IMF looking at nationalization of Panama freeways

(newsroompanama.com) The announcement that the government plans to nationalize Panama’s two main expressways, the north and south corridors has come under the eyes of the the International Monetary Fund.

Deputy Minister of Finance Dulcidio La Guardia said that ministry officials will travel to Washington, D.C. later this month to discuss the issue with IMF officials.

The nationalization issue has been strongly criticized in some quarters in Washington, as reported in Newsroom in August, and the use of Social Security funds has been attacked in Panama.

The nationalization of the Corredor Norte and Corredor Sur, currently owned by Mexican companies Pycsa and ICA, , will cost $1.7 billion, of which $100 million will be provided directly by the government, $970 million will be raised with a bond issue and the remainder will be paid by Social Security and the Fund for Social Development.

The issue facing the government is whether the amount owed by Social Security and the Social Development Fun should be counted as government debt or not.

While some economists argue that it is state debt, the government's position is that it it will, effectively, owe the money to itself.

"Ultimately, we are going to follow the guidelines of the IMF on this matter," said La Guardia.

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Original Source: http://www.newsroompanama.com/business/1659-imf-looking-at-nationalization-of-panama-freeways.html
Date Retrieved: September 9, 2010.