Business & Economy Briefs

Business & Economy Briefs

Panama moves to implement marine safety pact

Panama, which has the world's largest ship registry --- more than 8,000 vessels flying our flag --- has hired Absolute Maritime Tracking Services Incorporated (AMTS) for $11.2 million to implement the Long Range Identification and Tracking of ships (LRIT) program called for in the International Convention on Safety of Life at Sea (SOLAS). The LRIT system will have all Panamanian-flag vessels automatically logging in their positions four times per day. The system is useful in the case of accidents and pirate attacks, but the big push for it came from the United States in the wake of the September 11, 2001 attacks by al Qaeda, due to concerns that terrorists might float a ship bomb into a major US port. The standard was adopted by the International Maritime Organization in May of 2006 under a provision that allows the organization to update SOLAS regulations, and Panama is the first major maritime registry to fully implement it.

High prices trump low unemployment in public eye

The Unimer polling company, in a survey done for La Prensa between January 2 and 5, found that 60.6 percent of those responding said that the economy had become worse in the past year. The figures are not yet in, but in 2008 if the Gross Domestic Product growth missed double digits, it only barely missed them, which would be less than 2007's phenomenal growth but still an outstanding performance. Likewise unemployment statistics are politically manipulated and not as systematically compiled as a lot of economists would like them to be, but by all accounts unemployment was lower in 2008 than it has been in many decades. However, by the government's estimate food prices rose 14.9 percent last year and few working people saw wage increases that came close to matching that. For many of those still unemployed, inflation meant hunger. Maybe because of news of the global economic downturn --- which tends to lag behind in a temporal sense in Panama, due to the lead times involved in international shipping and commerce --- by a 38.8 percent to 21.5 percent plurality Panamanians expected the economy to get worse rather than better in 2009. It adds up to a political problem for the ruling Democratic Revolutionary Party and so far this year more labor disputes than usual.

More than 80 percent make less than $600

Yes, in some of those English-language email discussion groups they will tell you that you can't live on that kind of money. Well, maybe not in a transplanted North American lifestyle, but according to the Comptroller General, 82.1 percent of Panamanian workers make less than $600 per month and nearly one-third (31.8 percent) make between $250 and $399 per month. There are all sorts of lifestyle issues --- extended rather than nuclear families, not having a car or air conditioning, eating local foods --- that go along with living in Panama on such incomes. However, a sharp rise in the cost of living has made things difficult for Panamanian working families and their discomfort is being manifested in a number of ways.

Torrijos signs Eurobonds law

Balbina Herrera's brother, who lost Panama its preferential import duties from the European Union by his failure to file the proper papers to extend them, still has his job in Brussels --- there has never been any accountability or expectation of service from the party hacks and VIP relatives that Martín has put on the public payroll. But have no fear. The president has come through with a plan to have the taxpayers make up for tens of millions of dollars in extra duties on Panamanian agricultural exports to Europe: on January 21 he signed legislation that will create a system of "Eurobonds" that will reimburse Panamanian exporters for the extra expense. Not budgeted, however, will be the extra legal expenses and other possible costs that are likely to arise, as the Eurobonds violate World Trade Organization rules and will likely be challenged by rival exporting countries.

Allied charities join Lucom fight

The Sisters of Mercy, the SOS villages, the San Jose de Malambo Orphanage, Nutrehogar, the Ciudad de Niño and the Fundacion Pro Niños de Darien have joined together to form the Fundacion de Apoyo a los Niños Pobres de Panama. This was done in anticipation that Hilda Piza (viuda de Lucom, and before that de Arias) and her children will lose their challenge to the Wilson Lucom will, which is now pending in the Supreme Court. Lucom, a very wealthy man, left millions to his widow but the large residue of his estate to the poor children of Panama. Piza and especially her children by a previous marriage --- most notably Gilberto Arias of EPASA, the company that owns La Critica and El Panama America --- have challenged the will and, largely through attorney Héctor Infante, have fought vicious legal battles in Panama and the United States. These have concentrated on Richard Lehman, the Florida attorney appointed by Lucom as his will's executor, against whom bogus murder charges were brought, groundless arrest warrants were issued and an arrest order on a warrant that didn't exist was put into INTERPOL's international database. The case has become an emblem of corruption with impunity in the Panamanian legal system. The Supreme Court recently slapped down a detention order that Infante obtained against Lehman and the contest on the will itself is now pending before the court. The creation of the charitable alliance distances Lehman from the controversy, as the Piza / Arias family is basing their challenge on the supposition that he's a crook who's out to loot the fortune. Now it would be the charities rather than Lehman in charge of how the bequest is spent. Sister Lourdes Reiss of the San Jose de Malambo Orphanage heads the new foundation and has expressed confidence to the competitors of the Arias family's newspapers that the Lucom bequest will be upheld in court.

Bomberos get extra $40 per month

After months of strife and government claims that it could not afford to give full-time firefighters a raise, the government has announced that the bomberos will get a $40 per month pay increase, retroactive to the beginning of January. Other grievances in the fire department, about such things as obsolete, broken down or missing equipment, have been referred to a committee so won't be dealt with before the Torrijos administration leaves office unless the protesting bomberos press the issue.

Minister's family gets away with mangrove destruction

It's illegal to destroy the mangrove forests along Panama's coasts. In fact, it's illegal for the government to sell these to private individuals or companies. Nevertheless, in 2006 Housing Minister Gabriel Diez and his family's company, Desarrollo Turístico San Carlos SA, was sold a mangrove forest on the beach in San Carlos and the mangroves were destroyed. The Centro de Incidencia Ambiental (CIAM) and a couple of neighbors filed a complaint with the Aquatic Resources Authority of Panama (ARAP) --- much as had been done a few years before when Diez's brother bought an adjacent lot of mangroves and razed the forest, for which act he was fined. This time, however, ARAP Director General Bertha Morella absolved the Diez family and their company, holding that the mangroves were destroyed but the company --- which has the area fenced off --- wasn't proven to have done it. The Diez family seeks to line Playa Ensenada with a series of 20-story high-rise condos built on the sand.

Highway blocked over Santa Clara turf battle

A long-standing dispute between many people who live in Santa Clara and Sea Cliff owner Richard Crucet led to a blockade on the Pan-American Highway on January 20. Crucet claims to own and exercises the alleged right to block the access to the beach through Sea Cliff, and, the protesters say, in the course of asserting this claim (which has been the subject of years of litigation), he pulled a pistol on one Zaira Rodríguez and struck her with it. The protesters demanded that Superior Court magistrate Delia Carrizo come to resolve the issue, as the dispute has been languishing in the circuit court below her for some five years without a judgment having been issued. That didn't happen and the police came to disperse the protesters --- but not to arrest Crucet for assault. Eventually the mayor of Anton came, and said that he'd talk to the governor of Cocle about the matter. That worked to end the three-hour blockade. By and large, the beaches are public property and people have the right to cross private property to get to them if there is no other public access. The Crucet family is part of a tiny group in Santa Clara that's attempting to privatize the beach there by control over access to it. As such undertakings violate the letter of the Panamanian constitution and laws, they generally have to rely on improper actions by judges and other public officials to get away with it.

San Miguelito hospital workers block Transistmica

Metro area drivers have become used to traffic snarls from multiple sources, but particularly because of street blockades thrown up as a part of a Seguro Social clerical workers' strike that lasted 15 days until an accord was reached on January 15. So on January 21 it wasn't the clerical workers who were blocking the Transistmica in San Miguelito. It was a group of workers at the Hospital Integrado San Miguel Arcangel (HISMA), which as of January 1 passed from a quasi-public foundation and private service contractors scheme to the Ministry of Health. The latter is attempting to renege on debts owing to the hospital workers, taking the position that they must look to the insolvent Ministry of Health-controlled foundation, rather than the government, for what is owed to them. The response was a half-hour blockade on one of the nation's principal traffic arteries. The five-week doctors' strike in late 2006 was, in addition to pay and benefits issues, about the physicians' objections to the HISMA foundation model that the Torrijos administration wanted to impose on the entire public health care system. Over the course of 2008 unpaid health service companies ended their relationships with HISMA, forcing the Ministry of Health to take over at the hospital at the end of the year.

Cafeteria workers' strike declared illegal

When the Social Security Fund (CSS) clerical workers walked off the job at the end of December, they were following the employees of the cafeteria at the Arnulfo Arias Hospital Complex, who without a recognized union walked off the job a few days earlier to demand more pay and better working conditions. When the clericals settled their labor dispute, the cafeteria workers were still on strike. After a month of the strike, the Torrijos administration, which has refused to bargain with the workers, had the Ministry of Labor Development declare the work stoppage illegal. This would be a prelude to a mass firing. However, the workers appealed the decree to the courts. In general, during the Torrijos administration the ministry has delayed or denied certification to unions not affiliated with pro-PRD federations or controlled by companies rather than workers.

"Inequality traps"

The Panamanian education system is in a "profound crisis" because it has been rigged with "inequality traps" designed to exclude young people from the poorer classes from such job opportunities as there are in this country. So says a report by the National Education Council (CONACED), which included recommendations for the Torrijos administration. However, there is no money in the national budget to carry out any such recommendations this year, and this time next year there will be a different administration in power.

What an opportunity

The "Red de Opportunidades" (Opportunity Net) program wherein President Torrijos pays $50 per month to destitute families that keep their kids in school, with the president often personally handing out the money to be duly photographed, creates some wonderful opportunities. According to La Prensa, including for at least 10 spouses of officials who have jobs with the programs. Now having a government job makes one too affluent to qualify for the program, but having a spouse administering the program makes one able to bend the rules to get on the gravy train. The newspaper also found dozens of people improperly collecting multiple payments, and other abuses.

Panama-Nicaragua free trade

We are not the biggest of trading partners, but to the extent that Panama and Nicaragua do conduct business with one another, nearly 90 percent of all merchandise passing one way or the other will do so without any import duties. The free trade pact that the two countries signed on January 15 will, if ratified as expected, be one more step in the process of integrating Panama's economy with those of the Central American countries.

RP-flag fishing boats on US blacklist

For the most part, it's not an issue of Panamanian-owned fishing vessels, or those with Panamanian crews. However, the United States has placed Panamanian-registry fishing boats on a blacklist because except inside Panamanian waters Panamanian-flag vessels are in effect not regulated as to the methods they use and are frequently busted for illegal fishing. Fishing craft from France, Italy, Libya, Tunisia and China are also on the blacklist, and the Obama administration may impose sanctions such as prohibiting the fishing boats flying under these countries' flags from entering US waters or the importation into the United States of seafood caught by such vessels. World Trade Organization rules may limit the sanctions that the United States can impose, however, as in the past it has ruled that certain fishing rules amount to improper non-tariff trade barriers.

Taiwan treats Panama to a helicopter

The government of Taiwan, usually Panama's most generous foreign aid donor, has bought an $8 million Bell 412 helicopter for this country's National Aeronaval Service.

Also in this section:
Bus fleet purchase delayed
Clerical strike paralyzes many Seguro Social functions
Cinta Costera progresses
Electric companies for sale
An extra added distraction
Business & Economy Briefs

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