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Fitch Upgrades Panama´s Investment Grade

Development: On 23 March the international credit ratings agency Fitch upgraded Panama from BB+ to BBB-.

Significance: The upgrade is a victory for the rightwing government of President Ricardo Martinelli, making Panama the fifth Latin American country to reach this category, alongside Brazil, Mexico, Chile and Peru.

It follows Martinelli’s recent tax reform which was aimed at increasing access to finance and reducing the cost of doing business in Panama. The reform, which takes effect in July, raises VAT from 5% to 7%, cuts income tax and reduces the corporate tax rate from 30% to 25%. That VAT increase move has been lambasted as regressive by unions and popular movements. As well as simplifying the tax code by abolishing over 30 duties, the reform cuts taxes on banks with assets of between US$100m and US$750m but raises taxes on those with assets of over US$750m.

Fitch singled out the tax reform as one of the reasons for the upgrade, along with Panama’s ability to weather the recent global financial crisis. The agency noted that despite the fact that Panama’s real annual GDP growth rate slowed to 2.4% in 2009, from 10.7% in 2008, it still had one of the highest growth rates in the region and amongst other BBB rated countries.

The upgrade could help Panama in its efforts to secure a Free Trade Agreement (FTA) with the US, which has been ratified by Panama but is pending approval by the US congress. Panama’s lack of tax transparency has been a major concern for the US.

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Panama has 22% of the World´s Ships Flying its Flag
Machine translated from the original article in La Prensa:

Wilfredo Jordán S.
wjordan@prensa.com
http://mensual.prensa.com/mensual/contenido/2009/08/18/hoy/Negocios/1891335.asp

In 2004 there were 6061 ships registered by the Panama. Now, in agreement with the official registries, there are 8661 ships.

Between 2004 and what goes of 2009, Panama registered 2600 ships and about 40 million tons of gross registry, that means a growth of 41% in this period. At the closing of 2004, 6061 ships registered by Panama with 168 million tons of gross registry existed. At the moment the country has 8661 ships with 202,979,000 tons. These numbers represent 22% of the world-wide marine fleet, in comparison with the main competitors of Panama: Liberia, that has a registry of 2639 ships and Marshall Island, with a count with 1612. “We have like the Government, the commitment that the income from this institution gets to the people who need it”, the administrator of the AMP, Linares Robert commented. The approximated net income of the AMP by the registry of ships calculate in 80 million dollars a year. In 2004 this income was 52 million dollars and in 2008 it went up to around the 78 million dollars. In indirect income, it is calculated that the registry of ships generates more than 100 million dollars a year. If the smaller ships of 100 tons are included, Panama has more than thousand registries.

Ships Registered under the Panamanian Flag

Ships Registered under the Panamanian Flag

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Helping Protect Our Earth, One Step at a Time.

Helping Protect Our Earth, One Step at a Time.

Thought provoking ideas from two men ahead of their time but with ideas not out of reach:

PREVENTING COASTAL EROSIAN
Rohit Talwar and Ian Pearson
An Authorized Repost on Destination Panama thanks to The Fast Future Bulletin July 2009

In this article we propose an alternative approach to tackling coastal erosion around the globe which would also cut carbon emissions and reduce plastic levels in landfill and waste dumps.

The latest nightmare environmental forecasts suggest that much of the UK coastline will be affected by severe erosion. Indeed, some parts of the Norfolk coast are already suffering dramatic erosion. The official policy is not to protect such areas, but to allow erosion, for various reasons. In areas where protection is needed, often, concrete blocks are dropped into the sea to absorb or deflect the wave energy.

A seemingly unrelated environmental problem is the disposal of plastic. Much is recycled now, but a lot still ends up in landfill sites or waste tips, which are filling up fast all over the world. Big concerns have also been raised over the potential for non-biodegradable plastic to remain in the environment for hundreds or thousands of years.

However with a bit of imagination, both of these problems could be tackled together. When plastic is recycled, it is gathered and compressed into cubes for easy handling and distribution. If these cubes were wrapped and weighted, they could be thrown into the sea instead of concrete blocks, solving several environmental problems at once. Concrete production consumes energy and produces large amounts of carbon dioxide, both of which would be averted. Raw material costs would be reduced since the plastic is waste and in plentiful supply. It would hang around in the sea for many years, and as the blocks accumulate, they would provide an artificial reef, before becoming a good base for reclaimed land, while reversing the erosion process. During this time, the plastic blocks would be locking up carbon, making the plastic ‘reef’ carbon negative, as compared to the carbon neutral recycling process. And of course, landfill would not fill up as fast.

A plastic reef could be used to effectively seal off a region of coastal sea, making it possible to use it as landfill for other kinds of waste without the danger of sea pollution. This would accelerate the creation of reclaimed land as well as creating more landfill capacity.

One major obstacle is that under EU law, it is currently illegal to dump plastic in the sea. At the same time, landfill is highly taxed. It would be very sensible to review both of these obstacles to make such solutions feasible, as there would be very substantial environmental benefits. It is ironic that laws designed to protect the environment are now the major obstacles to one environmental solution.

For more information please contact Rohit or Ian via these links:

http://community.icontact.com/p/fastfuture

http://www.linkedin.com/in/talwar

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We are usually not a news site but since our family is very closely connected to Japan and the Japanese community here in Panama, we decided to post this important bulletin related to both Panama and Japan from the Daily Yomiuri in Tokyo. Because of Panama´s importance in World Trade and strategic position not only for shipping, the Japanese have historically been very generous with both assistance and funding to Panama.

The Daily Yomiuri is one of Japan´s English news sites and a great way to keep up with what is happening in Asia.

Japanese Group to Finance Panama Canal Project

The Yomiuri Shimbun – Japanese financial institutions have agreed in principle with the Panama Canal Authority to provide 800 million dollars for a project to widen the canal to alleviate congestion in it, it was learned Saturday.

According to sources, of the 800 million dollars, the Japan Finance Corporation’s Japan Bank for International Cooperation will provide 400 million dollars, and Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corp. and others will provide the remaining 400 million dollars through joint financing.

The Panama Canal is a major artery connecting the Atlantic Ocean to the Pacific Ocean. However, the canal is chronically congested, causing a wait time of several days for ocean vessels wanting to enter it.

To help solve the problem, excavation of trenches along both sides of the 80-kilometer-long canal began in 2007, to be completed in 2014, the 100th anniversary of the opening of the canal.

The Panama Canal Authority plans to procure 2.3 billion dollars of the total project cost of 5.25 billion dollars from overseas, from such sources as Japanese financial institutions and the Inter-American Development Bank.

The Japanese financial institutions determined they would be able to recoup their loans as the Panama Canal Authority has begun raising the canal’s tolls, according to the JBIC’s Americas Finance Department.

Japan is the third most frequent user of the canal, following the United States and China. A consortium of Taisei Corp. and Mitsubishi Corp., both Japanese companies, and U.S.-based Bechtel Corp. has announced its plan to undertake the widening project.

With its completion, the shipping volume will double in the canal, and more types of vessels will be able to use it, including mid-size oil tankers and liquefied natural gas carriers in addition to the current container vessels.

The project is also expected to drastically reduce the time it takes to transport oil from Latin American countries, which is usually transported via the Cape of Good Hope off South Africa.

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