Kenneth Rijock

Kenneth Rijock

Friday, July 11, 2014

PANAMA'S GOVERNMENT HAS A $300m BUDGET SHORTFALL


The Panamanian press is reporting that the Government of the Republic of Panama has revealed that it is, in essence, insolvent. There is a $300m gap between funds available, and what is necessary to currently run the government. Public employees will not be receiving their salaries, which could lead to a serious disruption in the economy, as well as civil unrest. Panama, which has a history of riots when a domestic crisis erupts, could descend into chaos.

The outgoing administration of Ricardo Martinelli has been accused of massive corruption, including the illegal diversion of large government accounts into the pockets of senior officials. Charges of widespread participation, by corrupt PEPs, awarding favorable government contracts, resulting in kickbacks, are part of the reason that the government treasury is depleted.

Compliance officers whose banks are financially extended in Panama  should be monitoring closely monitoring the situation, as the government's failure to obtain additional funding could seriously disrupt the economy, as well as the domestic stability of the country.

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