business & economy

Also in this section:
Who's coming to Panama?
Work begins on canal expansion
US ratification of free trade pact up in the air

Costa Ricans square off over CAFTA
Rate increases spur campaign to renationalize utilities

The building boom at a glance
Business & Economy Briefs

Business & Economy Briefs

51 Panamanian kids died of malnutrition last year

According to a Comptroller General's report, in 2006 in Panama 51 children aged one to four years old died of malnutrition. We have poverty all over this country, but in many remote rural areas it's severe and ubiquitous in the sense of cash income. In a lot of these places people grow their own fruits, grains, tubers and vegetables, raise their own chickens and pigs and catch their own fish. However, a flood, drought, death or other removal of a working person from the household or other disaster that disrupts such a family's economy can quickly lead to starvation. Malnutrition in the urban context is usually related to a profound social isolation where there are no family or community networks to fall back onto in hard times.

Isla Solarte promoter declares bankruptcy

Shepard Johnson, the developer of the unfinished Isla Solarte project on the island of the same name in Bocas del Toro, has declared personal bankruptcy in California. Also pending in California, he has a libel and slander suit against several of his critics, including customers who say that they didn't get what they contracted to buy --- titled lots with certain amenities. Does this mean that Johnson is destitute? Apparently not. He has land for sale in Bocas, but that real estate is in the name of a corporation, and he has been involved in real estate projects in California as well. Here in Panama the corporate veil tends to protect assets held in a corporation from creditors, while in the United States a personal creditor can generally go after a debtor's interest in a corporation. The failure of Isla Solarte is also a setback for the credibility of International Living and Escape Artist, publications that highly touted the project.

Red Frog developers fined over erosion

The National Environmental Authority has slapped Pillar Panama, the company that's developing the controversial Red Frog Beach resort and residential community on Isla Bastimentos in Bocas del Toro, with a $130,000 fine and an order to establish a 25-hectare forest buffer to prevent further problems. The charge is that the development allowed uncontrolled erosion from its construction activities to cover mangrove swamps and the sea floor with muddy runoff. The company says it followed all environmental regulations and will appeal. Earlier ANAM had denied the developer's permit to establish a seaside golf course, also over runoff issues. Environmentalist critics of the project have long argued that notwithstanding legal restrictions, a large development in that location will create runoff problems that will harm sensitive coral reefs, mangrove swamps and habitats for threatened species. It's probably possible, from a technical point of view, to channel runoff from the project into a natural or artificial wetland filter and control the runoff problem. From a financial point of view, however, the establishment of the 25-hectare buffer is surely more costly to the developer than the $130,000 fine.

DHV to supervise new locks construction

DHV, a Dutch company, has joined in a consortium with Grupo TYPSA and CH2M Hill, the latter which won the contract to manage the Panama Canal expansion contracting process and has won the subcontract to oversea all of the maritime and locks construction, including the extensive dredging work that will be required. Other companies are now doing the design work for the project, and will be doing the actual dredging and locks construction.

We're number four! We're number four!

A lot of people who should have known better made much of International Living's ranking of Panama as the number one overseas retirement place for Americans for the past several years. The criteria for that selection are and were subjective, and International Living is in the real estate business and thus has a conflict of interest. In any case, all things must pass and now Panama is rated number four. That probably reflects the deflating speculative bubble in high-end real estate and thus less lucrative pickings --- for International Living.

Construction worker deaths up to 19 this year

The deadly unsafe working conditions in Panama's construction industry, a cause of much labor strife this year, continue to take lives. On August 24 21-year-old Yair González was crushed by a 10-wheel dump truck that backed over him near the Los Pueblos shopping center on the road to Tocumen, where he was working on the construction of a pedestrian overpass. This government project used a non-union contractor. On September 2 Luis Gómez, a 44-year-old heavy equipment operator working for Constructora Urbana SA on the canal expansion project, was electrocuted when a dump truck he was driving touched a power line on the banks of the canal near Paraiso. Luis Gómez was covered by the SUNTRACS master contract with the Panama Chamber of Construction, of which his employer is a member.

Bus syndicates gain in Transito reform process

Last October when President Torrijos put General Noriega's old adjutant, former Panama Defense Forces Major Severino Mejía, in temporary charge of the Land Transportation and Transit Authority (ATTT, or Transito), the government was breathing fire against the bus syndicates. The plan was to replace the owner operated "diablo rojo" buses with a "bus rapid transit" system run by one or two large companies, but that fell of its own weight --- the government had not planned to make the infrastructure changes needed to make the changes before its term runs out, for one thing. The crackdown on various violations made the city buses in short supply and grossly overcrowded until the government let up. The plan to eliminate bus driver representation from the ATTT board prompted strike threats. Now the Mejía has left Transito and is again the number two man at the Ministry of Government and Justice and the legislature is considering a Transito reform that restores bus driver representation on the board, cancels bus drivers' old traffic tickets and bans free bus services offered by supermarkets to shoppers in the Interior.

Four-day truck strike at Bocas Fruit

During the last week of August about 70 members of the Cooperativa de Transporte de Almirante, an association of truck drivers who own the rigs they drive, refused to haul bananas for the Bocas Fruit Company, a local subsidiary of Chiquita Brands. The truckers are pressed by higher energy costs and were demanding higher fares, but the company was refusing to talk to them. After four days the company agreed to talk and the strike was lifted, but may resume if there is no agreement.

San Miguelito residents release hostage road equipment

After a 34-day standoff residents of San Miguelito neighborhoods through which the Corredor Norte phase 2 extension is planned returned the heavy road building equipment that they had commandeered to those purporting to be the management of the insolvent PYCSA construction company. PYCSA is in court-ordered receivership but both its management and the Torrijos administration are defying the court order and planning to extend the highway through San Miguelito with only a 40-meter right-of way --- that is, right up against some people's houses. There is allegedly an agreement brokered by the National Ombudsman to widen the right-of-way, but in other parts of the Corredor Norte PYCSA has not paid the owners of lands it has taken for the toll road and it doesn't seem that the company has the money to pay these residents either.

Local airline pilots leaving for better pay

El Panama America reports that in recent months about 70 Panamanian airline pilots have left COPA and the domestic airlines for jobs in other countries. Middle Eastern nations, which have pilot shortages, will pay more than three times what Panamanian employers offer.

Government promises cheaper electricity --- in 2010

Now THERE'S a promise that you know its makers won't keep. Luis Carlos Sandoval, the executive director of the state-owned ETESA power line company, promises that electricity prices are going down --- in 2010, well after the Torrijos administration is out of office. The argument is that in that year Panama's power grid will be connected to Colombia's and the lower electric rates there will be passed on to Panamanian customers.

Another broken promise

Remember the 2006 Panama Canal expansion referendum campaign, in which public funds were used to tell the Panamanian people that despite the expense of expanding the canal, the same level of support to the government's general operations would be forthcoming from canal revenues? Now Canal Affairs Minister Dani Kuzniecky tells La Critica that "the canal will give less money to the government to deal with community affairs, but this doesn't mean that it will be a big number."

New five-star hotel in Casco Viejo?

Assuming that it gets past neighborhood objections and the various permit processes, the waterfront locale where the ruins of the old Union Club are found will be the site of a five-star hotel. That's what New York hotelier Paul Stallings plans. However, despite the enthusiastic support of the Office of the Casco Viejo, there are no parking spaces as part of the plan and for that reason some of the neighbors are opposing the project. Stallings is also building cottages in Pedasi, which are far less controversial.

Supreme Court lifts ANAM stop work order

Grupo F's Jean Figali has all the luck with the Supreme Court. Earlier, the court canceled his debt for contractual payments to the government for the land he occupies at Amador. Now the high court has lifted a National Environmental Authority (ANAM) order that he stop work on a marina near the Figali Convention Center for which the authority said he didn't have a proper permit.

ANCON: Petaquilla operating without environmental permit

The National Association for the Conservation of Nature (ANCON) has complained that the Petaquilla group of companies, which has been touted in Cabinet Room publicity photos by none other than President Torrijos even though its main promoter Richard Fifer is facing charges for embezzling public funds while he was governor of Cocle province, in conducting mining and mine exploration activities without the required environmental permit. ANCON says that the area in which Petaquilla is operating is delicate due to its old growth forests and streams upon which people depend for water and fish.

Supreme Court lifts stop work order on Camino de Cruces

Carlos Pasco's Inmobiliaria P & P may get to destroy a wooded area containing the best preserved remnant of the old Las Cruces Trail after all. The Supreme Court has lifted an order stopping work on a residential development at the former Fort Clayton, holding that the old Interoceanic Regional Authority land use map that set aside the area as park land has no legal effect. There may, however, be further litigation because opponents of the development say that according to the law the parcel to be developed is within the Camino de Cruces National Park. Pasco, however, says that it's not so, that the park's boundary is two kilometers away. The development that Pasco plans would be especially marketed toward employees of the new US Embassy and Consulate complex that's not far away.

Costa Ricans square off over CAFTA
Rate increases spur campaign to renationalize utilities

The building boom at a glance
Business & Economy Briefs