Panama business & economy briefs

Ministry says inflation is now double-digit

The Ministry of Economy and Finance has revised its projections for the year and now predicts that when 2008 is history inflation will have topped 10 percent. However, along with that the ministry has also revised its projections for the gross domestic product, which it says will be a bit over nine percent when all is said and done.

Comptroller says direct foreign investment up

The Comptroller General's Office has announced that in the first half of 2008 direct foreign investment in Panama went up 32.8 percent as compared to the same period in 2007. The leading cause was bank assets being transferred to Panamanian branches of international companies, but there was also substantially more foreign investment in the construction, ports, telecommunications and electrical generation sectors.

$400 million canal expansion loan

The Inter-American Development Bank has formally approved a $400 million loan to the Panama Canal Authority (ACP) for the canal expansion job. During the 2006 canal expansion referendum the ACP endlessly repeated that the project would be “self financed” but now it says that it will have to borrow $2.3 billion for the project. It just got all but $1.9 billion of the money it now says it needs to borrow. So far we haven't seen major cost overruns in the stated $5.3 billion price tag for the entire project, and one glimmer of hope in the global economic crisis has been a dip in world prices of construction materials. However, the job is in its initial stages and the contracts for its most expensive parts, the design and construction of two new sets of locks, have yet to be awarded.

Full-time firefighters fall out

On October 5 there was to be the first practice march for the Bomberos Zone 1 (Panama City) band, through Calidonia. However, some 200 full-time bomberos fell out of the ranks at the start of the parade and refused to march because they had not been paid a $160 per month raise that was due to them. There ensued a series of shouting matches between the full-time firefighters and the volunteers, and the full-time firefighters and their officers. Since then there have been rumblings about various retaliatory measures by the Ministry of Government and Justice. Colonel Daniel Delgado Diamante of General Noriega's high command, now Minister of Government and Justice, could parlay the situation into the realization of one of the main militarist dreams for many years, having National Police bands upstage the bomberos at the November patriotic parades by eliminating or reducing the popular bombero bands. If that happens the public reaction will be interesting.

Doctors walk out in Changuinola

On October 6 most of the doctors at the Social Security Fund's Changuinola Hospital walked off the job for 24 hours. The physicians were protesting Seguro Social's decision to cut off the housing and electricity allowances that have existed for decades in order to attract MDs to work in Bocas del Toro.

Semi-private San Miguelito hospital in trouble

The Hospital Integrado San Miguel Arcangel (HISMA) in San Miguelito has been this and the previous administration's showcase of a semi-privatized public health care system. The hospital was set up by the Ministry of Health as a state-owned private foundation (patronato) that contracts with private companies to deliver its health care services. Opposition to this model of public health care was one of the reasons for last year's 39-day strike by doctors in the Social Security and Ministry of Health systems. Now it turns out that the patronato is asking the national government for a $5 million subsidy to get it though the year. The problem? The private companies delivering medical services haven't been paid and four of them, the ones that do the surgery, anesthesiology, gynecology and pediatrics, have discontinued their services at the hospital. Several more companies may follow suit when their contracts run out at the end of the year.

Resistance to dam project

Hydroelectric dams are very unpopular in the indigenous areas, viewed as they are as white people taking indigenous land and water resources in violation of the sovereignty of Panama's original nations. How unpopular? Well, Jera SA was building an access road to the Bonyic dam project through the Ngobe-Bugle Comarca and learned the hard way that its costs are going to go up. The company left a backhoe untended at the construction site over the October 4-5 weekend, and during that time somebody came by and set it on fire.

No conflict of interest here, because...

“Conectate al Conocimiento” --- connect to knowledge --- is the program that those billboards in which the Torrijos administration boasts that it's closing the digital divide are all about. The plan is to connect the country's public schools with the Internet, or at least that's the stated purpose. Internet-connected computers are being installed in public schools, at much higher than market prices for the machines and services. In charge of the program is the Presidential Secretariat for Governmental Innovation, under the direction of Gaspar Tarté, who has been given semi-cabinet ranking (a voice but not a vote at Cabinet Council meetings). And how innovative Mr. Tarté has been! $110,775 worth of Conectate al Conocimiento contracts have gone to a company named Metro Painting SA --- which is owned by his brother Alex Tarté and whose president is his sister-in-law Oris Rivera. But Gaspar Tarté says that there's no conflict of interest because the contracts that his relatives got only amount to .003 percent of the program's budget. But he got his math wrong --- it's actually about .3 percent of the contracts awarded, and that's not counting several more contracts that were canceled after La Prensa broke the story; nor a number of other contracts awarded to different companies to which Metro Painting is the “subcontractor;” nor the $150,000 consulting contract for Gaspar Tarté's Mexican business associate Germán Escorcia Saldarriaga (they were both execs in a company called GBM).

San Carlos fishermen lead resistance to beach project

Fishermen who operate out of San Carlos's Playa Ensenada have expressed their opposition to a plan by Housing Minister Gabriel Diez to fence off the beach and install four apartment towers (two of them 14 stories, the other two 21) to sell mainly to foreigners by staging brief traffic blockages on the Pan-American Highway in San Carlos. The project was approved by the Housing Ministry but Diez says that's not a conflict of interest because he put his son in charge of the company (Desarrollo Turistico San Carlos SA) and his subordinate in charge of the ministry's decision to grant the permit. Oh, and the environmental permit? The National Environmental Authority (ANAM) approved that in record time, without any public hearings being held and despite the project's inherent aspect of destroying protected mangroves. Environmentalist groups say they'll sue to overturn the ANAM approval. Local legend is that Playa Ensenada is one of Panama's few historic battlefields, although unrecognized by the government as such. At the outset of the 1900-1903 Thousand Day War, the Liberals suffered a severe defeat in a battle for the Calidonia Bridge in Panama City and such weapons as the Liberals could save were sent by sea to San Carlos, where Liberal leader Victoriano Lorenzo fought off the Conservatives, recovered the arms and headed to the hills to wage his long and ferocious guerrilla campaign. San Carlos residents say that the battle took place on Playa Ensenada.

Protected waterfall fenced off

The waterfall that gives the Cocle community of Los Chorros its name, part of a protected public nature reserve that had been a popular recreational site for local residents, has been fenced off. It has purportedly been sold to foreigners, by whom it isn't exactly clear. An organization, the Movimiento Anti Ventas de Tierras, has been formed to fight this and other illegal privatizations of public recreational assets, generally by criminal elements in the government.

Decades-old Veraguas community faces expulsion

La Piquera de Santa Fe, Veraguas, is in the controversial PRD deputy Pedro Miguel González's legislative circuit, in a municipal district run by Mayor Albertina de Castrellón of the PRD-allied Partido Popular. It's also home to some 30 families that have lived and worked the land there for decades, but which, according to a 1933 land title, belongs to the Giruad family. Under Panamanian law people who have held land for 15 or more years own it by squatters' rights, but that hasn't stopped one Félix Giraud from going to court to evict the families --- especially now that land in the mountains around Santa Fe is recognized for its value as a place for mountain resorts and retirement homes that foreigners might like to buy. The squatters may have rights, but they don't have money to put up adequate legal defenses of the same in court, and so far the courts have ordered the eviction of three families. This brought a crowd of neighbors out in front of the mayor's office on October 3. The mayor said that she knows about the situation but must carry out orders handed down by the courts.

Noriega's homes to be auctioned

Two homes in Altos de Golf where former dictator Manuel Antonio Noriega and his family used to live are to be auctioned off by the Ministry of Economy and Finance sometime in October. The planned sale is generating claims and counter-claims and will probably end up in court. On the one hand, families of those who were killed and survivors who were jailed, tortured or exiled under Noriega's orders are calling dibs on the auctions' proceeds as reparations that are owed to them. On the other hand lawyers have warned that the sale would be illegal --- with respect to one of the buildings because it allegedly belongs to the family of the ex-strongman's daughter Sandra's ex-husband --- and may also take the matter to court. The ministry estimates the value of the two properties at a bit more than $6.1 million.

Rice farmers warn of crisis

The Chiriqui Rice Producers Association (APACH) is warning of a food crisis, claiming that only 60 percent of this year's rice crop is harvested and space is running out at the grain mills that dry and store their crops. The storage facilities are full, largely with unsold rice from last year's crop. The government is denying that there is a problem, characterizing the situation as a dispute between farmers and grain mills that farmers want to use to raise prices.

Coffee blight quarantine

The broca de cafe (coffee rust) blight is back in Chiriqui, having broken out again on a farm in the Dolega corregimiento of Potrerillos. The Ministry of Agricultural Development (MIDA) has imposed a quarantine on the farm and surrounding area to prevent the blight's spread. In the past few years the blight has affected farms in Remedios and El Volcan, but MIDA claims to have brought it under control in those areas.

Tuna fishing moratoria

The Aquatic Resources Authority of Panama (ARAP) has decreed three periods over this and next year in which the catching of tuna in Pacific waters is forbidden: November 13 through December 31 of this year; and August 1 through September 28, and November 3 through December 31 of next year. The authority has banned the use of purse seines in Pacific waters in the November - December period of next year, but that practice, recently re-legalized, is under legal challenge by environmentalists and may be banned again by the legislature.

Environmentalists criticize Perlas sand concessions

A group of environmental activists and scientists led by architect Raisa Banfield and also including the Smithsonian Tropical Research Institute's Héctor Guzmán, Conservation International's Manuel Ramírez and the Fundacion Albatross's Alejandro Balaguer has complained that the government has granted some 1,700 sea floor sand extraction permits for the waters around the Perlas Archipelago without any inquiry into its effect on marine ecosystems or a regulatory plan. The issue is a siamese twin of the National Environmental Authority's practice of approving environmental impact studies for projects involving landfills without requiring the projects' developers to state where they will obtain the material for the landfills.

City restricts metal recyclers' hours

Hmmmm --- what happened to the steel storm drain gate in front of the Contraloria, across from the Hotel Miramar? And so on, all over the city. These kinds of questions are more frequently asked as scandal about the the 35 tons of bronze sculptures that disappeared from the First Lady's Office (under the noses of the SPI presidential guards) continues to reverberate in the news media and popular bochinche. The Panama City municipal government has taken a small and belated step to reduce the stripping of public property of metals for sale to recyclers by limiting the operating hours of metal recycling businesses to the hours when such city inspectors as there are also work. Now these businesses have to work between the hours of 8 a.m. and 6 p.m. And who was the most vociferous advocate for the new law? Cable & Wireless Panama, which loses a lot of money to cable thieves.

“Spaniards Swindled in Panama”

Some of the most obnoxious developers or purported developers in Panama have turned out to be Spaniards, and some of our home grown sharp dealing real estate operators have promoted their projects in Spain. Promotions of idyllic-looking beachfront homes on what's actually the trash-strewn waterfront of heavily polluted Panama Bay; developers raising the prices of homes that were sold before construction; parking spaces and recreation areas that were part of the package but don't actually exist; buildings on unstable hillsides or in flood plains; and inadequate or absent water, sewer or drainage utilities are some of the common complaints. In Panama's commercial culture thuggish businesspeople are used to suppressing bad publicity about themselves by invoking the criminal defamation (calumnia e injuria) laws against those who complain, but in Spain the consumers are not used to being intimidated in this way and act more assertively. For a couple of years there have been Spanish websites warning about Panamanian real estate scams, and now the Asociacion de Españoles Estafados en Panama (the Association of Spaniards Swindled in Panama) has been formed to seek redress for the many grievances.

Labor woes for Super Xtra

After a being closed for several days, the Super Xtra supermarket in 24 de Diciembre, where two people died from inhaling sewage gas, reopened. Come payday the surviving workers found that they were not paid for the days off. Their union, the Sindicato Industrial de Trabajadores de Compañias de Servicios, Supermercados y Asociados, has filed a grievance with the Ministry of Labor Development over that, along with other complaints about a pregnant employee being illegally fired and alleged attempts to force the workers to join a company union.

Ministry refuses to recognize university workers' union

Public sector labor unions are legal in Panama. In some instances, as with Panama Canal workers, they are forbidden by law to go on strike, but even then they retain the right to organize and bargain collectively. However, the Torrijos administration, despite its promotion of the ruling Democratic Revolutionary Party (PRD) as social democratic to gullible politicians and reporters abroad, is exceptionally anti-labor and the letter of our labor laws often means very little in practice. A case in point is the Asociacion de Empleados de la Universidad de Panama (ASEUPA), which represents many of the national university's non-teaching employees. But Labor Minister Edwin Salamín is refusing to recognize the organization because university workers are public employees. The organization has filed suit in the Supreme Court and it's likely that by the time there is a ruling the Torrijos administration and Salamín will be out of office.

Fifer and friends sell out for $45 million

The Canadian-based multinational mining company Inmet has bought the shares owned by a group led by former Cocle governor Richard Fifer in the Petaquilla copper mine project. Their 26 percent stake was acquired for some $45 million, after Inmet bought a controlling interest in a hostile takeover bid. The copper mine project, which would encompass some 3,000 hectares, is not yet underway and is likely to get a new name to disassociate it from Fifer. The Petaquilla name will probably remain with the illegal gold mine that Fifer still retains in the same area of northern Cocle and western Colon provinces. Environmentalist groups vow to keep up the fight against both projects.

MICI grants mining concession in national park

The law quite explicitly protects national parks from mining activities. However, it's smash and grab time in the Torrijos administration and the Ministry of Commerce and Industry has granted a mining exploration concession that lies mostly within the Chagres National Park to a company called Minero Cañazas. The concession, uphill from the Colon Costa Arriba towns of Nombre de Dios and Viento Frio, encroaches on what is legally part of the protected Panama Canal watershed, but in fact it's on slopes that drain directly into the Caribbean Sea rather than into the Chagres River that provides the water that's used to run the canal.

Odebrecht thrown out of Ecuador

The governments of Ecuador and Brazil are at odds after Ecuador kicked the Brazilian-based multinational construction company Norberto Odebrecht SA out of the country over a series of problems with public contracts. The biggest item was the San Francisco hydroelectric dam, inaugurated in 2007 but taken out of service this past June after structural faults that the Ecuadoran government considers dangerous were discovered. Brazil responded by cutting off aid to Ecuador, the biggest item of which is a multimodal container moving connection between Ecuador's Pacific port and air terminal at Manta and Brazil's Amazon River port at Manaus. (This project, if it is carried out, would instantly become a major competitor for an important part of the Panama Canal's business and could be the start of a continental South American multimodal system.) Ecuador and Brazil have had good relations, but Ecuadoran President Rafael Correa said that as a sovereign country Ecuador had to act against a rogue corporation “that has become accustomed to mocking us.” Odebrecht also operates in Panama, where it is also controversial for irregular public contracts and violent union-busting tactics.

Torrijos: public employees who don't work must go

A young man with an injured leg and using a cane (not very well) begins to hobble across Via España with a group of fellow pedestrians but falls behind. Meanwhile, swerving around slower-moving traffic farther up the street comes a speeding white Toyota, driven by another young man. A third young man, a PRD activist decked out in a Transito vest, leans against a signpost twirling a whistle on a string. The car swerves around the disabled man, barely missing him, and the PRD hack doesn't interrupt his whistle twirl to say or do a thing. Wonder why people around the city are shouting “botella” at these temporary employees in the Transito vests, and a few of the latter have been punched out by off-duty bus drivers? But President Torrijos assures us that he's running a tight ship. “Every functionary who doesn't work will be fired,” he declared in a PRD campaign swing through Capira.