The Electoral Code changes that were proposed by President Moscoso and passed in December with PRD support may have convinced banker Alberto Vallarino to drop out of the 2004 presidential race, but they probably won't result in a two-way race between a member of Mireya's entourage and PRD leader Martín Torrijos.

Meeting in Penonome on January 11 and 12, the Arnulfistas gave the president more control over the party's nominations and additional powers to retaliate against dissident party members. Among the presidentially acceptable presidential hopefuls are former Foreign Minister José Miguel Alemán, former Public Works Minister Víctor Juliao and legislator Marco Ameglio. Former Health Minister José Terán, who is also seeking the Arnulfista nomination, is unacceptable to Mireya and public employees who support him have been fired from their jobs. None of these candidates received as much as three percent public support in a Dichter & Neira poll commissioned by La Prensa and taken on January 10 through 12.

However, with Mireya controlling the Arnulfista nominating process and the possibility of a Vallarino "third force" candidacy off the table, new opposition quickly emerged from within the president's own cabinet and political party.

First, former President Guillermo Endara, an Arnulfista, declared his candidacy as a third party candidate and was immediately embraced by many former Vallarino supporters and endorsed by acclamation by the Liberal Party (which is gathering signatures to get back on the ballot after a poor showing in 1999). Also jumping on the Endara bandwagon were 1994 MOLIRENA presidential candidate Rubén Carles, 1999 Panama City mayoral candidate Miguel Antonio Bernal and anti-corruption campaigner Enrique Montenegro. Mireya said that if Endara runs, he'll have to quit the Arnulfista Party, but Endara isn't leaving and is likely to weave a purge trial into a campaign event. One of the party's founders, Endara charged that the Arnulfistas are "burning out in office" under Moscoso's leadership. He also blasted Mireya's economic and foreign policies, concurring with Martín Torrijos's vow to repeal the recent tax increases and criticizing the current administration's handling of Colombian paramilitary attacks on Panama.

Then supermarket baron Ricardo Martinelli resigned as Minister of Canal Affairs to run as the 2004 Cambio Democratico candidate for president. Martinelli had harsh words for Mireya's economic policies, and noted that unlike Endara, he already as a party with ballot status to get him on the ballot. Martinelli's strongest criticism of the current administration was for the "equalization" deal that cut rents and taxes to be paid by Hutchison Whampoa and the country's other private port management companies.

The Dichter & Neira poll found that 46.3 percent of those surveyed would vote for the candidate of the PRD and its allies, 21 percent for a third force candidate and only 15.8 percent for the Arnulfista Party and its allies. The undecided or non-responsive segment was 16.9 percent, but in Latin America these groups generally intend to vote against the party in power but are unwilling to say so to pollsters.

Meanwhile the PRD met to set up its own nominating process. They will hold a presidential primary on March 30 and primaries for all other elected posts on June 29.

The dissidence that has rent the PRD's legislative caucus has found its expression in a challenge to Martín Torrijos for the presidential nomination. Neurosurgeon and former Housing Minister Francisco Sánchez Cárdenas has thrown his hat into the ring, but most observers give him little chance of winning the nomination.

The PRD's divisions, and the unpopularity of the Legislative Assembly in general, may well lead to a primary bloodbath that ousts most of the party's legislative caucus. Such a turn of events would work in Torrijos's favor, as he could then run in the general elections without the baggage of public disenchantment with the PRD deputies' performance in the assembly.