News

Isthmian Update

Some of the news in Panama

Canal Enlargement
It seems that the Panama Canal Authority (ACP) may have solved the problem of the unexploded weaponry which was left on firing ranges after the withdrawal of U.S. forces. The 60 million cubic meters of rock and earth from the excavations for the enlargement of the canal, the greater part to be taken from the work on the Pacific side, will be used "to reorganize" the old firing range of Nueva Emperador. Some 46 million cubic meters of material will be emptied out there.

It is interesting to note that the 60 million cubic meters represents a little less than a third of the material excavated during the building the Canal in 1914 by the Americans when 203 million cubic meters were removed.

The enlargement of the Canal will affect 1,866 hectares of vegetation, according to the environmental impact study for the third set of locks. Because of this, the Panama Canal Authority (ACP) will pay compensation of US$2.5 million to the National Environmental Authority (Anam) and will re-forest 1,000 hectares in different parts of the country, reported the manager of the Management and Environmental Monitoring of Anam, Daniel Muschett.

Sugar monopoly
The preliminary audience for judgment on alleged monopolistic practices of five sugar companies was held last week. The process will take place in the Eighth Court of Commerce, and will seek to determine if the businesses Azucarera Nacional, Santa Rosa and the sugar plantations, La Victoria, Alanje and La Estrella came to an agreement to control distribution in the market and agree on prices.

How many islands?
The newspaper "Panama America" revealed that Government authorities do not know the number of islands that have been given under concession by the Panamanian State to individuals or corporations. This is because registrations are made, on the basis of a "finca" (farm) number and a "folio" (sheet) number, without an explanation of whether it involves an island.

Cash laundering
The newspaper "El Siglo" reported that the former National Director of Narcotics and former Vice-minister of the Interior of Colombia, Juan Carlos Vives Menotti, laundered more than half a million dollars in Panama with money that he introduced in cash through the Tocumen International Airport.

The rice issue
The increase of US$0.15 for a pound of rice, is still having repercussions.

Members of the National Association of Millers (ANALMO) met last week in the headquarters of the Chamber of Commerce, Industries and Agriculture of Panama to analyze the situation. They invited representatives of the Catholic Church and other associations related to the agricultural sector to the meeting.

For two days, the employees of the Panama University carried out a peaceful protest against the high cost of the Basic Family Food Basket. claiming that the prices of rice and meat are "sky high".

Onions, too
Gonzalo Cambefort, director of the Institute of Agricultural Marketing (IMA), indicated that sadly some middlemen are again speculating with the price of onions during this Christmas season, when the consumption of onions and other products increases. Cambefort said that some agents are paying producers in Chiriquí US$28,00 a quintal then selling it in the market at US$45,00 a quintal.

Death of Cemis
The Colon Free Zone yesterday ended the contract of the Multimodal, Industrial and Services Center (CEMIS), because in the five years since the project was initiated they have not begun the work. The decision was taken under the rules that are established in the contract signed in 2001 between the San Lorenzo Consortium and the State.

Investment from Venezuela
The Venezuelan-Panamanian Integration chamber (Civenpa) says some 25,000 Venezuelans are evaluating options to invest in Panama.

US-Panama trade treaty--hot issue

President Martin Torrijos went to Washington for a second attempt to lobby for the ratification of the commercial promotion treaty formerly called the "Free Trade Agreement" between Panama and the U.S.A. but met with more resistance.

The president of the influential Finance Committee of the Senate, Max Baucus, told him that the election of Pedro Miguel Gonzalez, as the president of the National Assembly, who is in the U.S.A. accused of killing a Puerto Rican soldier shortly before the US invasion is a "serious case" that should be resolved before discussion of the treaty starts.

In other quarters, heavy support is being shown in favor of ratification of the treaty.

The US Secretary of State, Condoleezza Rice, said that the refusal by the US Congress to ratify the treaty with Peru, Colombia and Panama would signify one of "withdrawal" of her country from Latin America. In a speech at the Organization of American States (OAS), Rice appealed to the U.S. "national interest" in asking for the ratification of the pacts and emphasized that its refusal would send a negative sign to the entire continent.

The U.S. ambassador in Panama, Willian Eaton, said that he will travel from October 21 to 23 to Pennsylvania to seek support for ratification of the commercial pact between Panama and the U.S., and to educate American citizens on its benefits.

The New York Times commented: "Some legislators say that they have turned against the pact after the Panamanian National Assembly chose as its leader a man who is wanted in the United States for the murder, in 1992, of an American soldier. But the newspaper recommended that Congress approve the pact with Panama. "In general, the human rights record of Panama is good and this (the case of Gonzalez) should not block the agreement," it said.

The Chamber of Commerce, Industries and Agriculture of Panama has invested about $60,000 so far in lobbying for ratification of the treaty. They hired the consulting firm of Greenberg Traurig, directed by the former American negotiator Regina Vargo.

London and Regional presents master plan
The British group, London & Regional (L&R) Panama Inc., has given the Agency of the Special Economic Area Panama Pacific (AAEEPP) the master plan of preliminary development for Howard, the old American Air Force base on the Pacific. In the next eight years L&R will invest some US$405 million and another US$300 million in the 32 following years.

Product piracy
The percentage of product piracy in Panama runs at 74% according to the company Software Alliance (BSA). They launched the campaign "Do Not Risk Using Pirated Software". They want to find out which Panamanian businesses are using illegal software, Erick Lopez, legal representative of BSA in Panama said in an interview with "Critica".

Dial 911
A Commission of the National Assembly approved in principle the government Bill that creates a Unique Emergency System with the telephone number 911. Juan Hernandez, president of the commission, explained that the businesses that will give the fixed telephone and mobile service will coordinate with the commission to explain the way in which they will locate with precision the origin of calls, and then the debate will proceed.

Dirt roads
Dirt roads form almost 30% of Panama’s road system according to statistics of the Comptroller’s Office and many are impassable at certain times of year. Of a total of 11,983.92 kilometers of roads, only 824.89 have a concrete base or concrete surface.

Flights from Europe
The European airline, Air Caraibe, has declared its interest in opening a route from Paris to Panama. This was revealed at the tourism fair of Top Resa, in Deauville, France. The Panama Tourist Bureau has defined as one of its main objectives promoting new routes to give Panama more seats from Europe, "an important market", according to Carl Fredrik Nordstrom, assistant director of IPAT.

Mexican company involved in Los Faros
The Mexican company ICA announced that it will participate in the construction of the complex Los Faros de Panama (The Lighthouses of Panama), in the suburb of San Francisco, which will be the tallest tower of Latin America, 346 meters high and with 84 floors. ICA reported that it has signed a contract for US$25 million with the Panamanian firm Hogalia Panama, a subsidiary of the Spanish real estate group, Mall, to take charge of building the foundation "of the multiple use complex".

Renewable energy
The five month pilot project to make Panamanians aware of renewable energy sources will cost US$105,000. It will promote the generation of renewable energies, said Rosilena Lindo, of the Unit of Climate Change and Deserts of the Environmental Authority (ANAM). She said that the government sector could reduce their energy expenses by 14 per cent.

Canal threat "false alarm"
The Minister of Govenment and Justice, Daniel Delgado D., confirmed that six members of the State Security Council were sent to Central America to investigate a supposed terrorist threat against the Canal by people of Iranian origin in Nicaragua. The minister added that, for the moment, the case has been declared a "false alarm".

Torrijos in Europe
President Martin Torrijos has been travelling in Europe. He met the president of the Spanish Government, José Luis Rodriguez Zapatero, in the Palace of Moncloa to discuss the participation of Spanish businesses in the enlargement of the Panama Canal. Zapatero visited Panama last July 17 accompanied by the heads of Spanish construction companies interested in the many contracts that will be put out to bid.

Torrijos was received at a special audience by King Juan Carlos of Bourbon in the Palace of the Operetta, at both meetings Torrijos discussed bilateral political questions of the international agenda, and the agenda of the next Latin American Summit that will be held next month in Chile.

President Torrijos also went to Germany and talked to the prime minister Angela Merkel, according to the news agency DPA.

Banana troubles
The search for a solution to the financial crisis of the Multiple Services Cooperative of Port Armuelles (Coosemupar) seems to have failed. The negotiations between Chiquita Brands, the cooperative and the government were suspended after there was no agreement on the requested increase of US$1.15 on the price of a box of bananas.

Meanwhile representatives of the banana producing countries of Latin America and the United States agreed to "unite in their efforts to find a satisfactory solution" to the disagreement with the European Union over the tariffs for importing the fruit.

Watermelons prosper
Watermelons are having more luck. The Dutch company, Lehmann & Troost, signed a watermelon purchase contract worth of US$400,000 with producers of the region of Alanje in the province of Chiriqui. The contract stipulates the sale of 25 containers with 1,260 boxes of watermelon per container.

And the US supermarket chain Wal-Mart, the largest retail chain in the world, will receive its first shipment of watermelons from Panama from seeds certified by the company Seed Way, the largest U.S. company carrying out tests and providing seed varieties for supermarkets. Roberto Rivera, marketing manager of International Quality Foods of Panama, the business that markets the fruit, emphasized that this is a test by the large supermarket chains to buy the fruit on low contracts, setting an established price.

Shrimp catch up, price down
The export of shrimp this year is expected to reach US$80 million, US$30 million more that that of 2006. The prices on the international market have dropped and the US$20 a pound last year has dropped to $11 and $12.

U.S.A. bank offers U.S. mortgages for property purchased in Panama

For the first time in Panama’s history, a U.S.A. bank will be giving U.S. citizens and residents the opportunity to acquire US mortgages for property purchased in Panama!

Up until now, U.S. citizens and residents have had to either apply for a tedious local loan or pay cash (from their personal savings or equity line) when purchasing in Panama.

Local loans can be frustrating. Long application process, hidden fees, FECI, 65 year age limit, shorter terms, inability to deduct local bank interests from taxes and life insurance requirements are some of the features which differentiate a typical U.S. loan from a Panama bank loan.

The U.S. loans are typically 30 year terms, no age limit, no life insurance required, very competitive rates, fixed rates for specific terms and tax deductible payments.

Mortgage International Brokers (MIB) opened a "representation office" this week at the World Trade Center. They will be taking applications and processing them in the U.S. exactly as any U.S. loan would be processed.

This is very exciting news for U.S. citizens and residents planning to purchase a home, second home, apartments, condos, etc. in Panama.

The news was announced at ACOBIR’s (Association of Real Estate Agents) assembly last week. Real estate brokers are excited that they can finally count on a U.S. Bank to offer U.S. mortgages to their U.S. customers.

Contact Mr. Ernesto Garuolis of MIB at 205-1617 or at ernesto@mibpanama.com

Noriega battles against extradition

Ex-general, Manuel Antonio Noriega, although eligible for release on parole, is now back in the same U.S. cell that he has occupied for the past 17 years, as his lawyers battle to stop his extradition to France to serve a 10 year prison term in that country for money-laundering.

They argue that his treatment in the French penitentary system will be more severe than in the U.S. where he was treated as a prisoner of war and not a criminal. It has been widely speculated that there has been a deal of sorts between France, Panama and the U.S. to keep Noriega from returning to his native land---an idea vehemently denied by all countries concerned.

KLM - Copa alliance makes Tocumen a hub to Europe

Copa Airlines and KLM Royal Dutch Airlines have signed an alliance and shared code agreement which will allow passengers to travel between the Americas and Europe using the connections centers in Tocumen, Panama and Schiphol in Amsterdam.

The new KL757 designated, KLM Amsterdam-Panama flight will depart from Schiphol Airport, in Amsterdam on Wednesdays, Fridays and Sundays at 1:30 p.m. and will arrive at Tocumen International Airport in Panama City at 5:40 p.m. of the same day. The flight KL758 will leave Panama on Wednesdays, Fridays and Sundays at 7:35 p.m. arriving at Schiphol Airport, in Amsterdam at 1:10 p.m. the next day. The flights will start operating on March 30, 2008.

In Panama City’s Casco Viejo

Hotel Central to be restored

More than $20 million will be invested by a Spanish company, in the restoration of the historical building of the Hotel Central, located in the neighborhood of San Felipe, in the Old Quarter of Panama City.

The building will be transformed into a luxurious establishment, with 134 rooms. The hotel will be decorated in the style of its heyday in the late 1800s. In will have multi-use salons, two restaurants, a spa area with jacuzzi, Turkish baths, massage room, weights room, a swimming pool and a terrace bar in the roof top with views of the Panama Bay and Cerro Ancón.

The balconied facade of the Hotel Central.

The restoration work began on October 12. The Central Hotel operated for 132 years until its closure in 1997. The architectural style will be respected and its facade will be restored faithfully to its original design, said Mr. Valentin Monfort on behalf of the company, Central Hotel Investment, at a recent press conference.

In the hotel’s heyday and when the Casco Viejo was still the elite district of Panama’s ruling class, the Hotel Central was considered the most elegant in all the Americas.

Hewlett-Packard and Caterpillar to open regional centers here

Proctor & Gamble may be next

Hewlett-Packard and Caterpillar will open regional centers in Panama during the next few months. Also the possibility exists that Procter & Gamble, one of the biggest multinationals of the planet, will do the same.

The Vice-Minister for Foreign Commerce, Carmen Gisela Vergara confirmed that Proctor & Gamble is thinking about moving its regional center from Venezuela and Guatemala to Panama, with the subsequent transfer of nearly 270 executives, which will suggest a considerable investment. As yet spokesmen of the company have not made any comments.

The I.T. company Hewlett Packard (HP), which offers computer products and services announced that it will establish in Panama a global service center to complement their operations in Costa Rica, from March next year. It is estimated that by 2009 more than a thousand people will work in the center.

Another giant which is transferring its regional headquarters to Panama is Caterpillar Inc., which has a history of over 80 years in the manufacturing of machinery and mining. The company will invest $25 million to create a call and services center, a logistic center, and an analysis laboratory.

Martín Castillo, General Manager of Hewlett Packard for Central America and the Caribbean said that his company chose Panama, because it offers a logistic platform fundamental for the type of businesses they are planning to develop. While Tom Gales, Vice-President of Caterpillar in Latin America pointed out that Panama is the ideal place for investment because of its logistic position in relation to the other countries in the Americas.

Aeroperlas Regional first to get security certification

Aeroperlas Regional is the first domestic airline to receive security certification under the stricter new regulations imposed by Aeronautica Civil earlier this year. Evaluation included operational areas, pilots, ground personel, flight attendants, mechanics, training, quality control, ramps, cargo handling, airports.

The certificate was presented to Sr. Nestor Echevers, general manager of Aeroperlas Regional, by Captain Mario Motta, Director of Aviation Security and Licdo. Ricardo García de Paredes (Management Consultant).

Mr. Echevers stated that Aeroperlas has been offering first class service and security since 1969 and is proud to be the first domestic airline to comply with the much stricter security regulations.

Dolphin debate

The members of Panama's Marine Corridor will re-open the possibility of giving permission to the company Ocean Embassy to capture marine mammals in Panamanian waters. The company had proposed the establishment of a dolphinarium at San Carlos on the Pacific Coast. The new administrator of the Panama Aquatic Resources Authority, Reynaldo Pérez Guardia, has called a meeting to discuss the matter.

Focus Publications (Int.), S.A.