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Volume 14, Number 21
November 18, 2008


Also in this section:
Labor Ministry official faces prosecution for favoring Isla Viveros company union
No bids on Noriega houses
Cinta Costera progresses
Antenna rule changes, protests
Canal retirees feted
The Panama News download numbers
Holiday line at the Panama Canal
Business & Economy Briefs

Business & Economy Briefs

Electric rates probably down in January
This time of the year, the rains are heavy and virtually all of Panama's electricity is produced by hydroelectric dams. Nevertheless, our electricity rates are set by the Public Services Authority (ASEP) on the basis of the price of fuel to produce the most expensive power on the market, that generated by oil-burning plants. Although petroleum prices have fallen more than two-thirds from their recent highs as a result of the global financial crisis, we won't see that reflected in our electricity bills until January, as Panama's electric rates are adjusted twice per year. The January adjustment will almost certainly be substantially downward but at this point we don't know by how much. A lot of households that didn't consume much electricity had been receiving a government subsidy and thus won't see as steep a decline in their bills as the oil price has dropped. The real question is the extent to which lower electricity costs may or may not be passed on by supermarkets and other businesses that passed on their higher energy costs to their customers. Economists in both the public and private sectors are not expecting Panama's overall inflation rate to go down before the end of the year.

S&P won't rate RP bonds investment grade soon
The Standard & Poor's bond rating service likes Panama's government bonds better than those of most other Latin American countries, but its rating is just below investment grade and the company doesn't expect the risk on Panama's sovereign debt to go down in the next year. Panama's public debt is at a record level in absolute terms, although as a percentage of the Gross Domestic Product it has actually declined during the Torrijos administration. However, the government is on a major spending binge to get the PRD re-elected next year and has a bunch of large construction projects going at once, the main one being the Panama Canal expansion. S&P thinks that Panama doesn't manage its public budget as well as it should, has weak public institutions and faces daunting unmet social needs, all of which make our public debt riskier. The company doesn't expect those factors to change in the next year or two. Only four Latin American countries --- Chile, Peru, Brazil and Mexico --- issue government bonds that S&P rates as investment grade.

IDB loan for Atlantic side electric lines
The Inter-American Development Bank is loaning the state-owned ETESA power line company up to $12.5 million to extend and improve power lines in rural Colon and Bocas del Toro provinces. The idea is to ultimately have a line that connects Colon and Bocas provinces, along with the remote Caribbean littoral of Veraguas that lies between them.

Got your papers in before the law changed?
Did you apply for a visa or some other document from Migracion before the law changed on August 26, and have you still not received it? Tough luck. To get your visa or other permit Migra is going to charge you the higher price set forth in the new law rather than the one that was in effect when you applied. The biggest hit in the new fees for a lot of people will be the $500 deposit required when one comes into the country on a tourist visa and applies for a residential visa. If the applicant doesn't get his or her papers in order within two months, then this deposit will be forfeited.

School curriculum changes off the table
The teachers' unions are not too fond of the current administration and have historically been suspicious of the reforms that politicians would impose on the schools, and have long been making militant noises about fighting the Torrijos administration over curriculum changes. Last year at about this time the Ministry of Education issued two decrees that would have all but eliminated teaching of the arts and physical education in the schools, and drastically reduced instruction in history. Those ideas elicited opposition from within the governing Democratic Revolutionary Party, and at about the same time the ministry's top leadership imploded in a series of scandals. The new minister, Salvador Rodríguez, had to concentrate on school buildings that were unfit for use and cleaning house after revelations of massive embezzlement and bogus contracts, and only afterwards was he able to turn his attention to curriculum. Now it turns out that the inter-agency committee he set up to study the matter has not yet reported, the school year is approaching its end and the Torrijos administration leaves office next July. Thus Rodríguez has announced that it will be another year, and another administration, before the school curriculum can be changed.

23.1% more European tourists
The Panama Tourism Authority reports that during the first nine months of 2008 we saw the arrival of 23.1 percent more visitors from European countries than in the same nine months of 2007. Spaniards and Italians led the influx, followed by tourists from France, the UK and Germany.

23.1% make less than minimum wage
For a country with such a large percentage of its work force in the informal sector, it should not be a big surprise. For the record, however, the Economic Commission for Latin America and the Caribbean (CEPAL) reports that 23.1 percent of Panamanian workers receive less than the minimum wage for their labor. The figures are based on CEPAL's household surveys, which are conducted throughout the countries of the region.

Mingthoy stepping down from Carnival post
The First Lady's special projects director, Mingthoy Giro, has told El Siglo that she won't be running Panama City's Carnival celebrations in 2009, as she has the past several years. As she is at the center of the stolen statues scandal --- her office having the key to the store room where the 35 tons of bronze were cut up and carted away --- Giro said that she didn't want to try to run Carnival while many people would be interested in that subject instead.

Problem with maritime treaty ratification
A 2006 United Nations Convention on Maritime Labor ran into problems on second reading at the National Assembly on October 30. It wasn't a matter of anti-labor or anti-UN sentiment in the legislature's chamber. It was a matter of only 30 of the 78 legislators bothering to show up for work that day. To approve a treaty two-thirds of the elected legislators must vote to ratify. Those in attendance did vote for the treaty but that wasn't enough. It's not clear what the government will do next about the treaty, the lack of Panama's adhesion to which might affect the way that some countries treat Panamanian-registry ships.

Bomberos may strike for torchlight parade
The annual Bomberos' Torchlight Parade on Via España and Avenida Central is in doubt this year, as band members are calling for a strike in the acrimonious dispute between the regular firefighters and the Torrijos administration. The government promised the bomberos pay raises in 2006 but has never implemented them. Add to that discontent over obsolete and in many cases faulty equipment and the government's plan to put the Cuerpo de Bomberos, which has always been an independent and mostly self-governing institution, under the Ministry of Government and Justice's control.

University union appeals to ILO
The University of Panama Employees Association (ASEUPA) is appealing to the International Labor Organization (ILO), a United Nations agency, over the Ministry of Labor Development's refusal to recognize the union's legal status. The government, despite ample contrary precedents for the recognition of public sector unions, says its refusal is because the workers in that union are public employees. What it's about is that the union is not particularly friendly to the ruling Democratic Revolutionary Party (PRD). Panama is a signatory to international treaties that give public employees the right to organize unions and bargain collectively.

Coronado gets San Fernando Clinic
Coronado has a new private health care facility, the Clinica San Fernando Coronado, an outpost of the private Panama City hospital. The facility, which recently opened, has an emergency room, outpatient facilities, dental clinic, laboratory, pharmacy and imaging department that includes CAT scans, ultrasound and fluoroscopes as well as x-ray machines. It's part of a major economic boom that's making Coronado the commercial center for the Panama Oeste beach communities.

HIMSA health care model officially a failure
The health care privatization model that the Pérez Balladares administration adopted for San Miguelito in 1998 is finally being scrapped. Hospital San Miguel Arcangel (HISMA) on Tumba Muerto was run by a government-controlled private foundation and contracted various private companies to provide the medical services offered there. But the contractors didn't get paid on time --- or sometimes at all --- and most of them pulled out. Now Health Minister Rosario Turner says that at the end of the year the old system will be abolished. It's not yet clear what the new arrangement will be, but a good bet is that it will be theoretically under a private foundation but in reality run by the Ministry of Health, in a fashion similar to Panama City's Hospital Santo Tomas.

Medicine prices going up
The Ministry of Health says that the prices it's having to pay to obtain many of the basic medications it buys from wholesalers and distributes to public health care system patients are going up 10 to 30 percent, with the biggest increases in drugs used to treat chronic illnesses. The production of medicine has been completely privatized in Panama since the Torrijios administration poisoned hundreds of people with tainted cough syrup and then closed down the state-owned lab where it was mixed. Although Seguro Social and Ministry of Health patients theoretically get their medications free, the public pharmacies often run out of certain drugs, which must then be purchased at market prices at private pharmacies if they are to be had at all.

Garbage pickers vaccinated
The government, fearing a possible epidemic, has vaccinated some 700 people who rummage through Panama City's Cerro Patacon garbage dump looking for things to recycle for a living. The "pepenadores" got shots for hepatitis, tetanus, influenza and other maladies. A Spanish company has won a contract with the city to take over the management of Cerro Patacon and begin a recycling project there, which will likely mean that most of these people will have to find another way to survive, but may become a source of regular employment for some of them.

No chemicals for DNA tests
The Torrijos administration has handed the nation's rapists and deadbeat dads a default victory by its failure to properly fund the Institute of Legal Medicine. The nation's forensics lab, whose funds were cut to prevent the documentation of the death toll in the poisoned cough syrup scandal, has also run out of chemicals to do DNA tests. La Estrella reports that this leaves a backlog of some 1,200 paternity tests and the processing of DNA evidence in 2,500 criminal cases.

Super Xtra settles
The Super Xtra supermarket chain has reached an out-of-court settlement with the families of two workers who were killed and several other employees who were injured by sewer gases from the septic tank at its 24 de Diciembre store earlier this year. The victims and their representatives have withdrawn their criminal negligence complaints against the company as part of the settlement, but the supermarket chain was hit with administrative fines for violating various labor and health regulations.

Anti-mining groups vow to fight Petaquilla copper mine
On November 12 an alliance of farmers, environmentalists and community groups picketed the Canadian Embassy to press their continued demand for an end to the Petaquilla copper mining project. After promoter Richard Fifer split Petaquilla between one company that's going ahead --- without a permit --- with the El Molejon open pit gold mine and Minera Panama (the former Petaquilla Copper), which has a much larger concession in northern Cocle and western Colon province, the Canadian-based Inmet mining company took over Petaquilla Copper by way of a hostile bid. Although Inmet doesn't share Fifer's reputation for political corruption as former governor of Cocle province or the opprobrium for the lawless gold mine, the protesters still say that copper mining would be an environmental disaster for the area and would deprive local people of clean water, fisheries and other natural resources upon which their way of life depends. Inmet says it will continue to pursue the permits it needs to legally develop the copper project.

Petaquilla Minerals stock prices over the past year

Fifer's mining stock falls through the floor
A year ago it was trading for more than $3 per share, and now its price is below 50¢. A small part of that is a decline in gold prices, but a more important cause for the drop is the international reputation of a gold mining operation that's defying all environmental laws and yet still keeps putting back the date that it claims that it will begin large-scale production. Essentially investors around the world have decided that the El Molejon gold mine is neither legally nor politically sustainable, and that promoter Richard Fifer is not to be trusted with other people's money. The latest indication of that? La Prensa reports that Petaquilla Minerals, which is what's left of Fifer's mining enterprise after the takeover of the copper project and is the corporate parent to Petaquilla Gold, hasn't posted the $3 million bond that its contract with the Panamanian government requires in order to take care of environmental damage claims.

Cell phone numbers not portable until 2010
One of the promises made when the government granted two new cell phone concessions (one of which was won by Mexican billionaire Carlos Slim, the other one going to Irish-based Digicel) was that cell phone numbers would become the property of those who own them and thus that people might put time from any cell phone company's cards into his or her phone and use it. But the Public Services Authority (ASEP) has delayed the implementation of so-called "portability" of cell phone numbers until 2010.

More controversy over Cuban light bulbs
The government has placed a large order for fluorescent light bulbs made in Cuba, so as to save on energy consumption by replacing the incandescent bulbs that use more electricity. However, the Panamanian Society of Engineers and Architects has warned that these particular bulbs have already caused five fires and present a risk of catching fire that other energy saving bulbs don't. The government dismisses the group's complaint and says that the taxpayers will save a lot of money by using the bulbs.

Four major infrastructure-related blockades in one day
Blocking the road about grievances with the government is an ordinary part of Panamanian political culture. To what extent, how and by whom the roads get blocked are the more important questions. Lately there have been a lot of blockages over dysfunctional public infrastructures, most often roads or water systems. On October 28 there were four major blockages. The Trans-Isthmian Highway was blocked by people in Chilibre and in San Juan de Colon by people annoyed by the water supplies to their communities being interrupted. In Tinajitas, people blocked the main roads to demand a restoration of road access to their community, which had been cut off by the Ministry of Public Works as part of the Corredor Norte toll road extension. In Baru, people blocked the Pan-American Highway to demand repairs in the roads in and around Chiriqui's banana growing area.

Chame mayor sells city land to his brother
Actually, "sale" might not be the right word for the transaction. La Estrella has revealed that Chame's Mayor Euclídes Mayorga Lorenzo has been selling off city land to a few people at bargain prices. As in, for example, a 1,491-square meter lot near Chame Airport in Bejuco to his brother Osvaldo for 25¢ per square meter. Anyone else who buys comparable land in the area would expect to pay $20 to $25 per square meter.

Isla Viveros developers want landfill for runway
The developers of the Isla Viveros residential and resort project, who include the Colombian Gustavo De La Cruz (who issued death threats against union workers in La Prensa), the Frenchman Andre Beladina (convicted of embezzlement from a Belgian bank and subsequently disbarred), and PRD legislator Héctor Alemán (who was President Torrijos's 2004 campaign manager and is also running Balbina Herrera's presidential campaign), have another argument with environmentalists. The development, which has been fined for deforestation and destruction of archaeological sites, now wants to extend a runway out from Viveros Island the Perlas Archipelago into the Gulf of Panama to allow jets to land there. However, environmental groups say that the runway would jut into a channel through which humpback whales migrate.

Also in this section:
Labor Ministry official faces prosecution for favoring Isla Viveros company union
No bids on Noriega houses
Cinta Costera progresses
Antenna rule changes, protests
Canal retirees feted
The Panama News download numbers
Holiday line at the Panama Canal
Business & Economy Briefs

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