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TRUST SERVICES, S.A.
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Previous issues can be selected by viewing our Letter from Panama index page

 

In conjunction with our newsletter, Offshore Pilot Quarterly, this quarterly regional roundup is provided to our clients and professional associates.  Issues of this newsletter, in full or in part, also appear in the British journal, Offshore Investment.com, under the heading, Latin Letter.

July, 2007.
                                                                                                                                                                                                   Volume 9
Number 3

The Trouble with Cheese

Last month the 35 members of the Organisation of American States held their 37th regular session of the General Assembly in Panama.  The theme of the OAS meeting, and one suggested by Panama’s president, was “Energy for Sustainable Development”, although plenty of other topics were discussed, including climate change, consolidation of democracy, security, economic growth and the poverty battle.  Also attending was Ban Ki-moon, Secretary-General of the United Nations. 

Membership of the OAS extends from Canada and south to Chile, taking in 13 Caribbean islands and one of which, Cuba, has been excluded from attendance since 1962.  With such a diverse membership, one can sympathise with Charles de Gaulle who said of France:  “How can you govern a country with 246 varieties of cheese?”  Inevitably, there are disagreements and this year saw the clash between the Secretary of State of the United States of America, Condoleezza Rice, and the Venezuelan foreign minister, Nicolas Maduro. The rift is deep and Hugo Chávez has said that “the axis of evil is Washington and its allies around the world, which go about threatening, invading and murdering”.  He plans on forming “the axis of good”. 

On the second day, the US Secretary of State had called on the OAS members to condemn Venezuela’s clamp down on freedom of expression following the cancellation by its government of the licence of a television station which had been a critic of President Hugo Chávez.  In his response the Venezuelan foreign minister stated that “the intervention of the United States representative constitutes an unacceptable intervention in the internal affairs of a democratic, sovereign republic”.  He suggested that if the US had a genuine concern about a free press it should allow television cameras into Guantánamo Bay.  Changing tack he went on to describe the fence planned along the US border with Mexico as “the wall of indignity”.  After OAS members refused to condemn Venezuela, and with only El Salvador supporting the US position, Condoleezza Rice walked out of the meeting. 

Panama’s president, Martín Torrijos, and host of the OAS meeting, understands that bitter disagreements do not mean that doors to dialogue cannot remain open.  Although Cuba has been excluded from participating by the OAS, he has maintained relations with Fidel Castro, not to mention Hugo Chávez and George W. Bush.  In the words of one commentator, he has earned his credentials as a broker between the hemisphere’s political extremes.

General Omar Torrijos, the president’s father, ruled the country from 1968 until 1981 and was the idol of the young Hugo Chávez (as well as being admired by Fidel Castro).  But unlike his father, Martín Torrijos, who is a successful businessman, is a political and economic conservative who sees Panama as the commercial and transportation “hub of the Americas” and has no wish to steer a disastrous political course.  The president, I am sure, would appreciate the view of John Galbraith: “Politics is the art of choosing between the disastrous and the unpalatable”. 

Exploitation & Domination

Nicolas Maduro, responding to Condoleezza Rice at the OAS meeting, touched upon 3 sensitive regional issues:  US immigration policy towards Mexico, the history of US interference in the region and Guantánamo Bay; the first 2 issues are particularly contentious subjects in the region and whilst the first of these is primarily a Mexican affair, the other is not. 

The history of Central and South America has been one of authoritarian rulers and foreign interference.  Portugal and Spain had considerable control and in the case of conquistadores, such as Hernán Cortés and Francisco Pizarro, there was a desire, besides personal glory and gain, to secure both the secular authority of the king of Spain and the spiritual influence of the Roman Catholic Church.  Indigenous populations were either massacred or practically reduced to slaves with large swathes of land owned by Spanish and Portuguese colonists.

Beginning in 1819, independence under Simón Bolívar – whom Hugo Chávez has attempted to emulate and whose revolution was helped by Britain to thwart the Spanish – brought an end to the control enjoyed by Spanish and Portuguese colonial administrations.  With the crumbling of the old order a vacuum was created which was exploited by President James Monroe of the US.  In 1823 he declared that henceforth the US (which had suffered itself under the yoke of colonialism) would protect all territories south of its border from threats against their sovereignty from nations outside the hemisphere.  This proclamation gave birth to the Monroe Doctrine and which regular readers of this newsletter may recall was central to the topics written about in the October, 2004, issue of Letter from Panama (Doctrines and Democracy).  Critics of US policy have frequently observed since that the doctrine, unfortunately, did not protect the region from nations inside the hemisphere – although with the gradual spread of democracy in the region things have changed. 

The OAS Secretary General, José Miguel Insulza, commented in Panama that “the Americas are experiencing growth with democracy” with the 2006 GDP growth rate for Latin America and the Caribbean put at 5.3%.   But still around 40% of the Latin American population is poor, even although between 2002 and 2006 the number of those living in extreme poverty dropped by 18 million with Haiti, followed by Nicaragua, being the poorest nations in the Americas. 

As for democracy, Latin America’s oldest (Costa Rica) is no longer isolated and between November, 2005, and December, 2006, there were 36 elections or run-offs held in 21 OAS member states, so Josef Stalin’s belief that those “who cast the votes don’t decide anything, it is those who count the votes who decide everything” may no longer be the golden rule in the Americas.  Instead, it is important today for voters to be able to count on those who are elected.

Letter from Panama is published by Trust Services, S. A. which is a British- managed trust company licensed under the fiduciary laws of Panama.  It is written by Derek Sambrook, our Managing Director, who is a former member of the Latin America and Caribbean Banking Commission as well as a former offshore banking, trust company and insurance regulator.  He has over 40 years private and public sector experience in the financial services industry.  Our website provides a broad range of related essays.

Engaging an offshore representative is an important decision and we advise all persons to seek appropriate legal and tax advice from professionals licensed to render such advice before making offshore commitments.

                Bankers                                                                                                                                                                                                                      Auditors
HSBC Bank (Panama), S.A.                                                                                                                                                                                                    Deloitte.
Banco Panameño de la Vivienda, S.A.                                                               
 
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