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Volume 17, Number 4
March 27, 2011
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economy

Also in this section:
Oil price spike sparks bus woes
Micro-business
French-Panamanian tax data sharing talks break down
Mining talks between legislators, indigenous and farmer leaders go slowly
WikiLeaks: Martinelli has threatened Panama's reputation as a good place to invest
Barro Blanco hydroelectric project sparks protests
US family farmers don't get benefit of high prices
An alternative energy future with today's technology
New World Development Report repackages old ideas
Brazil, Argentina and Colombia Lead Biofuel Production in the Region
Airport cost overruns and "off the books" budgeting
Inmet-Lundin merger dead, Panamanian regulatory decision blamed
Combination blows to Rio Hato beach communities
How do you say that in Babylonian?
Strip mine reportedly affected by ruling on a power plant
US - Latin America and Caribbean economics and trade (PDF, a CEPAL report)


Many things that used to be in a Business & Economy Briefs feature of the website have now migrated to our constantly updated Facebook page


Gas mask protests --- again --- at Playa Blanca

Garbage dumping and burning resumes, former Nikki Beach goes downscale, airport noise coming
Whither Rio Hato property values?
by Eric Jackson

Most likely, people who have invested in real estate at Farallon, Playa Blanca and what was sold as Nikki Beach will see the value of their holdings continue in their doldrums. The mayor of Anton, the governor of Cocle and the tourism minister may have made promises to developers and residents; the developers of what was to have been Nikki Beach may have made some glowing sales representations; and the government may have unveiled plans --- but reality has been undermining these air castles. There are some grounds for longer-term hope, but things look bad now and the future prospects are neither certain nor necessarily positive.

Smoldering garbage

The worst of it in the short run --- short in terms of immediate sales prospects and perhaps in term of shortened lives --- is the resumption of garbage burning at the old Anton municipal dump, along the road to Playa Blanca. The stench of rotting garbage and burning plastic puts conditions at the nearby Playa Blanca and former Nikki Beach developments onto a continuum between unpleasant and unbearable, and those who would like to cut their losses and sell are finding it nearly impossible to find buyers. When the wind blows out of the west, residents at Playa Blanca and the former Nikki Beach get a break but people at Decameron, a mile or so away, get to inhale the acrid smoke.

Promises had been made to relocate the Anton dump and a start had been made on that project, but there have been legal and political problems with the proposed new dump site. Neither the national nor municipal governments were providing either the budget or the trained personnel to do anything much more than move the nuisance from the entrance to Playa Blanca to another neighborhood to the northwest. The move had begun but was stalled, and now the garbage trucks are back at Playa Blanca and the burning has resumed.

Don't look for the anti-environmental Martinelli administration to resolve the problem very soon. Studying situations and planning things in light of what is learned is anathema to their corporate culture. They never bother to consult with anyone about anything. In light of these work habits, the probability of national government help for replacing the dump with anything environmentally or politically viable --- like a sanitary landfill that is recognizable as such by international standards --- is low in the short term.

Downscaling what was Nikki Beach

A Sunwing exclusivity, the Nikki Beach Resort, in Playa Blanca, Panama, is a brand new resort, combining chic, contemporary style with sophistication and VIP services. Overlooking the pristine white sand beaches of Panama’s Pacific Coast, the Nikki Beach resort offers 230 tastefully appointed deluxe rooms and one bedroom suites, for the ultimate in comfort and pampering. With its various dining options and luxury amenities, the Nikki Beach Resort is sure to please.

** Adult Oriented Property – not geared towards families & children **


Sunwing, the vertically integrated Canadian snowbird airline/travel agency and now hotel operator, now has an even closer relationship with the Galvez family's RG Hotels, owner of the place that got kicked out of the Nikki Beach franchise. It will bear the brand name of Sunwing's new hotel franchise, Royalton. As in, several steps downscale from the sort of place where one might encounter the likes of Paris Hilton.

Yes, the Galvez's Miami lawyers did issue a statement about how the Nikki Beach chain didn't deliver on what they promised and defamed the RG operation. The truth of the matter, from many sources, is that RG cut too many corners on construction materials and techniques, offered something less than five-star services and acquired a reputation in its customer/investor relations that the chain did not care to embrace.

RG, headed by Rugiere Galvez and with his daughter Maru Galvez as sales director and spokeswoman, is not entirely new to the hotel, resort and real estate business. Since the late 90s they have run the Bambito Casa Grande development in Chiriqui --- which is not related to the famous Bambito Resort, and which observers say is not particularly thriving. They also run the Club Playa beach club at the old Turicentro in San Carlos, which occcasionally throws the big party but on a day-by-day basis does not appear to attract enough business to be particularly profitable.

So how does RG get by? Somehow they do, and if it's attracting enough yeyes to throw a loud all-night beach party that annoys the neighbors, then maybe the magnetism of Maru Galvez's personality counts for something. On the global level, this sort of thing only confirms the suspicion that Panama's rabiblancos are a retarded and endangered excuse for a ruling class. But then, in this world there are actually people with a lot of money who would spend a big chunk of it on the remote possiblity of running into Charlie Sheen or Lindsay Lohan during a week at the beach. However, there are not enough of them who fail to discern the differences between one resort chain and another to make RG's new hotel and resort as valuable as a Nikki Beach franchise. People who bought into that venture because they believed that they were buying into Nikki Beach have received inferior goods and will probably not be made whole for their losses. There are threats of litigation, but this is Panama.

The airport

Once upon a time, there wasn't much traffic on the Pan-American Highway and a World War II-era military airstrip that crossed the highway near Farallon could operate with just a couple of gatekeepers along the road when aircraft were coming and going. The place was the scene of a minor if deadly battle during the 1989 US invasion and a related political fraud by the US Air Force.

Now the old airstrip is occasionally used for auto races that are popular with a certain oligarchic set, and although loud for some of the neighbors, always held in the daytime. However, the Martinelli administration plans to change the thing back to an airstrip --- an international airport, no less --- and spur the area's development.

The traffic issue? The plan is to build a tunnel by which the highway runs under the airstrip. Given the way that the Martinelli administration does things, it's a good bet that the geology and drainage issues have not been properly studied. Given enough money, any problems are amenable to solution.

What does this do to the area? It provides a convenient place from which to fly fresh seafood to points north, perhaps to the advantage of local fishers but more likely for the benefit of concerns like the Papadimitriu family business. It makes it cheaper and easier for the likes of Sunwing to bring in tourists by the planeload. There would be some airport jobs. Because garbage dumps attract vultures and seagulls, they are aviation hazards and the existence of an airport more or less dictates the removal of the garbage dump. If domestic commuter aviation is part of the picture, it would give the beach communities of Panama Oeste and Cocle a boost that would take away some of the remaining reasons for certain business and professional people to live in Panama City. RG and the fishing industry may find a measure of salvation in the reopened and upgraded airport. Depending on how busy the facility is, what kinds of planes come and go and the hours of operation, it could create an aviation noise issue. Decameron stands to be the most affected by this.

It would be a few years in gestation, but the reopening and upgrading of the old Rio Hato airstrip into an airport would on the whole be an economic boost for the area. From perspective of nearby property owners' concerns about the value of their real estate, the net effect is not so clear.











Also in this section:
Oil price spike sparks bus woes
Micro-business
French-Panamanian tax data sharing talks break down
Mining talks between legislators, indigenous and farmer leaders go slowly
WikiLeaks: Martinelli has threatened Panama's reputation as a good place to invest
Barro Blanco hydroelectric project sparks protests
US family farmers don't get benefit of high prices
An alternative energy future with today's technology
New World Development Report repackages old ideas
Brazil, Argentina and Colombia Lead Biofuel Production in the Region
Airport cost overruns and "off the books" budgeting
Inmet-Lundin merger dead, Panamanian regulatory decision blamed
Combination blows to Rio Hato beach communities
How do you say that in Babylonian?
Strip mine reportedly affected by ruling on a power plant
US - Latin America and Caribbean economics and trade (PDF, a CEPAL report)




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© 2011 by Eric Jackson
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