Panama Political Reviews
Own skyline, western immigration and the world’s most important channel: Panama stands out clearly among the countries of the Central American region with strong economic growth and better social living. But that has not always been the case, nor does today’s Panama escape the challenges we otherwise know from the region.
For most Norwegians, Panama is tantamount to the Panama Canal. The association is not without reason for the channel and its significance for international shipping can hardly be overstated. Since Panama took over operations and ownership from the United States in 1999, the channel has become increasingly important to the national economy. Economic growth of 6.8 percent in 2011 and projected growth of 5.5 percent in 2012 is one of the strongest in the entire Latin American region and the Human Development Index 2011 places Panama at 54, a full 62 notches above Guatemala which is at the bottom of the statistics for the region. However, a more even distribution of goods is still a challenge in a country where 30 percent of the population lives in poverty. In addition, drug crime is a growing problem, although Panama’s crime statistics are significantly lower than in other Central American countries according to Countryaah.
Free trade, electoral reform and corruption
President Martinelli, leader of the Cambio Democratico (CD) party, was elected in 2009 and leads the coalition Alianza por el Cambio, a collaboration between Martinelli’s party and Partido Panameñista. Martinelli won the election with close to 60 percent of the vote and is still popular after three years in power, but in order to retain the people’s support he must respond to criticism of his reform agenda, accusations of dictatorial leadership style and show results in the fight against crime. As president, Martinelli has focused on streamlining state bureaucracy, providing the market economy with good conditions, fighting crime and public corruption, as well as reforming the tax system. In addition, he has prioritized strengthening diplomatic relations with the United States, and collaborated with Mexico and Colombia in the fight against organized crime. Ratification of the Free Trade Agreement with the United States has been an important issue for the ruling party. The United States is Panama’s most important trading partner and increased trade with the United States was one of Martinelli’s election promises. Martinelli has also put forward proposals to include two electoral rounds in the presidential election, which is currently decided in one electoral round. This is common elsewhere in the region, but will probably reduce the chances for opposition party Partido Revolucionario Democratico (PRD) to win the 2014 election.
Martinelli’s ability to achieve its goals has been hit by budget problems and lack of government experience. The government has also had to deal with corruption charges, among other things, for having transferred large areas of land free of charge to companies that can be linked to several of the government members. In addition, Martelli’s dominant leadership style has been criticized for overrunning civil society. An example of this is the mining reform of 2011, which opens the way to establishing mining unity in indigenous areas, a reform that met massive resistance from indigenous groups and the environmental movement.
The story behind the construction of the canal is a story of political power play, where control of the canal was of great economic and strategic value. Panama was part of Colombia until 1903 when they detached themselves with the help of the United States. The country immediately signed an agreement with the United States on the construction of the Panama Canal. This was completed in 1914 and was administered by the United States until 1999 when Panama took over the dominion over the canal zone. The transfer of the canal to Panama was the result of an agreement made in 1977 between then-US President Jimmy Carter and Panama’s President Torrijos. The US still has military presence and its own rights in the canal zone, including the right to intervene militarily in the canal zone if they believe US national security is under threat.
Panama’s history up to 1990 has been stormy, with frequent bargains. US forces have intervened four times, most recently when President Manuel Noriega was ousted. He had taken over power in a coup in 1983. On December 20, 1989, 27,000 U.S. soldiers entered Panama and surrounded Noriega and his people. After a few days, he surrendered and was transported to Florida where he was arrested for drug offenses. Since then, conditions have been calm.
In 2007, work began on the expansion, which is scheduled to be completed in 2014 and double the current capacity. The price tag is NOK 31 billion, equivalent to 25 percent of GDP. At the same time, the channel is being challenged by channel plans in Mexico and Nicaragua, although it is currently unclear whether it will become a reality. With the melting of the police in the north, it is also conceivable that the Northwest Passage could become a competitive route for cargo ships.