business & economy

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The upper-end fishing boat business
Blades lashes out at tourism reporting
Will the return of traffic save Avenida Central?

El Mercadito
De facto urban renewal

Competition by vilification and litigation loses ground
Business & Economy Briefs

Business & Economy Briefs

Breaking news: city backs down on Peatonal traffic

After virtually every urban development expert in the country told them that the idea of saving the Avenida Central pedestrian mall as a retail shopping center by restoring traffic to the area, on June 21 Panama City's Mayor Juan Carlos Navarro and the city council backed down on their plan to bring back the cars as of October 1 and decided to study the matter in more detail before making any new decisions. The arguments over the matter took high and low roads, from explanations of urban trends worldwide to anti-Semitic allegations that Jews were behind the idea of bringing back traffic. The city administration says that it will have a much broader discussion about what to do next with the Peatonal.

New ATM protection against robbery or abduction

The "kidnap express" is all the rage in violent crime these days. Introduced to Panama by Colombians, it has gained home-grown practitioners and works like this: a victim is abducted and forced to withdraw as much money as possible from an ATM machine, possibly being held for days to get the daily maximum withdrawal as long as the money holds out. But now the banks and police have developed a new silent alarm system. If you are being forced by criminals to withdraw money from an ATM machine, type in your PIN number in reverse; or if criminals have your ATM card and force you to give up a number, give them that number in reverse. (It's 5678? Punch in, or tell them, 8765.) The PIN number in reverse still allows the machine to give out money, but which in some machines may be subtly marked. More importantly, it sends a silent alarm to police and Linces armed with machine guns will be racing on their motorcycles to the site of the ATM.

$552.5 million investment in canal expansion

The Panama Canal's 2007-2008 capital improvement budget is way up, with the canal expansion work beginning, but within that budget money for improvements to the existing canal is down some 16 percent. The ACP plans to spend $686.6 million on capital improvements in the next fiscal year, $552.5 million on the canal expansion and $134.1 on investments in the existing canal. In the current fiscal year $161.3 million is being spent on improvements to the 1914 canal. Especially as the expansion project progresses, it will be increasingly hard to differentiate between the two sorts of expenditures. Where, for example, would one assign money to deepen and widen the channel through Gatun Lake? In the 2006 referendum campaign ACP consultant Parsons Brinckerhoff of Boston Big Dig infamy put a $5.3 billion price tag on the canal expansion but even many of the "yes" campaign supporters will acknowledge that the figure is unrealistically low.

Tax and spend

La Prensa, based on Ministry of Economy and Finance figures, reports that this year the government is taking in 18.8 percent more revenue than it did in 2006. However, the daily reports that the government is spending 22.5 percent more than it did last year. By all accounts Panama's public debt has been on a constant upward spiral during the Torrijos administration. However, by official accounts, wherein certain things are selectively kept off the books, last year the government ended up with a budget surplus, even if most economists would say that the reality was a deficit. It seems that there will be another budget deficit this year, even if books are arranged to indicate otherwise.

Farmers protest by selling at the prices they get

How to protest against the low prices farmers get for their milk? By selling to the general public at the prices they get from the milk processing industry. The Asociacion Nacional de Ganaderos --- National Ranchers Association --- held a protest in which they sold milk to consumers at 42 cents per liter in San Miguelito, and plans further such sales in the capital. Now a larger and more comprehensive farmers' organization, ONAGRO, plans to join in the protest with retail sales of other foodstuffs.

On and off sequestration of oil terminal's inventory

The Chamber of Commerce was happy about it and environmental activists were not. On February 4 a malfunctioning valve at the Petroterminales de Panama (PTP) oil tank farm in Chiriqui Grande, plus apparent human errors in not catching and quickly fixing the problem, led to a big oil spill on the coast of Bocas del Toro. There are fines, assessments for cleanup costs and claims by affected parties for such damages as lost fishing opportunities, degraded beaches and illnesses said to be from inhaling volatiles from the evaporating oil, and a court had ordered the sequestration of 5,000 barrels of oil in the company's tanks to ensure payment of the various debts. However, the Supreme Court has agreed to hear the company's appeal and ended the sequestration while the litigation proceeds.

Church, economists question unemployment numbers

According to the statistics released by the Comptroller General, Panama's unemployment rate is down to 7.3 percent, lower than it has been since the 1970s. But nobody, probably not even the administration figures who are touting that number, believes that it reflects the realities of poverty and unemployment in this country. Economist for many years have claimed that the official method of counting the unemployed, based on a sampling of households, understates joblessness by several percentage points. Then under the Moscoso administration the government began to count many informal ways of making a living, like selling fruit at traffic lights, as "employment." The Torrijos administration has extended the concept of counting those living off of informal economic activity as employed, and the World Bank says that the informal economy accounts for more than three-fifths of Panama's Gross Domestic Product while a study done for the United Nations Development Program found that poverty is growing and now embraces the economic circumstances of a majority of Panamanians. One might expect the economists of academia to dismiss the government's unemployment figures as fluff hiding a hard underlying reality and that expectation has been fulfilled. Now, however, the Catholic Church and some business leaders have added their voices to the chorus of criticism and called upon the government to be more realistic about unemployment and poverty.

Some need to change cedula to renew driver license

The old Polaroid-style cedulas that about 85,000 Panamanians carry will expire early, at least for those who also want to carry driving licenses. That's because, notwithstanding that the old-style ID cards may not be expired, the Transito Authority will only accept the new digital cedulas when renewing driver's licenses. So make that an extra day or so of standing in lines to get a new driver's license if you have an old cedula.

Interior bus strike averted

A high court ruling that struck down bus fare hikes that went into effect in many routes in the Interior last year will apparently be avoided by a new deal negotiated between the Land Transportation and Transit Authority (ATTT) and bus driver syndicates. The drivers had threatened a strike, which if prolonged would have been devastating to the national economy.

Auto sales up

The Auto Distributors Association of Panama reports that its members sold 15,676 new cars in the first five months of this year, which is about 30 percent more than the same months in 2006. One noteworthy change, they said, is that now most cars are bought without bank financing, generally with cash but sometimes also by leasing or barter deals.

The Ice Tower crasheth

Another would-be landmark of Panama's high-end real estate speculation is in the place where plans for things that don't happen go. This time it's the 104-story Ice Tower project, which has been called off. Looks like we won't have Latin America's tallest building very soon. The thing is, units in Panama City's upscale construction projects that are going up or are for pre-construction sale are being bought, when they are being bought, mostly by speculators rather than people who intend to actually live or do business in the new digs. The few who are buying to use include more Europeans and fewer North Americans than had been expected, that being a function of the euro's rise against the dollar.

Cold water on refinery plan

There are various additions to and improvements upon our energy infrastructures in the talking phase, and surely some of these will come to pass. However, the EFE news agency reports that one of the oil refineries under discussion is now in doubt because the Mexican government has told the Panamanian ambassador in Mexico that the state-owned PEMEX oil company would have less oil to send for refining at the contemplated facility than had been previously predicted.

US Embassy may not be for sale after all

The American Embassy is moving to Clayton, so as to be less vulnerable to a terrorist attack. So is the present embassy on Avenida Balboa for sale? Probably not. The United States government has a deed to the property that allows it to use the land essentially forever, but doesn't let it transfer the property to third parties. Thus the initial impulse to sell the embassy after the move has been stalled. New negotiations with the Panamanian government to change the terms of US land tenure or the retention of the building for other US government uses are among the possibilities, but the gist of American plans here is to move everything possible out to Clayton.

Long sentences for lottery embezzlement

Eight former employees of the national lottery have been given 10-year sentences for skimming off well over one million dollars in an embezzlement scheme that went on for years and can't be completely documented. A ninth former lottery worker has received a 15-month sentence for failing to report the racket when she learned about it.

Seguro Social files charges against 325 businesses

La Prensa reports that the Social Security Fund has charged 325 businesses with employees for not keeping proper records or paying into the system as required by law. With the growth of the informal economy Seguro Social coverage of workers and its tax receipts have been shrinking as percentages of the labor force and the national economy respectively.

University creates new emeritus status

The Faúndes Law, passed to oust an elderly corrupt Supreme Court magistrate whose taped bribery negotiations were played for the Panamanian people but who had enough support in the legislature to avoid conviction in his impeachment trial, mandates that nobody over the age of 75 may hold a non-elected government job. It has been applied with a vengeance at the University of Panama, with younger faculty turning on their seniors in a scramble for scarce tenured positions. But in that process the scandal-plagued university lost some of its more prominent figures and a measure of its reduced prestige. So now the university is belatedly creating the classification of "professor emeritus," which allows those over 75 to continue working at the university as researchers, but not as teachers.

How convenient

The Ministry of Public Works has announced that it will soon begin work on nine vehicular overpasses in the Panama metropolitan area, all of which are scheduled to be inaugurated within five months of the 2009 elections. In most of these projects there has been no clear showing that the will do much to improve traffic flow around the city, but they will create construction jobs and public works contracts. The Moscoso administration used a similar strategy to ensure the continuation of her political coalition in power, but with little success.

Fifer's political ducks not in line

Richard Fifer, the promoter of the Mineria Petaquilla mining schemes, has some of his political ducks in a row. Despite the pending charges of looting public funds while he was governor of Cocle, President Torrijos did advertising photos with him in the Cabinet Room of the Palacio de las Garzas. The Ministry of Economy and Finance declared that Fifer's company was eligible for a permit to start mining on 3,396 hectares of northern Cocle and western Colon province, and that prompted a campesino protest that blocked traffic on the Pan-American Highway in Penonome --- residents in and downstream from the proposed mining area say that in effect Fifer is trying to drive them off of their land by destroying their water supply. But despite the presidential endorsement and the go-ahead from the ministry, the National Environmental Authority (ANAM) has found that, just as the campesino protesters claimed, the company has felled trees, bulldozed scars upon the land and otherwise trashed the environment without the required environmental impact study or permits, causing the silting of streams on which people depend for their water supply. Fifer's company, which has been fined for similar offenses by ANAM before, is now facing a new set of administrative procedures over the alleged environmental offenses.

Certain foreign professionals are welcome

Architects, lawyers and doctors Panama doesn't want you, at least not working here on a regular basis. However, immigration director Ricardo Vargas told El Panama America that so far this year Migracion has handed out between 400 and 500 visas to foreign prostitutes, mostly Colombians and Dominicans, to come and work here. Prostitution visas are good for six months, and a number of other foreign hookers come here on student visas, which can be good for years.

The upper-end fishing boat business
Blades lashes out at tourism reporting
Will the return of traffic save Avenida Central?

El Mercadito
De facto urban renewal

Competition by vilification and litigation loses ground
Business & Economy Briefs