Week in Review

FREE ZONE BOOM

During the first five months of 2012, the Colon Free Zone recorded a surplus in trade of $877.2 million, after record exports for $6,662.4 million and imports of $5,785.2 million, it was reported by the Bureau of Economic and Social Analysis of the Ministry of Finance (MEF). The document emphasizes that exports increased by $1,224.8 million, and was marketed primarily to Puerto Rico, Venezuela, Colombia, Costa Rica, the Dominican Republic and Ecuador.

SPREADING THE WORD

President Ricardo Martinelli met in New York with the NY Shipping Association, other shipping associations and the three major ports of the city, to talk about the work of the canal expansion. Port Elizabeth, in New Jersey, is the largest container terminal in the eastern United States, and is investing millions to prepare for post-Panamax vessels.

WHOLESALE REDEFINED

Bill 515 is being discussed in the National Assembly and will redefine the term “wholesale” to allow American companies to sell their products directly to customers, provided they invest more than $3 million and provide a service. The retail business in Panama is exclusively for nationals, but modifications are being made following the Trade Promotion Agreement signing, which changes the landscape and allows chains like Walmart to have a space.

SEAFARERS WARY

Panamanian seafarers are against signing the maritime agreement regulation on work at sea, adopted in 2006 to ensure compliance with safety aspects covering Panamanian and foreign seafarers who work on ships flying the Panamanian flag. This was stated by the president of the Panamanian Association of Merchant Navy Officers (APOM), Luis Fruto, who explained that the dissatisfaction is related to food and conditions aboard ships.

PORT EXCELLENCE

Efforts by the maritime sector have positioned Panama as the fourth country in the world for its quality of port infrastructure. This is according to the Global Competitiveness Report for the biennium 2012 and 2013, prepared annually by the World Economic Forum. In this edition, Panama rose one place from last year, when it was fifth worldwide, indicating a continuous curve of institutional development in the movement of containers.

COPA NOW 65

With sustained investment of $300 million in the past three years, Copa Airlines in August reached 65 years of operation. The company has a fleet of 83 aircraft and flies to 64 destinations in 29 countries, and is analyzing the feasibility of direct flights to at least 30 additional cities in the coming years.

THREE WAY FUSION

The National Customs Authority, the National Immigration Service (SNM) and the National Passport Office will very soon become a single entity. This was announced by President Ricardo Martinelli. According to the explanation of the president, by uniting these entities they are copying the US model, a country that has a Homeland Security body.

IMMINENT SHARE SALE

The National Authority of Public Services (ASEP) will open in October the sale of shares owned by electricity distribution companies operating in Panama, a year before the expiry of the current leases. The energy distribution contracts were signed in 1998 for a period of 15 years, culminating in 2013.

“FULL” EMPLOYMENT

Although the country has made “full employment” a promotion of the authorities, many Panamanians have, in practice, an informal job. Informality clothes 37.2% of workers in the country, according to a report recently published by the Comptroller, but that includes data through 2011.

AIRPORT DELAY

The Director of the Civil Aviation Authority (CAA), Rafael Barcenas, reported a delay of seven months and technical failures in the remodeling of the Marcos A. Gelabert airport in Albrook. Barcenas, in his own words, said the firms Consorcio Procom & Asociados and Heymocol Ltda. failed to meet the works that were awarded through a contract for $3.1 million in 2010.

ECONOMY GROWING

Panama’s economic growth is enviable, and most economic forecasts of international bodies have said the country will lead the region’s growth, pointing to between 7% and 8% growth in gross domestic product (GDP). To date, quarterly results suggest some of these will materialize in the first quarter by 10.6% and for the second half by 10.4%.

CORRIDOR CONFIDENCE

The risk rating agency Moody’s gave an investment grade (Baa3) with a stable outlook to the bond issue that will be made by the National Highway Company (ENA) to acquire 100% of shares of the Northern Corridor. The issue will be for $600 million. The remaining $50 million, to complete the deal, is agreed at $650 million and will be provided directly by the Government. The debt maturity is in 2028, but Moody’s expects that the payment will be completed before that date.

WETLANDS PRESSURE

Faced with the imminent destruction of coastal wetlands in Panama, the International Union for Conservation of Nature (IUCN) requested the Panamanian government to make restitution of protected wetlands in Panama Bay. The decision of the international body, representing 160 countries, came after Panamanian environmental organizations denounced the Supreme Court decision that suspended this condition on April 27 this year.

BAY CLEANUP

The sanitation project in the Bay of Panama, one of the greatest works in the public sector, reached an increase of 84%. The development of the work seeks to end pollution of the beaches in the capital city and improve the quality of life of Panamanians, according to the Ministry of Health, the entity in charge of the project. In total, the central government invested in this mega-project about $675 million, and it is built by the Brazilian company Odebrecht. Currently $490.3 million has been disbursed from the budget, which represents 72.5% of the investment amount.

PANAMA WEBWISE

Panama ranks among 70 countries with a higher proportion of Internet users in the world and the third in Latin America with access, according to a study by the International Telecommunication Union (ITU). In its first report on the state of development of broadband in the world, ITU included 177 countries worldwide. The study puts Chile and Brazil in the first two points of connectivity, followed by Panama, Colombia and Venezuela.

LOANS BLOCKED

The International Finance Corporation (IFC), the financial arm of the World Bank has stopped payment of at least $400 million to Panama-based companies, said Roberto Albisetti, regional manager for Mexico and Central America of the entity. Bank policies prevent payment to firms established in countries that have not passed the first stage of review of the Global Forum of the Organization for Economic Cooperation and Development (OECD), among which is Panama.

REVIEW DELAY

The extension was requested for the second time for the Panamanian government to review the progress made by the country after leaving the gray list of the Global Forum of the Organization for Economic Cooperation and Development (OECD) which concerned the banking sector, mainly because the country already is under sanctions and discrimination on the part of international organizations.

NEW “BIG APPLE”

The tallest skyscrapers in Panama are all in Panama City, its capital. They are currently built, waiting approval or under construction and a lot of buildings exceed 200 meters in height and some reach 300 meters. They will be included within the 200 tallest buildings in the world. These buildings mark a new skyline in the country. It has become the “Big Apple” of Latin America.

KOREAN LINKS

On September 30, Panama and Korea celebrate 50 years of bilateral diplomatic relations which, according to Ambassador Doo Jung-soo, are at their best. On stage there are cooperation projects to strengthen government service through e-government, education and cultural exchange, exchange of development experiences, the signing of a free trade agreement and participation in the copper mining project of Panama.

BANK PROFITS

The net profit of the National Bank of Panama totaled $103.4 million, $43.2 million more than in the same period last year. The percentage change is 69.2%. In its earnings release at the end of August, the State agency also reported that the portfolio of loans to the private sector grew 8.1%, increasing from $2,192.4 million to $2,368.9 million in this period.

CA EXPORTS GROWING

The sale of Central American products to the world amounted to $10,450 million dollars in the first quarter of the year, reflecting a growth of 6.8% compared to 2011. These figures come from the Central American Economic Integration Secretariat (SIEC) and excludes Panama because it was not until June 29 that the country signed the protocol of economic integration.