Panama Investor Blog

New U.S. tax on cosmetic surgery may drive more business to Panama

They will have to tax a lot more than just elective cosmetic surgery in order to pay down the debts being incurred, but at least it may help Panama. Come on down!

From Russia today

Desperately seeking money to pay for new health care legislation, Senate majority leader Harry Reid is proposing a 5 percent tax on elective cosmetic surgery and procedures.

With all the nipping and tucking and lifting and botoxing that members of Congress have recently indulged in, it's difficult to imagine that he will find much support. Nevertheless, some senators who have already had their fill of fillers and thus feel free to tax the sagging and wrinkly laggards, need to consider the following.

Panama education ranked near the bottom in Latin America

Panama spends a great deal of its budget on health and education, but unfortunately it does not pay off. This was made acutely aware by a recent study by UNESCO. Panama ranked 8th out of 11 countries evaluated. Who is to blame? Certainly it is the qualifications of the educators as well as the acceptance of cheating as a way to get ahead in this society. Cuba's ranking at the top may make some point to that communist country as the way to a better future, but I believe it is  better to be stupid and free than smart and enslaved!

La Estralla

Most Panamanian students have serious shortcomings in math and Spanish, that's what threw the second Regional Comparative and Explanatory Study of the Quality of Education in Latin America (SERCE) report released yesterday by the Ministry of Education.

The evaluation was organized by UNESCO, was practiced at the national level to about 13.011 students in third and sixth grade during 2005 to 2007.

  Arturo Rivera, National Director of Educational Evaluation, explained that the shortcomings are more noticeable in mathematics where only 4% of students managed to get the maximum points, but another 8.5% did not reach the minimum required because they generally do not dominate the geometry and find it difficult to solve math problems with two variables.  In Spanish, the main obstacle is the understanding of reading, only 6% of students obtained the highest level of qualification, but 12% did not reach the minimum.

 Similarly in science, just get the 0.77, in some countries competed this specialty, but also left Panama favored. Rivera recommended increased experimentation in the classroom.
 Panama eleven countries reviewed was the eighth, leaving as one of the worst.

Cuba won the first place, followed by Costa Rica, Chile, Argentina, Colombia, El Salvador and Peru.  Only three countries scored below such as Panama, Guatemala, Nicaragua and Dominican Republic.

  There are good schools
. El Colegio Brader (particular) and Nicanor Villalaz school located in Los Santos were among the schools that got results. . His students took higher scores than the averages for Latin America.. The assessment also includes the views of teachers teaching which calls for greater support.

  Lucy Molinar, Education Minister said the results do not surprise anyone, since it is well known, but they are an opportunity to identify areas that need reinforcement.

  Some plans included is incorporated into the bid book to those texts used in schools whose performance in the test was satisfactory.

  In addition teachers will strengthen in the areas of Spanish, mathematics and science through summer courses.

  Rivera added that the study found that teachers who use the dictionary every day in classes that their students have achieved high returns and this feature is achieved within the Republic. In addition it was determined that teachers require to memorize definitions math, "math is practice not theory," Rivera countered.Another important variant is that there must be a school climate conducive to the normal development of learning.

"I'm so sad," said Aixa Rodriguez, president of the parents, who ask what can we do?

  Rodriguez hopes that teachers be trained so that raising the quality of education.

  He added that some teachers were excused because students did not know the system, that argument was not accepted as valid.

Be careful what vegies you eat in Panama

Chiriqui is the bread basket for Panama and anyone who has visited the area of Cero Punta knows that the first thing you notice is the ever present smell of pesticides. In an article published in La Prensa today, we find out that the U.S. is restricting the imports from Panama because of the use of certain pesticides which have been determined to cause health issues. Yet these same chemicals are readily used and consumed by an unwary Panamanian and foreign consumer. The groceries they purchase and the foods they consume in restaurants for the most part have been using these dangerous pesticides.  I hope we can help raise awareness of this practice so it can be stopped. Fortunately more organically produced crops are being grown in our area and there are a number of hydroponic operations that don't use pesticides. We only use organically grown or hydroponics in our restaurants in Valle Escondido for this very reason.

Excerpts from La Prensa:

Panama will not be permitted to export to the United States (U.S.), beginning Jan. 1, 2010, any fruits or vegetables sprayed with the pesticide carbofuran.

The measure has been adopted by the U.S. Agency for Environmental Protection on the grounds that this pesticide is highly toxic and therefore poses a danger to the health of the population.

The pesticide is used in Panama to combat crop pests, including nematodes (worms), insects,  fleas, and bedbugs, among others.

Arlene Villalaz, in charge of the Department of Agriculture United States in Panama, reported that as an exporter to the U.S. market, Panama must adhere to this measure, which was announced to the World Trade Organization (WTO) last Aug. 13, and will take effect in 2010.

The U.S. is the principal market for Panamanian agricultural exports.  Last year, Panama exported $10 million worth of products in fruits alone.

Jorge Requena, Deputy Director of Plant Protection at the Ministry of Agricultural Development (MIDA), reported that the use of this pesticide has been restricted in Panama since 2008, but is still being used. However, he did note that agricultural exporters will be notified of the measure and will be advised to seek a replacement for carbofuran.

Paradoxically, while the United States restricts the use of carbofuran for its potential to endanger the health of its citizens, in Panama, this pesticide continues to be used in agricultural production for local consumption. 

On this note, Requena admitted that there does not currently exist any proposal by Panamanian authorities to prohibit the use of this pesticide in food production for local consumption. This, despite the fact that it is used in basic grain crops, vegetables, fruits, and sugarcane, among others, and that it has been known to affect the nervous system, causing convulsions, respiratory failure, and also inhibiting several enzymes. 

Within the country, this pesticide is marketed under the names Furadán, Curate, Rimafurán and Transmerquim. MIDA statistics show that 6.2 million grams of pesticides are imported to Panama annually, of which 161,795 grams are carbofuran.

Government launches free wireless Internet service

I consider this an important step in education for Panama. This is one of the campaign promises that Martinelli made and it is apparently coming to fruition. In the last sentence there is a commitment for free laptop computers fro schools.

La Prensa

More than 500 points in 22 cities across Panama have been enabled with free wireless Internet service, according to the State Secretariat of Communication.

In a symbol activating of the network yesterday, President Ricardo Martinelli launched the $25.5 million dollar project, which is being developed by Liberty Technologies, who won the bid in September of this year.

With this connection, users with any personal computer equipped with Wi-Fi signal can "have access to websites, chats, and e-mail for free through an attainable speed of up to 512 kbps," according to the press release.  The places that will offer this signal will display an orange logo that will identify the national network, said Eduardo Jaén, Secretary of Technology Innovation.

Connection points will be located in places found to have the greatest concentration of people, such as schools, parks, libraries, health centers, police stations, community gyms, tourist spots, and municipal and government sites, among others. 

The first phase of this project plans to install service in: Penonomé, Coclé; Colón, Colón; David, Chiriquí; Chitré, Herrera; Panamá, Panamá; Arraiján, Panamá; La Chorrera, Panamá; Santiago, Veraguas; Soná, Veraguas; and Pesé, Herrera.

In the second phase, the project will incorporate connection points in cities like Chanquinola, Bocas del Toro; Aguadulce, Coclé; Bugaba, en Chiriquí; Chepigana y Metetí en Darién; Ocú, Herrera; Capira, Chame, Chepo, and San Miguelito in Panamá..

Keeping a promise

"We are fulfilling a campaign promise; providing the opportunity for young people to gain access to technology," said Martinelli at the Orlando Winter gymnasium of the Alfredo Cantón school in San Miguelito, before a cheering crown.
 
Jaén chimed in that they also plan to provide public school students with free laptops.

Internet coming to remote schools all over Panama

In my humble opinion, this may do more for the Panamanian educational system than anything they have attempted in the past. Of course it will be important for the educators to learn how to use the internet for things other than social networking, gambling and porn, but should the effort be made, children all over the country will have access to information that can really change their lives for the better.

Excerpts from Istockanalyst.com

PETAH TIKVA, Israel, Oct. 8, 2009 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (Nasdaq:GILT) today announced it has been chosen by Cable & Wireless Panama (C&W), Panama's largest telecommunications operator, to provide a SkyEdge II high-performance network that will be used to deliver broadband Internet to hundreds of schools in remote areas nationwide.

As part of the solution, Gilat will provide equipment, technical support, assisted network operations, and training. The new network will enable students in Panama's remote areas to enjoy an enhanced educational experience through interactive learning programs and other Internet applications.

Read the rest of the story here....

Teachers fail language tests

I posted an article several weeks ago about the need for qualified English teachers in the country as many of the teachers ho's job it is teach English are woefully wanting in skills. As many of my readers made comments about the subject I thought it a good idea to post this article that came out today in La Prensa. Th article is about the inability of many teachers to speak proper Spanish as well and the fact that those with high degrees from public and private universities were deficient.  The problems in Panama's educational system are similar to those in most government run schools where teacher unions protect the incompetent at the expense of a quality education the public should expect.

This is a machine translation from LA Prensa

TEACHERS FAIL TEST

The first contest organized by the Ministry of Education (MEDUCA) to elect the directors of the 13 educational regions of the country, exposed gaps between educators who aspired to the post.

  Some were unable to speak well and others could not handled well the rules of syntax and spelling.  This was announced by the director general of Education, Reymundo Howard Lay, who explained that of the 100 teachers who applied for this position about half showed failures during the interview or to the written exam.

Howard Lay said some of the professionals who failed the test have on thier record documents certifying their attendance at seminars, master's and postgraduate courses.  This shows, he said, "not all those with a collection of workshops and conferences are the best educators."

  The contest results will be announced in coming days, according to official MEDUCA, who reported that yesterday began the period of response to complaints that some applicants submitted.

  Mario Almanza, general secretary of the Teachers Association Authentic, talking about the failures of educators said that as a guild, one of the criticisms that have made of the education system, is that they never worked on developing the profile for the position of Regional Director of Education.

He said that weaknesses in some of the applicants only demonstrate that there are masters, postgraduate and even doctoral degrees "that are very easily obtained.  That situation, he added, demonstrates "that we are receiving education in some private universities that are ineffective or remote" and that should be reviewed.

The leader added that the contest for regional directors was an aspiration of his guild because, well, really only suitable educators should occupy these positions.

How important is English for Panamanians

An article in La Prensa today tells us that the government budget has been increased to teach English to school students in the country from $5 million to $5.8 million. As an employer in the hospitality business, I can report that it makes a big difference in employee pay and a big difference in our business. On average an English speaker will make about $150 a month more which in this business is about a 30% premium. I have heard people say that they like the fact that many people don't speak English because it forces them to learn more Spanish. Although this may be true for some, people who are coming  to Panama on vacation are not wanting to be frustrated  with communication as part of their itinerary. All tourist related businesses in Panama are desperately seeking English speakers.

When the real estate boom was in high gear, many English speakers flocked to get their RE License and many I know made small fortunes selling real estate throughout the country. What made this possible for them was their ability to speak English to the many North Americans coming to buy real estate. They could not have accomplished it without this basic skill.

Even today an English speaker is sought after by foreigners who move here to help them with many of the things associated with settling into the country such as getting electricity turned on, Cable TV, home repairs etc.. I know Panamanians who have turned this into a small business and make a good living from it here in Boquete.

At a dinner last week with the Tourism Head Salomon Shamah, he shared with us his concerns about the lack of qualified English speakers for the many jobs interfacing with tourists in Panama. He recently let a number of employees go who were working in important areas without English skills.

And on a recent visit to Panama Pacifico, London & Regional's new mega project, the sales manager told  me  that Dell's call center has about 1500 English speaking Panamanians working there now and more call centers are coming. These call centers are sucking up every English speaker in the Panama City area. They pay very well and the jobs are very stable.

All three of my children are bilingual and you can bet it is a major advantage to their future in Latin America. Many of the successful  business people I know in Panama and other Latin countries speak fluent English.

The challenge for Panama is to find qualified English teachers. All through primary and secondary school my children told me how the teachers who were to teach English in their classes could not speak it, and would call of them for help in class. Many of the teachers who are teaching as part of government programs do not speak fluent English either. So we have the blind leading the blind which is why the programs are not very effective. The money needs to go to fluent English speaking teachers who are brought in form other countries if success in getting more Panamanians speaking English is to be accomplished.

How important is English speaking for a young person in Panama? It can mean the difference between getting a good job with a future or working in menial labor position for life

U.S. insurance starting to cover medical treatments abroad

I have often thought that U.S. insurance companies should be taking advantage of the much lower cost of medical care in foreign countries. There has always been the concern of lower quality of care, but it seems more insurance companies are embracing the idea lately. Obviously it just comes down to cost for employers, employees and the insurance companies. This article from Forbes online gives a good overview of the issue and even names some of the insurance companies running the programs.

Excerpts from Forbes:

As Washington searches for ways to tame the country's escalating health care costs, more insurers are offering networks of surgeons and dentists in places like India and Costa Rica, where costs can be as much as 80 percent less than in America.

Until recently, most Americans traveling abroad for cheaper non-emergency medical care were either uninsured or wealthy. But the profile of medical tourists is changing. Now, they are more likely to be people covered by private insurers, which are looking to keep costs from spiraling out of control.

The four largest commercial U.S. health insurers - with enrollments totaling nearly 100 million people - have either launched pilot programs offering overseas travel or explored it. Several smaller insurers and brokers also have introduced travel options for hundreds of employers around the country.

Social Security reports a surplus...but not really

Social Security was a very hot issue during the last administration, in fact after much wrangling with the unions they were able to work out a deal that would keep it from going broke. Now in today's paper we get details on operational costs and expenditures for the first 6 months of the year. Why should foreign investors care about the social security system of Panama? Well, because if anything happens to that system there will be tremendous social unrest which will affect the economy greatly and therefore the value of your investments.

The article points out that the revenues in the first six months of the year are in 'surplus" of $82 million. But then it goes on to say that they had an increase both in revenue and expenditures due mostly to increased number of people working for the Social security offices around the country. They increased the number by 1500 which makes me wonder just how many people work in that department. It must be many thousands. With revenue of $877 million for just 6 months this department must the the biggest in the country. In any case the head of the administration says "This is not a loss, on the contrary, it's improved service,". Some how I find that  difficult to believe.

In any case the Ministry of Economy weighs in saying that really they would be in deficit if the MEF did not make an annual transfer of $176 million from the state. The financial condition of Social Security is totally dependent high employment and the last few years has seen just that take place. Of course the state increased the cost of operations which nullified any real benefit or "surplus" to help carry it through tough times, which are surely going to come. Lets hope the new administration will have an opportunity to work on Social Security reform even if it just comes in the form of more efficient operations needing less people on the payroll.

read the La Prensa article here...

Study finds disparity between spending, learning

Here are some interesting statistics regarding education costs in Panama. Having raised three children through the system here I can add some further data regarding private institutions. The average private school tuition for elementary in the interior is about $90 a month. In Boquete there are 4 private schools charging about this amount or a little more. As this story points out, improvements in the educational system are challenging and most people know that it is the teacher unions that cause most of these challenges. Being state run they have no intensive to improve or bring in new ideas. But having a choice as we do in Boquete of 4 schools to choose from keeps all of the private schools on their toes. With public eduction eating up 18% of the state budget getting the unions de fanged should be a priority for this new administartion.

Excerps from La Prensa: Panama spends an average of $1,228 on each student in the public school system, according to a study by the consulting firm Goethals and an economic audit under the leadership of Mary Echarte, an analyst at the Latin American Economic Research Foundation.

That figure was far above those reported by the Ministry of Education (Meduca), whose spokesmen said that the country spends about $760 annually on every elementary and middle school student, and roughly $450 on kindergartners and preschoolers. Data on high school students was not available.

“We still do not have statistics for 2008,” reported the Meduca press office. “This is the official data from 2007.”

Meduca was allotted $ 968.2 million in budget funds this year, or 17.5 percent of the total state budget, of which $799 million goes toward operating expenditure and the remaining funds are designated for special programs.

This year, Panama is investing in education about 6 percent of its 2008 gross domestic product (GDP), researchers pointed out that those funds are not spent in an effective manner, impeding improvement to the quality of education received by the 700,000 students nationwide.

The study noted that state spending per pupil is higher than the monthly tuition fees and in many private schools, where the scholastic experience is often superior to that found in public schools.