Oct 21, 2012

More on the Colon Situation

After 3 continuous days of civil unrest in Colon, accompanied by demonstrations and strategy reunions in other parts of the country, most local business owners made the decision to cease operations for 48 hours.  Many of these same businesses were hit by vandalism and complained of insufficient police presence to protect their interests and property.  Then today it was announced that the Minister of the Presidency, Roberto Henriquez, will open dialogues tomorrow with the leaders of Colon to indicate and clarify the benefits to be derived from approval and sancioning of Law 72 of 10/19/12.  This in response to petitions from various sectors to repeal the new law.  The Minister indicated they will not cede to the objectives of the petitions.
In a television interview on 10/19/12,  just prior to approval of Bill 529, President Martinelli spoke on the subject of the sale of lands in the free zone.  He was asked specifically by the interviewer if Panama had incurred a large deficit hole that the sale of said lands was designed to address.  President Martinelli denied this to be the case and stated that the sale of the lands was not being implemented to address any deficit in the country.  He also commented that any sale from the designated lands would not materialize over a short term.   He stated that the current administration did have a very aggressive program to attract investment to the country, and this program involved a strategy to return to the province of Colon benefits equal to 35 cents on each dollar earned from the sales.
The President mentioned that the lands in question are currently held [presumably through rights of possession] by real estate developers that rent from the state at one balboa ($1.00) per sq meter.  They then lease out these same properties to businesses or individuals at $ 20 per sq meter.  Over the course of 5 years, there are slight increases in state rental rates, but these are increases are essentially "nothing".    By offering the owners of the rights of possession an opportunity to purchase and title them,  the expectation is that improvements will be made in infrastructure and construction.  He added that no one will be obligated to purchase the properties, but this new law removes some of the bureaucratic restrictions to the purchase of properties for  "the pueblo"  who are already occupying them.   He reiterated that the sale of the properties will generate income for the state and 35% of that income will be invested in social and infrastructure improvements for Colon.  According to the president, never before has Colon ever received the type of investment that will be dedicated to the province as a result of the property sales.
He stated that it was unfortunate that "two individuals" have taken it upon themselves to deceive the Colon community and finance the current unrest for their own ideological or political interests.  He accused "a Palestinian attorney" whom he named a narcotrafficker and a terrorist,  and an "ex-deputy" as the instigators of the current situation.   As previously stated, action is allegedly being taken to follow proper channels in getting the attorney deported and his naturalization revoked. 
Another question posed to President Martinelli involved the extent of debt his administration will be leaving for the next elected leader and political party to deal with after the election.  President Martinelli insisted that he was not leaving an excessive debt.  He emphasized the percentage of national debt has actually decreased during his administration and they have created the capacity for the next administration to realize a 50% increase in investment over prior ones.  He said he will be leaving the next administration with "19 thousand million" dollars available income for investment.  He explained that his political party intends to monitor those investments to assure they are applied for the good of the country.   He cited as example the prior administration, which he claimed took nearly 192 million from airport earnings and applied it to "political" activities that cannot be justified or identified.  He added that there is a cancelled check available to corroborate of this action.
Politics being what they are, it's difficult to get at the truth of matters.   When the TV announcer asked about accusations levied by economists regarding the large debt incurred by President Martinelli's administration, the President vehemently defended his position.   When asked about his interest or intent to remain in office for another term---something Panamanian law does not allow at this point---President Martinelli reaffirmed he has no interest in pursuing another term.  He demonstrated frustration with the question, and responded "I've said in as many ways as I can that I'm not interested.  Do you know how to say it in Chinese?  I haven't stated it in Chinese.   Could that possibly help?"
The interview was an hour long and covered multiple additional topics not to be addressed in this post.  All four parts of the interview are available on line for those who understand Spanish.   It appears, however, that the sale of the lands in Colon's free zone will not be reversed or stopped, as were the mining rights in the Ngobe comarcas.   From my limited vantage point, this may be okay.   It appears that although the lands may be purchased by foreign business concerns, these same businesses are currently in possession of the properties and are earning twenty times more for for their use than the Panamanian state is earning in rental income for them.  Perhaps the sale of the lands will encourage businesses to invest more in improvements to maintain a competitive edge, and the state income from property taxes will supersede what is being earned in rents.   Time will tell.