News

Isthmian Update

Some of the news in Panama

Heritage at risk
A delegation from the World Heritage Center of the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the World Conservation Union (IUCN) is in Panama at the request by environmental groups in the country to declare the La Amistad International Park (PILA), a heritage at risk.

Pilots needed
Copa Airlines signed a cooperation agreement with the National Institute of Training and Education for Human Development (INADEH) to boost the training of pilots in the country.

Mortgage Cap
There is pressure to raise the current ceiling of $65,000 on housing which qualifies for preferential interest rates for mortgages, since the costs of construction materials, land and skilled labor have increased. Mitsila Espino, executive director of the National Council for Promotion of Housing, noted that this entity has conducted studies showing that many families or people do not benefit from incentives. "We consider it of utmost urgency to increase the range or cap on preferential interest to at least US$85,000" she added.

Energy at home
The National Authority for Public Services (ASEP), has conducted studies to determine how cost-effective it would be for residential customers to install solar panels and produce and sell surplus energy.

Mega Port
Since a Singapor group withdrew plans for its development, the government has not decided how to continue with the concession for a mega port in the area of Farfán, said the Deputy Adminsitrator of the Panama Maritime Authority (AMP), Carlos Raúl Moreno. At its last meeting, the board of the AMP discussed the possibility of granting of concession contracts for the development of the project that has been promoted for more than three years.

Canal Finance
The maritime weekly "The Bulletin" reported that although the precise financing mechanism to be used for the Canal expansion has not yet been defined, it has been disclosed that the formula will consist of a mix of possibilities, including the emission of bonds in the local market to allow participation by investors in the country.

Green group in Chiriquí protests hydro projects

A group of environmentalists in the province of Chiriqui protested against the construction of hydroelectric projects and they complain that the National Environmental Authority (ANAM) is approving "fraudulent environmental impact studies". The protest took place in front of the office of the Governor of Chiriqui, and was focussed on the project called "Planet 1", on the David River, in the district of Dolega.

Cost of “family food basket” still rising

Early this year more increases have been reported in the basic family food basket. Of the eight food groups necessary for a family of 3.4 members, seven rose. The largest price increase was in vegetables (beans and lentils) 15.4%

In an offort to keep prices down, the government has gone into the distribution business with their own brand name "Compita". The Ministry of Agricultural Development launched other products that have been added to the trademark line of "Compita" rice, such as flour, lentils, sardines, oil and salt.

Social Disturbance

When the National Police shot and killed Aliromi Smith during a protest by the National Construction Workers Union (SUNTRACS) in Colon in mid-February, a social disturbance ensued. Police had to face off with angry members of SUNTRACS who were joined by the National Front for Economic and Social Rights (FRENADESO). In Panama City, Colón, Coclé and Chiriquí they shut down major thoroughfares, damaged property and threw rocks at the officials who returned tear gas at the rioters. Some 500 persons were detained over a two-day period.

SUNTRACS is calling for the resignation of Daniel Delgado, Minister of Government and Justice and Rolando Mirones, who heads up the police force. When he was shot, Smith was taking part in a protest against the high cost of living and neglect by the government to attend the social needs of the laborers.

Port development
Panama Ports Company (PPC) received four Super Post-Panamax container gantry cranes at the Port of Balboa this month. They have a lifting height of 36 meters above the rails and reach out 51.2 meters with a capacity to handle up to 19 rows of containers and download two containers simultaneously. This equipment is part of the Phase IV development of the Port of Balboa with an investment of US$300 million, which is part of an extensive project to modernize the port, reports Panama’s weekly maritime and cargo newspaper "The Bulletin".

Puerto Armuelles refinery
In August this year the final study will be presented for the construction of a refinery in Puerto Armuelles, which will allow Qatar Petroleum and Occidental Petroleum (OXY) to take a final decision on the project in late 2008, according to the Minister of Commerce and Industries, Alejandro Ferrer.

Gifts from Panalpina
The staff of the cargo company, Panalpina S.A. conducted last month their traditional delivery of gifts in remote communities with scarce resources. This year they went to Calobre, Siénaga, Tres Quebradas, Trapiche Arriba and Flor Bonita in the district of Chepo.

Tourism law published
The Panama Tourist Bureau, IPAT, reminded the public that last month it published on its website: www.visitpanama.com the draft of the Law on Tourism for their consideration, especially with an open mailbox to receive and collect any comment, contribution, or criticism. Tourism will have a budget of US$39.5 million for a period of five years.

Sea cadets briefed
Panama’s shipping weekly "The Bulletin" reported that 350 future cadets attended the annual "Orientation Week" scheduled by the International Maritime University of Panama (UMIP) to provide students with information on the maritime industry and the processes of discipline and leadership that will form their character in the next few years.

Guatemala accord
The Minister of Commerce and Industries, Alejandro Ferrer and his counterpart from Guatemala, José Carlos García, started the next round of negotiations for the signing of a Free Trade Agreement (FTA). Representatives of the sugar industry, producers and processors of oils and sauces and ketchup, participated.

Banking boom
The assets af the banking system increased by 18.8%, from US$36,000,302,600 to US$43,000,144,500 up until October 31, 2007, compared with the same period the previous year. Preliminary figures of the Comptrollers Office show that deposits rose 23.5%, from US$24,926,000,400 to
US$30,000,780,100

Foreigners push prices up
The daily "Panama American" reported that one of the leading causes of the high cost of living in Panama is the arrival of foreigners in the country who are looking for a second place of residence. Last year the cost of living rose 4.2%, the highest in 25 years. With an average income of between US$50,000 and US$150,000 a year, foreigners push up the prices of goods and services, to the detriment of nationals said the paper’s editorial.

Carnival count
The Carnival Board, chaired by Minghtoy Giro announced that this year’s celebration generated nearly US$43 million and attracted more than 17,000 tourists, achieving a record.

Alleged Canal fraud
The daily newspaper "La Prensa" reported that the Comptroller, Carlos Vallarino, ordered a special audit of contracting by the Panama Canal Authority (PCA) involving the company TPM Suppliers Ltd., made between January 3, 2005 and December 31, 2007 for a total of up to US$100,000. The investigation arose after a complaint of an alleged fraud of US$700,000, in which Igor Tello Spadafora, an employee of the ACP and nephew of Supreme Court judge, Winston Spadafora would have won 261 bids through TPM suppliers Ltd.

Bunker spill
A mechanical failure in a storage tank of the Italian company Decal Panama was the cause of the bunker oil spill on the coast of Taboguilla Island on the Panamanian Pacific coast, the company reported. The spill happened at dawn on February 1, when the tanker was unloading, explains a press release from the company.

Doctors walk out
Doctors walked out of final discussions on a new integrated health system proposed for Panama. Representatives of 40 different sectors of the country are involved, but Fernando Castaneda, a leader of the National Medical Negotiating Commission (Comenenal) said that the process lost legitimacy because the doctors withdrew. "The unions that are there do not know many technical aspects of the system", he said.

Transport strike threat
Public transporters are threatening an "indefinite strike" from February 25 if the government does not give a satisfactory response to their request for freezing fuel prices. José Concepción, of the Chamber of Transporters of Veraguas, said that the leaders in the provinces, with the exception of Panama decided to call an indefinite strike.

Taxi trouble
Taxi drivers in the country are on alert status, and could take measures lobbying for the adoption of new zoning and the postponement of the decision of painting all taxis yellow.

Bond Movie
According to the daily "La Critica", makers of the James Bond movie in Panama’s Old Quarter have transformed the locale into one of the areas of the Bolivian capital. Several of the street names were replaced by other names, like La Paz and Oruro.

Cell competition
The daily newspaper "La Estrella" predicted that when two new concessions for cellular phones are awarded there will be fierce competition to attract customers and offer lower rates, as well as the spending of billions of dollars in investments to improve the signal at national level. It is a market that currently has 2.4 million customers.

Journalism ethics
The Ethics Committee of the National Council of Journalism (NPC) launched a new campaign to publicize the importance of the work of journalists and the media, which is subject to "moral scrutiny". This campaign will be available for radio, television and print media. "If you feel that a story has violated your rights, do not lash our against the journalists, go to the Ethics Committee of the NPC and present your complaint" says the NPC.

Opposition unite
"The opposition parties should sit down to meditate and undestand that if they are not united, then we are telling the Revolutionary Democratic Party (PRD) you are there for another five years, "said former president, Mireya Moscoso.

Panama chairs Security Council
Panama’s Foreign Minsiter, Samuel Lewis Navarro, met with the secretary general of the United Nations (UN) Ban Ki-Moon, and discussed issues relating to children and armed conflict, piracy in the Indian Ocean and the implementation of the agreements on climate change. The meeting was held at the UN headquarters in New York after Panama assumed the rotating chair on the Security Council.

Ultra low cost Spirit here

Spirit Air began with three flights per week.

Spirit Airlines, based in Fort Lauderdale, Florida, has come to Panama offering three weekly ?ights to and from their hub just 30 minutes north of Miami. From there, travelers have the option to connect to an array of destinations like Las Vegas, Boston or Washington D.C. Flights leave Panama’s Tocumen International at 2:50 a.m. and arrive at 5:45 a.m. on Tuesday, Friday and Saturday. Early arrival stateside allows passengers to make an early connection. Return flights depart from Fort Lauderdale at 11:00 p.m. and arrive in Panama at 2:00 a.m. on Monday, Thursday and Saturday. Daily service will begin in May.

Flight destinations from Panama have increased nearly 40% since 2000. Recent additions: KLM to Amsterdam, Air Caribes to the Antilles and Paris, Continental and Delta to more U.S. cities. Even TACAS's subsidiary Sansa is once again connecting Chiriqui to Costa Rica.

The airline dominates the Ultra Low Cost Carrier market in the US, Latin America and the Caribbean. Their lowest fairs are available on the Internet at www.spiritair.com. Web surfers can buy tickets to Fort Lauderdale and with connections to Atlanta, Atlantic City, Detroit, New York (LGA), Orlando, San Antonio, Tampa and Washington DC.

To connect to other destinations like Los Angeles, Boston, West Palm Beach or the Caribbean, travelers must call the stateside reservation line at 001 + 800-772-7117 for English or 001 + 800-756-7117 for Spanish.

On www.spirtiair.com. The Visitor found round trip flights from Panama City to Washington D.C. for $440, New York for $410 and Atlanta for $410. Flights to Fort Lauderdale cost around $280 and becoming a member on line gives you updated access to their best tariffs.

"We are proud of the growth in Panama"

Bern to build new Ave Balboa hotel

National hotelier experts, Bern Hotels & Resorts Panama, announced last week that they will open a much needed hotel in Panama City. Le Meridien Panama will be a 118 room hotel located on Avenida Balboa at Calle Uruguay in early 2009. The hotel is a joint venture between Bern and Starwood Hotels & Resorts Worldwide, Inc. and will cost $25 million.

The luxury hotel will have a European atmosphere complimented by direct ocean views and offer 25 suites and one presidential suite. Other amenities will include a modern lobby bar, fine dining restaurant and 400 square meters of divisible private event salon space as well as an open air pool, gym and spa.

“We are proud to open the first Le Meridien hotel in Central America and continue developing tourism in our country.” said Glen Champion, VP of Bern Hotels& Resorts Panama. The Le Meridien brand has luxury hotels in Latin America and major cities around the world. They are proud to open in Panama, citing it as a modern and diverse destination for international travelers.

“We are proud of the growth in Panama,” said Herman Bern of Empresas Bern. “Our energy is focused on growing with the country.” Currently the hotel and tourism division of Empresas Bern is made up of the Intercontinental Miramar, Intercontinental Playa Bonita, Gamboa Rain Forest Resort, Crowne Plaza Panama, the future Holiday Inn in The City of Knowledge, Gamboa Tours travel agency, Royal Card, Ocean Business Center and Panama Rental Solutions.

Two new hotels by "H Top"

Isla Naos consruction site.

The Catalan hotel group H Top Hotels announced that they will build two hotels in Panama. One will be owned and operated by their H Top and the other under a management company. The Spanish chain currently has 14 hotels and is beginning its international expansion in Panama.

Their hotel will be on Isla de Naos, on the causeway. The $40 million, five star hotel will have 400 rooms, of which 40 will be junior sweets, another 40 will be senior suites and there will be one 300 square meter presidential suite. It is projected to open in November of 2010. The casino will be 4000 square meters. There will also be 20 private events salons totaling 1000 square meters of space.

The second hotel will form part of Panama International Merchandise Mart, a mega complex for commercial trading with an exposition center, office buildings, hotels and condominiums. The H Top hotel will be a 500 room, five star part of the complex.

Panama International Merchandise Mart will be located between Panama City and the city of Colon, near the Canal and the new highway connecting the two cities. Visit www.pimm.com.

News of the tourism industry

More European Tourists
In a recent press conference, Tourism Minister Ruben Blades noted that any decline in visitors to Panama from North America due to a recession there would be offset by an increasing number of Europeans who are coming to the country. The Panama Tourism Bureau (IPAT) is strengthening as European campaigns attract more people from the continent. Blades also noted that European travelers stay longer in the country compared to North American tourists.

Legislation to protect turtles
Law 8 was recently passed in a Panamanian effort to protect turtles, a positive step by the legislature for the country’s ecotourism appeal. Isis Pinto, of the MarViva Foundation, explains that living in harmony with other species also dependent on natural resources is the great challenge. Respect especially for turtles is considered a noble cause worldwide. The species has been in existence for 50 million years.

Panama stand recognized
At London’s most important travel fair, “World Travel Market”, Panama was commended along with the Central American Tourism Agency (CATA) for having the best stand at the fair. The Panama stand was located with other Central American countries, but Panama was said to have the most traffic through their attractive displays.

New tourism law
The private tourism sector has accepted the creation of a new entity, The National Tourism Authority (ANT), which under the new tourism legislation will replace the Panamanian Tourism Bureau (IPAT) and begin assessing the quality of the establishments and the companies engaged in the tourism industry. Another benefit of the creation of this office, a move strongly supported by IPAT Minister Ruben Blades, will be the extension of benefits for starting tourism-related business to locals whose communities will benefit directly from tourism in return.

Thierry Eck: Bern Hotel
manager and school
director

Bern foresees demand
Bern Hotels and Resorts is building a new Holiday Inn Hotel in The City of Knowledge that will also be home to The Panama International Hotel School where students from Panama and around the world will receive world-class training in the tourism industry and hospitality arts. Thierry Eck will be the General Manager of the Hotel and Director of the School.

New US Ambassador

William Eaton

US Ambassador William Eaton is leaving Panama. He has served here since 2005 and his three years of service will be complete in July of this year. He said, “I am very sad. But I am going to enjoy every minute in the country.”

Eaton will be replaced by Barbara J. Stephenson. She is already familiar with Panama, having worked here in 1986 as a political and economic advisor. She currently works in the State Department as a sub-coordinator on Iraq. She will be taking over around the same time trade agreements between the US and Panama should be raified.

Barbara J. Stephenson

Eaton says: “Stephenson's work as a diplomat is very well respected, she is an admirable person.” Eaton, who replaced Linda Watt in 2005, was the 33rd American Ambassador in Panama since William L. Buchanan took post in 1904.

Social Scene: Expat Explorers at Rino's

Bill Cunningham and Kristin Dove

Fred Grieser and David Van Gelder

Ricky and Cherie Flagg

Reasonable rates

SEDINUP Cabins received good reviews from price-conscious travelers wanting to experience the Kuna Yala islands on Panama's Eastern Carribbean coast. The rates start at $25 a night - cooking and a real toilet included! Contact "Henry Harrison" at 6749-6542 for availability and supplemental cultural tours.

Law 6 benefits for property
owners are in limbo

By: Manoj Chatlani, Senior Attorney and Steven Rich, Marketing Manager Panama Offshore Legal Services

President Torrijos has not decided whether to sign a two-year extension of Law 6 which contains an array of benefits for property owners. The law expired last December 31. Panama’s National Assembly (the legislature) sent the approval through to extend the benefits another two years, and the president’s signature, is awaited.

Law 6 allowed property owners to hire their own professional appraisers in order to update property values registered with the Catastro department of the Ministry of Economy and Finance that regulates titled properties. In return for doing the apprasial privately instead of using government resources, property owners only paid half of the normal property taxes. For example, a property valued at $100,000 would normally pay $1,362.50 a year in property taxes. Under Law 6, if the property owner has their own appraiser, the same property would only pay $615 per year.

Another benefit of Law 6 was that it raised the official registered value of the real property so when it sold, the capital gains tax would be less. The tax basis for capital gains tax purposes was raised to the new registered value, saving you as much as 50% (depending on the case) of the capital gains taxes!

Law 6 also provided up to 20 years exemption from property taxes for new improvements made to the property. This was a big incentive for foreign real estate developers to come to Panama.

Hopefully the benefits will return because one of the attractive aspects that incited the current real estate boom was the property tax exemptions. Law 6's popularity was due to lower property taxes in return for upgrading realistic property values while saving the government the time and expenses of having to appraise every property themselves.

Real estate agents and buyers complain about the lack of a system for analyzing comparisons of property types, location, size, and style with prices. Without a Multiple Listing Service and because the Public Registry lacks realistic property values, knowing the real value of a property for sale is difficult.

Private Appraisals: Allowing property owners to pay for private appraisals updates property values and adds to a bank of valuable information regarding the real value that properties are being traded at. The government should not want to appraise every property. But by giving the incentives back to the property owners to do this work themselves with property tax reductions and capital gains tax breaks will benefit everyone. Once all properties are registered with realistic value, sales can occur based on true market values rather than guesswork.

In summary: Reinstatement of Law 6 would bring back the following benefits:

1. The new property tax tariff/rate is applied, which is approximately 50% less than the normal property tax tariff/rate.

2. The update of the registered value by registration of the appraisal does not trigger or create any capital gains tax on the appreciated value of your property.

3. You can save money on capital gains tax when you sell your property.

4. If you have improvements on the land that you have not declared, you can include said improvements in the private appraisal and then register the appraisal with the improvements.

5. Property tax exemptions up to 20 years for new improvements can continue for another two years.

In Conclusion: Extension of Law 6 encourages Panama’s real estate boom to continue, as buyers feel most confident with genuine sales prices. Tax incentives motivate foreigners to invest in Panama. The economic benefits of more foreign investments in Panama outweigh the loss of immediate property tax revenues.

He could run for office here!

US presidential candidate
McCain born here

Por: Theodore James

John McCain

The next president of the United States might be a Panamanian! Seventy-one-year-old John Sidney McCain III was born August 29, 1936 at the Coco Solo Naval base in the formerly US occupied Canal Zone in Colon. His family has a long affiliation with the armed forces. Both his father and his grandfather were Admirals in the US Navy.

McCain was also a military man. He entered as a naval aviator, flying attack aircraft from carriers. During the Vietnam War in 1967, he narrowly escaped death in the Forrestal fire. On his twenty-third bombing mission he was shot down over Viet Nam where he was held for five years as a prisoner of war, even enduring torture. He was released following the Paris Peace Accords in 1973.

Coco Solo where McCain grew up when it was a U.S. naval base.

Coco Solo was a Navy submarine base established in 1918 on the northwest side of the former Zone near the Panama Canal. During World War II, the base served as a Naval Aviation Facility housing a squadron of P-38 Lightning aircraft. By 1960, no vessels remained, just support staff and housing. During the '80s and '90s Coco Solo was used by the US Navy, Marine Corps, and Army as a residential and administrative location supporting operation at the nearby Galeta Island facility.

McCain would probably not recognize today the grounds where he grew up. The Coco Solo base is now host to the Manzanillo International Terminal, the largest container shipping terminal in Latin America.

Coco Solo today– a Port complet.

If he chose to, McCain could also run for President of Panama and the reason is simple. Panama never recognized the United States' hold on the Panama Canal Zone "in perpetuity" and always considered it Panamanian territory. Therefore, anyone born in the former Canal Zone or on the military bases was considered to have been born in the Republic of Panama.

Such persons can claim full rights as Panamanian-born citizens and hold Panamanian identification and passport. On the Internet, many Americans are engaging in "blog" discussions about the US Constitution mandate that only "natural born Americans" can run for president and how this may affect his candidacy. Just put "John+McCain+Coco+Solo" in any search engine for hours of entertaining arguments on the subject.