Tuesday, September 22, 2009

Panama - Security concerns related to Canal ops and Darien Province

I conducted my RSA in Panama in March 2009 in Panama City and surrounding areas.
Panama has a developing economy. Outside the Panama City area, which has many first-class hotels and restaurants, tourist facilities vary in quality. The U.S. dollar is the paper currency of Panama, and is also referred to as the Panama balboa. Panama mints its own coinage.
The current security situation in Panama presents no indications that social unrest will rise to a level that would affect its economy. Nevertheless it is advisable to monitor constantly the general security conditions in order to assess any sign that of possible instability/threat to the actual tranquil situation, as outlined below.
All areas of the country outside of the capital are considered low risk with the exception of the southern province of Darien. Darien should not be considered a high risk area but must be kept under control due to the remoteness of the area, the lack of infrastructure and communications, and the sporadic incursion into the area of illegal armed groups from neighboring Colombia. A natural forest covers the border between Colombia and Panama and there are no entry access points between the countries.

Safety and Security – Darien Province:
This area encompasses the Darien National Park as well as privately owned nature reserves and tourist resorts. It has been reported by the local law enforcement agencies that foreign nationals and Panamanian citizens have been the victims of violent crime, kidnapping and murder in this general area. Reliable communications and medical infrastructure are not readily available in the region, which makes travel therein potentially hazardous. Moreover, all around the Panama-Colombia border area the presence of Colombian terrorist groups, drug traffickers and other criminals is common, increasing the danger to travelers. There is increasing evidence that the Revolutionary Armed Forced of Colombia (FARC), a designated foreign terrorist organization, has increased its operations in Panama’s Darien Province, including in areas far removed from the immediate vicinity of Panamanian-Colombian border. UNDSS advises that the risk of UN Staff members facing dangerous situations due to the sporadic presence of illegal armed groups from Colombia can be defined as “low”. The lack of an established communication system across the region can be mitigated through satellite phones.

Panama has an economy that has been shaped around the US Dollar. It is efficient and it is based on a number of well established business and commercial activities related mostly with the service sector. This large economic sector represents the 75% of the total GDP and includes the management of the Panama Canal, banking, the Colon free trade zone, insurance, container ports, flagship registry and tourism.
The unemployment level is about 8% and reflects the large oversupply of unskilled labor.
The factor that must be taken seriously into consideration in this analysis is the enormous disparity in the distribution of wealth. In fact 35% of the population lives in poverty and could trigger a higher level of crime and social unrest.

Natural Disaster:
The typical natural disaster which affect the Central America and Caribbean region, earthquakes, flooding and hurricanes do not have a significant impact on Panama.

Some ethnic groups in Panama can be identified as disadvantaged to others. This phenomenon does not express itself through violence acts or civil disobedience. There is a very high degree of religious tolerance between religious groups.

Crime in Panama City is moderate but increasing, particularly because of the activities of youth gangs. The city of Colon is a high crime area. Police checkpoints have become commonplace on weekends on roads in both cities. Based upon reported incidents by local police, the high-crime areas around Panama City are San Miguelito, Rio Abajo, El Chorrillo, Ancon, Curundu, Veracruz Beach, Panama Viejo, and the Madden Dam overlook. Crimes there are typical of those that plague metropolitan areas and range from rapes to armed robberies, muggings, purse-snatchings, "express kidnappings" from ATM banking facilities, in which the victim is briefly kidnapped and robbed after withdrawing cash from an ATM, and petty theft. There have been several targeted kidnappings, including in Panama City.
Several Security Advisors mention that in Panama does not exist the so called organized crime, as the dramatic phenomenon affecting other countries of the region (El Salvador, Guatemala, Mexico, etc). Neither exist Panamian drug cartels. An interesting trend that should be closely monitored is that of the juvenile gangs. It is growing but cannot be compared with most famous criminal gangs “Maras” existing in Salvador or Guatemala.
The police are fighting local crime with the little means available and the scarceness of resources allocated to internal security. The number of police patrols are insufficient above all in the Canal area, which is a vital asset for the country and yet vulnerable.
The official crime statistics released for the year 2008 report that the number of homicides was 27% higher than 2007 and 49% higher than 2004. The robberies increased 43% in one year.
Panama is used by the Colombian drug traffickers as a land corridor to smuggle cocaine towards the Mexican-US border. This situation brought to Panama some money laundering center intended to clean narcotic revenue.

Police – Security Forces:
Panama does not have its own Army, Navy and Air Force. Law enforcement and the control of public order is the responsibility of the Panamian National Police (PNP). The PNP are the subject of frequent allegations of corruption. PNP is limited by a chronic lack of resources.

Panama Canal:
The canal area can be considered vulnerable. In fact an attack could be carried out through a ship carrying huge quantity of toxic chemicals or other dangerous materials. If the vessel would explode while crossing the Canal, either due to a terrorist attack or an accident, the consequences are difficult to predict.

Author visiting the Miraflores Lock at Panama Canal

Although there are currently no indications that social unrest will rise, it is necessary to monitor the following potentially dangerous situations which could, under specific conditions, influence economy and life in Panama.
· Increased incidence of illegal demonstrations.
· Growing incidence of clashes between social and ethnic organizations of government security forces
· Increasing unrest in the provinces, especially in the Darien, has been observed.

Although Panama City has some very good hospitals and clinics, medical facilities outside of the capital are limited. When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service.

The security situation in Panama is generally good but several factors can potentially affect stability and security. The Darien Province is the most concern area in the country. Police should increase the number of its members and improve its specialized unit dealing with drug trafficking and smuggling across the border with Colombia.
Money laundering is another factor that has to be assessed in depth since it seems that part of the hidden economy circulating in Panama City is coming from illicit activities abroad.
The Canal security is finally the strategic key to the success of the Panamian financial system. The Canal brings to the State economy between 5 and 10M USD per day. An attack on the Canal could affect not only internal but the international stability and repercussion on global economy could be dramatic.

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