Panama's Maritime Investments Appear To Be At Risk

(MENAFN- Newsroom Panama) The president of the Panama Maritime Chamber, José Digerónimo, said in a media interview that the international pressure exerted by the President of the United States, Donald Trump, on the Panama Canal and contracts with Chinese companies generates uncertainty in the country and may also send a negative signal for attracting new investments. Digerónimo, pictured above, emphasized that China does not manage the Canal, nor does it have any influence on the ships that pass through the interoceanic waterway. He said that even for ships arriving at the country's five ports, the Canal itself is the one that coordinates the movement and trajectory of those ships to any of the port infrastructures located at the entrance of the interoceanic route.

The president of the Maritime Chamber joins the voices that refute the arguments of President Trump, when he tries to argue that the Canal has violated the Neutrality Treaty, and that is why he will challenge its management. Digerónimo expressed concern that the government may succumb to cancelling contracts under external pressure, which could send a negative message to future investors, making it difficult to attract foreign capital for megaprojects in the country. He said that there is already a negative precedent with the cancellation of the mining contract with First Quantum, with which the State faces international lawsuits and arbitrations, to which can be added that of the ports managed by Hutchison Ports PPC of Hong Kong, in case a decision is made on the ports of Balboa and Cristóbal.

Our position as a Chamber of Shipping is to support the Panamanian government. The leadership in this situation is led by President José Raúl Mulino and Foreign Minister Javier Martínez-Acha, and as Panamanians we must support them. As for the alleged Chinese influence on the Canal, I can say that it is non-existent. The Canal is 100% Panamanian-owned. Although the Hutchison Ports in Balboa and Cristobal belong to a Chinese company, their operation is fully regulated by the Panama Canal. Every ship that docks at these ports is handled by Panamanian pilots, who have full control of the vessel. These ships do not move unless there is a Panama Canal pilot on board and that pilot takes control of the vessel. Not even the captain has control, as the pilot gives direct orders to the ship's helmsman, and if this really constitutes a threat to the operation of the Canal, I honestly do not see it.

Port activity has been growing, and last year was again a record year with 9.5 million TEUs (20-foot-long containers) and shows that our port system continues to grow, remains powerful and could grow much more. We really need, beyond the investments that current ports are making to expand, more port investments. Since the PSA port was built in Balboa, there has been practically no other construction. There were plans to build a container port in Colón, but this did not materialize. There have been port projects in the Pacific that studies show are really necessary, such as the one in Corozal, and previously, during the government of Martín Torrijos, another area was studied in front of the Causeway to build a mega port, but unfortunately these projects have not advanced, but we do need them.

Panama has a very good opportunity to create investments in that area. The visit of former Senator Marco Rubio, current Secretary of State of the United States to Panama resulted in the formation of technical panels to evaluate the situation. The possibility of prioritizing the transit of merchant marine and US military vessels was discussed, although the Canal has operated under equal conditions for all in the last 25 years. Hearings in the U.S. Senate have attempted to argue that Panama grants preferential treatment to certain vessels, which is not true. The Canal policy has been fair and equitable, with no exclusive benefits for any flag or nationality. We elect governments, and governments negotiate contracts. These contracts, when they become legal contracts approved by the Assembly, end up being long-term commitments that, over time, can become difficult to sustain and maintain.

The threat to the Panama Ports contracts, regardless of whether we like the agreement itself or not, is a topic we could debate at length, along with audits and other aspects. However, the fact is that the nation signed a legal contract with Panama Ports, just as it did with the mine. This is perhaps the most contentious point of all, since in the case of the copper mine, the government reacted to pressure from the people, who demanded the termination of the contract, which resulted in the cancellation of a multi-million dollar agreement. We now face strong international pressure from the most powerful country in the world, our largest trading partner, led by a president with enormous media influence, who is difficult to fight against. We are currently facing pressure to cancel another law-enforcement contract, and we must ask ourselves: How will we see ourselves as a country in the future? How will we continue to attract foreign investment?

We are constantly reacting to external pressures, cancelling contracts and making decisions under changing circumstances. At the time, Panama made the decision - right or wrong - to get closer to China to attract investment. Now we are faced with the possibility of cutting or not renewing these Silk Road agreements. But let's think about this: What would happen if a Chinese company had made a mega investment with a payback period of 30 or 40 years and, suddenly, Panama decided to break relations? This would send a signal of instability and affect the confidence of future investors. In conclusion, Panama is creating an international image problem that could seriously hamper the attraction of large investments in the future. Legal stability and certainty in the fulfillment of contracts are essential to maintain the confidence of investors and guarantee the economic growth of the country.

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