Isthmian Update October 7

The Panama Papers effect

Isthmian Update October 7. The investigation led by the International Consortium of Investigative Journalists, together with the German newspaper Sueddeutsche Zeitung, on the Panamanian law firm Mossack Fonseca, has a worldwide effect. According to a statement from the Tax Administration Service of Mexico, these documents have helped this agency recover $21.3 million in taxes that were not declared.

Sweet energy

A new technology that will produce clean and green energy using sugarcane bagasse or sugar sludge, is being developed in Panama. The Central Sugar Company S.A., of Alanje (Cadasa) in the Chiriqui province, is working on what will be the first project of energy cogeneration from biomass. The project has an investment of $41 million. Biomass energy is cleaner and cheaper than thermal generation. It is obtained when sugarcane bagasse is put in a boiler at high temperatures, the steam produced during the combustion is transformed into energy.

Dragnet for illegals

The Ministry of Labor and Workforce Development (Mitradel) detected 24 foreigners without work permits during inspections carried out last week in twelve companies in the areas of Las Mañanitas, Perejil, Plaza 5 de Mayo and Casco Antiguo. The workers who did not have their papers in order were from Colombia, Nicaragua, Mexico, Dominican Republic and Venezuela.

Flood alert

October is just starting out and is traditionaly the wettest month of the year, said Jose Donderis director of the National Civil Protection System (Sinaproc). He recognized that during this period the chances of floods are higher. Donderis recommended that people take precautions to avoid being affected by flash floods.

Knowing the origins

Detecting counterfeit or substandard drugs and knowing the raw material origins are part of the benefits of traceability, a single standard that is being promoted for implementation in the Panamanian pharmaceutical sector. Traceability, especially in the area of health, requires the support of the State as well as members of the supply chain, said Alejandro Guevara, CEO of GS1 Panama, a company dedicated to promoting and implementing international bar code standards EAN.UCC.

Tourism for all

An investment of approximately $30,000 from October to December will be made by the Mayor of Panama with the new project Mi Route PTY, which aims to promote social tourism in Panama City. The first phase, which began recently and ends in December, aims to benefit 3,000 people, starting with students from 6th and 11th grade schools of the capital city, then for people with disabilities and seniors, who will tour the most important sites of the metropolis.

Matter of perception

The argument used by the government of Juan Carlos Varela that insecurity in the country is the product of a “perception” created by the media, is creating distrust in citizens, warned sociologist, Danilo Toro. According to Toro, the government does not have a communication strategy on the issue, but has a kind of “epilepsy” , i.e., communication attacks or reactions.

Guerrilla peril

The negative results of the Colombian referendum on the peace agreement with the FARC guerrillas puts the neighboring countries in a situation of uncertainty. This lack of compromise forces the Panamanian government and all political forces in the nation to analyse how it will affect the borders and enable them to take a decision about what to do next. That was the proposal made by analyst, Jose Isabel Blandon.

Airport developments

Tocumen, S.A. has prepared a master plan to develop the Panama Pacific Airport. Around $9.1 million will be invested to achieve this objective by 2019. It is hoped that in 20 years, three million travelers will arrive at the airport. Its targets are the low cost, charter and business aviation. There are plans to expand and modernize the Enrique Malek Airport in David, Chiriqui, to capture more tourists.

Assessment first, information later

Panama will not share financial information automatically, but first will make an assessment of countries to determine whether or not they can guarantee that information remains private, It will also require that they have adequate security to ensure that the information will not be stolen on computer systems. For a country to qualify it must show low levels of corruption and a high level of political stability, according to the criteria of the World Bank and Transparency International, said Gian Castillero, advisor to the Ministry of Foreign Affairs.

Isthmian Update October 7: More visitors

A total of 259,082 people entered Panama during August, 2.3% more than the 253,174 for the same period in 2015, according to the National Institute of Census and Statistics (INEC) of the Comptroller’s Office. The majority of them, 193,268, were visitors, falling in the category of tourists, hikers or cruise ship passengers. The rest was made up of national and foreign residents, according to official information. The main point of entrance was Tocumen International Airport in the capital, where 230,608 passengers entered, followed by the border crossing with Costa Rica at Paso Canoas, where 13,343 people crossed.

Flourishing insurance

Sales of insurance premiums grew by only $3.2 million in the first eight months of the year, reveals a report of the Panama Insurance Superintendent. From January to August 2016, insurance sales totaled $915.9 million. With these results, insurance economic activity expanded by just 0.4% in the accumulated period from January to August, 2016.

Illegal bunkering

A new scandal is about to explode since it became known that a Danish company, dedicated to the marine fuel market in Panama, could be operating illegally in the country. International press sources noted that the same company has recently been found guilty in a court of its home country for illegal practices and its top executives have been sent to jail for more than three years and ordered to pay a huge fine for their fraudulent practices in the period 2010-2013.

Panama in the PAHO Council

Panama was elected to serve on the Executive Council of the Pan American Health Organization (PAHO) for a period of four years, reported the Panamanian Foreign Ministry. “With this designation, Panama, represented by the Ministry of Health, will work more closely and cooperate with Member States in order to maintain a healthy environment and move towards sustainable human development,” said the official body.

Not reliable

There is little confidence in the economic sector about the report of the expert committee members appointed by the government to assess the practices of the financial system, called the “Panama Papers”. The document, which could be presented this month is not trustworthy in the view of economists. This a consequence of the shock generated by the resignation of two prominent members of the committee: the Nobel laureate economist, Joseph Stiglitz and the Swiss expert criminologist, Mark Pieth.

Advertisement on hold

It has been 57 days since the Cabinet approved the hiring of the American advertising agency VML, Inc. to run the next international campaign to promote the country, but the company has not returned the signed contract. Gustavo Him, the Panama Tourism Authority (ATP) administrator noted that the agency’s legal team, based in Kansas City, Missouri, is reviewing all the clauses with the company before signing and executing the $20 million two year contract.

Drastic budget cuts

Despite the crisis in the Panamanian agricultural sector, the authorities of the Ministry of Economy and Finance (MEF) decided to cut $39 million from the budget requested by the Cold Chain for the fiscal year 2017. This institution asked MEF, initially, for $51 million, which, after being evaluated by this institution, decided to allocate $12 million, a cut of $39 million, that could affect negatively the agricultural sector, which depends on this project to distribute their products.

Cold chain in trouble

Yori Morales, Food Market Commercialization Association president, said that it is regrettable that the allocated budget to the Cold Chain is so low because this practically strangles any initiative that this institution has. He added, that the association does not have a breakdown of the budget, but it is very low which worries the producers because they do not know what the government’s policy is with regards to the agricultural sector.

A bill for SENACYT

A consultation period began in the National Secretariat of Science and Technology (SENACYT) to submit, within three months, a bill to the National Assembly to amend Law 13 of 1997, which governs the organization. Carlos Aguirre, SENACYT adviser, said the institution should be upgraded in terms of demands and scientific challenges, so they can begin discussions to determine what content should be included in this proposed law.

Colombian exodus?

Colombia’s ambassador in Panama, Angela Benedetti, commented that former guerrillas and Colombian citizens are migrating en masse to neighboring countries. “People are very afraid that more Colombians will come to Panama, and it is quite the opposite, because in Colombia people left the country to escape violence, but in recent years this exodus has decreased. Not all have returned, but there will be people who will want to return,” said the diplomat during a conference at the Panamanian College of Lawyers.

Procedural errors

Political analyst, Jose Isabel Blandon, warned that the extradition request to bring former president Ricardo Martinelli to Panama made by the government of Juan Carlos Varela, seeks to wriggle out of responsibility for the large number of procedural errors committed against the former head of State.

Transport subsidies

The Budget Committee of the National Assembly approved a transfer of $33.1 million, as a start, for the Transit and Terrestrial Transport Authority (ATTT) which will give that money to the State company, Transporte Masivo Panama, S.A., that operates the Metro Bus system, to subsidy the bus fare. Between this year and 2017 the government will pay the company $103.1 million in subsidies. The 2017 budget includes $70 million for that purpose.

Duty free bid

Ten international commercial duty free shop operators are interested in participating in the upcoming tender by Tocumen, S.A. Among the companies are DFS, Duffry, Duty Free America, Heineman, DFAASS, Legarde, Penna and Flamingo. These companies operate in countries such as Singapore, Germany, Switzerland, the United States, Brazil, Italy, Mexico, Canada, China, Colombia, Chile, England and some Caribbean islands.

Stable outlook

The Republic of Panama maintained a rating of “BBB”, as an investment grade, according to the latest report provided by the rating agency Standard and Poor’s (S & P). By confirming the level of investment for the country, the agency stresses that it appreciates a “stable outlook”, which is “based on the strong growth prospects of the Panamanian economy.”

More direct foreign investment

Foreign Direct Investment (FDI) in Panama grew 6.5% in the first half of 2016, compared to the same period of 2015, when it reached $3,018 million, said the Ministry of Economy and Finance (MEF). In the second quarter of 2016 FDI increased by 25%, announced the Minister of Economy and Finance, Dulcidio De la Guardia, in a presentation about the impact of the Panama Papers scandal on the national economy.

Secret agenda

The government of Juan Carlos Varela had a hidden agenda when it appointed the Independent Commission of Experts, to review the scandal of “The Panama Papers”. This information appeared in a recent article written by the Nobel Prize winner in Economics, Joseph Stiglitz, for the Vanity Fair magazine. This renowned economist resigned as a member of the expert commission, along with Mark Pieth, after disagreements with the government of Juan Carlos Varela, when it refused to disclose the findings of the commission.

Real estate expo

For the first time Panama will host the Acobir Commercial Real Estate Expo 2016 and at the same time the first National Congress of Real Estate Brokers. Eric Van Hoorde, president of the Panamanian Association of Real Estate Brokers (Acobir), explained that the event will be an option to offer all exhibitors and industry professionals a space dedicated exclusively to meet the demand for real estate investment business existing in the country.

Panama in Argentina

Panama seeks to further diversify its tourist variety in the twenty-first edition of the International Tourism Fair of Latin America (FIT) in Argentina, the most important event of its kind in the region, where countries have the opportunity to offer their products through business meetings. The purpose of the delegation was to place Panama in a prominent position against strong competitors, such as the Dominican Republic, Cuba, Colombia, Brazil and Mexico.

Reforming the constitution

Around 534,000 signatures would be required to call a parallel constituent assembly to change the constitution, said the lawyer, Juan David Morgan. He added that in that case the Electoral Tribunal would have a term of three to six months to host the initiative and call for the election of constituents. Morgan’s remarks came during the Constitutional Reform and Business Freedom Forum conducted by the Panamanian Association of Business Executives (APEDE).

First Lady´s social interest works

The budget of the Ministry of the Presidency for 2017 will be $477 million. It is noteworthy that in the social interest works, there will be a reduction of $14 million, while in others and community issues linked to the Office of the First Lady, the amount allocated will rise from $3 million (2016) to $13 million (2017).


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