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Tuesday, September 02 2014 @ 10:05 AM EDT

Tourism Minister Visits Playa Blanca - Makes Headlines

Hotels By DON WINNER for - Yesterday I was notified that Panama's Tourism Minister, Salomon Shamah, was going to be meeting with the property owners and residents of the Playa Blanca beach resort in order to discuss with them the plans being made by the government to move the Rio Hato garbage dump. From earlier reporting I already pretty much knew the situation. This dump has been there for more than 25 years and it predates all of the high-end beach front developments and hotels that have since been built. However, the dump has since become a health hazard for everyone in the area. It burns constantly and the smoke from the burning garbage drifts through the developments and hotels at Decameron, Playa Blanca, Nikki Beach, Buenaventura, as well as the surrounding communities. The entire area has become invested with flies, rats, mice, buzzards, and who knows what else. Anyway, after many years of talk and little action, a couple of peaceful protest actions and demonstrations by area residents finally pushed it over the top. I knew Minister Shamah was going to be giving the "good news" to the residents, but I didn't expect what came later when I interviewed him one-on--one... (more)

Panama's Tourism Minister Salomon Shamah explained to the 100+ gathered residents of Playa Blanca that the garbage dump at Rio Hato will be closed and moved within four weeks.

The Dump Is Going To Be Moved: Minister Shamah explained that the land where they intend to locate the new dump was owned by the Ministry of Education, and it took some doing to get them to release ownership of the land to the Municipal offices of the Mayor of Anton so they could start using the location for the new landfill. He said there were many other delays, snafus, and inter-agency coordination problems, all within their administration. However, he said all of those things have been worked out. He flat-out promised that the dump would be moved and gone no later than 15 March 2011. He explained that they have a four week implementation plan which includes moving much of the existing heaps of garbage to the new site, putting pipes into the ground to allow for accumulated gases to escape, and a "massive" fumigation effort once the dump has been cleaned up and closed. He said they would be moving much of the garbage, and then burying the rest. The total budget for this operation is $500,000 dollars. Of that $100,000 was donated by the local hotel owners and the rest comes from the ministries of Health, Tourism, and Pubic Works. So anyway, that was the good news. Now let's see if they actually follow through with their promises and within the time frame specified.

What About Bed and Breakfasts? After he finished his presentation I had a chance for a quick one-on-one interview. I just ran through what I already knew about the dump thing, the money, the time frame, etc. I also let him know about a tip I had just received - that apparently a Frenchman (tour boat operator) had been found killed in Portobelo - and he immediately called his people there to have them check it out, because prior to me telling him about the body being discovered, he had not heard a thing. Then I moved on to meatier fare. Earlier this week someone had posted some questions about running a Bed and Breakfast operation in Panama. The last run-in I had with Minister Shamah was back towards the end of 2009 over short term executive rentals, and this B&B thing was sort of down the same alley. Anyway, since I had a crack at the minister, I bounced it off of him to see what would stick. I was surprised by the turn of events. The conversation went like this...

  • Panama-Guide: I know that in Panama there are several types operations where tourists can stay, such as hostels and hotels. Recently someone contacted me about running a Bed and Breakfast...

  • Shamah: Those are illegal, they are outside of the law. We have done many studies and it has been proven that these people don't make the same kind of investment as a regular hotel operator. The law does not contemplate, nor allow, these kinds of activities.

  • Panama-Guide: I know there are many different categories within which people can legally operate...

  • Shamah: This is a very complicated topic and we could talk about this for five hours or more, but the fact is that these kinds of short term rental activities are not allowed, and they fall outside of the law.

  • Panama-Guide: OK, but it could. Is there any chance of making a change to the law to allow for this kind of activity?

  • Shamah: No, absolutely not.

  • Panama-Guide: Why not?

  • Shamah: Because it does not have the approval of the Minister. (Meaning, him.)

  • Panama-Guide: Well, you know that these things are hard to stop, and people are probably just going to keep doing it anyway...

  • Shamah: We're going to be passing a new law in March to regulate this. The new law will contain sanctions and fines for those who insist on continuing these kinds of activities. Wait until I have my fine book in my hands, and when I can start sanctioning people, then we will see how long they keep it up...

  • Panama-Guide: When will this new law be passed?

  • Shamah: Next month, in March.

  • Panama-Guide: I would like to make an appointment to come by your office sometime to discuss this issue at length. Would that be possible?

  • Shamah: Yes, of course - just make the appointment with my assistant.

And Now, The Rest Of The Story: I don't think Minister Shamah realized who I was until I started asking him about Bed and Breakfasts, and all of a sudden his memory kicked in and went back to a time much earlier in his administration when he issued a simple resolution that had the affect of changing all property ownership laws in Panama. The legal impact of his seemingly simple ATP resolution made it instantly illegal for anyone to rent an apartment for a term shorter than one year. Any property owner could rent their property, but there had to be a contract registered with the Ministry of Housing (MIVI.) Anyone who wanted to stay for less than one year had to stay in a hotel. Period - no middle ground to allow for any kind of shorter term rental. The whole thing when on for a couple of months, but then eventually he had to issue another resolution which rescinded the first resolution. In short, he folded his cards and retreated in defeat. See these related articles from the fall of 2009:

OK, So It Really Only Took Nine Days: From the time that I found out about the new ATP resolution to they themselves killing it was nine days, total. It must have been a classic Homer Simpson "Doh" moment when they slowed down long enough to realize the far-reaching implications of what looked like just a simple memo on the surface. They finally realized that no, the Minister of Tourism does not have the power and authority to change all private property ownership rights in Panama with the stroke of a pen. At least they got there quickly, and made a fix - mostly because they had to.

I Sense Another Try: I am pretty sure that I know what Minister Shamah is planning to do. A couple of things are crystal clear. First of all, he is 100% - absolutely - on the side of the big hotel owners. That's exactly why this "move the Rio Hato dump" thing was such a down hill slide. The government is doing it because the hotel owners want it to happen - not because a handful of gringo beach front condo owners made a couple of headlines in the local newspapers. Of course that helped, and in his presentation today Shamah said those protests were the catalyst which pushed the deal over the top - but he got behind it because the hotel owners are behind him. I think this law that he's talking about getting passed in March will be an attempt to put into legislation what he failed to get through with his ill fated resolution.

Say What? Most of the people who were applauding Minister Shamah's support for their requests to have the garbage dump at Rio Hato moved probably had no clue that his next trick will be to make it illegal for them to rent their vacation properties for short term customers. Many of the people who were there today either own several apartments or condominiums in Playa Blanca, or they are snow birds who use their properties when Canada is under eight feet of snow and ice, and they rent them out during the other months of the year. If Minister Shamah and the hotel owners get their way, then that activity will become illegal.

I Have No Idea What The Draft Bill Actually Says: Much of this is pure speculation on my part, admittedly. I will make an appointment with Minister Shamah next week to discuss this topic again, at length, and I'm acutely interested to know what he's planning to present to the National Assembly. But judging by his first run at this back in September 2009, and the statements he made to me today - I suspect my radar is tracking pretty closely at this point.

Don't Bother Telling Me It's Stupid: I already know. A much better approach, in my humble opinion, would be to find a way to authorize, register, and tax things such as short term apartment rentals, short term executive rentals, and Bed and Breakfast operations. These are in fact individual owners and each one is a kind of micro-business, some more organized than others, and it is a basic and fundamental law of business that more options, choices, and opportunities generally leads to lower prices, more competition, free enterprise, and a more attractive array of selections for places to stay when a tourist comes to Panama. He might stay at an executive apartment in Panama City for a week, then hit Decameron or some other all-included resort, swing up to Boquete to stay at a nice quaint B&B in the mountains, and then pop over for a cool little place somewhere in Bocas. There are ways to manage all of these different kinds of options - and more options means more tourists.

There Are 45 New Hotels Under Construction: Did you realize that right now there are about 45 new (big) hotels under construction, just in Panama City. The number of hotel rooms available is about to jump sharply, and predictably these people who have invested millions of dollars in infrastructure are going to be lobbying hard for the government of Panama, namely - Salo Shamah - to pinch off the other non-traditional options to drive paying customers to fill their hotel beds.

Like Herding Cats: The hotel owners are organized and concentrated. Just a few of them can represent a huge amount of income for the government of Panama in the form of taxes. However, on the other hand, the dozens if not hundreds of individual property owners who currently rent their properties in the short term are split, divided, geographically separated, and not represented by one organization or under one umbrella. Therefore, the hotel guys will win if things remain as they are now. And, importantly, it is abundantly clear that Salomon Shamah is already 100% in their camp.

So, Here We Go Again: Obviously this is the first warning shot of what will probably evolve into a much larger story. Just remember (as usual) you heard it here first. I'll keep learning more and I'll let you know what's going on as I figure it out myself. And oh yeah, the dump at Playa Blanca is apparently history, so at least that's some good news. The other stuff, not so much.

Copyright 2011 Test and Photos by Don Winner for Go ahead and use whatever you like as long as you credit the source. Salud.

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Tourism Minister Visits Playa Blanca - Makes Headlines | 4 comments | Create New Account
The following comments are owned by whomever posted them. This site is not responsible for what they say.
Tourism Minister Visits Playa Blanca - Makes Headlines
Authored by: susangg on Saturday, February 05 2011 @ 10:12 PM EST

If Mr. Shamah actually believes that bed and breakfasts (and other non "hotel" tourist accomodations) are "illegal," "outside the law," that tells me that Mr. Shamah has not taken the trouble to read the tourism law of 2008 (Decreto 82 of December 23, 2008), which he is supposed to be in charge of administering. Or perhaps Mr. Shamah has trouble differentiating between "the law" and his own personal desires. ("We don't need no stinkin' law....") Neither alternative is particularly appealing, particularly to those who have invested their life savings in small ecotourism facilities, or, for that matter, anyone considering investing their hard earned money in Panama.
For example, Article II, Chapter 1 of that law recognizes no less than 8 categories of tourism accommodations, and requires their operators to register with the tourist board and charge/pay the 10% tourist tax: (1) hostels; (2) apart-hotels; (3) cottages or bungalows; (4) family hostel; (5) hotel; (6) motel; (7) marina; and (8) campground. Outside of Panama City, the majority of tourist accommodations fall into categories other than "hotel." This is particularly true in rural, mountain and beach communities, such as the islands of the Bocas del Toro Archipelago and Boquete.
Further, not only are there many micro and small tourism accommodation businesses falling into these non "hotel" categories, but their existence supports a multiplicity of small businesses that rely on the tourists who stay there as customers for guided tours, scuba diving, restaurants, nature treks, visits to indigenous communities for tours and overnight stays, gift and handicraft shops, and the related retail and other businesses that go hand in hand with such activities (boat repair, construction, etc.)
It would appear that Mr. Shamah wishes to shut down virtually the entire tourism infrastructure of the Bocas islands. Is this a continuation of the Martinelli Administration's war against the people of Bocas del Toro? (With Boquete apparently thrown in for good measure?) What does he have against ecotourism? What does he have against micro and small business? What does he have against any form of tourism that doesn't look like Cancun?
Furthermore, Mr. Shamah's expressed intention to shut down all accomodations that aren't "hotels" (to be defined, presumably, by him) would bankrupt many investors who relied upon existing law when they made their investments. Some of those investors actually received concessions under Law 8. Yet Mr. Shamah says those concessions were issued to businesses that are "illegal." He hasn't had a problem taking the 10% tourist tax money from all these non 'hotel' accommodations either. Is he planning a retroactive refund?
Mr. Shamah apparently desires to make a mockery of his boss's favorite slogan: "Panama is open for business." Instead, perhaps that slogan will be changed to "Panama is open for business but once you open it, we will shut it down if we feel like it..."

Tourism Minister Visits Playa Blanca - Makes Headlines
Authored by: Don Winner on Sunday, February 06 2011 @ 07:43 AM EST

@susan - As I tried to quickly explain on the phone yesterday, it doesn't seem to matter all that much to Minister Shamah what the current law says. His intentions appear to be clear. He wants to change the existing law, and pass a new law that would make these kinds of activities illegal, in the future. And once again this is mostly speculation and tea leaf reading on my part, at least until I have a chance to meet with him, discuss this at length, and to get a chance to read the draft of the new law he intends to present to the National Assembly.

Adult Swim: Even if Minister Shamah still intends to try to push through such a reform, there is obviously a process any suggestion would have to pass. For starters, he would have to present his proposal to Ricardo Martinelli's Executive Cabinet meeting. The proposal will be discussed and debated at that meeting and if adopted, it will be formally passed to the National Assembly for their consideration. Next, Minister Shamah will present the bill to the National Assembly, where it will first be discussed in the "first debate" by whatever lower level congressional committee is responsible for the issue. Once adopted by them it will head to the full session of the National Assembly where it will be discussed and voted upon twice. If passed, then it goes back to president Ricardo Martinelli for his signature. Once signed it will be published in the "Official Gazette." Once that's done, then the executive agency, in this case the Tourism Authority of Panama - will write and publish the implementing regulation which spells out in practical terms exactly how the new law will be put into practice, on the street level. So, there are ample opportunities during this process for the "adults" to step in and have their say. In many cases it seems that Minister Shamah has a locked and fixed gaze on this issue - he knows what he wants to accomplish, to shut down any kind of activity that's not a "normal" hotel - and he apparently can't understand why some people disagree with him.

Forget the Old Law - Worry About The New Law: This issue as it stands now has almost nothing to do with the existing and current law that's on the books. It's all about whatever Minister Shamah has cooking in the computer on his desk, that would completely and totally rewrite the old law, and which most likely will simply do away with many non-traditional types of short term rentals, including executive rentals, short term rentals of vacation properties by those who do not use their properties during the full course of the year, things like bed and breakfasts, investors who buy several apartments and then rent them out for a few weeks at a time, etc. His goal was made perfectly clear back in August and September of 2009. He thinks there are only two options - a full one year lease for rentals, and anything else of a shorter time span can only happen at a regular, traditional hotel. Period. It seems that in his mind, there is no middle ground. And, that's why I suspect that his proposal will be trounced into the ground, again. Albert Einstein defined Insanity as "doing the same thing over and over again and expecting different results." The motto of the last general election campaign was "Los Locos Somos Mas" - so I guess there's one of those guys running the ATP.


Tourism Minister Visits Playa Blanca - Makes Headlines
Authored by: susangg on Sunday, February 06 2011 @ 09:37 AM EST

Don, I completely understand what you are saying. But, not only did Shamah talk about the fact that he wants to CHANGE the current "master plan for tourism," he also stated, unequivocally, that B and B's, vacation rentals, and any tourism accommodation that isn't a traditional "hotel" are NOW "illegal" and "against the law." That demonstrates that Shamah (1) is too lazy to educate himself about the law he has been charged with enforcing for nearly two years; OR (2) is so incredibly arrogant that he cannot distinguish between the law and what he WANTS THE LAW TO BE (if I was going to guess, I'd guess #2). That is why his statements about the current law are important: It demonstrates why he should not have the job he has (or any job in the government) and why anything he proposes should be viewed as suspect.
He also displays an incredible arrogance in his attitude towards micro and small businesses. For the last few years, spanning both administrations, the government has tried to encourage small businesses to "get legal" - file a notice of operations, register with appropriate authorities, file tax returns, etc. Yet here is the head honcho in an industry that offers great opportunity for people to do just that, and he is slapping them in the face, saying they are of no value because they are not "big investors." Again: supreme arrogance and cluelessness about the big picture.
As for the timing of opposition organizing, I think it begins now. Having engaged in a great deal of (unpaid) lobbying over the years, I have learned that the earlier you can stop a bad law, the easier it is to do it. The further along the train rolls, the more steam (and passengers) it picks up, and the harder it is to stop it. The president needs to start hearing from the small tourism business community NOW. Kill it (the bill) before it grows. Let the powers that be know what we think of Shamah's words now, not after its in second reading.

Tourism Minister Visits Playa Blanca - Makes Headlines
Authored by: Dick on Sunday, February 06 2011 @ 03:50 PM EST

First of all, Susan THIS HAS GOT TO STOP!

This is the 3rd comment you've made in the last 2 weeks that I completely agree with! An INTOLERABLE SITUATION!

That said.

Where do Panamanian governments find people like the past and current tourism ministers? Blades was/is a great intertainer! Most intertainers I've known made lousy managers. Look at the last governor of California, for Pete's sake.

And who is this currrent guy? He couldn't manage a lemonade stand in Boring, Oregon (look it up, it's really there). Where did Martinelli find this guy? He clearly has no business qualifications, whatsoever.

Small busineses such as the ones the minister wants to abolish
employ more than 40% of all US workers. (SMALL INVESTORS),

If his proposals are adopted by the legislature and the President, I predict the following:

Apartment prices in Panama City will plunge.
Tourism will fall dramaticaly.
The Hotels, if they have overbuilt as much as Don's estimate, will find themselves in a dire financial situation.
Large investors will loose confidence in the economic stability of the country. What smart foreign investor (large or small) would invest his money in a place that changes the rules of business on the whim of some unquallified minister and croney legislators?

I doubt that Martinelli hires his Super99 business managers without investigation into and without being certain of their quallifications. WHY DOESN'T HE USE THE SAME GENERAL CRITERIA WHEN HE APPOINTS THE MINISTERS IN HIS GOVERNMENT?

Come on, Mr. President. If you want to run this country like a well tuned business, then use well established business hiring practices and demand that those who report to you do the same!

(apologies for the mis-spelling)