José Borrel.

The chairman of the European Parliament, José Borrell, recently visited Panama to discuss a future agreement between the European Union, the Central American countries and Panama. During his two-day stay, Borrell met with Panama’s president, Martín Torrijos and the president of the National Assembly, Elías Castillo, who discussed the expansion of the Panama Canal, the state of European investments on the Isthmus and trade issues. In recent years, Panama and the rest of Central American countries have accused the European Union of discriminatory practices trade in the banana between Latin America and the Old Continent.

This month, Panama’s Ministry of Economy and Finance started to auction property that once belonged to the former Panama Canal Zone, administered between 1995 and 2005 by the defunct Inter-Oceanic Region Authority (ARI). The first auction involves eight properties, in Arco Iris and Telfers Island (province of Colón) and in La Boca, Curundu, Cárdenas, Diablo, and Albrook, on the Pacific side of the Isthmus. The total value of the properties amounts to US$11 million.

The ministry publishes the public bid requirements for properties in the Panama Canal area every Friday in local newspapers. The next public bid will take place August 24.

In 1994, the Panamanian government created the Inter-Oceanic Authority as a semi-autonomous entity designed to manage the hundreds of thousands of hectares of forests, residential areas, recreational facilities, ports and public works that were systematically being transferred from U.S. to Panamanian control, as agreed in the 1977 Panama Canal Treaties.

A restored house in Albrook. There are still thousands of hectares available in the former Canal Zone.

Thanks to a strong promotional campaign by ARI officials, a number of international firms showed interest in investing in Panama during the mid-1990’s –a time of great optimism in the country’s transport, manufacturing and tourism industry. Local companies also successfully transformed the once austere U.S. military residential communities into landscaped suburbs for the middle and upper classes. However, a number of situations, including the world-wide recession of the early 2000’s forced many international firms to abandon their projects, leaving thousands of hectares without official ownership at the time of ARI’s expiration date on December 31, 2005.

With the strong recovery of Panama’s economy in the last four years, there is a renewed interest in eco-tourism and real estate projects in the Canal area as a result of a boom sparked by the arrival of thousands of second-home buyers and retirees from northern countries.

After the expiration of ARI, the Ministry of Economy and Finance has allocated a number of properties to a handful of government institutions and nature conservation agencies. The entity currently managers 59,300 hectares, of which 46,100 are expected to be incorporated into the country’s protected areas.

The president of the Panama Chamber of Tourism (CAMTUR), Jaime Campusano, and the Deputy Manager of the Panama Tourism Board (IPAT), Carl Fredrik Nordstrom, signed an agreement earlier this month by which IPAT agrees to fund a number of personnel training programs organized by CAMTUR –the largest, private-sector organization of Panama’s tourist industry.

"The establishment of nine labor training programs will help us to be more competitive and efficient in customer service and other areas related to industry," said Mr. Campusano of CAMTUR.

Panama’s tourist industry generated 11,743 direct jobs in 2005, which represents an increase of 6,943 jobs compared to 2004.