MESOAMERICA
VOLUME 21, NUMBER 9, SEPTEMBER 2002
PANAMA
Continued Border Problems with Colombia
Panamanian police officials have had a
difficult time trying to solve problems along the Panama-Colombia border
because of the nature of the terrain (tropical rain forest), the lack of roads
within the Darien region (also, no highway exists between Panama City and the
Colombia border), the lack of training of available police units, and the large
number of police required to patrol this remote and dangerous region.
Panama has been affected by the violence in
neighboring Colombia, where the military has been engaged in a long and bloody
campaign (lasting three decades) to combat guerrilla forces and drug
traffickers who have taken over portions of the country. Additional threats exist due to
para-military groups that are operation alongside the regular army units to fight
against the Marxist-led Revolutionary armed Forces of Colombia (FARC), as well
as criminal gangs that traffic in drugs, weapons, illegal immigrants and other
contraband goods. Recent military and
para-military campaigns in Antioquia province have produced a flood of new
refugees from Colombia along a porous border into Panama.
The Darien region of Panama is often used by
Colombian guerrilla forces and criminal gangs as a refuge and staging area for
their illegal activities, which has turned this region into a “wild west”
atmosphere where violence rules and public security is practically
non-existent. The areas of Pacora and
Chepo have witnessed an average of 10 murders a month, seven of which have been
of Colombians, according to recent police reports.
Security Strengthened at Costa Rican Border
Panamanian and Costa Rican security officials
have begun a joint effort at controlling the flow of illegal weapons, drugs and
immigration across their common border.
Joint police patrols began operation in May ’02, which have resulted in
the detention of numerous suspects and the confiscation of illegal weapons and
drugs on both sides of the border. Law
enforcement officials of both nations believe that the border crossing at Paso
Canoas is being used by organized crime to export violence to the rest of
Central America and Mexico.
Petroleum Waste Disposal Plant in Baru
After several failed attempts at other
locations, Environmental Protection and Recovery, Inc. (EPRI) finally received
the required permits to build a petroleum products disposal site within an
industrial park in the impoverished district of Baru, located in the Province
of Chiriqui. Previous attempts by EPRI
had been frustrated by opposition from environmental groups due to the threat
of contamination and health risks to nearby residents.
Despite these concerns, the mayor of Baru and
members of the City Council were convinced that the EPRI project was “good for
the community” because it involved a promised investment of $20 million to build
the disposal plant, plus a community hospital and the creation of a foundation
dedicated to “social assistance” to help solve local social problems in
general. Although the contract was
signed on 10 April ’02 the press did not get wind of this until mid-Aug.
The new plant is designed for the treatment and
disposal of a variety of petroleum derivates and other industrial and hazardous
waste such as: hydrocarbon mixtures, petroleum-contaminated dirt, PCBs, paint
sludge, solvents and other dangerous chemicals and medical waste. While most of these waste products will be
incinerated, it is unclear what the EPRI will do with the remaining hazardous
materials.
Panama Canal Modernization Plan on Hold
The expected amplification and modernization of
the Panama Canal is stil a future dream that is out of the reach of the current
government of Panama. Although numerous
studies have been done about how to modernize and widen the existing
inter-oceanic canal, or the possibility of building a parallel canal, there is
no short-term solution to this challenge.
Meanwhile, the world’s largest ships are unable
to navigate the existing canal that was built by the US government during the
period 1904-1914. The Canal was
operated by the US Panama Canal Company until ’77. At noon on 31 Dec ’99, the government of Panama took possession
of the old Panama Canal Zone and began administering the waterway under its new
Panama Canal Authority (ACP).
In Sep ’03, Panama, the US and Japan formed a
Tripartite Commission to conduct feasibility studies regarding how to improve
the Canal’s capacity to permit the passage of modern ships that weigh more than
165,000 tons and that are wider and deeper than the limits of the existing
Canal. Although several alternative
plans have been discussed, none of them have been financially feasible due to
current world economic conditions.
Several economists have estimated that the total cost of such an
endeavor would be $66-10 billion, which means that it may not be financially
viable.
However, according to ACP Assistant Disrector
Ricaurte Vasquez, no deadline has been defined by which to determine the
timeline, cost and funding sources needed to convert this dream into a modern
reality.
Decline in Industrial Production Reported
The industrial sector has been the most
affected by the downturn in Panama’s economy since ’99, according to the daily La
Prensa on 18 Aug. In ’99 this
sector declined by 7.5%, in ’00 by 5.3%, in ’01 by 5.7%, and in ’02 the decline
has continued. About 10% of the industrial
workforce is currently unemployed, which means that thousands of unemployed
workers have sought employment in other sectors of the economy. The industries most affected by the current
economic situation (first trimester of
’02) have been: shoe manufacturing (down 60%), textiles (-47%), fish
products (-26%), sugar production (-19.4%), food products (-10.9%) among
others.
Overall, the industrial sector has declined
about 20% since ’98, which translates to a decline in revenue form $672 million
in ’98 to about $530 million in ’02.
During this same period, the GDP of the industrial sector declined from
9.7% in ’98 to 7.5% in ’02, according to the General Comptroller’s office. Industrialist Roberto Lombana complains that
Panama currently does not have adequate legislation to ferment investment and
development of this sector.
Meanwhile, the Vice-Minister of Commerce and
Industry reported that the government is working on a new plan that will help
to revitalize the nation’s industrial sector.
CFZ Forecasts $2.5 Billion Loss
The Colon Free Zone (CFZ) is now suffering form
the current decline in the world’s economy, according to CFZ Director Jorge
Fernandez on 15 Aug. Although during
the past few years the CFZ maintained its level of re-exports at about $11
billion a year, Fernandez forecasts that its volume of sales will decline to
about $8.5 billion by year-end ’02, an anticipated loss of about $2.5
billion. This means, according to
Fernandez, that the CFZ must look for new markets while seeking to expand its
existing markets in a very competitive economic climate, in which consumer
spending continues to decline in most countries of the Americas.
The CFZ is a gigantic entity at the Atlantic
gateway to the Panama Canal, dedicated to
re-exports of an enormous variety of merchandise to Latin America and
the Caribbean. Imports and re-exports
are free of import duties and quotas.
— Clifton L. Holland