Panama Business & Economy Briefs

$325 minimum wage

With an unrepresentative rump of the labor movement present --- the militant CONUSI excluded and Mariano Mena of the more moderate CGT having walked out --- on December 11 representatives of management and company unions agreed to a minimum wage of $325 per month for workers in larger companies in the Panama - Colon metro area. President Torrijos then issued a decree ratifying those amounts. Small business employees in the area will have a $310 minimum wage while domestic employees in the same will have a minimum wage of $134. Minimum wages are lower in the Interior. The raises did not match inflation in the cost of living since the last adjustment during the Moscoso administration. Nearly 40 percent of the Panamanian labor force works for minimum wage. According to the government's "canasta basica" measure, basic food staples and cooking gas for a family of four costs $222.36 per month. This does not include housing, transportation, clothing, books and uniforms for children attending school, cleaning and personal hygiene supplies or other necessary expenses. While the organizations that remained at the table respond to the needs of employers and represent relatively few private sector workers, both moderate and militant labor leaders who actually represent rank-and-file workers have been talking a lot lately about a movement for a general raise in wages and this may be a prelude to an inflation-driven strike wave.

Free Zone activity up

The Colon Free Zone reports that in the first 10 months of 2007 its gross imports went up 12.9 percent and its gross exports went up 12.3 percent as compared to the same months of 2006. What it means is that the economic upturn in Panama is part of a wider regional phenomenon and the duty free import / export zone's customers, mostly businesses in northern South America, are selling more things to people in their countries because of stronger economies there.

Government markets rice

The government's Instituto de Mercadeo Agropecuario has been selling imported rice under the brand name "Compite" to combat shortages and high prices of Panama's main staple grain. Rice production here is not actually down, but the prices that farmers and processors get have not risen as fast as their costs of production --- or so they argue --- and thus they have withheld rice from the market here or looked to foreign buyers to pay higher prices. Along with the higher prices, the quality of rice in the stores has declined, with a higher percentage of broken grains and little stones found in bags improperly labeled as Grade A. Compite rice has not brought prices down to what they were before, because industrial-scale rice production is fuel intensive and the government can't do much about high world oil and gas prices.

Seguro Social selling real estate with expedited procedures

When the Social Security Fund (CSS) sells off assets or otherwise makes major decisions about its investments, the law as revised in 2005 says that an Investments Technical Unit must first pass on such decisions. However, President Torrijos has neglected to set up such a board and now the CSS has decided to sell a lot of the prime beach community real estate it owns --- reportedly valued at $215 million, but not recently assessed --- without bothering to comply with the procedure that Torrijos himself specified. If the norms as actually practiced for many years are followed, political connected operators will get valuable real estate at bargain basement prices. The CSS board, however, denies this and argues that with the prices of real estate spiking it's best for the fund to sell now while the market's up.

A sure sign

On the Internet of late, and in such PRD-aligned media as Telemetro and La Prensa, a purported Spanish-French consortium has been promoting Panamarina Pacific, a $2.5 to $2.8 billion mega-project to build an upscale city on an artificial island in the Gulf of Panama, several miles off of Veracruz and connected by a causeway. There are supposed to be a stadium, a convention center, a bunch of five-star hotels, dozens of high-rise luxury condo towers, a cruiser port with entertainment facilities for the tourists, shopping centers, and a water desalinization plant, and all of this carefully guarded from high-crime Veracruz. More than 20,000 jobs are promised. A certain English-language website with a reputation for plugging every scam that comes along has given its enthusiastic endorsement. But wait a minute. This project hasn't received any of the many government permits that would be required. Plus, a Google search for the names of the French and Spanish companies allegedly in the consortium combined with the name of the project pulls up no company website of any of these firms that will admit to any connection with the project. Really, one need not do all that much research to be "duly diligent." Just take a look at the promoter's own online video --- it claims that the parking for cars that would come to the artificial island is going to be underground. Uh huh.

Fifer's copper partners distance themselves

Former Cocle Governor Richard Fifer, still facing criminal charges for embezzlement of public funds while he was a public issue but still supported by the Torrijos administration in his illegal gold mine without an environmental permit, some time ago divided his Petaquilla mining company into several pieces, with one part, Petaquilla Gold, strip mining Molejon without a permit and another part, Mineria Petaquilla controlled by Fifer's Petaquilla Copper but with Canandian giants Inment as a junior partner and Teck with an option to become another junior partner in a copper mining project. But now Inmet and Teck are going to great pains to deny that they have anything to do with the gold mine and Teck saying that its final decision about whether to have anything to do with Fifer and his companies is still pending.

Juan Carlos Navarro criticizes Petaquilla

It shouldn't be possible that "in a civilized and serious country like Panama the rule of law and the collective interest before the private interest should prevail," Panama City mayor Juan Carlos Navarro told La Critica, "that there's an attempt to develop a strip mine without having submitted the project to the rigors of an environmental impact study." Considering that the mayor is the leading contender for the 2009 PRD presidential nomination at this early point in the process, it probably explains why Petaquilla is pressing ahead in defiance of the law. The odds are good that the next administration will not only not plug his stock in Cabinet Room photo opportunities like President Torrijos has, but that a new president from either the PRD or the opposition is likely to shut Richard Fifer's rogue operation down after Torrijos leaves office. Thus the rush to grab what can be grabbed before a change of administration.

$400 million World Bank loan

The World Bank has announced $400 million in new loans to the Panamanian government, to be disbursed over the next three years. There is a laundry list of goals and conditions that go with the loan, which is said by the bank to be for the purpose of "eradicating poverty and strenghthening the fiscal policy of the state."

Public deficit up

The Ministry of Economy and Finance reports that the government's deficit for the first nine months of 2007 was $365.3 million. That's $90.4 million more, or 32.8 percent more, than the same period in 2006.

ACP says expansion costs will be higher

The "no" campaign all along maintained that the $5.3 billion price tag attached to the Panama Canal expansion project by Panama Canal Authority (ACP) consultant Parsons Brinckerhoff --- the folks who played the same role for Boston's disastrous Big Dig --- was obviously low. (You don't add a bridge or tunnel across the Atlantic entrance to the canal and not adjust the cost upward like the public-funded propagandists for the Torrijos - Alemán Zubieta Plan did, for one easy example.) NOW we are being told that the plan only budgeted for two percent annual inflation, but the prices of cement and steel have soared much higher than that --- by a new set of ACP mouthpieces, Mr. Alemán Zubieta having in the meantime pulled off a reorganization that lets him say, for the most part, that "he doesn't work here anymore" when confronted by the proxies whom he sent to make fraudulent claims during the referendum campaign. Not to worry, we are told. There is supposed to be a contingency reserve built into that $5.3 billion cost estimate to cover inflation above what was projected. But of course, much of that reserve will be eaten up by the cost of the promised bridge or tunnel.

Arctic icecap shrank in November

This past August the entire Northwest Passage between the Pacific and Atlantic oceans across the top of Alaska melted to the point of navigability for the first time, and it was expected that in October it would start to freeze back up. However, the melting continued late into November, making prior predictions of the speed at which the polar icecap is receding turn unduly conservative in retrospect. The Panama Canal Authority has insisted that the Northwest Passage will not become a commercially viable competitor with the Panama Canal until 2050, but now it seems that there will be a regular commercial shipping season along that route well before the projected finish of the canal expansion project in 2014. Also melting, but still blocked by ice in one spot along the Russian coast, is the Northeast Passage that connects the Atlantic and Pacific oceans across the top of Russia and the Scandinavian countries. Meanwhile the National Environmental Authority is warning that this accelerated global warming is going to raise sea levels and thus affect properties and activities along Panama's coasts.

New English-language medium

The main stories of each day's edition of La Prensa are now being translated into English and published as a Panama section in the printed international edition of the Miami Herald and online on the La Prensa website. This is the second step by the mainstream Spanish-language dailies into English, the first being the creation of the Panama Star section of La Estrella's print editions.

Rainy dry season on the way

Panama's electrical prices are based on the cost of fossil fuels, the burning of which accounts for a small part of the power we use, in certain peak hours throughout the year and to a greater extent in the dry season when less water moves through the hydroelectric generators that provide most of our electricity. Several Panamanian government agencies are predicting that we won't have the usual shortages of hydroelectric power in the coming dry season because not only are we at the end of one of the rainiest rainy seasons on records that has the reservoirs behind the nation's dams filled to capacity, we are into a La Niña year that will give us a rainy dry season.

Israelis want to dam the Chiriqui River

Local rafting tour operators will give way to the Israeli corporation Tahal if the government gets its way. The Ministry of Commerce and Industry has announced a $100 million, 60 megawatt hydroelectric dam project for the Chiriqui River.

Torrijos continues to defy back pay award

By Panamanian law the court of last resort in the case of a firing of a public employee is the Inter-American Human Rights Court. This tribunal held some years ago that workers for the old state-owned IRHE electric company were illegally fired for striking in 1990 and owed compensation that now amounts to some $60 million. The Torrijos administration, like its predecessor, has refused to comply with the judgment and is insisting that the workers waive all further claims and accept one-third of what they were awarded, payable four years from now under the next presidential administration. The workers are rejecting this demand and Labor Minister Edwin Salamín is accusing them of trying to break the national budget.

Torrijos moves to break restaurant union

Some 50 workers at two restaurants on the Amador Causeway have unionized and bargained for contracts that give them pay raises and benefits. However, because the workers have affiliated with the militant CONUSI federation the Torrijos administration has declared the contracts invalid. The government made no specific citation of any alleged illegality of the contracts. The workers picketed the Ministry of Labor on November 20, with a large banner that in a word characterized their complaint about President Torrijos: "corruption." CONUSI also complains that the government is refusing to recognize another affiliate union that represents most of the workers at a glass company.

Air France - KLM to begin service in March

Air France - KLM, the merged French and Dutch airline, will begin offering three times per week nonstop flights between Panama City and Amsterdam next March 30. Direct air services between Europe and Panama have grown in popularity as flights that make connections in US terminals have been made impossible or annoying by Bush administration policies with regard to foreigners traveling through the United States. The same phenomenon has made Panama a more popular and Miami a less popular air hub for people traveling between Latin American or Caribbean destinations.

News \| Business \| Editorial \| Opinion \| Letters \| Arts \| Review \| Community \| Fun \| Travel Unclassified Ads \| Calendar \| Outdoors \| Dining \| Science \| Sports \| Español \| Front Page Archives \| Wappin' Radio Show	Volume 13, Number 23 December 9 - 22, 2007

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