The Laundry Man by Kenneth Rijock ( Penguin/Random House UK)

Friday, June 10, 2016

ANGRY PANAMANIANS TAKE IT OUT ON FOREIGN BUSINESSES

Panama City, 2017 ?
The one-two punch of the Waked Money Laundering Organization scandal, and the Panama Papers, have resulted in major outbreaks of violence and vandalism, against foreign-owned (meaning predominantly American) businesses. Canadian and American expats, who have businesses in the Republic of Panama, are reporting gangs roaming the streets of cities and towns, throwing rocks at business facades, and defacing store and business exteriors.

While the level of violence has not yet approached crisis levels, nor the Anti-American posture that Panama exhibited at the end of the Noriega regime, before the US invasion, it is a reflection of the anger the Panamanian street feels towards American nationals. They are being blamed for the OFAC sanctions, imposed upon local businesses, in the Waked matter, as well as the embarrassment felt nationwide, due to the Panama Papers scandal. Though the ICIJ, which released the Panama Papers, is an international organization, it was founded in the US, and its global headquarters is in Washington.

Clearly, the Panamanian economy is suffering, and not just as the result of the above scandals; The country's former president, Ricardo Martinelli, whose extradition from Miami is said to be imminent ( but may never happen), and his corrupt ministers, looted national funds, increased government debt, due to the increased prices that resulted from bribes & kickbacks, and failed to timely collect massive amounts of tax revenue .

In truth and in fact, the country runs on its offshore financial center, and the influx of foreign capital, much of which is of suspect origin. Should it dry up, the consequences for Panama could be severe; hence the anger, focused on the gringo population.  Let us hope that it does not increase, for such a development would effectively place Panama off limits for foreign investors, and expats, whether the be legitimate, or criminal. In that case, Country Risk would fly off the charts, and Panama's attractiveness for flight capital, or as a tropical residence, become a thing of the past.

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