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has  a strong offshore finance system of banks (now subject to tighter tax-evasion and money laundering controls), plus 'manufacturing and a shipping registry generate jobs and tax revenues', while it also benefits from 'the Colon free trade zone, home to some 2,000 companies and the second largest in the world' (BBC 2006). In recent years it has also sought to become a hub of telecommunications and Internet servers within the Americas.

Moreover, Panama still suffers from ongoing environmental and social problems: problems in maintaining water levels crucial to keep the Canal operating, has been a trans-shipment location for drugs, has had problems with money laundering, with a total of 65 banks cooperating through late 2001 to reduce funds that might have been directed towards terrorist groups (Gonzalez 2001; reformed through late 2002), has had to deal with flows of illegal immigrants, has a poverty rate of approximately 37-40% (with 60% of indigenous groups such as the Ngobe-Bugle, the Kuna, and Embera living in poverty), and has not yet developed a national plan that adequately represents the desires of its indigenous and campesino population, many of whom are threatened by new dam and canal improvement projects (BBC 2003a; NotiCen 2001a; NotiCen 2001b). The government has promised to address these issues as well as investigate the human rights abuses of earlier regimes through a truth commission, but economic problems and corruption issues have continued to plague the government (BBC 2003a; BBC 2006). Likewise, Plan Puebla Panama (PPP), connecting southern Mexico through Central America onto Panama, though it aims to reduce regional poverty, to preserve the environment and to establish  'a hemispheric energy grid' has yet to accepted by indigenous groups, the poor and campesinos, leading to ongoing protests through 2004 in Guatemala and Mexico (NotiCen 2004a). However, through mid-2005 the Plan did get further government support regionally on the basis of increased energy prices and energy shortages: -

The region's energy ministers met . .  . in Guatemala to confront spiking energy prices. Electricity and fuel costs have come to be regarded as threats to the stability of regional governments as these costs are passed on to an increasingly resistant public.

Participants in the meeting represent the countries included in Plan Puebla-Panama (PPP), the megadevelopment scheme frequently attributed to Mexico's President Vicente Fox. The logic of PPP is to integrate the region in matters of energy, transportation, tourism, and other common concerns. Whether PPP projects could, or would, result in decreased consumer costs remains problematic, but the slow-moving plan could get a boost by linking to this growing issue. Popular resistance has been one reason for the PPP's lethargic pace.

. . . Observers from Brazil and Colombia were present at the meeting, making it probable that those countries will be well-disposed to the proposals that involve them. The Brazilian delegation suggested and explained the use of biocombustibles. Colombia asked for formal inclusion in the PPP. That country has participated in PPP meetings for more than a year. The request will be taken up at the Cumbre de Tuxtla, as the presidents' meeting is called, in Honduras. Colombia will participate at the summit, along with member states Mexico, Panama, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Belize. (NotiCen 2005)

Timeline: Panama 1502-2003 (based on BBC 2003b; 2004; 2005a)

1502 - Spanish explorer Rodrigo de Bastidas visits Panama, which was home to Cuna, Choco, Guaymi and other indigenous peoples.

1519 - Panama becomes Spanish Vice-royalty of New Andalucia

1821 - Panama becomes independent of Spain, joins Gran Colombia.

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