Business & Economy Briefs

Business & Economy Briefs

Boquete Flower & Coffee Fair still on

The recent flooding along the Caldera River may have made a mess of the park upon which the Boquete Flower & Coffee Fair is centered but things have for the most part been cleaned up and repaired and in some cases replanted in town. The roads are open, albeit in some cases with makeshift repairs until more permanent works can be built. The big local tourism infrastructure loss is the Hotel Ladera, which may or may not be rebuilt on the site of its ruins. In any case, Boquete's big annual tourist event, the Flower & Coffee Fair is on for its scheduled January 8 start.

Electric bills going down

Panama's system of regulating electric bills, which was largely designed by the utility companies for their benefit, pegs the price of electricity to the price of oil, even though the great majority of our power is produced by hydroelectric dams that use no fuel. Now the price of oil is down and the ruling party that upheld that system is down in the polls, so adjustments are being made. The regular semi-annual January rate adjustment will be downward, but only about 20 to 25 percent instead of the steep drop in world oil prices. Added to that, however, President Torrijos has ordered an end to the fuel price surcharge that has been tacked onto consumers' bills, effective immediately. Many households --- those which use 500 kilowatts or less of electricity per month --- had their bills subsidized by the state so won't see such a dramatic drop. Businesses that didn't get the subsidy will be the big beneficiaries and we shall see, for example, whether supermarkets that were getting hammered by the cost of refrigeration will pass any of the savings on to consumers in the form of lower food prices.

Double billing by electric companies?

El Panama America reports an investigation by the Public Services Authority of unspecified electricity distribution companies, over allegations that some people who used less than 500 kilowatts of electricity and thus received a government subsidy to reduce their bills were nevertheless charged the full amount on the bills and the companies took the subsidy from the government too.

Local veggie prices up

The Chiriqui highlands are where much of Panama's fruit, vegetable and coffee production takes place, and the recent heavy rains, landslides and floods there have hit many of the area's farmers, either by destroying crops, affecting their harvesting or disrupting transportation of food products to the market. The problems are seen in Panama City supermarkets, above all in the form of higher vegetable prices.

Panama makes its debut as cruiser home port

December 7 was the day --- let us hope not infamously --- that Panama officially became a home port for cruise ships. Royal Caribbean's cruise ship Enchantment of the Seas was scheduled to set sail from Colon in the first cruise based in Panama. This means that Europeans, South Americans and Asians who don't want to or can't get visas to enter the United States to board a cruise ship there have a Caribbean cruise alternative. It's likely that some North Americans will also take advantage of the new opportunity for other reasons. For Panama it means tourists coming here and doing the things that visitors do and spending money ashore here before or after boarding the cruise ships. The deal between Panama and Royal Caribbean is just for this tourist season, after which it will be reviewed and may or may not continue. The folks over at the Tourism Authority are hoping that this will be a success that leads other cruise ship companies to designate Panama as a home port.

Canal expansion loans approved but not backed

The Torrijos Cabinet Council has approved some $2.3 billion in credits from four international lenders for the Panama Canal expansion project. Curiously, the cabinet's approval was needed, but the credits were approved without the government's formal endorsement. As in, no government collateral, and under the constitution the canal itself can't be encumbered. Canal revenues would surely be another matter, but in the event that the canal expansion is a financial fiasco the loans would likely be paid off from Panamanian public sources, whether canal revenues or some other government revenues, and it would be at the expense of other things that the government does.

Estimate passed without question or comment

At the Tuesday Talks lecture that was moved to a Wednesday, banker Moisés Cohen attracted a large crowd to Exedra Books, including a number of folks from the American Chamber of Commerce, to hear his take on the prospects of the Panamanian economy in general and its banking sector in particular in light of the world economic crisis. In passing, one of the things that Cohen said he thinks will keep the Panamanian economy going is the Panama Canal expansion project. Officially, the price tag on that public work is $5.3 billion, but Cohen estimated the cost at $7 billion and that didn't elicit any crowd reaction.

MV Camilla Desgagnes

A step toward canal competition

Desgagnes Transarctik is a Quebec-based shipping company used to navigating in icy waters, so it's just the sort of outfit that would do what some observers said couldn't be done this year --- it made the first commercial transit of the Northwest Passage with its super ice-class MV Camilla Desgagnes. The company has reserved the services of a Canadian Coast Guard icebreaker in case they were needed, but the ship didn't encounter any ice in the passage. Earlier this year we saw the first tourist circumnavigation of the Arctic Ocean. Shipping industry people in Panama say that it will be a few years before there will be regular competition with the Panama Canal via Arctic routes, but this development is expected. In anticipation of that time Canada has a fleet of the world's most modern and powerful icebreakers on order at a South Korean shipyard.

IMF paid in full

Panama has paid off what remained of its debt to the International Monetary Fund (IMF), which stood at about $1.3 million in September. Although that relationship between the nation and the international lender is ended for now, there are still some important ties. Panama has made commitments to the IMF with respect to its fiscal policies. Without such commitments other international lenders such as the Inter-American Development Bank and the World Bank tend to refuse or limit loans. Much of Latin America has cut its ties to the IMF and very pointedly refused to sign commitments to follow policies that the institution favors, like the privatization of public assets, reduced regulations of many sorts and the opening of national economies to more foreign ownership. But if that so-called neoliberal policy is unpopular in the rest of the region, it's favored by the current Panamanian administration and both of the two leading presidential candidates.

Dead Frog

The Supreme Court's administrative bench has struck down the National Environmental Authority's (ANAM's) approval of an environmental permit for the controversial Red Frog Beach development in Bocas del Toro. The project, which in its latest phase called for 734 residences, a four-story hotel, an activity center and a 250-vessel marina, would have affected the Isla Bastimentos National Marine Park. Originally it included a golf course whose runoff would have affected the underwater park's reefs, which ANAM rejected. The development has been the focus of local and international environmentalists' protests. The project's developers have also had labor trouble with the SUNTRACS construction workers' union. The case came to the court on a challenge to the environmental permit by the Centro de Incidencia Ambiental (CIAM) and marks the first time that the court has revoked an environmental permit that ANAM had already granted, in part because the Torrijos administration violated four international treaties in issuing the permit. As the case was decided by a unanimous three-member administrative bench rather than the full nine-member court, its intra-familial implications were muted: a high court over which Harley Mitchell Sr. presides slapped down the arguments made before it by ANAM attorney Harley Mitchell Jr.

"Unified" --- somewhat --- public working hours

The Panama City metro area is approaching total traffic gridlock and as a response the Torrijos administration has announced that from January 2 through April 2 public employees' work hours will be 7 a.m. through 3 p.m., and that includes the lunch hour. The post offices, Banco Nacional de Panama, Caja de Ahorros and Superintendencia de Bancos are not included in the new hours, according to the government's announcement? (But the schools and hospitals are? Probably not, but you know probably how complete and accurate the information provided to the public by the administration that's founded on the ad agency cartel has tended to be.)

Toll-free for 10 days in December

What's a party in power to do when falling behind in the polls? Give something away, of course. Thus President Torrijos decreed that on the Corredor Norte and the Corredor Sur there would be no tolls on December 6, 7, 8, 13, 14, 20, 21, 22, 23, 24 and 25. The stated reason for the move is the traffic snarl that has gripped the metro area and is part of some voters' disenchantment with the ruling Democratic Revolutionary Party. The government will subsidize the ICA construction company's loss on the Corredor Sur. The Corredor Norte? Well, that's under a court-ordered receivership that the government refuses to acknowledge, and it's most likely that Torrijos will pay the notorious Mexican-Panamanian businessman Máximo Haddad rather than the creditors he and his PYCSA construction company cheated (which was the reason for the receivership in the first place).

Celebration off, City Hall open for business

After complaints about the high cost of the celebration planned to inaugurate the new City Hall in the Edificio Hatillo between Avenida Cuba and Avenida Justo Arosemena, Panama City Mayor Juan Carlos Navarro called off the party and just opened the place for business on December 1. The remodeling continues upstairs, but you can now go to one place for almost all city payments, paperwork and permits on the ground floor and first floor of the building. Panameñista mayoral candidate Bosco Vallarino, who has investments in the collapsing upscale real estate construction business, has complained that the city should have bought space in a new building rather than remodel an old one, but the other mayoral hopefuls have muted their criticism of the move from the old offices on Avenida B, which were almost universally considered inadequate.

School year extended for some public schools

The Ministry of Education has agreed with the teachers' unions (the Teacher's Action Front or FAM organizations, rather than the PRD puppet United Teachers' Coordinator that doesn't actually represent much of a constituency) about extending the school year for public schools in 12 districts around the country. Most of these lost school days because the buildings were unfit for use at the beginning of the school year, and others which lost school days due to floods. Schools subject to the agreement will be open through December 31.

Move to ease beach front land grabs

With only seven months left in this administration for PRD politicians, their families and their friends to grab land along the public beaches, legislator Freidi Torres (PRD-Veraguas) is proposing to take away the power of Catastro, which is part of the Ministry of Economy and Finance, to regulate concessions of public land within 200 meters inland from the public beaches and hand that job over to Reforma Agraria, which is part of the Ministry of Agricultural Development. Over the years Reforma Agraria --- which has very little to do with agrarian reform anymore --- has earned a reputation for corruption that far surpasses that of Catastro, which is the government's surveying office.

German allegedly used Panama as a base for fraud

German citizen Günter Paul Hörberger is under investigation by the Ministry of Commerce & Industry --- but not local prosecutors or the National Securities Commission --- for using Panama as a base to swindle more than 600 European investors in his various companies out of more than $24 million. The main company used in the alleged scheme was EuroAmerica Finance Holding, and also named by European authorities were Glorus Credit Corporation, Contifinance, Glorus Trading, Inversiones Selectivas and Hornhill Ranch, and other companies registered in Paraguay and the Cayman Islands. Hörberger was promising 10 to 12 percent annual return on investments, but according pleaded that it lost $35 million investing in Glorus Credit Corporation, a Panamanian company that ws part of the Hörberger network. The National Securities Commission, which under the Torrijos administration has favored the use of Panama for pyramid schemes of all sorts, told La Prensa that Hörberger's companies are not licensed to sell securities here, but has not opened an investigation of the case. A number of people who say they were swindled have hired attorney Carlos Varela to file private civil and criminal charges in the case, which he has done. EuroAmerica Finance Holding continues to do business at an office on Via España. Hörberger, who remains at large in Panama, is denying through his attorneys that guaranteed returns on investment were part of the contracts that the investors signed. The EuroAmerica Finance Holding German-language website has been erased but partial copies of some of its previous versions can be pulled up using the Internet Archive's Wayback Machine. On some of those pages the "investor" button directs to a Glorus page, which comes up essentially stripped of information.

Buy NOW! Another fraud artist at work here

Where do they dredge up people like this? Well, Panama breeds them, and because it's so tolerant, attracts them from the four corners of the universe. If you run across a real estate business called Templar Panama, first know that you are dealing with one Gonzalo de la Guardia, who teamed up with one Donald K. Winner and one Kevin Bradley in the failed Panama Expat Center, an ersatz "community institution" whose undisclosed purpose was to steer newcomers to certain businesses. Dutch journalist Okke Ornstein's Bananama Republic has discovered that in Templar, de la Guardia has teamed up with a Canadian, Martin Roy Lamb, who was a telemarketing whiz involved in a scheme that operated under a variety of names including NAGG Holdings Ltd., Canada Prepaid Legal Services and BSI Premium Bonds, in both Canada and the USA --- until US and Canadian authorities shut it down. They would promise monthly returns of $5,000 to $12,000 on a $5,000 investment and sometimes take another bite out of the suckers who put their money down by credit card by extra charges without the knowledge (until they got their bills) of the card holders. Templar Panama is now making unauthorized use of the names of Australian actor Mel Gibson and Mexican billionaire Carlos Slim to promote land out in the boonies of southern Veraguas province. Buy from de la Guardia and Lamb and you'll be right next to Gibson's resort and Slim's marina, so the pitch goes. Except that Gibson has no resort, and Slim has no marina, in that area.