Business & Economy Briefs

Business & Economy Briefs

Tourism was up 11% last year

Rubén Blades can point to some good numbers for his performance in office. As in some 1,585,800 tourists coming here in 2008, which is about 11 percent more than in 2007. It's up a little more than 50 percent from 2004, the year in which he took over the old Panama Tourism Institute (IPAT), which has been superseded by the Panama Tourism Authority.

More visitors coming for Carnival

Based on hotel reservations and airplane tickets sold, Carnival organizers told El Siglo that they are expecting an increase of some 20 percent over last year's figures in people coming from abroad to partake of the festivities in Panama.

Bocas marina stalled

Right. Hold a public hearing about a controversial environmental permit during the holidays, with very little notice. Six Diamond, the promoter of the 435-vessel Harbor of America marina on Isla Colon's Saigon Bay was set for a December 29 hearing, but the previous day the word was leaked in La Prensa and environmentalists cried foul. The hearing was called off, with the National Environmental Authority (ANAM) claiming that the scheduling was not coordinated with the authority's provincial branch, and meanwhile the Panama Maritime Authority (AMP) complained that it needed permits from them before even starting on the environmental evaluation process and had failed to obtain these. So, is it a matter of a bureaucratic shakedown that negates any sense of legal security, or just some developers trying to pull a fast one? Take your pick --- the attempted hearing appears to have been a mockery of public participation, but the project has been under discussion for a long time. The wisdom of such a large development in an area where water, sewage treatment and other public infrastructures are already deficient is another question. Look for this proposal to come back, probably with the promoters armed with responses to many of the objections that have been raised.

Though better educated, women get 75¢ on the dollar

In recent years about three-quarters of those graduating from Panamanian universities have been women, but the International Labor Organization says that on average women in this country are only paid 75 percent of what men are paid. It's not only a matter of gender ghettos in the work force, but also of women who are doing the same jobs as men being paid less.

Electric rates down

As of January 1, electricity rates went down about four cents per kilowatt hour for those customers whose bills are not subsidized. That's a reduction of about 20 to 25 percent. The rates were raised according to the increase in petroleum prices (even though very little of our power is generated by burning oil), but the reduction doesn't reflect the steep drop in world oil prices.

Plans for five hydroelectric dams advance

The PRD is getting clobbered in the polls, and part of this is that in rural areas it's going ahead with plans to effectively privatize public water resources and displace communities by granting private hydroelectric dam concessions. Five more such projects, the Santa María, La Soledad, Gariché 2, Gariché 3 and La Laguna dams, have advanced a step in the bureaucratic process when just before Christmas the National Environmental Authority (ANAM) gave their promoters permission to begin environmental impact studies. The companies are hoping for 50-year concessions that would give them dibs on water resources that until now been public property. In these processes those whose homes and farms have been flooded out have a right to compensation --- which experience says may or may not be honored --- but those who depend on the water resources appropriated for their drinking water, to irrigate crops or for their farm animals to drink get nothing.

US-RP free trade likely to wait until after Panama votes

While business groups had been pushing for a quick congressional ratification of the US-Panama free trade pact by the 111th Congress, word from Washington is that the Obama administration doesn't want to deal with any treaty issues during its first 100 days in office. The derailing of Bill Richardson's nomination for Secretary of Commerce also delays consideration of the subject. When the 100 days are up, that would be on the eve of Panama's May 3 elections and it would be unusual for Washington to do something that might appear to be favoring one side, especially if it looks likely that the side that would appear favored is bound to lose. Thus, look for some moves in mid-year, with business lobbies pushing to ratify the deal as is and US labor unions and environmentalist groups urging the Obama administration to scrap the proposal and start new trade talks with the new Panamanian administration.

Ad agencies hit with minor fine

A $1,021,000 fine? Sounds steep until one realizes that it's divided among 16 companies that are part of the ad agency cartel created by the first lady's father. The ad cartel was fined for forcing Servicio de Monitoreo y Control de la Inversion Publicitaria, SA out of the business of measuring how many people see which ads, in favor of IBOPE. Essentially they decided to continue the rampant fraud against clients, wherein newspaper readerships and broadcast audiences are falsified and ad agencies place ads with media that suit the agencies rather than the clients. The Consumer Protection and Defense of Competition Authority imposed the fine for monopolistic practices after more than five years of litigation. There isn't any particular reason to believe that the monopolistic practices of the ad cartel and their accomplices in the mainstream media will end anytime soon.

How many ad agencies...?

BB&M is a Panamanian ad agency. The Torrijos administration has hired it, to the tune of $500,000, to advertise three million fluorescent light bulbs that it bought from a Cuban company. So does the government think that Panamanians need instructions in how to install these? font>

ICA funds sequestered

Back in 1996 the Mexican-based ICA construction consortium got a contract to build and run the Corredor Sur toll road, with the understanding that once the company recouped its costs for building the road, the government would get the rights to collect and keep the tolls. In other compensation, ICA got the former Paitilla Airport and the right to fill and develop adjacent waters. Now the government and ICA are having an argument about how much the company has made and thus what the government is owed, and as a result the nation's tax collection agency, the DGI, has seized $2 million from ICA's accounts. The company protests that it has paid all of its taxes and contractual obligations to the state and that the sequestration is abusive. Look for this to be litigated for some time to come.

So who are the doofuses who fell for Madoff?

The estimates --- all of which seem to be based on very partial information --- are that Bernard Madoff looted people or institutions in Panama to the tune of at least $23.5 million and maybe $100 million or more. The Banking Superintendent says that three Panamanian banks were taken --- but won't say which ones and says that none of them are likely to collapse as the result of the losses. The National Securities Commission says that seven Panamanian brokerage houses --- it won't say which ones --- got taken in the huge investment pyramid scam. Bear the institutional protection of incompetents in mind when considering the risks of investing your money in Panama.

Port activity expanded in 2008

The world economy may be collapsing, but the effect on Panama is delayed in many sectors. Measured by TEUs (20-foot containers), La Prensa reports that this country's ports moved some 14.8 percent more cargo in the first 11 months of 2008 than the same period in 2007. Most of this increase was due to a 10 percent hike in cargo going into and out of the Colon Free Zone.

Another canal dig contract

Constructora MECO, SA, the Panamanian subsidiary of a Costa Rican company, has been awarded a $ 36,659,852.28 contract for dry digging in the new channel to link the new Pacific side locks with Culebra Cut. The company will have to remove about eight million cubic meters of rock and dirt, including some from former firing ranges that's contaminated with unexploded ordnance. Part of the job will be taking down Cerro Paraiso and another part will be the construction of 2.5 kilometers of access roads. The company beat five other bidders.

Double tolls to Interior, no toll back

For the rest of the dry season drivers on the Arraijan - Chorrera Autopista will pay double the toll going westbound and no toll when heading east. The change, which is supposed to speed traffic flow, is scheduled to last through the end of March.

License plates going up

Panama City's representantes have approved a one-dollar increase in the price of automobile license plates. The measure has to be approved by the Municipal Treasury Committee and signed by the mayor, but those formalities are expected to happen. City Treasurer Mario Miranda says that the hike is not to raise more money for the city, but to cover increased costs of making the plates.

New Cerro Patacon dump rules

The city's privatization of the Cerro Patacon city dump management has brought some policy changes that will have substantial environmental consequences. Urbaser-Plotosa, the company that has been hired, started refusing to take medical wastes and industrial trash as of January 1. Under pressure from the government, the company relented on the medical waste issue and delayed implementation of a ban on sewage sludge from chicken and pig farms, but now many businesses have no legal place to get rid of their waste. Some companies will no doubt figure out ways to recycle their waste products or avoid generating them in the first place, but no doubt we will be seeing a lot more industrial waste along roadsides and in streams in the metro area.

School trimesters out

The PRD created the Teachers Unity Coordinator (CUM), a paper organization, so as to avoid meaningful negotiations with the unions of the Teachers Action Front (FAM) in 2006 contract negotiations. The Ministry of Education attempted to breathe some life into CUM by agreeing with them on a plan to change the public school schedule from a semester to trimester system starting with the 2009 school year. However, this plan has run aground because the FAM unions actually have memberships and could actually call a strike a few weeks before the May elections, and these unions objected to the plan. CUM issued a press release complaining that the government was only listening to the unions and not CUM.

Martín rents from Ricky Traad

There's this misunderstanding, apparently prompted by the US Drug Enforcement Agency's insistence, but it seems that the falling out between Martín Torrijos and Ricky Traad isn't total. Former "Vice Admiral" Ricardo Traad Porras, the PanCanal pilot whom the president chose to head the National Maritime Service, which was Panama's coast guard until recently merged into the National Aeronaval Service, is being held behind bars, originally on suspicion of stealing and selling a ton of cocaine and a shipload of scrap metal, but now on illicit enrichment and money laundering charges arising from essentially the same situation. But meanwhile, the Presidencia is renting a building near the Palacio de las Garzas from Traad, and has paid him more than $1 million in rent over four years. On top of that, the government's remodeling the building.