April 2008: Nieuwsflits Panama
From Handelswijzer Midden-Amerika van de Koninklijke Nederlandse Ambassade te Costa Rica
Holland Month in Panama
The new initiative created by the Consulate in Panama and the Embassy in Costa Rica called the Holland Month took place from March through April. The goal was to concentrate events promoting the Netherlands all through one specific month. The kick off was on the 30th of March when the first of three direct weekly flights of KLM from Amsterdam Schiphol arrived at the airport of Tocumen in Panamá City. The president of KLM Mr. Peter Hartman was received by the Minister of Foreign Trade Carmen Gisela Vergara and the Dutch Ambassador Susan Blankhart. An other mayor activity was the Rembrandt exhibition in the Museo Canal Interoceanico de Panamá which was made possible by sponsorship from the Dutch companies Shell, Boskalis, KLM and Philips. The director of the museum spoke of the most important exhibition throughout the history of his museum. Furthermore, several articles were published about typical Dutch theme´s such as water, the distribution sector, Dutch culture and art, the installation of Dutch lights on the Tower of Panama Viejo (a cultural heritage) was and the Holland Trade Day. On this day the private Panamanian sector was informed on business opportunities with the Netherlands as well as certain programs aimed at stimulating trade. There was also a quiz, made possible by the sponsorship of again KLM, Philips and also Heineken, awarding two tickets and spending a weekend in Amsterdam including some pocket money and a room in a hotel. Second price was a flat screen television from Philips and an other price was some Heiniken barrels of beer. The month ended with the celebration of the Queens Birthday Party which was busier then ever before.
Holland Trade Day
On April 29th the Consulate of Panama and the Netherlands Embassy in coordination with the Panamanian Chamber of Commerce organised the first Holland Trade Day in Hotel Panama. The Embassy provided a general presentation regarding the Dutch economy, economic growth sectors, distribution and logistics advantages and business opportunities. Dutch organisations such as PUM, SNV en Oikocredit promoted their services/tools and Dutch companies such as RIKS en KLM gave presentation on products they offer to the Panamanian business community. By including all these different organisations and presenting all the different tools offered by the Netherlands aiming to promote trade the participants got a coherent and complete picture of all services. The turn out was around 100 persons (businesses) and more than 40 specific business inquiries regarding Dutch products and services were presented.
Panama’s economy continues to report strong growth
(Source: La Prensa)
Panama, according to the Economic Commission for Latin America and the Caribbean, will lead economic growth in the region for the second consecutive year in 2008. That strong performance has caused a considerable reduction in unemployment and increases in wages. These changes have not only favoured the elites of the labour market, but also those with lower income levels. Domestic employees and construction workers in some cases are making as much as three times more than in the recent past. Unemployment is down to 6.3% with all forecasts predicting that number will continue to fall. There less people working informally, with a 5% increase in the number of people hired to work in the industrial section and a growth of 12.8% in the number of people who are newly participating on the active rolls of Social Security.
Panama consumer prices rise 1.2 pct in March
(Source: Reuters)
Inflation in Panama rose 1.2 percent in March from the previous month, the government said on Monday as Panamanians struggled to cope with the double effects of high global food and fuel prices and a weak dollar. Twelve-month inflation at the end of March was 8.8 percent. Strong domestic economic growth has also pushed up wages and prices. In 2007, gross domestic product was up 11.2 percent, but it is expected to cool to around 8 percent growth this year.
Amplification of Petroterminal
The state signed a contract with Petro Terminal de Panamá (PTP), of which it owns 59%, to convert the company in the energy hub of the region. The state commits itself for USD 952 million over the coming 30 years. With this contract the state enlarges its share from 44 to 59%. USD 150 million will be inverted on the short term for the construction of petrol storage tanks in the region of Chiriquí Grande.
Farfán Mega-Port facility will become a reality
(Source: La Critica)
The Panamanian government will negotiate for the construction of a new port facility in Farfán. The project will be located on a 253 hectare parcel of land in Farfán, part of the old Howard Air Force Base. The Executive Branch has authorized the Minister of Commerce Carmen Gisela Vergara together with the Panamanian Maritime Authority, to conduct the negotiations in representation of the Panamanian state. They will negotiate a contract with the joint partnership formed by Cosco Pacific Limited and Ports America Group that involves the design, land fill, construction, operation, administration and maintenance of a shipping container terminal in Palo Seco / Farfán. A study conducted by the Japanese International Cooperation Agency (JICA) established that a port in this zone could become the second largest container port in the Pacific. Plenty of opportunities for Dutch dredging companies and port consultancy.
Panama seeks $2.3 billion Canal funding
The Panama Canal Authority is looking to put debt finance in place for $ 2.3 billion by the end of the year, a figure at the upper end of its borrowing forecast, according to ACP administrator Alberto Aleman. Under its expansion plan proposal the ACP had said it would need to borrow between $ 1.5 bn and $ 2.3bn to cover the shortfall between revenues and capital expenditure between 2009 and 2011. Toll increases lifted annual revenues last year to $ 1.76 bn and planned incremental adjustments of around 10% a year are expected to lift that figure to $ 2 bn this year. Multilateral development banks have already committed themselves to the project, months ahead of the deadline to have a decision in place. The Inter-American Development Bank has reported that it will take almost 20% of the debt, offering $400 million for the project. More than 40 private investment banks have also expressed their interest in participating. Japanese investment bank Mizuho has been appointed alongside Shearman & Sterling to advise the ACP through the process, a final decision is required by the third quarter of 2008.
Dredging International wins Panama Canal dredging contract
The Panama Canal Authority has awarded its largest contract to date, for the dredging of the Pacific entrance to the Canal, to Dredging International. The Belgian firm's winning bid was US $177.5 million, significantly less than bids from Boskalis and a consortium of Jan de Nul and Van Oord, who had presented bids of US $258.8 million and US $485.4 million, respectively. Dredging International will deepen the entrance to 15.5m and widen the channel to 250m, and will dredge the new South access for the construction of the third set of locks, moving about 9.1 million m³ to allow the transit of post-Panamax vessels. The work will take four years.
Iberia adds flights to Guatemala and Panama
(Source: The Financial)
Iberia is strengthening its presence in Guatemala and Panama. Today, May 5th, it is launching a fourth weekly flight from Madrid to the capital cities of the two Central American nations. The aircraft used on the route will be Airbus A-340s, both the 260-seat 300 and the 352-seat 600 model. The fourth weekly flight was added to meet demand which has grown steadily since the route was launched in October 2004. In 2007, Iberia carried 253,000 passengers to Central America, with an average cabin occupancy rate of 89.5%. In 2008, it expects to carry some 315,000 people, which would represent an 11% increase.
Tourists spent $1.1 Billion in Panama in 2007
(Source: La Prensa)
Tourists visiting Panama in 2007 spent more than $1.1 billion dollars in the country, representing a 23% increase over the level of tourist activity for 2006, according to Panama's Minister of Commerce and Industry Carmen Gisela Vergara, who spoke during the inauguration of the 42nd Annual Conference of Business Executives (CADE.) Approximately 114,000 Panamanians are employed in the tourism industry throughout the country.
Hotel room shortage in Panama
(Source: La Critica)
The shortage of hotel rooms compared to a significant increase in demand has become the Achilles heel of Panamanian tourism. Starting in 2006 there is now no "low season" for hotels and the shortage of hotel rooms is now a known crisis. In 2006, 1,358,000 tourists visited Panama and there has been a reported increase of 17% in these past two years with only two new hotels opening their doors, not enough to cover the demand. This small crisis will be more evident when factors are added like: the beginning of operations in November of the Panama Home Port, the tourist promotion with a new advertising campaign of $39.5 million dollars, the new niches of markets with a focused 30% in Europe, the increase of airlines and flight frequencies. Although during 2008 it is anticipated an additional 10 hotel projects will be completed in Panama City adding approximately 3.386 new hotel rooms to the market, for 2009 there are only four new hotels coming on line with an additional 1,088 rooms. Plenty of opportunities for Dutch entrepreneurs to provide services for the tourism industry of Panama.
New 5-star, 139 room hotel for Casco Viejo
(Source: La Prensa)
A group of investors are working to build a new five-star, 139 room hotel on the site of the former Club Union in Casco Viejo. The project measures 5,512 square meters on which the group plans to build two buildings for a total constructed area of 15,848 square meters in five levels (including a basement and an attic), with a front that will rise a total of 80 meters. The hotel, which has not yet been named, will cost approximately $30 million dollars to build and supposedly it will be finished by the end of 2009.
Panama extends 20 year property tax exoneration
Law 21 of 15 April 2008 was published in the "Official Gazette", and specifies a change to Article 81 of Law 6 of 2005, saying "Those improvements whose construction permits were issued before 1 July 2009 will enjoy twenty years exoneration from Property Tax, as long as the improvements are inscribed in the Public Registry before 31 December 2011. The exonerations granted by this article will be conceded upon the date of inscription (in the Public Registry) or the issuance of the occupancy permit, which ever comes first." So, with that the very popular 20 year tax exoneration has been extended, yet again. Good news for anyone looking to buy property in Panama.
Panama civil aviation authority (AAC) to launch tender
Panama’s AAC will launch a tender this month to build new hangars at capital Panama City’s Marcos Gelabert airport; the project will be valued at US$ 5-6 million. The project includes the installing of lighting, sewerage systems and aqueducts, and aims to cope with the increasing demand for the airport's hangars by foreign airlines. The ACC is also considering offering the airport's parking lot in concession, although no time frame has been defined. At the same time, the ACC launched the tender process for a US$600,000 project to expand the airport terminal. The project will complement works already underway to improve the airport's runway, the parking apron and taxiway. In addition, ACC will spend US $8.1 million on a modernization program for several domestic airports and aerodromes around the country to accommodate growing passenger traffic.
Central American Parliament to meet in Panama
(Source: Prensa Latina)
The Central American Parliament (PARLACEN) Integration and Political commissions will hold meetings in Panama this year, according to a schedule published in this capital. Panama has been one of the countries, together with Costa Rica that has shown resistance to the integration issue, and this session has the intention of contributing to agreement about the issue. The newspaper also said this step is a requirement by the European Community to make viable an economic cooperation agreement with the region. PARLACEN Political Commission and representative of 52 parties of the six Central American countries will meet in Panama in August. They will propose at the meeting that the National Assembly recognize that the PARLACEN agreements are of a binding nature, which was approved at the Central American Presidential Summit last March.
Torrijos visits the White House
(Source: La Estrella de Panama)
The President of the United States George W. Bush received Panamanian President Martin Torrijos this week in Washington to discuss the bilateral Free Trade Agreement between the United States and Panama that is pending approval before congress. The agreement has already been ratified by the Panamanian National Assembly, but still lacks the approval of the American Congress, where the democratic majority is reluctant. In addition, the leaders discussed how to strengthen democracy and democratic development in the region, the improvement of cooperation in matters of security and the strengthening of cooperation in international forums.
Panama President announces Cabinet changes
(Source: Prensa Latina)
Panama President Martin Torrijos announced a cabinet reshuffle of his cabinet to match election laws and adjust his last year in office. Torrijos replaced resigning Trade and Industry Minister Alejandro Ferrer with Vice Minister Carmen Gisela Vergara. Minister Balbina Herrera (Housing), who will run for president was replaced by Doris Zapata and Minister Belgis Castro (Education) whom is running for Congress is replaced by Salvador Rodriguez. Political circles and the media hint that Senior Vice President Samuel Lewis Navarro may run for president as well. Election laws urges every official planning to enter elections race to vacate office six months early. This time the deadline is set to October 31 and the elections are set for May 3, 2009.
Texas A&M signs agricultural cooperation agreement with Panama
The Texas A&M System has signed a memorandum of technical and scientific cooperation which will help Panama improve its agricultural competitiveness and enhance its agricultural capacity. The agreement was signed during a ceremony in Panama in March. Signatories included President Martin Torrijos Espino of Panama, Dr. Guillermo Salazar, Panama’s Minister of Agriculture and Dr. Elsa Murano, president of Texas A&M University. The agreement focuses on three general areas of cooperation; strengthen Panama’s national food safety program, strengthening their national agricultural extension service and the third will address technical assistance with Panama’s livestock, rice and jatropha production. Jatrohpa is a genus of trees, plants and shrubs native to Central America. Jatropha seeds contain a large percentage of oil and have been identified as a promising source for biodiesel production.
Cooperative sells only 12 percent of banana boxes in Panama
The Cooperativa de Servicios Múltiples de Puerto Armuelles (Coosemupar) sold at the Bolsa Nacional de Productos (BAISA) 416.477 boxes of banana at $ 6.50 dollar/box of 19kg, that is only 12% of the total offer. The firm which bought bananas is the US based Latin Fruit Co. for 2,7 million dollars. Total offer by Coosemupar is 4,8 millions of boxes from the week 16 in 2008 (April 2008) to the week 24 (June 2009) In February Coosemupar sold 5.2 million boxes of bananas to the US-Belgium-based firm International Shipping Business Group for 29.7 million dollars (50.9% of the whole production). Coosemupar had a contract to sell exclusively to Chiquita but since 1. March 2008 Coosemupar sells to a fix price of 6.50 dollars/box to Chiquita (premium quality) and the remaining production can be sold to other buyers.
