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President wants $300 million to save 20,000 jobs

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President wants $300 million to save 20,000 jobs

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President Varela, has  announced that he will ask the National Assembly for a tax exemption to raise the deficit by 1% that, according to the Law on Fiscal Social Responsibility, should not exceed 0.5% of gross domestic product. (GDP).

The Fiscal Responsibility Law obliges governments to comply with a maximum deficit ceiling, in order to control spending and public debt. A deficit cap is established for the NFPS based on the Nominal Gross Domestic Product .

The exemption, says Varela president, would be to be able to inject at least $300 million into new construction projects and thus maintain the level of growth and execution of works so as not to lose about 20,000 jobs in the transition between the current government and administration reports La Estrella.

The announcement came after the International Monetary Fund (IMF) reduced expectations of economic growth of the country by 1%.

“That was the cost of the construction strike, a totally unnecessary strike of thirty days, ” said Varela.

The bill requesting the dispensation would reach the Assembly in the midst of a political struggle between the official Panameñista Party and the current legislative majority made up of the Democratic Revolutionary Party (PRD) and Cambio Democrático (CD) in the middle of the election year says La Estrella.

Varela said that the strike resulted in a loss of $250 million, which can be recovered by working weekends or 24 hours in some projects. “We have to make the best effort to be able to recover that month when the construction of the country was stopped, which represents almost 20% of the economy,” he said.

He  said he was concerned about reactivating new construction projects because the completion of the works of the current government in the first half of 2019, such as Line 2 of the Metro, the expansion of Tocumen Airport, Urban Renovation of Colon  and others, more than 20,000 jobs will be lost.

Varela gas  asked the Minister of Public Works, Ramón Arosemena, to move forward with the fourth bridge over the Canal and with Line 3 of the Metro, among other works.

The MEF originally  had $100 million from the budget to finance the start of construction of the fourth bridge, but made  transfers of items to other projects as the project for  the mega-project has not yet been awarded. Varela announced last year that work would start in January.

“The most important thing for us is to be able to move forward with the projects and we are going to be asking the Assembly for a tax exemption to leave the deficit at 1% in order to inject $300 million into new projects and this way to maintain the level of growth and execution of works so as not to lose those 20,000 jobs in the transition between one government and the other,

Lawmaker, Pedro Miguel González, General  Secreyary of the PRDm the government has had an “irresponsible” management of public finances.

He said that on the one hand the Government maintained the same rules used by the last administration to make the State contracts for four years and made an estimate of the 2018 budget well above what the economic reality of the country.

Although González believes that the  construction strike will have a negative impact on growth, he pointed out that: “The commercial sector and the services sector have been depressing too,” reports La Estrella

He said that the strike is the perfect excuse to do what they are going to do in Tocumen S.A., with an Odebrecht contract in which they asked for an addendum of $14 million.

“We know that they are works with huge surcharges and the strike is the perfect excuse to increase these surcharges through addenda, just before the start of the electoral tournament,” he said.

Regarding the request of the dispensation to the Assembly, González said that the deputies must act with a vision of the country.

” To not approve a dispensation would represent a degradation in the rating of the economy in the future, which would be much more catastrophic for the development of the country,” he said.



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He said that the strike is the perfect excuse to do what they are going to do in Tocumen S.A., with an Odebrecht contract in which they asked for an addendum of $14 million.

When deadlines are important, paying overtime wages to catch up after a strike or other unperceived slowdown is standard procedure.

In this case, Panama needs the Airport expansion and Metro ? Line 2 ready for the JMJ to be held in January 2019.

Edited by Keith Woolford
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OPINION:  Panama Bread today, hunger tomorrow

botella-cartoon-620x264.jpg "
Botellas" (fake jobs) in the Assembly cost millions
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The executive branch wants the National Assembly to authorize a  fiscal dispensation to spend 300 million dollars more, in order to face unemployment that will be produced by the completion of the state megaprojects. Since the approval of the Fiscal Social Responsibility Law, governments have looked for creative ways to break this. Like  the

“Turnkey” and the issuance of bonds of state companies, such as Etesa, Tocumen, S.A. and the three subsidiaries of the ENA. Despite the very high rates of economic growth that the country had in the last decade, and three reforms the voracity of public spending continues to grow and has created an important inflation in the country and, what is worse, has turned our economy to being addicted to public spending and indebtedness. Let’s look at the examples of Greece, Puerto Rico and now Argentina, to understand where excessive public debt can make us. Maybe if the Government were more efficient, and there would be certainty of punishment for the corrupt, there would be resources left over. Indebting the country is enslaving it, with bread for today and hunger for tomorrow … LA PRENSA, June 5



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