Republic Of Panama Essay, Research Paper

An emerging nation is a group of people linked together through nationalism in the

hopes to rise from obscurity with the common goal to become a more productive and

cohesive country. Panama is indeed known as one of the worlds emergent nations. There

are many plans under way to ensure a better, more productive future for Panama. The

current president, Ernesto Perez?s main platform was to modernize Panama. He hopes to

achieve this by reforming labor codes, investment laws, decreasing import barriers,

privatizing the public sector companies, passing anti-monopoly laws and improve

Panama-US relations, just to name a few. President Perez is planning redevelopment of

the Panama Canal Zone. Efficient operation of the Zone is expected in the year 2000.

The most important interest the United States has in Panama is definitely the

Panama Canal. (2.)The Panama Canal Treaty of 1977 and1979 returns the Canal from the

U.S. control to the Panamanians. Between that time the U.S. agreed to pay $10 million

for control of the Canal until 1999. Also an annuity of $250,000 was tacked on and we

promised independence for Panama. Each year the price we pay for the canal rises. The

total in 1995 was $100.2 million due to certain provisions of the treaty. (1.)The treaty

also set up the Panama Canal Commission Organization (PCCO). The PCCO is a part of

the executive branch of the United States. It was enacted to manage, operate, and

maintain the canal until the term ends on December 31, 1999. The commission is

expected to recover all costs of operating and maintaining the canal through tolls and

other revenue. This includes interest, depreciation, capital for plant replacement,

expansion, improvements, and payments to the Republic of Panama for Public services and

annuities. The revenues are deposited into a U.S. Treasury accounted known as Panama

Canal Revolving Fund. (3.)The tolls being paid are based on ships tonnage. Currently the

tolls are $2.39 per PC/U.S. Net Tons for Laden (w/passengers or cargo) vessels, $1.90

per PC/U.S. Net tons for Ballast(w/out passengers or cargo) vessels, and $1.33 for other

miscellaneous vessels. Though tolls have been gradually increasing there is an expected

deficiency in the future. In 1997 tolls increased 8.2% and in 1998 they are only expected

to rise7.5%. In 1996 a total 13,536 and 198,067,990 in vessels and cargo passed through

the canal. That equals $486,688,265 in tolls. We could probably have a substantial

amount of profit from the tolls if we didn?t have to rent the canal from Panama every year

until 1999. Specifically for U.S. interest, in 1995, 899 thousand long tons of Japanese?s

automobiles were ship to the canal. Half of these were marked for the United States.

Also, 44.1 million long tons of grain coming from the gulf went through the canal which

was mostly heading for the far east. (4.)Approximately 13% of international seaborne

trade passes through the Panama canal. This doesn?t seem like much but the United

States is one of the major users of the canal.

Economically, Panama hopes to the trading hub of this hemisphere. Anyone who

has control of the Panama Canal will eventually be the trading hub this hemisphere. This

includes instillment of a banking center of the world, free movement of capital, a better

tourism incentive, and a restructured economy based on free markets. (5.)In 1995

Panama?s Gross Domestic Product (GDP) was 6,961. The GDP per capita was 2,646.

Panama?s natural resources are timber, seafood, and copper ore. Most of the products

they export are bananas, corn, sugar, rice, coffee, shrimp, timber, assorted vegetables, and

cattle. The United States is one of Panama?s major markets for their exports. There are 2

billion tons of copper ore which is reality able to be mines. Also they export

approximately $14 million in tropical fruit a year. The export of vegetables has doubled in

the last three years. Another of Panama?s resources is the tourist attractions. There are

miles of white sandy beaches and numerous islands on each coast. This allows for

excellent snorkeling, skin diving, and fishing adventures. The climate in Panama is tropical

all year round.

It is rather unclear to ma as what the United States should actually do with

Panama. Do we really want to give the canal to the Panamanians. I don?t think so. Do

we have to give the canal back. NO, we stole it first, fair and square. Yes we do have a

treaty with Panama but it would not be the first time a country has broken a treaty

agreement. The U.S. does have the power to do such a thing but moral and legal it is not

just. Panama and the Canal area will one day be a very stable nation and as it emerges

from obscurity the United States needs to protect its investments and further interests in

Panama. We must keep up good relations with Panama since we are one of the major

users of the canal. It would be very costly for us if we did not keep up decent relations. I

also believe there is no way the U.S. can pull out of the Canal Zone 100%. We should

definately leave military forces where they will be handy in case of an emergency. If

something unforeseen, like another war breaking out the canal will be a hot commodity to

have. Also, as Panama expands and grows there will be many major, million dollar

construction projects on the canal and in other areas in which we can bid on. These

projects will produce many outlets for U.S. technology.

Overall, I believe all we really can do for Panama as they develop is aide if needed,

guide when appropriate and protect the interests and investments we have there. After all,

86,000 acres of the canal is made up U.S. military infrastructure.