January 19, 2012
Economic Freedom Feels GoodPuerto Armuelles has been in economic shackles for years because of the enormous debt owed by Coosemupar.
Coosemupar is a worker cooperative that owns and operates the many banana plantations in the Puerto Armuelles area of Panama.
President Martinelli and members of Coosemupar, signed an agreement that states that the government will:
This is great news for those of us living in Panama, especially in Puerto Armuelles.
Until the early 2000s, Puerto Armuelles was a prosperous and beautiful beach town.
Then Chiquita Banana left.
Chiquita Banana has had a tremendous impact on the physical look and the economy of Puerto Armuelles; for good and for bad.
Chiquita came to town in 1927. It was called United Fruit Company back then.
Chiquita transformed Puerto Armuelles into a unique jewel of a town.
Chiquita built whole neighborhoods of great classic wooden tropical houses on stills, a club house, golf course, and an airport.
Most importantly, Chiquita Banana provided a steady supply of relatively high paid work.
Starting in 2003, when Chiquita Banana left Puerto Armuelles, the town's economy has diminished steadily.
At that time, Chiquita's banana plantations were taken over by a workers' cooperative named COOSEMUPAR.
1) A self-serving (now former) union leadership that treated the cooperative as its own personal property. It was the antics of this same union that prompted Chiquita to leave Puerto Armuelles. It wasn't the only reason, but the union's penchant for debilitating worker strikes was a significant reason for Chiquita's departure from Puerto.
2) Chiquita Banana imposed the biggest obstacle to Coosemupar's success.
As part of the terms for the transfer of operations to Coosemupar, Chiquita required that the bananas from its former plantations be sold exclusively to Chiquita. Not only that, but Chiquita got to decide what to pay for those bananas. Perhaps in revenge for forcing them to leave Puerto, Chiquita set the price they would pay for Coosemupar's bananas way below the market price.
These 2 factors guaranteed the ultimate failure of the cooperative.
The only reason that Coosemupar survived was due to government subsidies.
Unfortunately, given Coosemupar's self-serving leadership, those subsidies were not always used appropriately.
After years of these subsidies, the Panamanian government finally insisted that Chiquita renounce its exclusive banana contract with Coosemupar. Chiquita eventually complied.
Unfortunately, by that time, Coosemupar was a crippled company with massive debt.
No one would buy and take over operations from Coosempar because of its debt.
A new company would have to pay the almost 20 million dollar debt.
In addition the plantation workers were still living on the plantations. Those workers want to be compensated for all their time and efforts in keeping the banana trees alive - usually without pay.
In addition, most prospective buyers wanted the workers removed from the plantations. This was not popular with workers who had lived there for years, sometimes for generations.
Various companies started negotiations to buy the banana plantations from Coosemupar, but they always backed out.
However, soon that will be all behind Puerto Armuelles.
The Ministry of Economy and Finance (MEF) will sell by public auction the 3,500 hectares of plantation land. MEF will award the land to those companies that will generate the greatest number of jobs.
Using the proceeds from the sale of the plantations, the government will pay the debt own to Social Security for the worker-employer portion of the retirement funds.
In addition, the workers will receive individual titled land upon which to live. This process of awarding land to plantation workers will take 6 months to a year to complete.
This agreement is a great relief to the people of Puerto Armuelles.
A vision for Puerto Armuelles's future is slowly and steadily being implemented.
A construction project to widen the 2 lane to a 4 lane road to Puerto Armuelles will begin soon.
The key reason for the road project is to service the deep container port outside of Puerto Armuelles. Construction of this pier is estimated to begin in conjunction with the road construction project . The future Puerto Armuelles' port will have 217 storage facilities, a deepwater container and future cruise ship port, and a marina.
The Puerto Armuelles road is envisioned as a 4 lane "dry canal" highway connecting Puerto Armulles to Chiriqui Grand on the Caribbean side of Panama. It is anticipated it will have a similar economic effect to the "wet canal" in Panama City
These 2 construction projects along with the government's agreement to cancel the debt of Coosemupar and the workers, shows that the Panama government is through ignoring the once-vibrant town of Puerto Armuelles. The Panama government is now activity promoting the economic revitalization of Puerto Armuelles.
