National newsbriefs

Week in Review

MANUFACTURING NEED

Panama is recognized internationally as a transshipment center. It is probably the most developed in this sense in Latin America. Just in 2011, 6.6 million containers moved through the Panamanian ports. However, for the country to make better use of its geographical position and to generate more jobs in this sector, industry experts point to the need to attract companies not only to use Panama as a transshipment port, but that the merchandise is transformed and even produced in the country.

RETALIATION

The Government decided to create a list of countries to apply retaliatory measures as leverage on those nations that apply discriminatory acts against Panama. Ecuador was the first country on the list. The Cabinet approved retaliating against institutions, companies or citizens of Ecuador, as a mechanism to deal with restrictions and discriminatory actions taken by that country against Panama, keeping it on its list of tax havens. On April 2 the Panamanian government threatened Ecuador that it would apply that measure. The Foreign Minister, Roberto Henriquez, said the government, from the highest level, made a communication with Ecuador to clarify the situation, but its efforts were in vain.

CLOSER TO PERU

Panama and Peru have embarked on a new path in their trade relations to implement a Free Trade Agreement signed in May last year. Trade between the two countries totaled $546.8 million in 2010, according to official figures. Motivated by the entry into force of the FTA, representatives from 30 companies of the Colon Free Zone will be in Peru from May 6 through May 10 to find new customers. Guillermo Russo, Ambassador of Peru in Panama, said Peru wants to learn the experience to implement the FTA in Peru.

RADAR PAYMENT

This month the Government will make the first payment for the purchase of 19 radars to the company Selex Sistemi Integrati, a subsidiary of the Italian conglomerate Finmeccanica, sources in the Ministry of Security said. However, they did not reveal the amount. Sources confirmed that the radars entered the country in late January and since then they were transferred to the National Air Service, which distributed them to strategic points in the country. The Minister of Security, Jose Raul Mulino, recanted on the Government’s decision to review and possibly cancel contracts with Finmeccanica, in the event that the Italian authorities do not declare, as Panama demanded, that in this negotiation there was not any corruption.

SLOWING ECONOMY

National and international forecasts point to a slowing down of the economy this year. After growth of 10.6% in 2011, it is expected that gross domestic product (GDP) will increase by 7.5% this year. However, official data indicates that it will be short of projections. The local economy will slow in the coming years at a rate of between 5% and 6% from the 10.6% in 2011, but it will remain one of the most dynamic economies in the region, predicted analyst Ruben Lachman, for whom a more moderate growth rate will be positive to dampen inflation. Growth will be double or triple that of developed economies.

ECONOMY DISORDERLY

Although in 2011 the Panamanian economy managed to climb 10.6%, unlike other countries in the region, the isthmus has a disordered growth, mainly due to the lack of an education system that promotes a sustainable economy, said Ernesto Bazán, executive director of the company Homónima. For the entrepreneur, a reality is that the country has education, but it lacks quality, which is a right.

PANAMA COMPETES

Panama ranks second in the competitiveness ranking of countries in Latin America, according to the Institute for Competitiveness of the ADEN Business School. In the May 2012 ranking, led by Chile, Panama is consolidated in second place and separated from the rest of the countries that follow, such as Mexico, Costa Rica and Uruguay, says a press release from the institution.

PROMOTING LAND SALE

The Colon Free Zone (CFZ), under the management of Leopoldo Benedetti, spent $68,000 on the advertising campaign to promote the sale of land in this zone. Genesis Communications Inc., was the company benefiting from a direct contract to develop the media plan, according to official documents. The technical report supporting the hiring of the company says that Genesis was chosen because “there is no adequate substitute” for providing the service.

FAMILIES GET SEEDS

More than two million families who are producers of basic grains in Honduras, Guatemala, El Salvador, Nicaragua, Costa Rica, Panama and Belize require quality seeds to improve food security and nutrition in Central America, according to the UN Food and Agriculture Organization (FAO).

PRIVATIZATION NOT NEW

In the mid 1980’s, a process of economic liberalization was applied in Latin American known as the Washington Consensus, which stated, among its main duties, privatization of State enterprises.

ENVIRONMENT FORGOTTEN

The recently passed Law 13 which restores the validity of sections of the Mineral Resources Code did not include a fee for inspection of mining projects. The rule also tightened environmental protection in mining.