News Briefs, 28/5//2008

Fred, Rickie the Cat, and Ethel

It is pouring here, and has been through most of the night.

The biggest story in most of the on-line newspapers today is the report of a mula--a large, flat-bed truck, falling on top of a house in one of the Gatún neighborhoods in Colón.  I've linked to La Prensa's front page.  

Another brief article states that while the water level at Fortuna is increasing, Bayano is still below normal, so there's increased production of electricity from "thermal" sources in order to keep up electrical production.  I'd read that earlier in the week.  I'm not exactly sure what that means.  Normally, I'd assume that meant geothermal energy; while there are hot springs in Chiriquí, I don't think they're large enough to generate electricity.  So I'm assuming that fossil fuel plants are what's meant.

Another article that appeared earlier in the week in Crítica quoted the ex-director of IRHE (no idea but a hazarded guess is some governmental agency that oversees energy), Gonzalo Córdoba, as saying that the current energy crisis is a created one, thanks to self-serving decision-makers (I assume in the electricity-generating businesses) who don't listen to the experts but only act to increase profits and against the interests of the country.  According to Córdoba, one of the big problems is that there isn't adequate regulation, and those that are in charge of regulation now are the same ones who are involved in the privatization of IRHE. 

Well, I see that they've certainly learned from the US.

Don Ray from Chiriquí Chatter sent me this link to a blog that has a post with more complete information about governmental food subsidies here in Panamá.  The blog also mentions the potential for a "social explosion" to hit the streets here if something were not done.  I have been reading brief references in the on-line papers to demonstrations: University of Panamá students, other students, labor groups.  The Panama News has mentioned "restlessness" about food prices.  I was really surprised to read in the blog that the price of a pound of rice (I would guess in Panamá) had risen to $0.70/lb.  I have not seen anything more than $0.50/lb here, but that's one advantage of living in an agricultural area (and is one big reason why we chose to live where we are)--food prices are almost always lower.  Still, we're going shopping today, and since we have to buy rice, we'll see.

I should mention, for those who are in the area that, at 3:00 pm on Sunday, there will be a presentation (in Spanish) at the Potrerillos Arriba Infoplaza about the history of Chiriquí province, as an adjunct to the celebration of the 159th anniversary of David.  We intend to go.  I'm bringing the cam corder--this time, complete with tape.  I still haven't forgiven myself for Easter's faux pas.

News Briefs, 27/5//2008

La Prensa:  "English: A Stone in the Shoe."  The article reports on the failure of colegio students to demonstrate proficiency in English as evidenced by poor performance on exams.  According to the article, a 60% grade is passing; average grade was 53%  for 12th grade students.  The test has been mandatory since 2007.  It's bad news for the universities, too, because, since 2007,  proficiency in English is required to get a diploma.

La Prensa:  Panamanian economy, while growing, is slowing in rate, down 4% from this time last year.  Those sectors that have slowed: pretty much all the agricultural sectors, which is very bad news at this time of higher food prices, tonnage passing through the Canal, manufacturing in the food and textile industries, among others.  Officials are blaming the slowdown on high fuel prices.

La Estrella: Hydroelectric production at the plant in Bayano stopped this weekend due to low water levels.  However, the situation at Fortuna, here in Chiriquí, is getting back to normal with the steady--and at times--heavy rains we've been experiencing over the past week.  Heaven knows it's beginning to feel like August around here.

Interestingly enough, there have been demonstrations (reported in La Prensa in the past week) over Volcán way, protests by farmers and residents against a proposed hydroelectric project that would reduce if not outright eliminate water that has traditionally gone to small farmers there.

There have been accounts in La Prensa recently of demonstrations by parents and students at different primary schools that fiberglass removal has been inadequate and badly done. Today in Panamá Américana, there's an article quoting the Vice Minister of Education as admitting that many companies don't have experience in that work. Always leads me to wonder if there's a money trail there.

La Estrella: Torrijo's plan for assisting the agricultural sector with high costs consists of reducing the interest rates on loans to that sector to 2% and broadening the insurance coverage in case of natural disasters, accidents, etc affecting crops and harvests.  The president of ONAGRO (Organización Nacional Agropecuario) congratulated Torrijos on this measure, but also requested steps to reduce the number of middlemen between the producer and the market, saying that this is a major cause of the increase in costs to the consumer.

There's a much longer article in Dia a Dia on steps being taken to give consumer relief over high prices of basic foods.  It doesn't say when, but a program was started in the Azuero Peninsula that introduced measure to help producers and guarantee lower prices to the consumer.  One of those measure is that the government would buy 100% of the rice crop, which has at its base the rise of oil to $135/barrel last week.  this also would help eliminate speculation.  Urea, which is a prime chemical fertilizer used, would be sold at half the going rate.  The hope, of course, is that these measures benefitting producers will lower costs that will be passed directly to the consumer.

But meantime?   At the beginning, the article does mention some steps taken in other countries, such as the issue of food vouchers.  That certainly would help the poor in the short term.

Yesterday, I went to our local mercadito to buy a bag of cement, since our favorite construciton worker is coming here today to do a small project for us.  I shelled out $7.35 for the bag, remarking as I did so that the price had risen $0.06 since I last bought one.  The young woman at the cash register, someone I'm not familiar with, shyly started talking about the rise in food prices.  Then we got to talking about the increase in fuel prices.  

Panamá regulates the price of fuel, adjusting every two weeks; the next price adjustment is on the 28th.  Right now, we're paying $4.10 for a gallon of diesel, which about as cheap as you can get it locally.  Boquete is traditionally $0.10-$0.15 higher.  We were surprised last weekend to see stations in David $0.15 higher than our local bomba.  

For dead certain, the price is not going to drop, not with oil reaching ever higher records.  All we can do is wait and see, and continue to implement our plan to do even less driving than we are now.

So much for a brief post.

Living with Inflation

Panamá is not immune to the sharp increases in food prices and general cost of living. The rise in the prices of gasoline and diesel has been sobering in an area where $10/day is a very good wage, and skilled labor such as electricians and plumbers make $15. I know of at least one death attributable to the rise in gasoline prices. An older man was returning from work on his bicycle, riding on the carretara (highway), when he was struck by a motorcycle and killed. He had started riding his bike because he couldn't afford gas for his old car. Fortunately, bus fares haven't gone up recently; although there has been a big jump in the number of cars on the road, most chiriquenos still use public transport--or walk or ride horses or bicycles.

Sunday's (May 4) La Prensa had most of an entire section devoted to the food crisis and what the situation is in Panamá. Rice grows in this area; you can see the farms in the lowlands outside of David. I had assumed that Panamá produces all the rice it consumes. Not so. Consumption is about 7.5 million quintales (100 lbs) per year; internal production is about 6 million. The big surprise for me was maize (corn). Annual consumption is about 7 million quintales but only 500 thousand of which is for human food--the rest is for animal feed. Since I have yet to see a feed lot in this area (which is not to say they don't exist), one of the major cattle ranching areas of the country, I assume the corn is going to chickens. The Panamanian poultry industry is huge; traditionally, people eat far more chicken than they do beef. But Panamá only produces 1.5 million quintales of maize. The rest is imported.

The biggest part of the problem is that rice and corn land have been converted to growing melons, watermelons and other products that fetch a better price, mainly as exports to the US. According to the newspaper, there has now been some reconversion of land to growing basic grains, but it's not enough fast enough. For 3 years, the government has been encouraging increased yield per hectarea. That's succeeded, but as a recent article in the New York times, I believe (or Washington Post--I read both) pointed out, the cost of chemical fertilizer has also been rising. Thanks to--you guessed it--the rise in fossil fuel prices.

Certainly we've noticed the jump in food prices. When we first came here 4 years ago (Has it only been 4 years? Seems like we've been here a lifetime), rice was just under $.30/lb. It's now close to $.50. In less than 2 years, chicken has jumped about 20%, as has beef.

Our truck runs on diesel which used to be more economical here--usually about $.40/gallon cheaper. Not now--the price of gasoline and diesel is about the same, just under $4.00/gallon. Like just about every other ex-pat we know here in this valley, we've begun conserving by cutting down the number of trips we make to David, which is the major shopping center. For us the bus is NOT cheaper; the cost for two of us is not much less than the cost of a gallon of diesel, which is what we need for a round trip, and the convenience more than makes up for the difference. Plus I really can't see myself lugging two 40 lb bags of dog food, 16 lbs of cat food, two 12 pack cartons of milk and far more by bus. In the end, it actually works out to be cheaper to use the truck. But we are looking at ways to cut our trips to one every 10 days.

There has been some unrest about food prices in Panama City, but so far not much. Part of that is due to what was a thriving economy here in Panamá and probably still is in Panamá City. But the economy here in Chiriquí has been driven by a 4-year construction boom, which has, if not come to an end, slowed sharply. Land prices in Boquete have maxed out, the housing slump in the US has slowed immigration, and construction as a result is limited to last year's sales and commercial construction. We've already started to hear about home foreclosures and layoffs; since we are really out of the information loop, if we're hearing about it, it has to be significant.

Plus there's the problem of reverse immigration, but that's another story.