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  Taiwan and The Republic of Panama

State of the Republic of Panama (October 2003)

1. State of Panama

History:
The Spanish first set foot in Panama in 1501. In 1513 they began to colonize the southern portion of the country and on November 10, 1821, Panama separated from Spain as a part of Colombia. On November 3, 1903, Panama declared its independence from Colombia.

On October 10, 1968, Panama faced a military coup, and the democratically elected president Arnulfo Arias was overthrown and replaced by military strongman Omar Torrijos Herrera. In 1981, Herrera perished in a plane crash and he was replaced by Ruben Dario Paredes, the nation’s security commander. In 1983, Manuel Antonio Noriega forced Paredes to resign and he himself became the country’s security commander. He in effect controlled the political and military arenas.

In May 1989, Guillermo Endara Galimany, a presidential candidate jointly supported by opposition parties, was given a clear mandate in a national election. Noriega, however, declared the election void and in September of that year, the United States implemented economic sanctions against Panama. On December 15, Noriego, in his capacity as Panama’s head of state, declared a state of war against America. On December 20, American troops invaded the country, overthrew the military government and installed Endara Galimany as the country’s president. On January 3, 1990, Noriega surrendered to American forces, marking the end of 21 years of military rule in Panama.

On May 8, 1994, Ernesto Perez Balladares, the presidential candidate of the Partido Revolucionario Democratico, which was the ruling party during previous strongman rule, won the presidential election. In the May 2, 1999 election, Mireya Moscoso, who was supported by Panama’s opposition parties, won 45% of the vote. She became the nation’s 23rd president.

Politics:
Executive: Panama has by a presidential system. The country has one president and two vice presidents, all of whom are directly elected by the populace. The term of office for each is five years and the officials can only run for re-election two terms after their original term of office. The country has 13 ministries, with the minister of each designated by the president. The agencies are namely the Ministry of External Relations, the Ministry of Finance and Economy, the Ministry of Labor and Social Welfare, the Ministry of Interior and Justice, the Ministry of Agricultural Development, the Ministry of Education, the Ministry of Public Works, the Ministry of Health, the Presidential Office, the Authority of the Panama Canal, the National Directorate of Women, the Ministry of Commerce and Industry, and the Ministry of Residence.

Legislative: Panama has a unicameral Asamblea Legislative that has 72 seats. Each member is directly elected and has a five-year term. The legislature has one speaker and two vice speakers, each of whom faces re-election each year. The legislature has 21 committees, and each committee has a chairman, secretary general and members, all of whom are elected each year.

Judicial: The central Supreme Court of Justice is comprised of nine judges appointed for 10-year terms. Superior courts and courts of appeal are under the Supreme Court.

Panama presently has a number of political parties, namely the Democratic Revolutionary Party (PRD), the Popular Nationalist Party, the Solidarity Party, the Nationalist Republican Liberal Movement, the Arnulfista Party, the Christian Democratic Party, the Pap Egoro Movement, the Civic Renewal Party, the National Renovation Movement, the Authentic Liberal Party, the Labor Party, and the Independent Democratic Union.

As of June 2003, 942,000 people were members of the various political parties, with the PRD having the largest number of members at 430,000, followed by the Arnulfista Party, with 210,000. The National Republican Liberal Movement had 140,000 members. The rest of the parties have less than 100,000 members each.

In terms of foreign affairs, Panama remains on friendly terms with many nations due to the Panama Canal, ship registration, its status as a cross-shipment center and an international financial center. Panama and the United States, and other Central and South American neighbors have close relations due to shared geographic and cultural backgrounds. Panama’s economy centers on the service sector. Its agricultural industry faces difficulty in competing with the farming sectors of neighboring countries. It previously had a relatively cautious attitude toward regional integration and a common market. After the inauguration of President Moscoso, Panama has become more active in participating in regional organizations. It has signed preliminary agreements with Central American nations and El Salvador on the framework for free trade agreements. The legislature has approved these agreements and the President has promulgated them. Panama has negotiated free trade agreements with Nicaragua, Dominica, Mexico, Costa Rica, and the United States. The American Free Trade Zone set up its rotating secretariat in Panama for a two-year period starting in 2001. The secretariat recently rotated to Mexico. Panama is seeking to have the secretariat permanently stationed in the county and is working to have the country become an international convention center.

After the September 11 events, the Panamanian government repeatedly condemned terrorism and voiced its support for the anti-terrorism stance of the United States. Panama was party to four anti-terrorism resolutions passed in the United Nations. It participates in the American Mutual Assistance Agreement and maintains neutrality in the management of the Panama Canal. Panama has worked actively to increase trade, investment, and tax information cooperation with the United States. It has expanded cooperation with American agencies fighting drug smuggling and has asked the American side to clean up the pollution from firing ranges. Panama has also strengthened cooperation with Colombia on putting down conflicts with militia, guerillas and drug barons. It has also worked to prevent terrorist groups from dealing drugs, laundering money, smuggling weapons and other activities that such groups might use to raise funds. These efforts are aimed at maintaining regional safety and stability. Panama is adamant on using its own forces to defend its interests and has declining requests by the United States to provide forces.

Economy:
The Panamanian economy relies primarily on the service sector, which accounts for 75% of national income. Cross-shipment trading is also well-developed. Panama exports bananas, coffee, shrimp, beef, sugar cane, fish, and fuels. Its main imports are crude oil, foodstuffs, machinery and chemicals.

The Panamanian economy grew 0.8% in 2002, and its national per capita income stood at around US$3,699. Panama has a foreign debt of US$8.5 billion. In the first two months of 2003, Panama’s imports stood at US$487.9 million, while imports for all of 2002 were US$3.035 billion. Exports in the first two months of 2003 stood at US$59.4 million, while exports for all of 2002 were US$755.7 million. In January-April 2003, the Colon Free Trade Zone registered imports of US$1.122 billion, while for all of 2002, imports in the zone stood at US$4.218 billion. Meanwhile, the zone’s exports in the first four months of this year stood at US$1.267 billion, while exports for all of 2002 were US$4.844 billion. Income from the Panama Canal in fiscal 2002 stood at US$588 million. A total of 12,000 ships are registered in Panama, generating registration income of about US$45 million per year.

The Moscoso government maintains an economic policy of caring for farmers and the middle and lower classes. It supports a slower pace of privatization, aims for revitalizing industry, developing tourism, and supporting small and medium enterprises, looks to attract foreign investment and is planning to widen the shipping lanes in the Panama Canal. The government is also building a second bridge to span the canal. Authorities are building a knowledge-based city and a government administration center, and have plans to diversify development in Colon.

2. ROC-Panama Relations

Diplomatic Relations:
In 1909, two years before the establishment of the Republic of China, China established a consulate in Panama City. In 1922, the consulate was upgrade to a mission, and in 1954 it was upgraded to an embassy. Panama established a diplomatic presence in China in June 1933. In 1972, the ROC established a consulate in Colon and on June 19, 1989, this was upgraded to a consulate general. In October 1978, Panama established a consulate in Taipei, with the head of the office being the ambassador, who was concurrently the consular general. The consulate also invited chairman Chang Jung-fa of the Evergreen Group to serve as its honorary consular general.

The ROC and Panama have smooth avenues for communication, and both sides have frequent interaction and contact on political, economic, investment, cultural and athletic affairs. In terms of cross-strait issues, the Panama government supports a policy in which Chinese solve the issue among themselves in a peaceful manner. The Panama president and foreign minister are friendly to the ROC, and they seek to strengthen the relationship between the two countries. In 2000, President Moscoso visited Taiwan and the following year President Chen Shui-bian visited Panama, at which time both sides signed a joint communiqué that reiterated the commitment of each country to the other.

The two countries have frequent contacts at high levels. Former Panama President Guillermo Endara Galimany visited Taiwan twice – once in May 1990 to mark the inauguration of then President Lee Teng-hui and again in October 1992 to mark Taiwan’s national day. Former Vice President Tomas Gabriel Altamirano Duque led a mission to Taiwan in October 1990 to celebrate the ROC’s national day, while former President Ernesto Perez Balladares led a group to Taiwan in September 1995. Previous first lady Dora Boyd led a mission to Taiwan in May 1996 to attend the inauguration of President Lee Teng-hui. In May 2000, a former Second Vice President came to Taiwan to attend the inauguration of President Chen Shui-bian, and in July, President Moscoso paid a visit to Taiwan. President Moscoso was the first foreign head of state of visit the ROC after President Chen Shui-bian took office. Meanwhile, President Moscoso and her Second Vice President visited Taiwan again in August and September of 2003, respectively. Meanwhile, the heads of the foreign affairs, education, health, interior and accounting ministries and agencies have also been invited to visit Taiwan. The speakers of Panama’s legislature over the years have visited Taiwan many times. On the Taiwan side, many high-ranking officials have visited Panama, including former Vice President Lee Yuan-tsu (September 1994), former President Lee Teng-hui (September 1985 when he served as Vice President, and September 1997 when he served as President), Premier Vincent Siew (August 1999), President Chen Shui-bian (May 2001), Premier Yu Shi-kun (August 2002), and Vice President Annette Lu (August 2003). Meanwhile, the Legislative Yuan, Control Yuan, Examination Yuan and the National Assembly have sent many delegations to Panama for visits. In addition, the heads of the Ministry of Foreign Affairs, Ministry of Economic Affairs, the Council for Economic Planning and Development and the Overseas Chinese Affairs Commission have visited Panama, as has the Mayor of Taipei.

Economic and Trade Relations:
The ROC and Panama in 1963 and 1981 signed two ROC-Panama Trade Agreements. The two countries in 1992 signed a ROC-Panama Investment and Income Protection Agreement and in 1994 inked a ROC-Panama Air Cargo Agreement. The two countries in 1997 signed a Small- and Medium-Sized Enterprise Loan Agreement Memorandum, a ROC-Panama Free Trade Agreement Memorandum, and a ROC-Panama tourism Cooperation Agreement, and in 1999 inked a Volunteer Assistance Agreement. On August 21, 2003, the presidents of the ROC and Panama signed a Free Trade Agreement. The pact will spark further exchanges of goods, investment and services between the two countries and marks a new chapter in economic and trade relations, not to mention the diplomatic relationship between Panama and the ROC. This also marked the first time the ROC has signed a free trade agreement with another country, adding special significance to the event.

In 1992, the ROC, under the agency now known as the International Cooperation and Development Fund, offered to transport officials from Panama government agencies to Taiwan for training in agriculture, economic development, industrial technology, trade promotion, small- and medium-sized enterprises and various specialized fields. To date, a total of 171 persons from Panama have participated in the program.

Taiwan’s Central Trust of China has set up a representative office in the Colon Free Trade Zone, while the International Commercial Bank of China has branches in Panama City and Colon.

According to statistics compiled by the Investment Commission under the Ministry of Economic Affairs, up through July-end 2003, Taiwan’s private sector has invested a total of US$932.67 million in Panama. The Evergreen Group alone has invested nearly US$200 million in the country and is presently carrying out a second stage container port project in Colon. A total of 55 Taiwan companies have invested in factories in Panama, included 22 related to trade, three in the manufacturing sector, two banks (International Commercial Bank of China branches in Panama City and the Colon Free Trade Zone), two companies in the shipping sector (Evergreen Shipping and Evergreen Colon Container Center), five companies in the wholesale/retail sector and 11 companies in other sectors.

In July 1995, the two countries signed a memorandum on developing a processing zone. In 1996, the International Cooperation and Development Fund formally agreed to provide US$7-million loan to finance the project. In September 1997, the heads of state from each country jointly presided over a ceremony marking the inauguration of the Fort David Processing Zone. Today there are still seven companies operating in the zone. In July 2002, a management bureau of the Panama Canal area decided to repossess the zone to stage development of its own.

Starting in 1984, the ROC has participated each year in the Panama International Trade Fair. In 2003, which marked the 21st year of the fair, business amounting to US$5.3 million was carried out by Taiwan businesses, with follow-up business amounting to US$12.8 million.

Bilateral Trade: According to data from Taiwan’s Directorate General of Customs, Taiwan’s exports to Panama in 2001 stood at US$123.96 million, while they rose 2.7% in 2002 to US$127.35 million. Of this amount, over 95% of sales were made to the Colon Free Trade Zone. In January-June 2003, Taiwan exported US$52.33 million worth of goods to Panama. Meanwhile, in 2001, Taiwan’s imports from Panama were US$4.21 million, and in 2002 this total rose 14.2% to US$4.81 million. In the first six months of this year, imports stood at US$2.08 million. According to official statistics from Panama, Panama’s onshore (not including the Colon Free Trade Zone) imports from the ROC in 2001 stood at US$24.45 million, and US$18.79 million in 2002. In the first five months of 2003, imports from Taiwan stood at US$7.58 million. On the other hand, Panama’s exports to Taiwan in 2001 stood at US$11.72 million, US$4.5 million in 2002, and US$1.91 million in the first five months of this year. The Colon Free Trade Zone imported US$595.87 million worth of goods from Taiwan in 2001. In 2002, it imported US$536.13 million of products. Meanwhile, in 2001 the Zone’s exports to Taiwan stood at US$10.75 million. In 2002, exports to Taiwan from the zone stood at US$13.29 million.

Technical Cooperation:
In 1969, the two countries signed the ROC-Panama Technical Cooperation Agreement. The following year, the ROC set up an agriculture technical mission in Panama. In 1973, the two countries furthermore signed the ROC-Panama Fisheries Technology Cooperation Agreement. In August 1974, the ROC’s fisheries technical mission donated a 23-tonne fishing vessel to Panama and in September 1997 also donated a brand new FRP fishing boat to Panama. In 1997, Taipei and Panama City signed the ROC-Panama Technical Assistance Agreement. The agriculture and fisheries missions were combined on July 1, 1998 to become the ROC Technical Mission to Panama. Presently, the mission has a chief and six technicians. The primary work of the mission is to assist in the development of fishing villages, aid the planning of fruit and vegetable and food processing, help to achieve the goal of structured agriculture, and strengthen the function of fishermen’s cooperatives. The mission also provides micro loans to fishermen to help them build fishing boats. In addition, the mission, working in line with goals of the Ministry of Agriculture and Livestock, established two agricultural incubation centers, promotes simplified structures in which to grow vegetables and has helped organize farmers cooperatives. Furthermore, the mission has helped integrate production and sales avenues, and it has helped established 30 cooperative farms. This project directly assists President Moscoso in her plan to achieve sustainable farms. In the near future, the mission will also assist the Ministry of Agriculture and Livestock in creating a food processing center. In addition to providing Panamanian small- and medium-sized enterprises with US$10 million of loans, the mission has sponsored fact-finding visits to Panama over the past two years by Taiwan experts. These experts have also provided information services for food, lumber and metals processing industries. Finally, nine volunteers have been sent to Panama as well as one male who is serving his military term in a special program that sends conscript-aged men abroad to do national service.

3. State of Overseas Chinese in Panama

Chinese have resided in Panama since 1850 when they were instrumental in the building of the Panama railroad and the construction of the Panama Canal. At present, approximately 130,000 ethnic Chinese live in Panama, representing 4.5% of Panama’s population. Of this group, 99% are of Cantonese origin. The Chinese community also includes roughly 80,000 new immigrants from mainland China, 50,000 ethnic Chinese, and nearly 300 new immigrants from Taiwan. In 1931 and 1941, the country saw anti-Chinese movements and that period was known as a dark period for the Chinese community. Ethnic Chinese are increasingly educated, and many serve as doctors, lawyers, accountants, architects, engineers, teachers and in the government and political parties. Ethnic Chinese in the past have served as government ministers, vice ministers, provincial chiefs, accounting heads, council chiefs and vice chiefs, and supreme justices. Ethnic Chinese are gradually playing a more important role in Panama’s business sector as well.

There are presently 35 Panamanian ethnic Chinese groups (there are another 11 that are inactive and therefore are not counted), with most concentrated in Panama City. The rest of the groups are in other major cities. The Overseas Chinese Affairs Commission is made up of various ethnic Chinese organizations in Panama and has 50 members on its board. It is the highest organization for overseas Chinese in Panama and has traditionally supported the ROC government. It is instrumental in leading social diplomacy and public service work in the community. Given the large number of immigrants from mainland China in recent years, the structure of the organization has begun to change and various organizations are more supportive of mainland China. On March 18, 2003, pro-China overseas Chinese groups created a Central and South America overseas Chinese peaceful unification association, which stages activities on an irregular basis. The Global Alliance for Democracy and Peace in May 2002 staged a preparatory conference to establish a branch in Panama. In June it elected a board and in August held a celebration to mark its founding and the board’s inauguration. The ROC-Panama Cultural Center held elections for its fourth board, and its chairman Chang Chih-cheng was re-elected and took office in September. The same month, the Overseas Chinese Affairs Commission selected its new board. Liu Wen-hui was sworn in as the head of the organization.

With the assistance of the ROC government and the leadership of Chen Feng-tian, planning for the ROC-Panama Cultural Center began to be carried out in 1980. In 1985, ground was broken on the first stage of the building plan. Presently, various facilities, such as the administration building, the education building, the Chung-cheng Athletic Arena, a swimming pool and a three-hectare friendship park have been completed. Still in the planning stages are the Chen Feng-tian Memorial Library, a language training center and an athletic facility. The Sun Yat-sen School includes a kindergarten, an elementary division and a junior high school division. The school, which has 120 teachers, provides instruction to about 1,700 students. Given the outstanding instructors, rigorous coursework, and strong reputation, the school is highly thought of in Panama.

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