Analysis: Martinelli’s Panama: Tilt or Tide… to the Right?

Ricaurte Soler, one of Panama’s best known academics, used to observe that his country’s sentiment generally militated against contemporary international political currents. However imprecise, this blanket statement does have some truth to it, especially after 1989, when Panama’s politics consistently displayed an ideological lag when seen in a wider international context. Although the country was caught up in the political undertow which sprouted dictatorships in most of the region during that period, Panama was one of the last countries to exit the current, and it did so only after a forceful and controversial military intervention spearheaded by the United States. This still fiercely debated event broke the continuity of the country’s modern history and battered policy measures otherwise in place for decades. Today, Panama’s own history seems to be only weakly at odds with the rest of Latin American history, which until recently, tilted the region to a murkily defined ideological left.

But Panama always has been a singular country, mainly due to its geography and derived social factors, which framed its economy with a unique blend of insularity and cosmopolitanism. This is best reflected in the long and intimate love-hate relationship with the United States (US), a country which at times continues to exert a draconian tidal influence over the Panamanian citizenry despite Washington’s orderly withdrawal from the Panama Canal Zone in 1999.

The election of Ricardo Martinelli as President in 2009 was hailed by conservative forces in the region as a welcome rebirth of the Panamanian Right. A highly successful businessman and former government official, Martinelli, soon after his presidential inaugural, ably positioned himself standing side-by-side with President Felipe Calderón of Mexico and President Álvaro Uribe of Colombia in a show of ideological co-determination. But to interpret Panama’s political process within the same context of the international setting that carried the other two leaders to office or, for that matter, Sebastián Piñera to the Chilean presidency, can be misleading. Internally, the Panamanian body politic time, is presently undergoing a peculiar pattern of restructuring, which might lead to unexpected results in the medium to long term.

A brief overview of Panama’s history

Panama’s history has been driven by two overwhelming physical factors, its geography and small size, which made it equally vulnerable to foreign influences and external cash flows. This dependence has shaped weakly defined democratic institutions, given that internal forces have lacked the muster to break the stranglehold of special interests, elite or otherwise, which historically have competed for power.

This was exhibited with the construction and operation of the Panama Canal, which was constructed by the United States in 1914 after President Theodore Roosevelt’s political chicanery took advantage of an incipient national sentiment to split the territory away from Colombia in 1903. Washington, over the years, gradually established a lethal military presence in the country and became the ultimate arbiter of its politics, something which coupled with overt racist practices in the Zone (as the US enclave was called), slowly proceeded to ferment growing nationalist sentiment in the country.

This sentiment was expressed in many ways and through very different political outlets. Even when many Panamanians would shirk at this simple observation, as a matter of fact, both President Arnulfo Arias and General Omar Torrijos came out with different versions of this same sentiment. The first, a highly educated and politically complex character, assumed the presidency three times between 1940 and 1968, but never finished a full term after being repeatedly deposed with tacit US approval, when it became painfully evident that he would be a loose cannon for Washington’s local interests. Torrijos, who had lead the last coup against Arias in 1968, implanted a dictatorship which jailed dissenters and quashed the opposition, but simultaneously catered to the masses through the expansion of welfare programs initiated by former socially-minded administrations. But unlike Arias and his counterparts in Argentina and Chile, Torrijos knew the scope and limitations on his hold on power, and played a delicate game with the United States, Panamanian nationals and the traditional elites. This strategy was successful at first and even delivered on the reversion of the Panama Canal, with the Treaty of 1977. The landmark document was negotiated with the anticipated US withdrawal from the Panama Canal Zone in mind. But his untimely death, allegedly masterminded by Manuel A. Noriega, an ambitious CIA-rostered double-agent, would expose the contradictions of this political system.

Noriega’s regime would ultimately divide Panama. Corruption, a persistent curse on the country, would be compounded by Noriega’s links with drug traffickers. The anti-Torrijos opposition which had rallied with moderate success against some of his reforms, but ultimately had proved too weak to oust him, attracted wider support during Noriega’s influence over the government. The fraudulent elections of 1984 had led to the Cruzada Civilista, a mainly middle-class movement, that despite its impressive manifestations, proved incapable of removing Noriega from power, even amidst growing allegations of rampant fraud in the course of the 1989 elections. Ultimately, the US would intervene at the behest of the Panamanian elite to get Noriega out of power, incurring the heavy cost of thousands of lives and leaving homeless even larger swaths of already impoverished Panamanians.

The original sin of Panamanian democracy

Guillermo Endara, a close associate of Arnulfo Arias, won the May 1989 elections by a wide margin. As President, he led a disparate movement of political forces which only agreed on the need to exorcise the military from power. But Noriega was not devoid of his own base of support, and his candidate of choice was able to attract almost a third of the ballots. When Endara assumed the presidency, friction arose with the Christian Democratic Party (PDC), the hardline faction within the government alliance that wanted to purge the government of all military influence. The PDC’s intransigence eventually led to their exit from the Endara government and their ultimate electoral demise as an autonomous force within the Panamanian political system.

Endara’s nuanced approach set the tone for post-military governance in Panama. He reformed institutions, but kept the basic constitutional framework in place: although painfully committed to macroeconomic stability and the liberalization of the economy, he only sponsored piece-meal legal reforms while dismantling the military regime’s social and bureaucratic structure. These changes lagged behind the neo-liberal reforms undertaken elsewhere decades earlier, which only increased the social divisions in an already sharply divided country and trickled down into the generational wedge which continues to affect Panamanian politics to this day.

The Partido Revolucionario Democrático (PRD), the political wing of the Torrijos movement, won the 1994 elections in a divided vote. The new President, Ernesto Pérez Balladares, an economist who had served as a minister during the dictatorship, accelerated the pace of the country’s liberal reforms. Yet the residual strains would soon become evident: Workers of the construction union (SUNTRACS) and the teacher’s unions marched against his administration’s efforts which sought to weaken worker’s rights and decrease the government budgetary allocations for education. After Balladares’s failed his reelection bid, the new government, led by Arnulfo Arias’s widow, Mireya Moscoso, tried to stall coming to important decisions in the hope of guaranteeing continued political support for her agenda. However, protests intensified when the government ousted the soft-spoken but iron-willed director of the Social Security Administration, Juan Jované, with the aim of privatizing the entity. Even when an uncomfortable middle ground was reached on the issue after mass rallies in defense of the system, the National Front in Defense of Social Security (FRENADESSO) was formed to provide a coordination front for policies which many deemed harmful for the Panamanian popular movement.

Martín Torrijos, son of General Torrijos, eventually would win his bid for the presidency. The Moscoso administration proved incapable of tackling high profile cases of corruption — at best her government exhibited a lackluster performance in its daily operations. However, one singular achievement of her administration eventually allowed for the negotiation of the Free Trade Agreement (FTA) with the United States, which would quickly become the reference frame between US-Panama foreign relations from then on.
However, the PRD would also fall short on the corruption problem, which even seemed compounded in the last throes of the Torrijos administration. Nevertheless, Panama’s economy experienced rapid growth, mainly due to the immigration of high-end elites, an unintended consequence of social upheaval in countries like Venezuela and Ecuador. These were positive indicators that proved Panama’s economy resilient amidst the worldwide financial crisis. However, these inflationary pressures also intensified economic iniquity in the country, widening the already substantial gulf between the rich and the poor.

Internationally, the Torrijos presidency received accolades in its efforts to mend course after the whimsical if not starkly venal policies of the Moscoso foreign office, which plummeted to abhorrent lows when it freed Luis Posada Carriles, a wanted international terrorist with close links to the Cuban American community in the United States. Although the PRD went great lengths to repair strained relationships in the hemisphere, efforts which achieved a coveted non-permanent seat on the United Nations Security Council as a consensus candidate, it did not manage to get the FTA approved by the US government. As a result the U.S. has increasingly leaned on this issue to exercise leverage over Panama.

The PRD then appeared to implode amidst a tense internal campaign which pitted two popular figures, former government minister and Congresswoman Balbina Herrera, an emotionally-charged figure with ties to the Noriega years, and Juan Carlos Navarro, the former Mayor of Panama City. This situation, coupled with the arnulfista’s intrinsic weakness, appeared to pave the way for Martinelli’s victory.

Martinelli’s Panama

Even though he wanted to be labeled as an outsider, Ricardo Martinelli intimately knew the inner-workings of the Panamanian government: he served as director of the country’s Social Security Administration and held a ministerial post under Moscoso. However, the success of his most recent campaign, leaving aside some of the contextual factors explained beforehand, owes itself largely to the relentlessly competent strategies of his campaign manager and now Minister of the Presidency, Demetrio Papadimitriu, a political operative with close ties to the US Republican party.

Despite running for president before with little success, Martinelli this time ran on a platform of change, but his relatively small party campaign structure was severely limited when compared to the arnulfista and PRD political party machines. When Balbina Herrera won the PRD primary and ceded to pressures to put Navarro on her ticket as the Vice-Presidential candidate, the US felt uncomfortable with the prospect of an Herrera presidency. It then helped to broker an alliance between the arnulfistas, led by their then presidential standard-bearer Juan Carlos Varela, owner of Varela Hermanos, one of the biggest distilleries in Panama. This political shotgun wedding in effect secured the election for Martinelli.

Martinelli took office at a critical juncture, during the early days of the
Obama Presidency, a US administration he could not easily relate to or politically read—indeed, during his own campaign he had developed ties with the McCain camp. Leaving his foreign affairs to Varela, Martinelli embarked on ambitious projects, which uneasily mixed public works with neo-liberal policies. Trying to get attention from both the White House and conservative U.S. congressmen, Martinelli has even tried to outflank the State Department on issues like the Middle East in hopes of assuring an easy passage of the long-pending FTA in the Senate. Internationally, his administration already is pursuing an aggressive program to increase foreign investment efforts, ultimately rewarded when the rating agencies granted Panamanian debt investment-grade status. But achieving the coveted BBB- came at a heavy price: Panamanian authorities have had to push forward an increase in value-added-taxes to tame the budget, something that mobilized the heir of the National Front in Defense of Social Security, the now renamed National Front in Defense of Economic and Social Rights FRENADESO), an organization with concrete political aspirations. The PRD is still weakened, and a recent internal reshuffle has only served to put a narrow faction atop the party structure, hoping to heal wounds but at the expense of appealing to a wider cut of the Panamanian population.

Moreover, Martinelli is intent in pursuing the baleful legend of past PRD leaders involved in corruption scandals, and has even dismissed the Attorney General with utter disregard for legal checks and balances to accelerate his plan. The problem is that in doing so, he has raised eyebrows amongst those who see his professed straight-shooting demeanor only as a mask for an increasingly authoritarian torque on his part. Coupled with forthcoming electoral reforms that could lead up to a second round of voting (something the PRD might have problems overcoming), Martinelli may be capable of delivering a fatal blow to that party.

The future

Martinelli tends to wield his power with a heavy hand. Even when many see him as a natural outgrowth of the general public’s displeasure with the current state of domestic affairs, others see his ambitions with grave distrust. Granted, he has continued, and also initiated very popular and needed programs, like a universal grade school scholarship, the Panamanian version of the Townsend plan (a cash allowance for poor citizens over 70 years old), the re-structuring of the Opportunity Network (a program started under the Martin Torrijos administration which carefully tracks Brazil’s Bolsa Familia Program) and free Internet access for the country. But he seems intent on transforming the political framework put in place by the Endara administration.

Martinelli has challenged the Endara framework in place by strengthening security institutions, a policy timidly pursued by the Torrijos administration, but now in full force. He has allowed the construction of forward operating bases off of Panama’s coastline against drug trafficking in the country and created a new ministry to coordinate their activity. Even more so, he is floating the idea of calling for a Constituent Assembly to re-write the 1972 Torrijos Constitution, which repeatedly was modified by all governments which held office since 1990, but was never completely overhauled.

However, recent polls attest to a sustained erosion in his popularity. For this reason, his inner circle seems to have slowed the implementation of his ambitious plans, and right now is waiting to analyze bellwether indicators on how the political pulse on his future might change in the coming months.

But if politics abhors a vacuum, Martinelli’s policies and the PRD’s weakness is creating just that. For this reason, FRENADESO is poised to try to steal their thunder. This movement is spotlighted by the contradictions of a country which has experienced rapid growth but at the expense of straining the country’s social fabric with increased income inequality and other social vices. Yet FRENADESO has contradictions of its own: SUNTRACS, the Teacher’s Associations and the Union of Doctors who work for the Health Ministry and Social Security (COMENENAL) are its core. SUNTRACS‘ style of leadership is brash and divisive, and has attracted a lot of criticism to itself over the years, especially given its treatment of dissenters from the established union line.

The teacher’s associations have played a historical role, especially in overturning the educational reform project in 1979, a politically motivated move which left the system obsolete and marred by special interests. It remains to be seen whether the realities of politics will dampen FRENADESO’s fiery temper as well as the logic of its proposals. Hopefully, this could be in favor of an order to seek constructive engagement in the democratic arena, and as such, help to re-engineer a political system under increasing strain.

Martinelli’s political resilience still needs to be assessed, and it depends on whether it will deliver on its promises, and whether these promises will not seek to accelerate more social frictions and inequity. Also, the fabric of his alliance with his allies needs to be tested, for any reelection bid will put strains on his capacity to govern., One thing is certain: Martinelli ultimately seeks to overturn the Endara template in order to achieve wider room for political maneuvering. However, it still remains to be seen whether his plans will secure movement in his direction, something which will momentarily tilt the scale or tumble the system into disarray and perhaps, a most noteworthy rebirth.