We provided some historical background on the Panama Canal in our Vol. XIV, Art. 17 commentary, and a few days ago we heard from someone quoting a “permalink” source. The upcoming referendum on the proposed expansion of the Canal will be influenced by the “yes” and “no” campaigns, and the arguments revolve around corruption, cost, employment and questionable benefits to the ordinary Panamanian. Our own concern, however, is that U.S. citizens, in these dismal times, are being hoodwinked into paying the cost of that unnecessary canal expansion. That’s why U.S. port officials are sponsoring “workshops” and “conferences” for their Panamanian friends.

“Permalink”, whoever or whatever that might be, deserves credit for this information, and we’re pleased to be able to print pertinent passages from the report.

“As The New York Times noted, even the former chief engineer for the Panama Canal Authority (A.C.P.) is saying the project will cost a lot more than the US $ 5.25 billion estimate, which is just less than Panama’s annual budget of US $ 6.5 billion.

“The cost estimate for the A.C.P. was done by Parsons Brinckerhoff, the same firm that calculated and built Boston’s Big Dig. That project ran over budget by about 50 percent, and a tunnel in its network collapsed.

“(Eric Jackson of Panama News has more details on PB’s involvement in the Big Dig and its cost estimate of the expansion.)

“But, of course, only time will tell if and by how much the direct and indirect cost of the Canal expansion will rise.

“A brief analysis by the Council on Hemispheric Affairs (COHA) shows that the cost is likely to rise perhaps as high as five times the official estimate when all is said and done.

“The A.C.P. has touted how much employment the expansion could generate, but the figures are being disputed by opponents. The Authority claims in the Master Plan that during the peak of construction, which will start in 2007 and end in 2014, as many as 7,000 directly-related and 40,000 indirectly-related jobs will be created. And by 2005, as many as 250,000 jobs will have been created.

“Panama’s current labor force is about 1.4 million, out of a population of about 3.2 million. Assuming that the unemployment rate , currently at 8.9 percent, will stay the same or fall slightly, Panama would need a large foreign labor force to fill all the jobs created by the Canal expansion.

“The ‘yes’ campaign has been touting the quarter-million job figure as an absolute certainty without delving into the types of jobs that might be created. Panama is in desperate need of skilled labor, which the expansion alone cannot supply.

“Dr. Keith Holder, in a column in La Prensa, points out two key assumptions in the Master Plan: 1) The Canal usage will always increase without fluctuations despite historical data to the contrary; 2) An increasing number of post-Panamax ships will use the Canal.

“Dr. Holder concludes that the expansion is unnecessary and far less urgent than the government claims. He urges the government instead to invest the funds safely in education, hospitals and public works.

“In agreement with Dr. Holder, a former legislator, is Fernando Manfredo, the deputy canal administrator at the Panama Canal Commission, as the A.C.P. was previously known, through the 1990s.

“In an interview with Panama America, Mr. Manfredo says a debate about an expansion of the Canal is possible when the A.C.P. and the government release all relevant information, including possible pitfalls, delays and other risks for Panamanians to understand the full scope of the project.

“In the Master Plan, the Authority makes the following blanket statement:
• ‘It has been found that all possible adverse environmental impacts can be mitigated through existing procedures and technology and no immitigable or permanent adverse impacts on the population or the environment are anticipated.’

“The Panama Canal Authority has used questionable tactics in presenting the environmental impact of the expansion on areas surrounding the shipping lane. Mr. Jackson, of the Panama News, describes in painstaking detail how the Authority allegedly whitewashed and simply ignored concerns about the salinity of the area’s fresh water.

“While democracy is far from the minds of Panamanian leaders, one key demand of the opposition has been transparency. A transparent debate with the A.C.P. and the government on the one hand and the public on the other would have produced a more stable environment for the October 22 vote.

“President Martin Erasto Torrijos Espino, is the son of Colonel Omar Efrain Torrijos Herrera, military director of Panama from 1968 to 1981. The revolving door of politics has been good to the younger Torrijos, who served in the administration of Ernesto Perez Balladares (1994-1999). Col. Torrijos had handpicked Mr. Balladares to serve as finance minister during the dictatorship.

“Both Mr. Jackson, of the Panama News, and the Noriegaville News (now defunct, sadly), have reported on vote-buying — apparently $ 35 for each person. The source of the fund is unclear although Mr. Jackson believes the money used by First Lady Silvia to buy votes comes partly from an international fund.

“When it comes to corruption, Panama ranks fairly low on the scale of integrity or transparency. Recent Panamanian presidents had a discretionary fund of $ 25 million, which would as documented be for personal use, according to Transparency International. That fund has been cut to $ 5 million under Mr. Torrijos.

“Mr. Torrijos has taken some steps against corruption on paper, but their impact has been invisible. The Berlin-based anti-corruption group has documented, in Global Corruption Report 2006, that Panama remains a country where nepotism, influence-peddling and a judiciary unwilling to tackle corruption fails to inspire much confidence in the government.

“In a scathing commentary, the Council on Hemispheric Affairs reported last year about how Mr. Torrijos has refused to launch a full investigation into the distribution of thousands of fraudulent University of Panama diplomas. Regent of UP, Gustavo Garcia de Paredas is a close associate of the president.

[What’ll you bet that Senor Sponge is also a “close associate of the president”?]

The above-mentioned “Permalink” report also stated that Panama “is ruled by ‘a few elite families of European descent’ who share very little of their ill-gotten wealth with the poor. Corruption is institutionalized and rampant.”

“The Canal may be a source of pride for Panamanians, but it is of little benefit to ordinary cictizens. Money trails and tentacles of foreign interests are more twisted than plots in John LeCarre’s ‘The Tailor of Panama’…”

“The 2005 World Development Indicator by the World bank shows that the richest 20 percent earns or spends most of the country’s wealth (60.3 percent), while the poorest 20 percent gets only 2.4 percent of the pie. Between 40 and 50 percent of Panamanians live in poverty or extreme poverty.

“In such a dismal economic climate, ordinary citizens may care very little about the benefits of expanding the Canal. In fact, resistance to the expansion has cropped up in Panama. And there are signs that the government has not only clamped down on the opposition but also bought votes.”

The money First Lady Silvia uses to buy those votes, of course, comes from “an international fund”. The money to “buy” the Canal, of course, also came from “an international fund” … the U.S. taxpayers … the gullible ones who support the “richest 20 percent”.

We reminded you earlier of what Nevada’s Senator Paul Laxalt said in his opening day address to the Senate when they were debating the new treaties back in the 70s. His words are just as meaningful today as they were back then, and they’ll be ignored today … as they were back then. He pulled no punches when he said:

“It looks like big business is concerned enough about insuring its investments in Panama to back the treaty. It is no secret that the (ruling) regime is teetering close to the edge of financial collapse. What is less well known is that many U.S. companies have created offshore investment centers in Panama, taking advantage of Panama’s lax banking and tax laws, and pouring literally hundreds of millions of dollars there.”

[It’s deja vu all over again.]