Panama Investor Blog

Costa Rica sets example for corrupt politicians

This article from La Nacion in Costa Rica provides details on the conviction and sentencing to jail of a former President of a party and other high ranking officials for corruption. Here in Panama, corruption is rampant from the lowest official working as a minor clerk in a state office, apparently all the way to the top. It has come to be expected that if you are fortunate enough to be elected by the people or placed in a position for helping in an election, it is now your turn to reap as much as possible during your five year turn at bat. This atmosphere of corruption starts early, as children learn that this is the way to get ahead.

It is socially accepted to pay a little to get paperwork pushed through the heavy bureaucracy which of course leads to more delays for those who don't pay. I was amazed years ago at an accepted practice here in Panama to be able to pay $250 in order to get land titles registered in days rather than the weeks or months it may take after submission. Everyone I knew went this route because it meant you got paid by the buyer faster when you delivered title. The $250 is made out to the public registry so it is not corruption per se, but it seems to me that it encourages delays in order to get more people to pay the $250 to the state. The state is not UPS or Fedex where they should have differing rates based on who can or is willing to pay. We all are already paying the state to perform at maximum level.  When our various applications are delayed month after month we know it is because someone in some office is waiting to be paid off. Files that had "disappeared" in some office somewhere miraculously reappear when a finders fee is paid. All graft does is enrich those who practice it and it encourage inefficiency.

We have seen the local papers recently full of stories of past politicians who are accused of taking advantage of their positions to enrich themselves and their families.To expose them without any prosecution or penalty sends the message to the people to continue the practice of corruption as exposure means nothing other than a few nasty articles in the local paper pointing out how much you got away with. Unfortunately, to many this is like a badge of honor. Exposure without penalties just makes things worse and encourages corruption.

I would hope that Panama will take the example set by Costa Rica and show the citizens that if you get caught stealing from the people there are severe penalties. This is the only way Panama can reduce corruption in its society and strengthen the rule of law so all citizens are treated equally.

The first Paragraph of the article says it all.

"Justice and the political system of our country have gained credit, credibility, legitimacy and strength to the historic and unanimous verdict issued Monday by the trial court in the case of Goicoechea Box-Fischel.  The sentence against the former president and presidential candidate of the Christian Social Unity Party (PUSC), Rafael Ángel Calderón Fournier, and six of the seven other defendants-all, though to varying degrees, influential people in politics, administration and business - , is a stern message, yet refreshing, against impunity and for the institutions.  Therefore, revives confidence in our rule of law, equality of citizens before the law and democracy as the basis of social and political organization."

Merida funding in Panama begins

Although a rather small sum compared to numbers we usually hear thrown about by the U.S. government, the $2 million initial funding for the Merida initiative has begun in Panama.

From the State Department
Bureau of Public Affairs

Office of the Spokesman

Washington, DC

March 13, 2009

U.S. Ambassador to Panama Barbara Stephenson and Panamanian Minister of the Presidency Rafael Mezquita today signed the first letter of agreement implementing the Merida Initiative, a multi-year regional effort to combat organized crime, gangs and the trafficking of narcotics and firearms. Today's signing provides an initial $2,011,000 in FY2008 funding for the first year of the Merida Initiative.
Under this agreement, the Panamanian Government will participate in the following four projects fully funded by the U.S. Government: Central American Fingerprint Exchange, $300,000; Central American Vetted and Sensitive Investigative Units (SIU), $1,000,000; Improved policing and police equipment, $613,000; and improved prison management, $100,000. A second letter of agreement to be signed in the future will cover projects including the targeting of at risk youth and anti-gang programs, community policing, and demand reduction.

Representatives of the Government of the United States and the Government of Panama will meet quarterly to review qualitative and quantitative progress towards achievement of the project goals and objectives. These evaluations are in addition to the ongoing monitoring of the programs and activities conducted by each government.

How serious a problem is money laundering in Panama

According to the latest U.S. government report on money laundering and financial crimes in Panama, there are some serious challanges. Highlighted are the Colon Free Zone, financial and banking center and the construction boom. The report does say however  that the construction industry appears to be more ligitimate than previously thought, highlighted by the diminished activity since the real estate bust. Rather than reprint the entire report, here is a link to Eric Jacksons Panama news which carried a summary. The entire 558 page report can be downloaded here.

Why 911 does not work in Panama

An article in LA Prensa caught my attention because it shows the challenges that face this small country when it comes to making beneficial changes for the public. In the first 4 days of implementing the 911 emergency call number they received over 30,000 calls of which they believe only 300 were actual emergencies. The other 29,700 were prank calls which take up all of the 14 lines making it impossible for actual emergency callers to get through. Why would something like this take place? According to the article in La Prensa, it is because lack of education and lack of penalties for making prank calls. The delinquents behind the prank calls need education in the fact that their actions can cause people to die and that the penalty for making false calls will be very serious. The challenges the country faces in penalizing young people is that laws have no teeth with them. This is why sophisticated criminal operators use underage teens to perform the crimes as they are rarely held for criminal action, even if it involves robbery or battery.

La Prensa;

The new 911 Emergency Management System received upward of 30,000 calls, less than 1 percent of them valid, during the first four days of the service’s launching.

System Director Marta Sandoya said the situation is very serious, since the call center can only serve up to 14 calls simultaneously.

“While a delinquent is monopolizing the time of one of our operators, a person who really needs help may be on call waiting,” she said, explaining the system’s intention is to dispatch emergency aid within 15 minutes of receiving a call.

That time goal may be not be possible now, with the number of false alarms forcing operators to attempt to verify the caller’s identity and location before sending help.

Government Innovation Minister Gaspar Tarté said the issue represents a cultural problem. “The Panamanian people need to act more intelligently and seriously than other countries that also report these irregularities,” he said. “We need to understand that the misuse of this service can result in someone’s death.”

Sandoya added that his office was working on drafting a law that would impose “harsh” punishment on those who made prank calls, and hoped lawmakers would regard it as a crime equal to that of threatening a person’s life.

Panama ranks no.8 in LatAm murder rate for youth

In this ranking Panama would rather be in last place, but unfortunately they are in the middle of the pack of 16 countries rated by World Health Organization for young people between the ages of 15 and 24 who are victims of murder. In a recent report titled “A Map of Violence on Young People in Latin America,” the likelihood of a young person in Latin America being the victim of a murder was 30 times greater than a person living in Europe. You can read the complete report here www.ritla.net. Glad I am over 50 as the statistics show we are not the targets.

Civic groups demands repeal of security reforms

The recent security reforms decreed by the President have met with strong resistance that appears to be gaining momentum. Many civic organizations as well as a number of high profile Panamanians have come out against the reforms as a throw back to the days of the dictatorship. Many consider this move disastrous for the ruling party at a crucial time of elections because it has apparently united both opposition and the general population against it.

La Prensa

A letter has been sent to the Asamblea asking it to repeal the recently approved security reforms.

The Asamblea returns to session for the first today since the reforms were enacted.

Carlos Lemos/LA PRENSA

opposed: A civic organization has written to the Asamblea Nacional demanding it repeal changes made to the nation’s security agencies.1082799

The Comisión Nacional Pro Valores Cívicos y Morales yesterday asked the Asamblea Nacional to dismiss the reforms to public safety recently approved by special decree.

A letter from the commission, which represents six civic organizations, was sent to the media yesterday.

The Asamblea returns from a recess today, and will meet for the first time since the reforms were enacted by President Martín Torrijos,

“We have concerns about the legal changes that were recently enacted,” the letter stated. “We are departing from an historic commitment to public security based on democratic values and handled by civilian authorities.”

The letter asks that the reforms be “dismissed” by the Asamblea and that any future security reforms be debated by the legislature before they are enacted.

The Asamblea will begin debating several articles that were removed from the security reforms because they conflict with the country's Constitution.

This includes perhaps the most controversial of all the proposed security reforms, the right for the country's newly-created security agency to intercept private communications without a court order.

Critics say that the creation of the security agency and the powers that Torrijos wants it to possess are reminiscent of the infamous G-2 intelligence service operating under Manuel Noriega's military regime, which was responsible for keeping tabs on dissidents critical of the dictatorship.

The government has defended the reforms as being necessary to combat the country’s growing crime problem. Panama has experienced an increase in violent crimes.

 

Panama creates controversial intelligence force

Where have we heard this before? President calls for new security measures, implements secret intelligence gathering units,  civil rights advocates claim foul. I think it was Ben Franklin who said, "those that will sacrifice their freedoms for the sake of security, deserve neither".

Associated Press Excerpts: Panama, which has no army, is creating a new intelligence agency and a border police force, prompting concerns of a return to its militarized past.

President Martin Torrijos says the intelligence force is needed to combat growing drug crimes.

But opposition lawmakers and civil rights advocates say the laws would give the government unprecendented surveillance powers.

Read the story here at AP

And from La Prensa;

As most of the country celebrated Irving Saladino's return to Panama, controversial reforms to the country's security agencies was brought into force with little fanfare or public acclamation.

But opposition leaders and social activists quickly reacted to their approval, calling the move a dark day for Panama's democracy.

Leaders of opposition political parties described the approval of the reforms as being like an “ambush,” because it took place when the public was occupied with the arrival of Panama's gold medal-winning long jumper.

The Red Democracia Ciudadana announced that it will organize street protests against the reforms and submit appeals to the Inter-American Court of Human Rights and the Human Rights Commission of the Organization of American States.

Mauro Zúñiga, a member of the group, said that the reforms, “restart the military dictatorship, with a new dictator, Daniel Delgado Diamante, who has been given absolute powers to control the country.”

Ministro de la Presidencia Dilio Arcia defended the decision, noting that one of the more controversial articles in the law, which would, among other things, expand the ability for agencies to tap phones, was taken out for further discussion by the Asamblea Nacional.

The Executive branch has dismissed claims that the security reforms will give the police too much power. Instead, it has defended the measures as a necessary move to offset the country's crime problems.

Panama crime stats not too bad

According to this article in today's La Prensa, crime in Panama is statistically not too bad, although it appears to be on the rise and more violent in nature. Like most countries murder is concentrated in cities and mostly taking place among the poorer neighborhoods where drugs play a major role. I have personally heard of a number of taxi kidnappings where people have been held up for money by the driver and then left in a bad part of town. Several cases were to younger Panamanians who did not have much money on them but were robbed anyway. The lesson is to be careful who you ride with and where you go in the cities. A gringo is even a higher grade target for would be robbers so be careful.

Excerpts:

A report by the Secretaría General Iberoamericana (SEGIB), for example, estimated the country’s homicide rate at 11.3 per 100,000 people, a number well below that of El Salvador and Jamaica, but significantly greater than Chile and Uruguay.

Taking that homicide rate into account, the Consejo Nacional de Seguridad Pública de El Salvador went one step further in its analysis, rating Panama as the country with the second lowest crime rate in Central American, topped only by Costa Rica, which averaged 7.7 murders per 100,000 people.

Whether those figures are modest or not, Panama has the symptoms of a “crime epidemic,” a diagnosis defined by the Organización Panamericana de la Salud as any rate higher than five murders for every 100,000 people.

Security reforms generate more criticism

Judging from this article, many organizations share my concerns about the reforms Panama President is attempting to implement by decree. We have been down this road before, led by some of the very same individuals who say it is not a big deal and only for your protection. Fortunately, not all the people are swallowing this line.

Excerpts;

Owners and managers of mass media organizations, as well as former chief executives of the Consejo de Seguridad, expressed concerns yesterday at a forum on the government's proposed security reforms.

The reforms were defended by the Ministro de Gobierno y Justicia Daniel Delgado Diamante and Dilio Arcia, minister of the Presidency. They said these changes are not pushing the country closer to being ruled by a military regime, as some critics have suggested, but rather a realistic approach to dealing with problems such as drug trafficking and illegal immigration.

Read the whole story here....

Are foreigners committing most crimes in Panama?

An article from La Prensa today seems to indicate that the answer is yes, but most likely they are from Latin American countries.  Many people are concerned about the powers given to the president to rule by decree regarding the security measures being implemented, especially with the history Panama has had over the last 20 years. This article points out that several of the business organizations along with church leaders are calling for open discussion.

Excerpt: Both Vice President Rubén Arosemena and the Conferencia Episcopal de Panamá recently said that the panel, which consists of 40 representatives from various sectors of society, should review the proposals to dispel fears about an alleged remilitarization of the country. Enrique De Obarrio, director of the Consejo de la Concertación, pointed out that the issue of public safety and national security should be subjected to deeper analysis and broader public consultation.

But apparently even a call from the vice president and other leaders is going unheeded by  the administration. Although they intend to meet with the various leadership, they  are not going to show the details of the plan until it is implemented.

Excerpt: Delgado, however, said that the reforms are being considered to help curb the country's growing crime problem, especially violent assaults and drug trafficking, some of which have been committed by foreigners.

There were 444 murders in Panama in 2007, 319 of which were committed with a firearm. Police seized 20 tons of narcotics, 1,625 illegal weapons and arrested 1,733 foreign citizens.

My bet is that the majority of the "1733 arrested foreign citizens" were arrested for immigration issues and not violent crime. With a murder rate of 444 last year (.134 per 1000), this puts Panama in the top five countries with the highest murder per capita in the world, certainly something that we should be concerned about. Clearly the government IS concerned about the rising crime rate and we all applaud efforts that will make the country more secure, but to do so without public debate and with decrees rightfully concerns Panamanians and foreigners alike. For foreigners, especially gringos, they are concerned because the only thing the government can do besides enforcing existing laws is to radically implement new immigration and border controls which we know they are planning.

The fact is that most of the crimes are committed by criminals  from Latin countries and most of those have entered the country illegally. In their misguided efforts to non discriminate, they will probably make it more difficult for the very people who are laying the golden eggs.