos cabinet may have found a way around those obstacles. On January 17 it approved the creation of a new National Protected Areas System. The fine print is not yet available to the public, but as the Presidencia describes it, this new system seeks "to conserve, recover and promote the sustainable use of these areas of the country." Of course, a well-built parking lot where once there was a rainforest could be said to be a "sustainable use." The key undisclosed details are the relationships of this system to the present National Environmental Authority (ANAM) and our system of environmental laws.

CEMIS for sale?

The Multimodal Industrial and Service Center (CEMIS) was to have been a key industrial advance for poverty-stricken Colon that included the expansion of the airport at France Field into an international facility mainly dedicated to handling freight; a container-handling link among the airport, the railroad, the Colon Free Zone and the Manzanillo International Terminal and Colon Container Terminal sea ports; and a warehousing and transportation services industry area around the airport. However, the concession for it became shrouded in controversy after legislator Carlos Afú alleged massive bribery to gain its legislative approval and a series of court cases that resulted in such controversial rulings as one holding that if a legislator with immunity takes a bribe that immunity also applies to the non-legislator who paid it. Also mingled in the controversy was an acrimonious fight within the Rodin family, one of whose members was the principal promoter. The litigation and political fallout has paralyzed the project for years. Now, El Siglo reports, the project may gain new life by way of a sale by its original promoters to a group that includes Panamanian and foreign investors. So far, the tabloid reports, the negotiations for a sale are just that and in case a deal is reached it would have to approved by several governmental entities.

Most of the opposition walks out of development talks

The Union Patriotica (recently created by the merger of the Solidaridad and Liberal Nacional parties), supermarket baron Ricardo Martinelli's Cambio Democratico and the conservative MOLIRENA party have all withdrawn from the talks about about a national development plan that were called during last year's canal expansion referendum campaign, and the Panameñista Party may follow them. Vanguardia Moral, the party in formation led by 2004 runner-up presidential candidate Guillermo Endara and the organizations and labor unions associated with the leftist FRENADESO were never part of the talks to begin with. That leaves the PRD, its junior governing coalition partner Partido Popular, a number of business groups and the nation's least militant labor unions --- and maybe the Panameñistas --- still at the table. The PRD and business leaders aligned with that party are blasting the opposition for boycotting the process, which is convened under the auspices of the United Nations Development Program, for failing to take a constructive attitude about Panama's economic development. However, from right to left the various opposition forces say that the process is a sham and they have better things to do than to sit in meetings designed to give the false impression that already formulated government policies were made in consultation with the various social sectors.

Panama's first stem cell bank

Panama is getting its first stem cell bank service. Hospital Punta Pacifica is starting to collect and freeze cells taken from the umbilical cords of newborn infants. For now the cells will be taken to a storage facility in the United States. Stem cells are now useful for things like regrowing marrow in patients who have had their ability to produce blood cells destroyed by cancer treatments, and with further ongoing research it’s expected that many more useful medical applications will be found for stem cells.

Taking a color scheme from the yellow jackets...

The Land Transportation and Transit Authority has given taxi owners until June of 2008 to paint their cabs yellow, with black and white trim. A previous plan to require cabbies to paint their vehicles yellow by the beginning of this year had been suspended. Just why this decree is necessary has not been explained.