Mining companies and spanish citizens are suing the Panamanian State arguing arbitrary and discriminatory measures imposed by the Martinelli Administration are detrimental to their investments.
The companies Petaquilla Gold, Petaquilla Minerals LTD, and Corporación de Recursos Iberia, S.A. are sueing the Panamanian government for $2.3 billion at the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank for direct damages against the company in Panama and its shareholders, reported Laestrella.com.pa.
The Supreme Court has ordered the provisional suspension of a disputed contract with a subsidiary of Finmeccanica to install a digital mapping system.
The Supreme Court justified the provisional suspension as being "... in order to avoid the effects of the contract causing 'serious and impossible to repair damage to the community as it may affect the heritage of the Panamanian nation because of the delay in the decision on its merits that could be made by this court. '"
The government of Panama has filed a lawsuit to annul the contract for the purchase of 19 radars from the Italian company Finmeccanica and a temporary suspension while the claim is being settled.
A year after stopping the execution of the project to install radars provided by the company Selex, the Varela administration is now asking for the cancelation of this contract, arguing, among other things, that "...
Both Citibank and Banco Nacional de Panamá have closed accounts belonging to the Democratic Change Party, founded by former President Ricardo Martinelli.
In what appears to be a reaction to the scandals caused by the allegations of corruption on the part of members of the previous administration, Citibank and Banco Nacional have stopped attending to the accounts where the Democratic Party's administrators deposited money coming mainly from electoral subsidy.
Experts are warning that the rapid growth of public spending could have negative implications if conditions change in the economic environment.
After the Ministry of Finance raised the ceiling on the deficit for the nonfinancial public sector to 4.1% at the end of September 2014, there are now significant differences between income and expenses, resulting in a deficit of $2.07 billion.
Fitch Ratings highlighted as a recurrent weakness of the Panamanian fiscal policy the inability to limit the growth of debt as a percentage of GDP.
From the statement by Fitch Ratings:
Fitch Ratings-London-03 October 2014: The Panamanian government's request to raise the 2014 non-financial public sector deficit ceiling highlights the persistent use of waivers of the country's Social and Fiscal Responsibility Law (LRSF), Fitch Ratings says.
At the same time as increasing social spending and delaying the removal of the electricity subsidy, the Varela government has asked for a raise of the state's legal debt ceiling to $1.756 million.
The formal request to the National Assembly will be made by Dulcidio De La Guardia, Minister of Economy and Finance, who attributes the decision to request an adjustment to "...
In the first five months of the year the country bought nineteen times more energy than the in the whole of 2012 and in 2015 it is projected that 200 MW will be purchased abroad.
While it is expected that in the coming years several renewable energy generation projects will start up, Panama is already planning to alleviate possible shortages in the short term by importing energy from neighboring countries.
President-elect Juan Carlos Varela has announced that prices, rates, importation and obligations established in the law will be reviewed when he takes office.
The next president of Panama also noted in an article on Prensa.com that "... only the market of domestic ethanol production should be incorporated thereby promoting agribusiness."
The law establishing the mandatory use of ethanol in gasoline which is produced and distributed in the country was approved in 2011 by the administration of Ricardo Martinelli. "...Ethanol is currently sold at a fixed price set by the company Pesé Golf, which was accepted by the Government. The cost is $1.21 per liter or $4.58 per gallon, a price which is more than double the international price ($2.08 a gallon). "
Greenfield Resources has initiated efforts to request the reopening of the Remance mine, in which it plans to invest $110 million.
16 years since the closure of the mine, caused by the collapse of the gold price in the international market, the Panamanian company Greenfield Resources Inc. has asked the National Environmental Authority (ANAM) for approval of an environmental impact assessment (EIA) in order to reactivate their exploitation activities. The site in the province of Veraguas has projected a production life of 12 years and to exploit it the company plans to install a plant with initial capacity to process 5000 tons per day of the material, with projections to increase this to 7000 tonnes.
The inclusion of Panama in the Colombian government's gray list could mean surcharges on capital repatriation by investors in the country.
"If Panama is included on a (Colombia's) gray list, it will affect the Colombian investments that exist in Panama and which have a strong presence in banking and other industries, because they will pay a surcharge when they repatriate their profits," the outgoing Minister of Economy and Finance in Panama, Frank De Lima, said.
The government has announced the start of a public consultation process for the comprehensive review of the Panamanian Constitution.
Although topics have still not been fully defined for a possible amendment to the Constitution, the Government is planning a comprehensive review as part of the public consultation process with the public.
An article in Capital.com.pa reports: "The president also said the constitutionalist and former Ombudsman Italo Antinori will lead one team, coordinated by the Ministry of the Presidency, which will be responsible for carrying out this consultation process with all components of society. "
The progressive completion of major infrastructure works slowed down growth in 2013 to 8.4%, below what was achieved in the previous two years.
The Panamanian economy smoothly dodged the 2008 global crisis, and has maintained a high rate of activity through the implementation of public and private projects.
"The Central American country escaped the worst of the global recession, achieving an average growth rate of 8 percent in the past six years and scoring a double-digit growth in 2011 and 2012."
Although work has been restarted, there are still differences at the negotiating table that make the final agreement uncertain.
Just yesterday afternoon more activity could be seen in the works of the Canal expansion, as the administrator of the Panama Canal, Jorge Luis Quijano said it was "a good restart of works."
"... Although the Panama Canal Authority (ACP) and Grupo Unidos por el Canal (GUPC) reached a partial agreement on Wednesday which included the revival of works on the third set of locks, differences remain, both at the negotiating table as well as internally in the consortium.
The fourth round has been completed with agreements made on the chapters on Rules of Origin, Investment and Financial Services.
The delegations from both countries agreed to hold a fifth round of negotiations from 18th to 21st March in Panama City.
From a press release issued by the Ministry of Economy of Mexico:
The Governments of the United Mexican States and the Republic of Panama have concluded a fourth round of negotiations for a Free Trade Agreement (FTA). This round of negotiations was held in Mexico City from 4th to 7th February 2014 and was led by Deputy Minister of International Trade Negotiations of Panama, Diana Salazar and Assistant Secretary for Foreign Trade of Mexico, Francisco de Rosenzweig.
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