Panama abandons plans to sell land in duty-free zone

PANAMA CITY – Panama's president said Wednesday that he is willing to cancel plans to sell state-owned land in a duty-free zone on the Panama Canal following a week of sometimes violent protests in which a 10-year-old boy and two adults died.

President Ricardo Martinelli said on his Twitter account: "If the people of Colon don't want the land in the duty-free zone to be sold, the sale will be canceled."

Late Tuesday, Martinelli's economy minister offered to use proceeds from the proposed sales for development projects in the city of Colon after a woman and a man were killed by stray bullets. The boy was killed during a confrontation between police and rioters Friday.

Despite the government's statements, hundreds of residents carrying signs that read "Colon is not for sale" burned tires on the streets Wednesday. In the capital, Panama City, construction workers and students protesting in support of the people of Colon threw rocks at heavily armed police who responded with tear gas.

Protesters object to legislation signed into law Friday that would let export-import businesses buy land they are now leasing in the duty-free zone, an area that city residents consider their patrimony.

Critics of the law say the lease charges should be increased and the money invested in the impoverished Caribbean coast province of Colon.

"We've said clearly that we do not want a law that seeks to sell the land," said protester Felipe Cabezas, a member of the Colonense Broad Movement. "As long as the law is not revoked, we won't dialogue."

The duty-free zone houses about 2,000 companies that lease land next to Colon, a city of about 50,000 people. Colon province is home to several Atlantic ports that service ships using the Panama Canal and supply the country's only oil refinery. It's economically the second most important province after the province of Panama, where the capital is.

But the bustling duty-free area and ports have had little effect on improving conditions for the province's 245,000 people. The new law helped revive resentment against the national government over it taking the lease money directly to the capital.

"Nothing ever comes into the province," said Roberto Chiari, a 48-year-old bricklayer in Colon. "We have lived in the duty-free zone all our lives and no government had ever come up with the crazy idea to sell the land."

The government gets about $33 million in rent a year that go directly to the state's budget. Martinelli proposes selling the land and allocating 35 percent directly to Colon's development. It is estimated the government would get $400 million from land sales the next two years.

Protesters don't believe the money will go to the province to build more housing, fix water treatment plants and do other much needed infrastructure improvements.

"In Colon, there is an economic system that clearly shows its injustice," political analyst Jose Blandon said. "On one side is the canal, the duty-free zone, and on the other is the city where half of the population lives in poverty."

The duty-free zone, established in 1948, belongs to the national government and it is separated from Colon. But residents have considered the zone part of their heritage because its port plays a crucial role for their region 50 miles (80 kilometers) north of Panama City.

"The government thought about selling the land (because) it doesn't understand that historically it has been the patrimony of that province and they will fight for it," Blandon said.