I found this to be a
n interesting article from the Korea Herald about the relationship between Panama and the government of South Korea. Besides the fact that things are hunky-dory, a number of interesting statistics come to light.
2010-08-22 17:47
One of the first things noticed during the recent meeting of the leaders of Panama and Korea was their compatibility that soon grew to a friendship based on mutual interests.
Both President Lee Myung-bak and Panamanian President Ricardo Martinelli are from the private sector, which gives them a certain expertise in advancing the business activities of the two countries. After all, what’s good for business is good for both nations.This
mutual respect has propelled the relationship of the two countries into
a sphere that has never been seen before in the 48 years of formal ties
between Panama and South Korea.
But that is just the tip of the
iceberg because sometime this fall, the Panamanian leader will return
Lee’s visit with a three-day stint in Seoul. “I think relations between both countries are waking up,” said Panama Ambassador Jaime Lasso Del Castillo to The Korea Herald.
First and foremost for both countries is trade and that famous and important lifeline known as the Panama Canal. Panama is the third destination for Korean exports to the area and the Central American country has the second largest free economic zone in the world after Hong Kong.
“This means all Korean goods come to Panama and then are exported to other parts of Latin America,” he said. The
canal, which connects the Atlantic Ocean with the Pacific Ocean, is an
engineering marvel that is currently going through a $6 billion
facelift. Upon its completion in 2014, the Panama Canal will be able to
handle supertankers and the largest of the modern container ships
including United States navy supercarriers.
The biggest part of
the embassy’s business in Korea is taking care of everything that has
to do with the shipping industry and the canal. Sure there is trade, investment and every other gamut of diplomatic promotion, but over all, shipping takes up most of the time of the eight-member staff at the embassy.
“We
mostly conduct registration for the flags of convenience,” he said.
“That’s business because every merchant ship in the world has to have a
convenience flag. Out
of all countries using the Panama Canal, Korea ranks fifth and the
Panamanian Embassy in Seoul handles about 600-700 ships navigating the
world’s waters.
“We handle 20 percent of the world’s market, which adds up to about 10,000 merchant marine ships,” he said. Korean firms are also interested in Panama’s mining sector, particularly copper, where Korean companies have been focusing their new mining exploration businesses in Mexico, Peru and Panama.
The free trade agreement is also an important part of the future of both countries. “The FTA is a good instrument because you can regulate many different items,” Lasso said. He added that in the agricultural sector, there are virtually no conflicting items except for beef, but by the looks of things, Panamanian beef might not hit these shores for a long time.
Panama has been in talks with the local authorities concerning beef imports, but in the last five years the process has only moved up three steps out of an eight step certification process. Lasso would also like to see direct flights starting to operate for the sake of using Panama as a hub. “Panama is already a hub for connections from many countries, not only international flights, but also telephone and Internet,” he said.
In the coming weeks, both countries will move further in dealing with the double-taxation issue with the goal of signing a treaty during the Panamanian president’s visit.
Also discussed will be the issue of e-government. “Korea is very good at it and it’s something we want to achieve. I believe Korea can help us achieve our goals in this regard,” Lasso said.
Concerning the Central America Integration system -- an economic, cultural and political organization of Central American states -- their main goal nowadays is getting all their eggs in one basket to further the trade between themselves and the rest of the world.
By Yoav Cerralbo (yoav@heraldm.com)
The title of this blog post should be "disappointed in the
This is the article title in La Prensa regarding the increased government spending for 2011. Although there has been increases in tax revenue, all is dependent on the world economic climate and things are not looking so rosy. Yet governments continue to increase spending based on an optimistic view of the worlds economy. This article gives us a good overview of all the areas of expenditure and expresses some of the concerns about meeting them. I especially like this question from the writer. "The
projected behavior of debt, the budget of 2011 and all strategic plans
of government find their reason for being in a strong pace of economic
growth. What if this assumption is not met?" Good question.



This is one of the first manufacturing operations I have heard of in Panama. Interesting and expected statement from the company, "Benalal
argues that it has been difficult to find qualified personnel in
Panama, so there are workers from other regions who will be working for the
project locally."
Thanks to La Prensa we now have a complete picture of where the roads will go and the cost of them. Many of us have been concerned about a proposed road from Boquete to Bocas del Toro. They are preparing to start the construction of a four lane highway from David to Boquete and then it is to continue over the mountain range to Punta Robalo on the Caribbean. My concerns have been mitigated to some degree through some conversations with folks in the know here in Panama. The road will not go through Boquete, but will turn east somewhere between Caldera turn off and Alto Boquete. But the question still remains, why spend the hundreds of millions to build this road?
If you drive between David and Bocas del Toro, you will see a large pipeline running along the road near lake Fortuna. This pipeline was put in may years ago to run oil from the Pacific to the Caribbean. Over the last year they have reversed the flow to go from the Atlantic to the Pacific and built large container tanks on either side in order to increase storage capacity. This is nearly a $500 million investment into the new system. During the last administration there were serious negotiations going on between a consortium including Occidental Petroleum and Panama to put in an oil refinery in Chiriqui which was an investment of about $8 billion. During the 2008-2009 economic turmoil this project was put on hold, but recent mandates by the U.S. government to stop all oil production in the gulf have made it more viable to put in the refinery. I have heard rumors that the Chiriqui refinery is back on track, but one more major hurdle of dealing with the workers unions that must be settled. Current labor laws are prohibitive for large investments of this kind.

Panama is getting very serious regarding tax collection as I pointed out in a post several weeks ago and it appears they will get even more aggressive as they identify areas where large tax leaks are occurring. Anywhere folks can make cash deals to eliminate sales taxes you can be sure they will take advantage of it. Even though the free zone in colon is to be exempt from taxes, this does not apply if the goods are going to end up in Panama. Many folks head to the free zone jewlery stores to buy goods they wear as they walk out of the zone and no one is the wiser. I guess they will have to begin strip searching to nail this one down. In any case, this half billion expected loss over a four year period is probably more guess work, like the U.S. believing that bizillions are lost to offshore tax evasions. Either way it justifies more aggressive tactics by the powers that be.
The lack of skilled labor is not the only challenge facing the hotel industry. Raising levels of care also of concern to the union.





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