Republic of Panama



An emerging nation is a group of people linked together through nationalism in the
hopes to rise from obscurity with the common goal to become a more productive and
cohesive country. Panama is indeed known as one of the worlds emergent nations. There
are many plans under way to ensure a better, more productive future for Panama. The
current president, Ernesto Perez?s main platform was to modernize Panama. He hopes to
achieve this by reforming labor codes, investment laws, decreasing import barriers,
privatizing the public sector companies, passing anti-monopoly laws and improve
Panama-US relations, just to name a few. President Perez is planning redevelopment of
the Panama Canal Zone. Efficient operation of the Zone is expected in the year 2000.
The most important interest the United States has in Panama is definitely the
Panama Canal. (2.)The Panama Canal Treaty of 1977 and1979 returns the Canal from the
U.S. control to the Panamanians. Between that time the U.S. agreed to pay $10 million
for control of the Canal until 1999. Also an annuity of $250,000 was tacked on and we
promised independence for Panama. Each year the price we pay for the canal rises. The
total in 1995 was $100.2 million due to certain provisions of the treaty. (1.)The treaty
also set up the Panama Canal Commission Organization (PCCO). The PCCO is a part of
the executive branch of the United States. It was enacted to manage, operate, and
maintain the canal until the term ends on December 31, 1999. The commission is
expected to recover all costs of operating and maintaining the canal through tolls and
other revenue. This includes interest, depreciation, capital for plant replacement,
expansion, improvements, and payments to the Republic of Panama for Public services and
annuities. The revenues are deposited into a U.S. Treasury accounted known as Panama
Canal Revolving Fund. (3.)The tolls being paid are based on ships tonnage. Currently the
tolls are $2.39 per PC/U.S. Net Tons for Laden (w/passengers or cargo) vessels, $1.90
per PC/U.S. Net tons for Ballast(w/out passengers or cargo) vessels, and $1.33 for other
miscellaneous vessels. Though tolls have been gradually increasing there is an expected
deficiency in the future. In 1997 tolls increased 8.2% and in 1998 they are only expected
to rise7.5%. In 1996 a total 13,536 and 198,067,990 in vessels and cargo passed through
the canal. That equals $486,688,265 in tolls. We could probably have a substantial
amount of profit from the tolls if we didn?t have to rent the canal from Panama every year
until 1999. Specifically for U.S. interest, in 1995, 899 thousand long tons of Japanese?s
automobiles were ship to the canal. Half of these were marked for the United States.
Also, 44.1 million long tons of grain coming from the gulf went through the canal which
was mostly heading for the far east. (4.)Approximately 13% of international seaborne
trade passes through the Panama canal. This doesn?t seem like much but the United
States is one of the major users of the canal.
Economically, Panama hopes to the trading hub of this hemisphere. Anyone who
has control of the Panama Canal will eventually be the trading hub this hemisphere. This
includes instillment of a banking center of the world, free movement of capital, a better
tourism incentive, and a restructured economy based on free markets. (5.)In 1995
Panama?s Gross Domestic Product (GDP) was 6,961. The GDP per capita was 2,646.
Panama?s natural resources are timber, seafood, and copper ore. Most of the products
they export are bananas, corn, sugar, rice, coffee, shrimp, timber, assorted vegetables, and
cattle. The United States is one of Panama?s major markets for their exports. There are 2
billion tons of copper ore which is reality able to be mines. Also they export
approximately $14 million in tropical fruit a year. The export of vegetables has doubled in
the last three years. Another of Panama?s resources is the tourist attractions. There are
miles of white sandy beaches and numerous islands on each coast. This allows for
excellent snorkeling, skin diving, and fishing adventures. The climate in Panama is tropical
all year round.
It is rather unclear to ma as what the United States should actually do with
Panama. Do we really want to give the canal to the Panamanians. I don?t think so. Do
we have to give the canal back. NO, we stole it first, fair and square. Yes we do have a
treaty with Panama but it would not be the first time a country has broken a treaty
agreement. The U.S. does have the power to do such a thing but moral and legal it is not
just. Panama and the Canal area will one day be a