Panama Nervous Over
Weaker Dollar
Panamanians woke up
today to new danger
signals for their
pockets due to the
bondage of the national
economy to the US
dollar, currency
circulating freely in
the country.
For the first time,
businesspeople,
economists and consumers
begin to seriously
question the alleged
advantage of using the
dollar all the time and
operate with the same
currency of that world
power.
The devaluation of the
US greenback facing the
euro, 45 cents more
valuable than a dollar,
the hike in oil prices
and of all imported
inputs due to the loss
of purchasing power,
give people a headache.
According to
knowledgeable sources,
Panama is on the verge
of the most violent
price increase of fuels
this year.
"We have no
confirmation, but the
trend points to an
increase in gasoline of
over 25 cents and of 20
cents for diesel," Hugo
Cuellar, president of
the Gasoline and Oil
Derivatives Distributors
Association.
Francisco Ycaza,
spokesperson of oil
wholesale companies,
stressed that, according
to projections, the
barrel of oil will keep
ranking from 95 to 100
dollars over the next
few months.
Most of the promotion to
sell the country´s image
abroad as a privileged
site to invest, buy a
second residence, travel
or have fun at the
casinos, is based on
dollar circulation "as
in the United States."
"The dollar is in
trouble," warned
Wednesday the largest
circulating newspaper in
Panama and everyone
knows what the common
reaction is when a
partner is in trouble.
"Let loose as soon as
possible", experts
recommend.
All products and
services are more
expensive by the day.
Rice and milk up now, in
a few days ham, turkey
and pork favorites for
Christmas, comment
analysts who blame oil
first until another
comes along and points
to the downfall of the
dollar.
In the opinion of
economist Aristides
Hernandez, the
consequences of monetary
change always end up
hurting the poorest
countries like Panama,
he explained to the
daily La Prensa.
The problem is Panama
lacks its own monetary
policy, said Hernandez
and indicated the
country depends on
international money
markets and directly on
the dollar.
Among the visible
consequences there is
the hike in prices of
imported products from
Europe as high-tech
equipment for the
electric, transport and
communications sectors.
The advantage of selling
cheaper is lost because
most of the raw material
is imported at higher
prices.
After an eight-month
growth, exports fell 9.6
percent in September,
when they reached 74.7
million dollars, eight
million below the figure
the same month of 2006.
The Balboa, national
currency named after the
Spanish conqueror that
broke his way to the
Pacific, is taken as
official accounting
unit, equal in value to
the dollar, but
circulates only in coins
of up to 50 cents.
The use of the greenback
goes back to 1904, when
an agreement was signed
between both nations
after Panama separated
from Colombia and was
proclaimed an
independent republic. |
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