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business & economy
Also in this section:
Toxic revelations prompt raids, seizures
Business & Economy Briefs
Casco Viejo historic building expropriated The government has seized the old Libreria Preciado premises in Casco Viejo from the Amarillo Guayacán Investment Corporation, which had for years been sitting on the dilapidated building waiting for somebody to pay them the price they wanted for it. The government cited a 1997 historic preservation decree to support its action. A number of property owners in the area took advantage of laws that allowed them to evict residents from properties in order to restore them, or to obtain subsidized low-interest building rehabilitation loans, and have then just allowed the properties to remain vacant in the hope that someone will pay their asking prices. Housing Minister Balbina Herrera and others in the government have been threatening for some time to expropriate derelict buildings that aren't being restored, and that has in turn prompted various complaints from owners and speculators. This particular property was a likely candidate to be the example made, because it's right on Plaza Plaza de la Independencia, a high-value historical site that's used for a lot of public events and promoted to tourists.
Tax breaks for multinational corporations Having early in its term increased taxes on the middle class, the National Assembly has now approved a new tax exemption for multinational corporations that establish their international or regional headquarters here. The measure passed the legislature with the support of only the ruling PRD caucus, and with most opposition legislatures either absent or abstaining.
World Bank loan Much of Latin America is weaning itself from the World Bank - International Monetary Fund international financial cartel, and in the previous two administrations Panama had reduced its dealings with these institutions. It's not anything personal about outgoing bank president Paul Wolfowitz but rather decades of advice that wasn't very helpful. On May 11 the Torrijos administration bucked the trend by signing a $39.4 loan agreement with the World Bank for rural development programs, with the national government required to put up $1.9 million in matching funds and the direct beneficiaries of the programs another $5.6 million.
Railroad to do well on cruise tie-in The Panama Canal Railway Company, whose main business is moving shipping containers among the Colon Free Zone and Panama's main ports, is one of the few local businesses that coordinates its opportunities with the arrival of cruise ships and has taken another profitable step in this direction. On May 17the Carnival Liberty called at Colon 2000 and all 300 seats on a special passenger train were booked. For the next five months the Carnival Liberty will be making a monthly call in Panama and the trains are already scheduled.
High court overrules Interior bus fare hikes Last year, as fuel prices reached record highs, the Torrijos administration avoided a nationwide bus strike by agreeing to higher bus fares on many routes in the Interior. Fuel prices have gone up and down since, but overall have not declined, but now the Supreme Court has ruled that the fare increases were illegal. That has panicky bus owner/operators threatening to park their vehicles and Minister of Government and Justice Olga Gólcher calling for calm and a reconsideration of the ruling. The government may extend some sort of an increased fuel subsidy to the drivers while the problem is being sorted out, as any sort of prolonged bus strike would have serious repercussions in the national economy. The problem with a subsidy is that the government is already running up high deficits and couldn't afford that sort of solution for very long.
Dairy farmers threaten strike They say that the dairy processing and distribution companies are paying them between 21 and 34 cents per liter of milk, but their production costs run from 29 to 42 cents per liter. Thus the dairy farmers are threatening to keep their products off of the market (they wouldn't want to stop milking their cows, as that would immediately impair their ability to start production again), and the dairy processing companies are talking in terms of a government subsidy as a solution. However, there are now free trade agreements with Mexico and Central American countries that would probably be violated by any milk subsidy.
Figali may lose Amador concessions Businessman Jean Figali notoriously flaunts his political connections and flouts legal restrictions and obligations and has so far been fairly successful at it. After all, not many people can get a Supreme Court magistrate to cancel multi-million-dollar debts to the government. Now the National Maritime Authority says that it's moving to cancel the concession that Figali's Grupo F company has to build and operate a marina at Amador, given various alleged breaches. But Figali is continuing with the work on the landfill, despite previous orders to stop because of such things as making it larger than the concession agreement allowed.
RP to remain on Spain's blacklist Panama is not going to get off of Spain's blacklist of tax havens anytime soon. The Spanish government gives special scrutiny to financial dealings between its citizens and Panama because it says that this country's banking and corporate secrecy laws make it easy for Spanish citizens to evade taxes using Panamanian front companies and bank accounts. Panama passed a law purporting to prevent the use of our banks and corporations for tax fraud against foreign governments last year, but Spain says that this is weak and in any case not enforced and demands either a treaty to exchange tax information or a binational joint taxation scheme for those people and companies operating in both countries. The blacklist's effect is extra paperwork that slows down and in some cases effectively blocks financial transactions between the two countries.
USDA: pollos de patio are dangerous Panama's pollos de patio --- those big, tough, free ranging chickens that live off of maybe a little bit of corn and such bugs as they can pick up around the yard, bird's that you want to stew rather than fry --- are not kept under conditions that minimize the threat of a bird flu epidemic, the US Department of Agriculture warns. The caution is not unfounded. However, there are plenty of people and nations that warn that chickens raised by US standards --- full of hormones and antibiotics --- are also a hazard to human health. The USDA warning here carries with it a particular fear in light of a propose US-Panama free trade agreement, that the Americans will set food standards and ultimately food prices for Panama and that small farmers, poor households and entire indigenous coummunities that depend on the free ranging chickens they raise to feed themselves will not be allowed to market, and maybe not be allowed to raise, poultry anymore.
Niko's keeps police contract If you're going to get the contract to provide the National Police in the metro area with meals, either the cops get asked to accept little variety or there just aren't many competitors for the concession. You need several outlets around the metro area that are open 24 hours a day and provide much more selection than just burgers and fries. Niko's fits that description, and arguably enough to be allowed to bid, so did Cafeterias Metropolitanas SA. Niko's kept the contract, with the renewed concession running through the end of 2008. Officers will still be able to get burgers and fries, but the more cultured among them might also get gyros or corvina al ajillo, and the ones being threatened with losing their jobs if they don't lose weight might order salads. They can't do those things at McDonald's or Pio Pio.
Puerto Armuelles oil refinery closer On May 15 the Panamanian government and a consortium of Occidental Petroleum and Quatar Petroleum signed an agreement to go ahead with plans and studies aimed at the companies installing an oil refinery in the economically depressed Chiriqui city of Puerto Armuelles. That's at the Pacific end of the country's Atlantic - Pacific oil pipeline. Venezuela's state-owned PDVSA oil company has also expressed an interest in a refinery here, and in modifying the pipeline to allow Venezuelan oil to be pumped from Chiriqui Grande to Puerto Armuelles en route to China. The design and study work for the Quatar - Oxy plant is expected to cost $15 to $20 million, and if all goes well construction work on the refinery itself, which would represent an investment of more than $1 billion, would begin early next year.
Cement plant gets zoned out Although the Parque Industrial Maritimo de Panama (PIMPSA) may have won the belated support of National Environmental Authority (ANAM) director Ligia Castro for its plan to install a clinker plant at Rodman, it's losing its battle on another front. Supreme Court magistrate Winston Spadafora has issued a preliminary ruling suspending the Ministry of Economy and Finance's designation of the land where PIMPSA wants its cement factory as an industrial zone.
Hotel owners not so hot on sex tourism It's difficult for a man to walk on Via Veneto or nearby streets at night and not be accosted by hookers, most of whom are Colombian and many others Dominican, and the great majority of whom are working in Panama illegally. (Many of them have visas to be students at the nearby University of Panama or other private legitimate or bogus universities that are chartered by the University of Panama. Generally such students don't actually attend classes, but a fair number of foreign prostitutes work here for a few months in order to get money to study back home or to open a family business in something other than sexual services.) In any case the Panamanian Hotels Association (APATEL) doesn't like what's happening because its members for the most part believe that the explosion of street prostitution drives away a lot of tourists whom they want to attract to Panama. The group's president, Jorge Loaiza, told El Panama America that nobody's trying to block foreigners from coming into this country but his group wants better control over the abuses.
Singaporean airliner repair shop's license approved The Civil Aeronautics Authority (AAC) has approved a license for Panama Aerospace Engineering Incorporated, a subsidiary of a Singapore company, to operate an aircraft maintenance and overhaul business at the former Howard Air Force Base. With respect to the unionized mechanics at commercial airlines throughout the Americas, color this "outsourcing."
Citgroup buys Grupo Cuscutlan Make that one less bank in Panama City. The consolidation of the world banking industry continues, this time with the completion of a $1.510 billion buyout of the El Salvador-based Grupo Cuscatlan by the US-based but largely Saudi-owned Citigroup. Earlier the Cuscutlan banks had bought out Lloyd's branches in Panama.
Mastellari heads APEDE Antonio Fletcher wanted to be re-elected as president of the Panamanian Business Executives Association (APEDE), but that was not to be. On May 10 the group's members voted 164-119 to elect Juan Carlos Mastellari instead.
Security agencies may lose licenses According to El Panama America some 30 security guard companies might get their licenses lifted by the Ministry of Government and justice. Rent-a-cops, who in general are poorly paid, are often just given weapons with little or no training and told to guard some place. There are regulations and the ministry has been checking the companies to see if they comply. It seems that many of them can't show documents indicating compliance with weapons training and storage requirements or with the people they hire, and they might get their licenses suspended or revoked depending on how serious the problems are.
Also in this section:
Bush - Pelosi deal improves US-RP free trade
pact's chances
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