Panama 2014

Presidential and congressional elections were held in Panama on May 4, 2014.

The President of Panama is the head of state and government and is elected by popular vote (FPTP) for a five-year term, and may not hold the office for the two terms immediately following. The outgoing President’s relatives (within the fourth degree of consanguinity or second degree of marital relations) may not be elected. Similar to ‘fusion voting’ in the US, voters may vote for the same presidential candidate under different party lines (the candidate with the highest sum of votes, across all party lines, wins). Like in New York state, the number of votes which a party line won determines whether it keeps its electoral registration or not.

The National Assembly (Asamblea Nacional) is Panama’s unicameral legislature, composed of 71 deputies elected in single or multi-member constituencies, called circuitos electorales. These electoral constituencies are based on Panama’s administrative districts, which are the second-level administrative divisions: each district with a population over 40,000 inhabitants forms a constituency on its own, and each constituency elects one deputy per 30,000 inhabitants and an additional one for every fraction over 10,000. As of today, there are 26 single-member constituencies whose members are elected by FPTP. The remaining 13 constituencies elect between two and seven deputies to the National Assembly, returning a total of 45 deputies. In multi-member constituencies, voters vote for only one candidate on the party’s list. Seats are attributed using an electoral quotient, which is the number of valid votes cast divided by the number of seats to be filled. Party lists which have obtained more votes than the quotient obtain as many seats as they have full quotients. In the case that no party has won more votes than the quotient or there are still seats left to be filled, seats are distributed to parties which have obtained more than half of the quotient (medio cociente); parties which have already won seats with the quotient are not eligible for seats. Finally, if there are any seats left to be filled, they are distributed to candidates with the highest votes.

In this election, voters also elected Panama’s 20 deputies to the Central American Parliament (PARLACEN), 77 mayors, 648 representatives of corregimiento (the third-level administrative divisions below the district) and 7 councillors (elected by the districts of the indigenous comarca of Emberá-Wounaan and the offshore island district of Taboga).


The isthmus of Panama’s strategic location has had a huge influence on the country’s history. When Latin American countries gained independence from Spain in the early nineteenth century, Panama became part of the country which would eventually become known as Colombia. Panama’s golden age had come and gone under Spanish rule, and by the time Panama became a province of Colombia, it was a backwater region isolated from the decision-making centres of mainland Colombia (to this day, there is no road connecting the two countries, broken by the wild and impassable Darién Gap). Nevertheless, Panama’s strategic location as the connecting link between Atlantic and Pacific soon turned attracted the attention of foreign speculators. During the California Gold Rush, the isthmus became an important transit route between the American east coast and the west coast. In 1850, a group of New York financiers obtained an exclusive concession from Colombia to build a railroad through the narrow isthmus, which was completed in 1855. The railway restored Panamanian prosperity (briefly), led to the construction of the city of Colón on the Atlantic and exposed locals to Americans. In 1869, the completion of the Transcontinental Railroad in the US reduced passenger and freight traffic.

Ideas for a canal through the isthmus first sprang up under Spanish colonial rule, and throughout the nineteenth century, investors and governments in the US, Britain and France displayed varying levels of interest in a canal. In 1846, the US and Colombia signed a treaty which removed restrictive tariffs, granted free passage to all US citizens over any road or canal which might be constructed, while the US guaranteed the isthmus’ neutrality and Colombian sovereignty. But the first attempt to build a canal was that of France’s Ferdinand de Lesseps, who obtained a concession to build a canal in 1879. Work began in 1880, but the project foundered due to corruption (the scandale de Panama became one of the major political scandals of the French Third Republic), damaging speculation from rivals, financial troubles, tropical diseases and the impracticality of a sea-level canal despite de Lesseps’ obstinacy. In 1889, the company was bankrupt. Nevertheless, the French canal had completed excavation for 2/5 of the future canal and it left behind infrastructure and an Antillean black labour force, part of which would stay and eventually work on the US canal.

As an isolated backwater region of Colombia, there had been separatist conspiracies and movements in Panama for most of the nineteenth century, culminating in five failed secessionist attempts. Yet, Panama was also affected by spillover from the decades-long on-and-off political violence, civil wars, coups, riots and regime changes in Colombia (which affected Panama’s degree of autonomy: a federal state with significant devolved powers from 1863 to 1886, it became part of a very centralized and conservative-minded Colombia after 1886). In 1885, a riot in Panama basically destroyed Colón and Colombia called on US forces to restore order. After Colombia adopted a centralist constitution in 1886, many Panamanians became to support the idea of independence. Between 1899 and 1902, Panama was a major battleground in the Thousand Days’ War between Colombia’s warring Liberal and Conservative factions. Once again, Colombia called on the US to intercede and mediate the signature of an armistice on board an American warship off Panama in 1902. As a backdrop to all this, the US retained interest in building a canal, and an obstacle to this was dropped in 1901 when Britain agreed to the idea of a canal built solely by the US. The difficulty of moving warships from the Caribbean to the Pacific theaters during the Spanish-American War convinced President Theodore Roosevelt of the necessity of a canal.

In January 1903, the US and Colombia signed the Hay-Herrán Treaty under which Colombia conceded a 100-year lease on a canal zone 10km wide in return for fairly small financial compensations to Bogotá. The Colombian Senate unanimously rejected the treaty, a move which led to the formation of a separatist revolutionary movement in Panama which sought to negotiate directly with the US. The US actively encouraged these separatists. Philippe Bunau-Varilla, a French engineer who owned stock in the new French canal company and who had successfully sold the idea of a canal in Panama to the US Congress (which appropriated $40 million to buy land from the French), now provided financial assistance to the Panamanian rebels. In October and November 1903, they staged a successful uprising, while the US used the USS Nashville to impede Colombian troops from landing troops to suppress the uprising. Colombia resented the US’ actions, but was powerless to do anything. In 1921, Colombia finally recognized Panamanian independence in exchange for a financial indemnity from the US.

Within days, the US and other countries recognized Panamanian ‘independence’. Bunau-Varilla, from the Waldorf Astoria in New York (he had not lived in Panama for 17 years) wrote the Panamanian declaration of independence and served as Panama’s negotiator with US Secretary of State John Hay. In the hastily negotiated treaty ratified by Panama (having little choice), the US was granted, in perpetuity, the use, occupation and control of a 16km-wide zone for the construction and operation of a canal (in exchange for $10 million and subsequent annuities). The treaty further allowed the US to extend the Canal Zone if it believed it to be necessary for defensive purposes. The 1903 constitution of Panama gave the US the right to intervene anywhere in Panama to “to reestablish public peace and constitutional order”, in exchange for guaranteeing its independence. Therefore, Panama became a de facto American protectorate. In the Canal Zone, the US interpreted the treaty to mean that it could exercise complete sovereignty. The treaty and the constitution would rankle Panamanian nationalists for decades.

After independence, Panama inherited Colombia’s Liberal and Conservative parties, although these labels had little meaning. The Liberals having been behind the revolutionary movement, they came to dominate politics in Panama until 1932, although it remained an extremely factionalized and fractious array of caudillos. During this era, politics remained the exclusive preserve of a small oligarchy.

The US took control of the canal zone from the French in 1904 and began work on the canal, building on the foundations laid by the French and trying to avoid their mistakes. The US Army Corps of Engineers successfully rid the region of deadly mosquitoes carrying the yellow fever, allowing construction to begin with a workforce of approximately 65,000 men – mostly from the West Indies. The Panama Canal was completed in 1914. The canal has remained an issue at the core of Panamanian politics, and it has had a major impact on the country’s society and political culture. New forms of discrimination and segregation arose, and US presence in Panama began to generate resentment in the country. In the Canal Zone, the US assumed full sovereignty, despite Panama’s opposition. The US naturally retained deep interest and involvement in Panamanian politics, intervening directly – often at the request of the Panamanian government – to restore order, protect American citizens and property, or quash local riots at the government’s request. Disgruntled factions in domestic politics turned to the US to secure their rights.

In 1932, Harmodio Arias Madrid, a mestizo from a poor provincial family who led, alongside his brother Arnulfo Arias Madrid, through a middle-class mestizo nationalist, anti-oligarchy and anti-American movement, was elected President. He instituted relief efforts for the countryside and established the University of Panama, which would become the focal point for middle-class nationalist agitation. His election came at a time when the US were moving to a more conciliatory stance, with Franklin D. Roosevelt’s Good Neighbor Policy. In 1933, the US pledged sympathetic consideration of arbitration requests on non-vital economic issues, efforts to protect Panamanian businesses from smuggling cheap goods from the Zone and agreed that US rights in the Zone applied only for the maintenance and operation of the canal. However, the devaluation of the US dollar in 1934 reduced the gold content and meant that the annuities paid to Panama were effectively cut in half.

In 1936, Panama and the US signed the Hull-Alfaro Treaty ended the protectorate status, removing the US’ guarantee of Panamanian independence and its concomitant right to intervention, increasing the annuities and dealt with Panamanian business and commercial complaints (non-canal linked private commercial operations were banned in the Zone, free entry into the Zone for Panamanian goods). The US Senate reluctantly ratified the treaty in 1939.

In 1940, Arnulfo Arias, at the helm of a nationalist mass movement known as Panameñismo, was elected President. Panameñismo opposed American hegemony and wanted to rid Panama of non-Hispanics (Americans but also Anglophone blacks, Chinese, Hindus and Jews). He promulgated a new constitution which centralized powers behind the President and extended the presidential term to six years, but also barred Anglophone blacks from Panamanian citizenship. In October 1941, the National Police – Panama’s only law enforcement/military force at the time – removed him from office, much to the US’ delight. A new constitution adopted by a constituent assembly in 1946 erased Arnulfo Arias’ changes. Arias’ successor, Ricardo de la Guardia, proved a loyal American ally who leased 134 sites to the US for the duration of the war and declared war on the Axis on December 7, 1941. However, after the war, the US sought to hold the bases for an indefinite period, and compelled the Panamanian government to a draft treaty granting a 20-year extension of the leases. However, the National Assembly rejected the treaty in the face of an angry mob and in 1948 the US had evacuated the occupied bases.

Arnulfo ‘lost’ (but really won) the 1948 election, whose winner died in office. Colonel José Antonio Remón, the National Police chief, gained significant power and between 1948 and 1952 he installed and removed several presidents – he even gave the presidency to Arias in November 1949 (who was proclaimed in 1949 to have won the election), until Remón sided with the National Assembly when they removed Arias from office in May 1951. Remón, meanwhile, increased wages and benefits for his forces and transformed the police into a paramilitary force. In 1953, the police was transformed into the National Guard. In 1952, Remón, running for the National Patriotic Coalition (CPN), an hastily assembled coalition of different parties which would become Panama’s party of power until 1960, was elected President. He enriched himself, but also promoted a reformist program. Remón was assassinated in fairly murky conditions in 1955, and his First Vice President (who briefly succeeded him in office) was impeached and jailed (but never tried) for the crime. His impeachment may have been a cover-up to protect Panamanian political families and a US organized crime boss. Remón’s two CPN successors dismantled most of his reforms.

In 1955, Panama signed a treaty with the US which again limited commercial activities in the Zone, the annuity increase and discriminatory wage differentials in the Zone abolished to provide equal wages to all employees regardless of nationality. However, the nationalization of the Suez Canal in Egypt in 1956 led to tensions with the US, which declined to invite Panama to a conference of global maritime powers, proclaimed that Suez could not repeat itself in Panama because the US possessed ‘sovereignty rights’ and clarified that the ‘equal wage’ clause of the treaty didn’t preclude a 25% wage differential for US citizens in the Zone. Between 1958 and 1960, several student protests and riots worried the US that Panamanian mobs might actually force entry into the Zone. The US toughened military presence in the Zone, strengthened security measures and relations with Panama worsened. In 1960, with the CPN having largely disintegrated, a Liberal candidate won free elections. Although he sought to implement a moderate reformist agenda, the National Assembly paid no attention. Once again, Panama and the US negotiated an agreement over contentious labour, social security and wage issues in the Zone and Panama received loans and grants from John F. Kennedy’s Alliance for Progress.

Popular resentment against the US, its policies and citizens boiled over in January 1964, originally due to a dispute over the flying of the Panamanian flag in the Zone (which was raised in 1960, but the US’ staging of the ceremony angered the Panamanian President, and Panamanians were still angry that their flag was one flown at one spot in the Zone). After an agreement to raise the Panamanian flag alongside the US flag at several spots in the Zone, including American high schools, it was now US citizens who protested and American high school students hoisted the US flag alone. In January 1964, over 200 Panamanian students marched into the Zone and the tensions turned into a bloody riot killing 20 people after the Panamanian flag was torn in a clash with US students. Panama’s government took the extraordinary step of severing relations with the US and appealed to the OAS and UN. Tensions and diplomatic deadlock lasted until April 1964, when diplomatic ties were restored. Nevertheless, relations remained strained for almost a year.

In the mid-1960s, Panamanian politics was still tenuously controlled by the oligarchy, while the middle-class – spearheaded by the vocal students – failed to unite with the rural lower-classes, which were generally disconnected from national politics. Political parties were, like elsewhere on the continent, clientelist parties and/or personal machines for a leader (such as the Panameñista Party for Arnulfo Arias). In 1964, Marco Aurelio Robles, the candidate of the moderate ruling Liberal-led coalition, defeated Arias’ nationalist (slightly toned down by now) and anti-oligarchic coalition and an equally nationalist CPN-led coalition. Arias alleged that Robles had rigged the election. Robles’ government faced challenges aggravated by the 1964 riots, and remained dependent on US aid to develop infrastructure projects.

the 1964 riots led to negotiations to draw up a new treaty to replace the increasingly loathed Hay-Bunau-Varilla Treaty of 1903. Negotiations continued under Liberal President Marco Aurelio Robles, who won (officially) the 1964 election by a thin margin over Arias and his Panameñista Party. Negotiations resulted in a treaty in 1967, but Panama failed to ratify it. The draft treaties would have abolished the ‘in perpetuity’ clause  in favour of an expiration date in 1999, and would have compensated Panama on the basis of tonnage shipped through the canal. However, Panamanian nationalist opinion objected to clauses allowing for continued US military presence in the Zone and the right for the US to deploy troops anywhere in Panama.

In the 1968 election, the ruling Liberal coalition endorsed David Samudio, a middle-class engineer and cabinet minister under Robles. Arnulfo Arias ran again, largely concerned over the validity of the election itself. Charging that Robles was illegally interfering in the election to help Samudio, Arias and another candidate recommended the President’s impeachment. In March 1968, the National Assembly voted for impeachment and declared him deposed. However, Robles, backed by the National Guard, ignored the National Assembly and awaited the Supreme Court’s decision, which later ruled the impeachment proceedings to be unconstitutional. The election went ahead in May 1968, and despite delays in announcing the results, it was finally announced that Arias had won with 54.7% against 41.8% for Samudio. On October 1, Arias took office, his election having been guaranteed by the National Guard’s approval. Upon taking office, he demanded the return of the Canal Zone and reorganized the National Guard. On October 11, the National Guard removed Arias from office. Once again, he did not complete his constitutional term.

A new junta, with civilian and military members, took power and assumed control over the entire territory. The junta arrested several political leaders on trumped-up charges or grounds of subversion, disbanded the National Assembly and political parties, censored the media and closed the University of Panama for several months. Omar Torrijos and Boris Martínez, commander and chief-of-staff of the National Guard respectively, became the real leaders of the country – and within months, Martínez, who promoted radical agrarian reform, was ousted by Torrijos. In 1969, he survived a failed coup attempt by three colonels backed by the two-member governing junta, and promptly exiled the rebellious colonels and installed a civilian puppet president.

After 1971, Torrijos’ authoritarian regime shifted towards the left, although siding with a non-Marxist populist form of leftism rather than Marxism. He became a very popular lead with Panama’s impoverished rural masses, who saw him as ‘one of their own’ rather than a member of the old, predominantly white oligarchy. He regularly met with the rural poor, listened to their problems, created new jobs, opened schools and launched a public works program. Torrijos therefore built an alliance with the rural campesinos, students, the National Guard and a portion of the working-class and the left; this alliance was held together by nationalism, which reduced antagonisms between antagonistic elements, and patronage. In 1972, Torrijos filled a large National Assembly of Municipal Representatives with supporters, and tasked it to confirm his position as head of government and to approve a new constitution, which expanded state powers. Legitimated by the new constitution, Torrijos undertook land reform which aimed to distributed 700,000 ha of land to 61,300 families within 3 years, which had some successes but which ultimately didn’t go as fast and as far as expected.

The government restructured education to focus on vocational and technical training, expanded access to healthcare to workers and their dependent relatives, built hospitals and clinics outside Panama City and undertook an ambitious public works project which built roads in rural areas and expanded urban housing in the cities. Although nationalist and populist, Torrijos did not overly disturb the dominant position of the elite and successfully lured foreign investment. International banking was encouraged to locate in Panama and offshore banking was facilitated. Torrijos’ grand schemes became less ambitious after 1973, when the country was hit by economic stagnation and Torrijos’ alliance eroded by economic problems.

Torrijos’ main achievement came with regards to the Panama Canal. The canal remained of vital importance to both countries: for Panama, the level of traffic and revenue generated by the canal were key in the national economy; for the US, the Zone was of strategic military importance in the Cold War, using it as a key military centre for the whole region. In 1973, the UNSC considered a resolution (vetoed by the US) calling on the US to negotiate a new treaty. In 1974, both governments agreed to basic principles to guide future negotiations, including the recognition of Panamanian sovereignty in the Zone and an expiration date for US control of the canal. However, negotiations under President Gerald Ford in 1975 ended in deadlock, with Panama resenting the US’ demands for continued military presence. The election of Jimmy Carter, who proved more willing to relinquish physical military presence and to provide bilateral aid to Panama for canal operations, broke the deadlock and negotiations resulted in the signature of the Torrijos-Carter Treaties in August-September 1977. The main treaty abrogated the 1903 treaty, the Canal Zone and Panama Canal Company would cease to exist, Panama would assume complete legal jurisdiction over the Zone, Panama granted the US the right to operate, maintain and manage the canal through a joint US-Panamanian agency and Panama would assume full control on December 31 1999. Under a neutrality treaty, the US and Panama would guarantee the canal’s neutrality. The US was allowed to retain military bases and training facilities in Panama until 2000. Despite the agreement, Torrijos spoke for many Panamanians when he expressed reservations about the transition period, the presence of US military bases in Panama during this period and the wording of the neutrality treaty (a later agreement explicitly clarified that the US’ right to act against any threat precluded US intervention in Panamanian affairs). The treaty was ratified by two-thirds of Panamanian voters in October 1977. In 1978, the US Senate ratified the treaties, but amendments and reservations passed by the Senate incensed Panamanian opinion again. The treaties finally came into force in October 1979.

Carter had conditioned the signature of treaties to domestic democratization in Panama, which forced Torrijos to amend the 1972 constitution to legalize political parties, allowed exiled leaders to return and promises for legislative elections in 1980. In 1978, Torrijos also relinquished his titles of head of government and ‘Maximum Leader of the Panamanian Revolution’, but retained actual control as head of the National Guard. Torrijos’ supporters founded the Democratic Revolutionary Party (Partido Revolucionario Democrático, PRD), a coalition which aimed to bring together Torrijos’ socially diverse coalition in a kind of patronage and corporatist party of power similar to Mexico’s PRI. In the 1980 election, actual electoral competition only concerned 19 of the National Assembly’s 57 seats (the rest were appointed by the National Assembly of Municipal Representatives, effectively all Torrijos supporters). The PRD won 40% of the vote and 11 of the 19 elected seats, with the Liberals winning 5 and the Christian Democrats winning 2.

The PRD was widely expected to nominate Torrijos as its presidential candidate in the direct presidential elections promised for 1984, but Torrijos was killed in a plane crash in July 1981. His death opened a political vacuum, filled by Colonel Florencio Flores and Torrijos’ handpicked civilian President, Aristides Royo. Royo soon alienated his backers in the National Guard and Torrijos’ clique with his leftist, anti-American nationalist rhetoric, contributing to the breakup of Torrijos’ carefully-assembled coalition of the National Guard and the PRD. In March 1982, Flores retired in favour of General Rubén Dario Paredes, Torrijos’ initial handpicked military successor, and in July 1982, Paredes removed Royo from office. Manuel Noriega, assistant chief of staff for intelligence since 1970, gained in power and standing within the military circles. In late 1982, Noriega became chief of staff of the National Guard. In November 1982, constitutional amendments reduced the president’s term from 6 to 5 years, banned electoral participation by members of the National Guard and provided for the direct election of all legislators. These changes, approved in a 1983 referendum, reduced the National Guard’s powers but it remained clear that they retained as much power as they wished. In August 1983, Paredes retired from the Guard to stand as the PRD’s presidential candidate in 1984. He was succeeded as military boss by Manuel Noriega. However, Noriega declined to support Paredes’ candidacy, which compelled him to effectively withdraw from the race as a serious contender (he was nominated by a small party, but only won 2.5%). Noriega consolidated the National Guard into a formal military, the Panamanian Defense Forces (FDP).

For the 1984 elections, the PRD joined forces with smaller parties on the right and left to nominate Nicolás Ardito Barletta, a little-known US-educated economist. Opposing him was Arnulfo Arias, backed by his Authentic Panameñista Party (PPA), the Christian Democrats (PDC) and the conservative MOLIRENA. The government and the media favoured Ardito Barletta, and election day was marred by serious reports of misconduct, fraud, purged voter lists and vote buying. The vote counting process was extremely slow and opaque, before being stopped altogether when results showed Arias to be leading. The courts rejected the opposition’s challenges and the electoral tribunal proclaimed Barletta’s victory with 47% to 46.7% for Arias. The FDP’s power was comforted; they had already silently deposed the civilian president who had been speaking out for free elections a bit too loud for their tastes.

At any rate, Barletta’s presidency was brief. He sought economic assistance from the IMF to refinance the country’s huge debt, implemented unpopular austerity measures to meet the IMF’s loan conditions and presided over mounting unrest which worried the FDP. His policies and style ran into conflict with traditional politicians dependent on patronage politics, and Noriega finally moved against him in September 1985 by forcing him to resign (unofficially because Barletta wanted to investigate the suspicious death of a critic of the FDP who claimed to have evidence linking Noriega to drug and arms trafficking).

The US opposed Barletta’s ouster and relations with Noriega deteriorated. Noriega had been a CIA asset since 1967, and convinced the US to turn a blind eye to his corruption, money laundering and drug dealing (notably with Pablo Escobar’s Medellín Cartel in Colombia). At home, Noriega faced rising opposition after the new president was forced to continue Barletta’s austerity measures. In the US, there was mounting congressional concern with Noriega’s regime and the first allegations of the Panamanian government’s involvement in narcotrafficking and the murder of the military critic in 1985 were published in the US press. In June 1987, the forced retirement of one of Noriega’s rivals in the FDP led to riots when that dismissed officer alleged that Noriega had been involved in the death of Torrijos and the military critic. Noriega responded by declaring a state of emergency, suspending constitutional rights and instituting censorship, while the opposition organized a general strike to paralyze Panama. While the Catholic Church called for calm and criticized the government, the military responded with heavy-handed actions and tough rhetoric against the protesters. Smaller protests continued for much of 1987, while relations with the US deteriorated further as the government claimed that the US supported the opposition. The US froze economic and military assistance to Panama in the summer of 1987, and in 1988, Noriega was indicted in the US for drug trafficking.

Presidential elections were held in May 1989, featuring a contest between Carlos Duque, a PRD candidate and Noriega ally; and Guillermo Endara, the candidate of a broad opposition alliance including the PPA (Arias had died in August 1988), the MOLIRENA and the PDC. Although the opposition’s parallel counts showed that Endara had won in a landslide, with 71% of the vote, it soon became clear that Noriega had every intention of fabricating the results to proclaim Duque as the winner. Eventually, Noriega annulled the election results and his thugs beat up Endara and his running-mate. The US began preparing for an invasion of Panama, and did so on December 20, after the Panamanian puppet legislature had declared war on the US. President George H.W. Bush, who had previously worked with Noriega when he was CIA Director and Noriega was a CIA asset, cited threats to US citizens in Panama (the FDP had killed a USMC First Lieutenant at a roadblock in Panama City a few days before), defending democracy and human rights, fighting drug trafficking and upholding the 1977 treaties (Bush claimed that Noriega threatened the canal’s neutrality). In a flash invasion, the US quickly neutralized and destroyed Panamanian military targets and resistance within days. Noriega sought refuge at the Vatican’s diplomatic mission, but American psychological pressure forced him to surrender to US forces on January 3, 1990. He was later tried and sentenced to 40 years in jail in the US, he was released early in 2007 for good behaviour.

The US’ military actions had a fairly heavy toll on civilian lives, with estimates ranging between 500 and 3,000 civilian deaths, while the US lost 23 military personnel and 205-314 Panamanian soldiers were killed. The invasion was condemned in a UN resolution and by many Latin American countries.

Guillermo Endara had been sworn in as President of Panama in the Canal Zone on December 20, 1989 by American forces and he became the country’s official president at the end of the invasion. Endara promoted democracy, human rights and civilian rule – a month after he left office in 1994, the National Assembly voted, on Endara’s recommendation, to abolish the country’s military forces. Since then, Panama’s law enforcement forces, the Public Forces, include the police, border security, a presidential protection force and a small naval and aerial security force. Endara’s anti-military coalition soon fell apart, largely due to tensions between Endara’s Arnulfista Party and Vice President Ricardo Arias Calderón’s PDC, the most intransigent party with regards to the military. Arias resigned the vice-presidency in December 1992, and the PDC never regained prominence as an autonomous force in Panamanian politics. Endara’s popularity collapsed over the course of his term, due to the unpopularity of neoliberal reforms he implemented and especially to perceived incompetence and corruption scandals (his wife was accused of reselling food donated by Italy, and when she won the lottery, she chose to keep the money).

In 1994, Ernesto Pérez Balladares (PRD), a former minor Noriega ally, was elected President in a close contest with 33.3% against 29.1% for Arnulfista candidate Mireya Moscoso and 17.1% for Panamanian salsa singer Rubén Blades. Under his presidency, the pace of liberal economic reforms – privatizations, deregulation, labour market changes, spending cuts and so forth – were accelerated despite opposition from construction workers and teachers. He controversially rehabilitated a number of former Noriega officials and supporters during his presidency, and he too was hit by corruption allegations (he was forced to admit that he had indeed received campaign contributions from an agent of the Cali Cartel in Colombia, he was investigated after he left office in a number of corruption cases, including allegations that he illegally sold US visas to Chinese immigrants). His unpopularity help explain why voters rejected a 1998 constitutional amendment supported by the President and the PRD to allow Pérez Balladares to seek reelection in 1999.

In 1999, Mireya Moscoso – Arnulfo Arias’ wife, the Arnulfista candidate, was elected President with 44.8% against 37.8% for Martín Torrijos (PRD), the illegitimate son of Omar Torrijos. Moscoso’s party was in the minority to the PRD in the National Assembly (which passed strict spending restraints), restricting her ability to make policy. Instead, she sought to avoid making important decisions, and faced protests when she did make one – firing the head of the social security administration, in an apparent attempt to privatize social security. When she left office in 2004, her government was widely perceived as corrupt, incompetent and ineffectual. Before leaving office, she pardoned Luis Posada Carriles, an anti-Castro Cuban terrorist who had bombed a Cubana flight in 1976 and committed other terrorist acts.

In 2004, Martín Torrijos won his bid for the presidency, winning 47.4% against 30.9% for former president Guillermo Endara, standing for the ‘Solidarity Party’ and 16.4% for the Arnulfista candidate. As President, Torrijos maintained the orthodox ‘Washington Consensus’ economic policies which all presidents since Endara had implemented – he raised pension contributions and the retirement and, in 2007, signed a FTA with the US (finalized in 2011), as he had promised in 2004. But his term was more successful than that of his predecessors, buoyed by solid economic growth until 2009 – peaking at 12% growth in 2007. A lot of that growth came with the launch of a major $5.2 billion canal expansion project, announced by Torrijos in 2006 and ratified by voters in a referendum. The Panama Canal has been working at full capacity and has faced congestion problems for a number of years; additionally, the size of ships which can transit through the canal is constrained by the size of the locks. The project, which formally began in 2007, will notably build a third set of locks to allow more ships – and larger ships – to transit through the canal. The immigration of affluent elite families from Ecuador and Venezuela, ‘fleeing’ the left-wing Correa and Chávez administrations back home, also led to an infusion of capital in Panama, which has established itself as Central America’s main financial centre and proved very resilient in the 2008-2009 economic crisis (growth fell to 4% in 2009 but Panama has escaped recession). Internationally, Torrijos’ administrations improved the country’s diplomatic standing after Moscoso’s whimsical foreign policies. His government, while fairly successful, was unable or unwilling to tackle corruption. In the 2009 campaign, the PRD’s candidate was hit by allegations of illegal campaign financing from a Colombian national who was wanted in the US for extortion, money-laundering and drug-trafficking, and who received protection from the presidential protection force.

However, the PRD was badly divided as it entered the 2009 election. The PRD’s nomination went to Balbina Herrera, Torrijos’ housing minister and a former President of the National Assembly; she defeated Juan Carlos Navarro, the PRD mayor of Panama City. The PRD’s divisions and Herrera’s reputation as a ‘henchwoman of Noriega’ and concerns that she was too far to the left, allowed Ricardo Martinelli, a wealthy supermarket magnate who ran as a centrist independent backed by his Democratic Change (Cambio Democrático, CD) party and the Panameñista Party, to win in a landslide – 60% against only 37.7% for the PRD’s embattled candidate. Guillermo Endara, who would die a few months later, won 2.3%. Martinelli had previously served as president of the Panama Canal Authority under Moscoso’s presidency (the CD, formed in 1998, had been part of her winning coalition in 1999) and ran for president in 2004, winning only 5% of the vote. He had hatched an alliance with the Panameñista Party’s Juan Carlos Varela, who became his Vice President (allegedly the deal was negotiated by the US). Martinelli’s platform mixed anti-political sentiment (the idea of a centrist outsider solving problems), a typically liberal promotion of free enterprise, a tough-on-crime attitude (security was one of the main failures of Torrijos’ government) and some populist promises for the poor. He was not hurt by Herrera’s concerns over Martinelli’s wealth (which she claimed represented $400 million, or 2% of the GDP!) and conflicts of interest.

Martinelli’s coalition, the Alianza por el Cambio, won 42 seats to the PRD coalition’s 27 seats. However, the CD elected only 14 deputies against 22 for the Panameñista Party and 26 for the PRD. That being said, thanks to the defection of venal deputies, the CD now has 36 seats to the PRD’s 17 and the Panameñista Party’s 12.

In office, Martinelli has mixed liberal economic policies with populist measures. He reduced tax rates, simplified tax brackets, cut the corporate tax and worked to improve tax collection; yet tax collection never met the expected and projected goals and the government has been forced to ask for exceptions to legal limits on deficit targets. The government moved aggressively to attract foreign investment, with the stated aim of transforming Panama, already Latin America’s fastest-growing economy and one of the five richest countries in mainland Latin America. Martinelli’s government built on Panama’s low import tariffs by announcing a five-year, $13.6 billion investment plan. In 2011, Martinelli oversaw the finalization of the Panama-US FTA, which was ratified by Congress in October 2011 after Panama had agreed to a tax information sharing system with the US, resolving American concerns about Panama’s banking secrecy laws and tax haven reputation. He also passed populist measures, which have made him popular with voters: a $100-per-month pension for the elderly poor, subsidies for students and an increase in the minimum wage. One of his main infrastructure projects was the Panama City metro, a subway system inaugurated in April 2014.

Economic growth is projected to reach 7% in 2014, down from 8% in 2013 and nearly 11% in 2011-12, still making Panama the fastest-growing economy in Latin America. Unemployment was only 4.5%, when it had stood at nearly 15% in 2001. Despite a strong and growing economy and government dreams of making Panama into a ‘Singapore of Latin America’, income inequality remains a major problem in Panama. The country’s Gini coefficient was 51.9 in 2010, making it the seventh most unequal country in Latin America, just behind Chile and ahead of Mexico. The flashy skyscrapers of booming Panama City (although the city has its own challenges too, with substandard infrastructure) contrast with extreme levels of poverty in Panama’s three indigenous comarcas (self-governing reserves), where over 80% of the population is poor. The poverty rate has declined significantly, from 36.5% in 2007 to 27.6% in 2011.

Martinelli gained a reputation as a ‘bully’ with little tolerance for the opposition or separation of powers. In 2009, a Wikileaks cable from the US embassy revealed that Martinelli had asked for help in the wiretapping of his opponents, and reported his penchant for bullying and blackmail. In office, he moved to make CD the dominant force of the coalition, first moving to encourage prosecutors to investigate former PRD officials while simultaneously inciting PRD MPs to defect in return for pork, committee assignments and patronage. In 2011, the Panameñista Party and Juan Carlos Varela, Martinelli’s estranged VP and foreign minister, left the coalition. Martinelli had been trying to adopt a two-round system for the presidential election and allegedly considered amending the constitution to allow him to run for reelection in 2014. Martinelli is guilty of autocratic penchants, but the cause of many of Panama’s problems are corrupt and inefficient administrations and public institutions; institutional weakness has been a constant in democratic Panama since 1990, and corruption remains widespread (and the corrupt politicians continue to act with impunity).

In September 2012, Varela accused officials in Martinelli’s administration of taking bribes from an Italian company. The scandal involves a close associate of Silvio Berlusconi, Italy’s former Prime Minister. Martinelli pugnaciously fought back against all charges, and tried to pack the Supreme Court with allies.

Martinelli’s style and policies also mobilized significant public opposition. The National Front for the Defense of Economic and Social Rights (FRENADESO), made up of teachers and unionized workers, protested the government’s policies and demanded economic fairness. The Panamanian Chamber of Commerce lost confidence in the President’s policies. In 2011, his mishandling of a proposal to change the legal framework regulating the mining in native lands mobilized significant indigenous groups against the government and blocked the Pan-American Highway for a few days. The government scrapped it plans. In October 2012, the government’s aborted plans to state-owned land on which Colón’s free-trade zone is built led to major protests in Colón. Once again, protests forced the government to backtrack. But the protests represented an upswell in popular dissatisfaction with the political system and Panama’s weak institutions.

Candidates and Issues

Panama’s three main parties – the PRD, CD and Panameñista Party – ran autonomously this year.

Unable to run himself, Martinelli and his CD is supporting José Domingo Arias, a former minister of housing between 2011 and 20134. He’s relatively unknown, but at the same time he’s probably seen to be a pliable candidate for Martinelli. Indeed, Arias is widely seen as a proxy candidate for Martinelli, who would exert power behind the scenes. To add to that perception, Arias’ running-mate is Marta Linares de Martinelli, President Martinelli’s wife who has no formal political experience herself. Although Article 193 of the Panamanian constitution fairly clearly bars relatives within ‘the second degree of martial relations’ of the incumbent President from being elected Vice President, the courts, which favour Martinelli, have not blocked her candidacy.

Arias’ platform, like that of Martinelli in 2009, was fairly eclectic. He proposed a Ciudad Mujer program almost identical to that implemented by El Salvador’s left-wing government, they are government service centre for women with specialized services in sexual and reproductive health, support for victims of violence against women and courses to promote economic autonomy. His platform also promised university scholarships, increasing the value of the $100 monthly pension to the elderly poor over 70 to $120 per month and indexing it to the minimum wage, technical training courses to single mothers and the youth, strengthening the fight against criminality, expanding Panama City’s new metro, lowering food prices, building new houses to help families buy their first homes and a very vague promise to create new social programs. His platform stated that he would continue the infrastructure projects started by Martinelli and maintain the subsidies for transportation, gas and electricity.

Arias appeared on the ballot as the candidate of the CD and the small right-wing Nationalist Republican Liberal Movement (MOLIRENA).

The PRD nominated Juan Carlos Navarro, the former mayor of Panama City between 1999 and 2009 who narrowly lost the PRD’s 2009 presidential nomination to Balbina Herrera (but was her running-mate in the election). Navarro is a vocal opponent of Martinelli, and Martinelli really hates him with a passion.

Navarro’s platform talked of the unacceptability of poverty and inequality in Panama, but his platform was not all that left-wing. Indeed, it is mostly a grocery list of various projects and policies, but hardly anything indicates a major change with the economic policies of the current and past governments. Some of Navarro’s promises included plans against extreme poverty and malnutrition, a new agricultural policy to help farmers and consumers, vague pablum about security, a preventive health program, policies to help poor people buy medicine and access clean water, new infrastructure projects, 100,000 new or improved houses, creating jobs for the youth (Latin America’s famous ‘nini’ – people between 16 and 29 who do not study or have a job) with the private sector and tax incentives and increased pensions. Navarro was critical of Martinelli’s record on the country’s public debt, which has increased significantly under his administration, and the perception of corruption in public work contracts.

Vice President Juan Carlos Varela, a sworn opponent of the government, ran for the Panameñista Party. His platform struck a fairly anti-establishment and anti-political tone (Varela says he’s no professional politician but an entrepreneur who knows how to create jobs and obtain results), with the usual clichéd promise of ‘working above parties’ to ‘solve problems’. Overall, though, his platform is hardly different on the whole from the broad economic framework in place since 1990. It is rather ambitious (but probably too ambitious), with promises of reducing poverty (with plans for 100% access to clean water and 0% of latrines/unimproved toilets), improving access to healthcare, emergency price controls to reduce food prices, job creation, bilingual ‘first world’ education, building 150,000 new houses and a plan for safer towns with more job opportunities. He also talked of a constituent assembly, but made no promise of actually adopting a new constitution.

Varela appeared on the ballot as the candidate of the Panameñista Party and the Popular Party (PP), the old PDC which is now a very minor party.

The ideological differences between the top three candidates were very thin, and all three pledged to maintain Martinelli’s popular social programs, public works projects and the neoliberal economic framework. Martinelli/Arias’ two opponents instead presented themselves as more transparent and democratic candidates than the outgoing President.

Genaro López, the former lead of the construction workers union – one of Panama’s largest and most vocally left-wing unions, ran for the new Broad Front for Democracy (Frente Amplio por la Democracia, FAD). The left-wing FAD proposed ‘economic democracy’ – opposition to neoliberalism, ‘political democracy’ and patriotism.


President (96.8% reporting)

Juan Carlos Varela (Panameñista-PP) 39.11%
José Domingo Arias (CD-MOLIRENA) 31.45%
Juan Carlos Navarro (PRD) 28.07%
Juan Jované (Ind) 0.59%
Genaro López (FAD) 0.58%
Esteban Rodríguez (Ind) 0.11%
Gerardo Barroso (Ind) 0.09%

National Assembly (90.9% reporting, unofficial projection for all seats)

CD 42.49% winning 28 seats (proj. 28)
MOLIRENA 1.28% winning 1 seat (proj. 1)
Unidos por Más Cambios 43.77% winning 29 seats (proj. 29)
PRD 33.84% winning 22 seats (proj. 26)
Panameñista 17.87% winning 11 seats (proj. 14)
PP 2% winning 1 seat (proj. 1)
El Pueblo Primero 19.86% winning 12 seats (proj. 14)
Independents 2.3% winning 1 seat (proj. 1)
FAD 0.23% winning 0 seats

Vice President Juan Carlos Varela was elected to the presidency, a somewhat surprising twist of events in one of Panama’s most closely fought elections since 1990 with a genuine, open-ended 3-way contest for the top job. Most polls had showed either Arias or Navarro placing first, with a narrow edge to the former on advantage, although in most cases all three candidates were within the margin of error. On preliminary results, Varela won about 39% of the vote against 31.5% for Arias, his closest opponent. The PRD’s Juan Carlos Navarro, a major contender, placed a solid but ultimately quite disappointing distant third with 28% of the vote. None of the other four candidates registered on the map. It is a major defeat for the pollsters, none of which had predicted that Varela would win (and only one poll showed him in second place). Pollsters, although their methodologies are often concealed and are unregulated by the electoral tribunal, had been fairly successful in past elections. One pollster has suggested that there was a significant swing in public opinion in the final days of the campaign, during a poll black-out period.

Varela’s victory and Arias’ defeat is a major blow for Martinelli, who had been counting on his protege and his wife’s victory to continue influencing politics from behind the scenes. However, since the US invasion, no incumbent party has managed to win reelection – in every presidential election, the president’s party was defeated. Martinelli, however, was significantly more popular than most of his predecessors, except Torrijos (who was fairly popular when he left office in 2009), with approval ratings in the 60% range. However, there were serious concerns in Panama about corruption and authoritarianism in the outgoing government (two issues which Varela, who as a VP estranged from his original running-mate at the top of the ticket in 2009, seized on in this campaign) and public discontent about inequality and the high cost of living. Varela, much like Navarro, promised to keep Martinelli’s popular policies and projects (pensions for the poor, the new metro in Panama City, public works) while campaigning strongly against corruption and the President’s ‘bully’ and autocratic personality. Panamanian analysts have suggested that voters were left unconvinced by Navarro’s fairly tame and conciliatory campaign, in contrast to Varela’s tough, aggressive anti-incumbent campaign. Former PRD president Perez Balladares claimed that Varela benefited from a ‘protest vote’/’punishment vote’ against the government.

That thesis is certainly confirmed, at least in part, by the results of the legislative vote. On preliminary results, the CD-led coalition won 43.9% of the legislative vote against 33.8% for the PRD and only 19.8% for Varela’s Panameñista coalition. The new President will find himself lacking a majority in the National Assembly, with his coalition holding only 14 seats (projected) against 29 seats for the CD-led coalition and 26 for the PRD. Varela has so far said that he would work with the opposition parties and ‘respect’ the distribution of seats, rather than try to convince opposition deputies to convince to his party like Martinelli had successfully done since 2009 (when his party, the CD, only held the third-most seats when the legislature convened).

There was also a very close race for mayor of Panama City. The Panameñista candidate, José Blandón, narrowly won with 35.7% – with 92% reporting. The PRD’s candidate, Jose Fabrega, won 34.4% while incumbent CD mayor Roxana Méndez won third with 29.2%. It appears that the PRD has performed fairly well, compared to its poor presidential showing, in the local elections.

Varela assumes the presidency with no majority in the National Assembly, and a rather ambitious grocery list of promises to fulfill. Although his election does not signal a major shift in the country’s direction or the broader policy framework, of the three candidates, Varela perhaps had the more ‘ambitious’ platform and thus faces the challenges of living up to them. Although Panama’s economy remains in fairly good shapes, there are signs that trouble may lay ahead. On the one hand, heavy borrowing has significantly increased the country’s debt under Martinelli’s presidency. The economic growth of the past years has been unequal, sparking discontent in rural areas but also in the better-endowed cities of Panama City and Colón.

Posted on May 6, 2014, in Panama. Bookmark the permalink. Leave a comment.

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