Perhaps I was Too Optimistic

When I wrote that the unrest over Law 72  would blow over quickly, because everyone could see its implementation would benefit Colon and the country,  I think I was being naïve.   I’ve never had a business head, and this matter requires thinking like a business person.
 

It initially seemed obvious to me that selling inhabited and developed public lands to those businesses already occupying the land, for the purpose of improving infrastructure while generating additional income and higher revenue for the country, the province, and the municipality, would be something everyone could get on board with.
   

What never occurred to me was that certain business people, presumably those with the most money, would get their noses bent out of shape and have the means to sabotage the efforts.   Colon riots and vandalism have gone on for longer than anticipated, and it now appears those funding the unrest have deep pockets.
 

Although the law doesn’t obligate anyone to purchase the occupied land in question, in retrospect it probably does pressure the wealthiest to go that route.
 

The government essentially wants to sell these lands because they are being leased out at ridiculously low prices to individuals or corporations with long term contracts. Apparently these entities haven’t been paying the lowly taxes assigned with the contracts, either (something like 1%).  Prior governments have either been unsuccessful or unaggressive in collecting this revenue.   According to reports, payments have been pending for 12 years.  Those entities that hold these long term contracts with the government are able to sublet the properties at significantly higher rates (up to 20x higher) to 3^rd parties who are doing business in the free zone.   The contract holders are the ones making all the money. 
 

Along comes Law 72 which allows for the purchase of these public lands.  I am probably missing some things here, but my understanding is that purchase of these lands is not obligatory and is not necessarily an open market.  Maybe that will change, however.   At the current time, the ability to purchase the properties in question is being extended only to those who hold the contracts.  The hope is they WILL purchase the properties, invest in improvements, and pay the government its due share.  According to Frank de Lima, the Minister of Economy and Finance, there are three mechanisms for acquiring title to the public properties. 
 

1.      Outright purchase

2.      Option to Purchase, putting 10% down and paying the remainder over 5 years.

3.     Continuing to rent, and understanding that at the end of 5 years the property values and applied taxes will be re-evaluated and adjusted.
 

I’m not clear on whether the lands for sale will be up for grabs by others if the concession holders decline to purchase by the end of the indicated 5 year period.
 

It's imaginable that businessmen who already have a sweet deal with these government contracts may not want to avail themselves of the above mechanisms at extra expense.  Perhaps, even if they were to choose option 3,  they would face income and expense changes they didn't like in the next five years.
 

Unfortunately, few businesses / corporations are praised for their social conscience.  And people with no business acumen can easily get deceived by false rhetoric and the scapegoating of an unpopular president.  I wouldn't rule out the existence of false government promises, either.  I suspect a lot of the student protests and criticism from other social groups may be due to this.

But I'm beginning to realize I'm watching corporate-style warfare between those on top who like things as they are versus the have nots  who either want a piece of the pie, or at least want to make those who have the pie,  share a little more of it.
 

This may get nastier than it is, or it might get negotiated out at the 'conference' level.  The sad part is that the country could be held hostage during the negotiations.  It’s probably going to depend on who can fund their position the longest.   Meanwhile, police as well as citizens are getting shot in the streets, and children are being killed.  This is greed at its ugliest level, and it’s sickening.   I have to give Don Winner credit for his following comment which I think I now comprehend:
 

It makes sense that the businessmen should be meeting with the government delegation, because the protesters are being paid for and funded by the businessmen of the Colon Free Trade Zone, who don't want Law 72 to stand. They are willing to fund a whole lot of unrest in order to make it go away.

Was Wondering About This--But No Enlightenment

Gilma Camargo, attorney for Walyd Sayed, spoke on Panama's national television channel yesterday regarding the status of her client.  Mr. Sayed is the naturalized Panamanian attorney of Palestinian descent who President Martinelli openly and publically accused of being a narcotrafficker, a terrorist, and an instigator and  financier of the manifestations in Colon following the sancion of Law 72.

 

Ms. Camargo stated her client woke up in the morning to calls from friends and family informing him of the accusations, and warning him that the President announced he would be revoking the man's citizenship and deporting him.   Ms. Camargo added this was a direct political attack against her client for his origin, and allegedly for his ideology  which the President failed to elaborate upon.    She accused President Martinelli of committing various international offenses against a naturalized citizen, and said he was acting on behalf of the State when doing so because he made the accusations publically while taking part in a television interview in the role of president of the republic.   They will be filing complaints with the Human Rights Commission of the OEA.

 

The interviewer added that President Martinelli made the accusations based upon intelligence received.   Ms. Camargo's measured response was,   "It would be irresponsible for a Panamanian intelligence system to permit a person to commit so many offenses and say nothing until the moment when the land upon which [that person] has his business is up for sale."

 

The interviewer asked the obvious and compelling questions,  Who is your client, Why the accusations, What has he done?  Again, the attorney's very measured responses can be summarized as Mr. Sayed is a naturalized citizen within his rights to do business and practice law in the country, and is appropriately fearful for his life and security because the city where he lives is under political unrest and police occupation.   After further prompting from the interviewer,  Ms. Camacho added that Mr. Sayed is a Palestinian from a respectable Catholic family,  and lived some decades in Columbia before relocating to Panama.  He apparently obtained his citizenship in the 1980's.  The interviewer mentioned Mr. Sayed has a business in the free zone and also exercises his profession as a human and civil rights attorney.  She said he is well respected and has good relationships with the community in Colon.  In response to questions from the interviewer regarding why President Martinelli was targeting him, and whether there was prior history, Ms. Camargo responded  that there had been prior incidences, but she didn't know why the president chose this moment to do what he did.  She speculated that the president  might be sending a message to all businessmen in the free zone (clarifying there are many businessmen in the same situation; ie.  Mr. Sayed isn't the only foreigner).  She then shifted the conversation back to the actions being taken by her client regarding the issues at hand.   She specified there is nothing negative about being Palestinian and there currently are no charges against her client that she is aware of.   They are requesting the Interamerican Commission on Human Rights for the OEA take measures to cautiously investigate what prompted this situation, what information they have against Mr. Sayed, and whether there is any 'judicial security'.  When asked if her client would  file a complaint with the Ministerio Publico (public ministry), Ms. Camacho indicated they first would go through the international organizations and assure that it be known "that justice doesn't exist for anyone in the republic [of Panama] ".   She also stated there were other "civil rights violations" that could result in the President being taken to the International Criminal Court.   Ms. Camacho ended the interview saying that in Colon there was an arbitrary and disproportionate attack against the civil population, which was protesting peacefully.

 

Being liberal in the majority of my political beliefs, I can't believe I'm going to say this.  But this woman seemed anything but credible.   Her demeanor and responses seemed contrived.   I was surprised to hear the President make the comments he made on television regarding Mr. Sayed.  I thought they were very unusual and somewhat unprofessional.   At the time I had sympathy for this unknown individual under attack.  But unfortunately,  Ms. Camacho neither said nor did anything  to create sympathy in me for her client.   I was left with more suspicions and doubts than I had before watching the interview.

 

Out of curiosity (and because there's nothing better to do during the  incessant rains)   I'll keep monitoring matters.

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.

New Political Unrest in Panama---This Time in Colon

In record time today, the Panamanian National Assembly approved Bill 529 and sanctioned Law 72 of  October 19, 2012, allowing for the sale of public lands in the Colon Free Zone.  The controversial project also contemplates the sale of some adjacent land, outside the free zone, under certain restrictions.  Apparently in the third and final National Assembly debate, there were 41 votes in favor and only 4 opposed.  President Ricardo Martinelli has been in favor of the measure since its introduction.  He expressed his opinion that opponents of the measure are posturing for purely political reasons and are unpatriotic; ie people who "do not love their country".   He argues that currently the lands are generating little rental income and the sale of them to business enterprises to allow for improvements will actually bring better revenue.  It is estimated the income from the sale of the lands will  provide around $ 100 million annually and the current plan is for  $ 35 million of that income to be invested to solve social problems specifically for Colon,  thus making the initiative "good for Colon".   

 

President Martinelli is also citing a particular "foreigner" as the impetus behind the current protests against the law, and reports that it is only a small group protesting.  The administration is vowing to start an investigation process against that person, alleging him  to have serious legal problems regarding his nationalization. The President is saying that the sale of the lands in the Colon Free Zone is supported by all the people of the business class of the province.

 

Today, two Panamanian attorneys appealed to the Human Rights Commission of the Organization of American States (OEA) to assure the life, physical integrity, personal security, and human and procedural rights of attorney Walid Saied, who is accused by President Martinelli of financing the opposition efforts of the Colon community against the sale of the free zone lands.   President Martinelli reportedly told journalists for the local newstation TVN 2 that attorney Saied is of Palenstinian nationality and entered the country under fraudulent means. The President is pushing for expedient deportation and revocation of nationalization for this individual.

 

The oppositional activities carried out in the region last night and today were sufficient to result in road barricades and closures, destruction of businesses and properties, burning tires and vandalism, and injuries to 16 people, six of whom suffered gunshot wounds. One death occurred, of a nine-year old child, from three gunshot wounds. Tear gas and pepper spray were also used for riot control.

 

Law students of the University of Panama also vocalized protests and demonstrated, but stressed peaceful opposition. 

 

The US embassy has issued warnings to US citizens to avoid travel into the city of Colon, as well as the province for the coming days.

 

It will be interesting to follow the accusations against attorney Saied as well and observe the outcome of the protests against Law 72.