On the afternoon of September 18, people turned out in their tens of thousands from all over Panama to march through a tropical cloudburst from Parque Porras to Plaza Cinco de Mayo. Once there, they gathered around an improvised speaker’s platform on at the front of the Reina Torres de Arauz Anthropology Museum, but the crowd was so large that many could not see what was going on up front. Reporters, cops, organizers and others with an interest in estimating the number of people present had a very hard time because, with the exception of an aerial view, it wasn’t possible to see everybody. From the air, the people seeking shelter from the rain under Avenida Central awnings or other people’s umbrellas were likewise difficult to see. Suffice to note that election rally crowds that take up so much space in the plaza and on adjacent streets are generally estimated in the 200,000 range, though with the rain and all the umbrellas this throng may have been a bit more loosely packed. Still, there were easily 100,000 people on hand and to their numbers must also be added another large crowd that marched for the same reasons on the same day in David.
At the rallies, which were mainly attended by unionized workers, concerned retirees and the left, the call was issued for a nationwide general strike to begin on September 23. Most of the nation’s teachers were already on strike, the militant SUNTRACS construction workers’ union had been conducting street protests for several days, and it seems that most government workers (with the notable exception of Panama Canal Authority employees) and a lot of the private sector, both unionized and unorganized, will heed the general strike call.
And for what? Judging by some of the chants at the march and rally, and by the slogans that student radicals spray-painted on walls along the parade route, one might guess that it’s something personal. About the president, the crowd chanted “Rié, llora --- a la Yeya le llegó su hora” (Smile, cry --- the spoiled girl’s time has come) and the students simply painted “Down with Mireya” (in Spanish of course). About the protesters’ man of the hour, fired Social Security director Dr. Juan Jované, the chant was “Jované amigo, el pueblo está contigo” (Jované, friend, the people are with you), and the wall painting proclaimed that “Although it hurts, Jované stays” (see our Spanish news section for the untranslated original).
Jované’s detractors also made their cases in personal terms. These critics include, in addition to the nation’s ever-dwindling minority of Moscoso administration loyalists, most business groups and the owners and managers of the mainstream news media.
Most viciously, the sensationalist necro-porn tabloid El Siglo, whose publisher is the former Christian Democrat national police chief and aspirant to be Martín Torrijos’s running mate Ebrahim Asvat, published amidst its usual fare of gore and lewdness the allegation, based on an unidentified source, that Jované MIGHT HAVE diverted medicines from Seguro Social to Colombia’s FARC guerrillas. (Jované angrily denied it, and complained that, given the right-wing Colombian AUC death squads’ frequent deadly attacks on Panama, people can get killed over bogus claims of this sort.)
In a series of television ads, the Moscoso administration accused Jované of being unwilling to make decisions that are needed to save the Social Security Fund (CSS).
La Prensa published stories about how Jované hired a number of labor leaders or their relatives as administrative aides. There was no denial, but few adherents of the Moscoso administration or the PRD-Partido Popular opposition cared to be so hypocritical as to criticize political patronage.
(However, Chiriqui Governor Miguel Fanovich was an exception. He told El Panama America that he had recommended two of his sisters-in-law to be hired by CSS, and that Jované had hired them. Maybe the unpopular governor, part of an extended family that occupies many positions on the Moscoso administration payroll, had little to lose by defending his part in the transactions and finding Jované’s blameworthy.)
El Panama America editorialized that Jované “fell like an idol with feet of clay” when it was discovered that he isn’t the honest man that even his detractors thought he was.
The day after his firing, an entirely anti-Jované panel on RPC’s “Debate Abierto” morning talk show joined in a chorus led by former Christian Democrat legislator and current El Panama America editor Milton Henríquez and PRD attorney and journalist Renato Pereira, which blasted Jované and his supporters as Marxist-Leninist ideologues.
The TV news broadcasts gave far more time to Jované’s critics than to the former Social Security director or his supporters, and much of the time given to the latter was in response to Ebrahim Asvat’s wild allegation of Colombian guerrilla ties.
However, there are substantive issues at stake, matters that had been brewing for a long time and came to a head at the CSS board of directors special meeting on September 10.
First, there is the problem of the long-term solvency of the retirement, disability and surviving dependents fund. Some small part of this can be attributed to a long-established tradition of theft, in which public officials of various governments over many decades have frequently converted CSS assets into their own. Mostly, however, it’s a demographic matter of not enough people paying into a system to meet the pension obligations of those who are retired or will be leaving the work force over the coming decades. None of the parties to the current dispute deny that this problem exists. There are arguments about how acute this situation is, but the biggest bone of contention is over how to put things back onto an actuarily sound basis.
(The World Bank is the most pessimistic prognosticator, alleging insolvency within about five years where most other experts say that in the absence of reforms the fund can hold out for at least a decade before it goes broke. The well-known pressures of international lenders for all countries to privatize their pension systems, and the Moscoso administration’s vague commitments to such bodies to move toward privatization of “social risks,” have given rise to allegations by Jované and the labor movement that the real issue at hand is the privatization of the CSS. The president, all but the most fanatical business leaders and most politicians deny that privatization is a possibility. But then the privatization debate gets into an argument about semantics, as we shall see below.)
There is a certain faction of Panamanian business that will not agree to any sacrifices and seems willing to let the CSS collapse. However, this is the extreme fringe. Generally, business is for a combination of such measures as equalizing women’s lower retirement age to that of men, raising men’s retirement age to 72, lowering pension benefits and increasing workers’ contributions to the retirement fund. The “run government like a business” advocates tend to favor reforms to the legal restrictions on pension fund investments that would allow the CSS to seek a greater return. Some business leaders would accept an increase in employers’ contributions to the fund, but this is a minority view in the business community.
The unions want to increase employers’ contributions to the fund, and some may accept greater deductions from workers’ paychecks. Organized labor wants the remaining unsold real estate from the former Canal Zone transferred to the fund, an idea that business generally dislikes and politicians and patronage seekers vehemently oppose. Although it’s not part of their public posture, many labor leaders are quietly willing to compromise on some reduction in Social Security benefits, either by limiting future payments or by adjustments to the retirement age.
In a structured business-labor-government dialogue on the future of Social Security, employers and employees have been unable to agree on measures to save the pension fund. There have been mutual recriminations, and the perception by both business and labor sectors that the Moscoso administration is a bunch of thugs and incompetent ones at that does not help matters.
The CSS is really four different funds, of which the pension program is the most threatened by long-term actuarial trends. However, all of the other programs, including the public health care system, are running at a deficit. Jované’s critics blame him for this and cite a substantial increase in the number of people on the CSS payroll at a time when revenues are down.
The reality is that sometime in 1998 the Panamanian economy went into a decline, which accelerated into a free-fall over the ensuing years and apparently bottomed out sometime toward the end of last year, and which has been followed by a weak recovery this year.
Official statistics are inaccurate in the best of times and politically manipulated to understate problems by the present government, but two examples might serve as an indicator.
First, the news business is a part of the advertising industry, and between 1999 and 2002 the total amount of money spent on advertising in Panama was about halved. When one considers that government advertising remained about the same, the decline in advertising, most glaringly apparent in reduced television broadcast hours and cheaper programming, tells a tale that cannot be hidden by the Comptroller General’s low unemployment figures.
Second, the CSS publishes a list of businesses with arrears in their Social Security payments. (Like many small businesses, The Panama News is included.) That list includes some 15,500 businesses. It does not include those establishments that are legally required to enroll their workers with the CSS and make payments into the system but have never done so.
This economic crisis has cut into the social security system’s revenues and shrunk the Panamanian middle class to the extent that many people who used to pay for private health care have turned to the socialized medical sector, which includes both the Seguro Social hospitals and clinics and facilities run by the Ministry of Health for those who are not insured by the CSS. (If they scrape your mangled but still-living body off of the street after a Panama City traffic mishap, you get taken to the CSS’s Arnulfo Arias Madrid Hospital Complex if you are covered by Social Security, and to the Health Ministry’s Santo Tomas Hospital if you aren’t.) This has driven some private health care providers to close their doors, and created big lines at public hospitals and clinics. To meet the increased demand the CSS has bought formerly private hospitals and employed more doctors, nurses and other staff.
It is with respect to health care services that the privatization debate, albeit a semantic one, becomes much less of a theoretical argument. That’s because the Health Ministry is deeply committed to a form of privatization and receives a subsidy from the CSS with which it carries out this policy.
The metro Panama area’s newest large hospital, for example, is San Miguel Arcangel in San Miguelito. Basically the Health Ministry created a quasi-private non-profit foundation to run this sprawling facility, and that foundation turned around and hired for-private businesses to provide most of its medical services. The hospital’s contracts have frequently been awarded on the same political patronage bases that characterize contact decisions throughout the Moscoso administration.
Not too long ago, Jované emphasized the nature of what’s going on at San Miguel Arcangel when he pulled a surprise raid on a dozen of its private contractors and found that almost all of them had neglected to enroll their employees with Seguro Social. However, these private businesses’ incomes derive in large part from a CSS subsidy to the hospital.
Another Health Ministry facility that has been somewhat devolved to a semi-private foundation is the Instituto Oncologico Nacional (ION), the cancer treatment facility that occupies a part of the old Canal Zone’s Gorgas Hospital complex.
That facility has been plagued by scandal --- more than two dozen patients were exposed to radiation overdoses, some of them fatal, from a machine for which the hospital didn’t have an operating manual. A number of doctors and technicians were fired or suspended, and a few are facing criminal charges, for their failure to go by a book that they don’t possess. To compound the physical injury, the medical records of the radiation overdose victims got into the hands of reporters and were published in La Prensa.
You don’t find many more egregious administrative disasters than what happened at the ION, but no administrators have suffered from the scandal. Of course not. The director is Juan Carlos Barés, brother of National Police Chief Carlos Barés and brother-in-law of Immigration director Ilka de Barés, a member of one of the handful of extended families that enjoy impunity as one of the perks of their spot on Mireya’s nepotistic gravy train.
The ION recently got a new radiation therapy machine from Taiwan, but unfortunately it came without a Spanish-language instruction manual. In order to use the machine the hospital had to get a permit from the CSS, which was withheld pending the acquisition of an instruction manual. The ION management conducted a campaign of press leaks accusing Jované of denying cancer patients the treatments they need to save their lives.
The ION is another non-CSS hospital that exists in part upon subsidies from the Social Security Fund.
The confrontation that led to Jované’s ouster began with an impasse in the business-labor-government dialogue and came to the CSS board in August, when Jované presented a 2004 budget proposal that was unbalanced. The directors demanded a balanced budget and the legal August 15 deadline for the Seguro budget to be passed came and went without an agreement.
Jované filed a suit before the Supreme Court seeking to compel the board to pass some sort of a revenue and expenditure plan for 2004, and on another track, called the board’s bluff and presented a balanced budget.
Jované’s balanced budget would have increased employer contributions to the Social Security Fund and eliminated subsidies to San Miguel Arcangel Hospital, the ION and the Hospital del Niño. When presenting it, Jované complained that he was under pressure to use half of the CSS’s billion-dollar cash reserve to buy government bonds that would allow the cash-strapped Moscoso administration to go on an election-year spending spree, and vowed to resist such pressures.
The board of directors rejected Jované’s proposal and his detractors accused him of trying to make a political statement at the expense of sick children and cancer patients.
The embattled CSS director, however, posed the argument as a matter of privatization on the one hand, and of a government raid on the fund on the other, both of which he vowed to oppose. The Moscoso administration responded with furious denials, while the labor movement rallied to Jované’s side.
On the morning of Wednesday, September 10 the CSS directors held a special meeting, with the 2004 budget the sole item on the agenda. Despite a rule that only the specific business for which a special meeting has been called may be addressed at such a gathering, the board took up and passed a resolution calling on President Moscoso to fire Jované on a 6-4 vote, with the three business representatives, Minister of Economy and Finance Norberto Delgado, Minister of Health Fernando Gracia voting against Jované as might have been expected, and Eduardo Castañedas, the alternate for the Independent Teachers delegate breaking ranks with labor and casting the decisive vote in favor of the ouster.
The vote prompted immediate scuffles between police and Seguro Social workers around the CSS headquarters in the Bolivar Building on the Trans-Isthmian Highway. Directors who voted to oust Jované needed heavy police escorts in order to leave the building.
But all the board could do was recommend Jované’s ouster. That afternoon, President Moscoso was on the air saying that she hadn’t received the board’s resolution and that Jované wasn’t fired. At close to the same time, she was ordering riot police into position.
That evening Moscoso fired Jované, appointed his subordinate Rolando Villalaz as interim director, and several senior CSS administrators were given their walking papers.
The next morning Seguro’s clerical workers were on strike and doing battle with police in the street in front of the Bolivar Building, construction workers on building sites adjacent to both entrances to the upscale Punta Paitilla neighborhood were engaged in a rock and tear gas-throwing brawl that cut off traffic, and students and teachers at many public schools and the University of Panama also took to the streets.
Dozens of people were arrested, including the number two leader of the SUNTRACS construction workers’ union, Saúl Méndez, who was nabbed by police while walking to the Multicentro shopping mall construction site, from the roof of which the rank and file were throwing chunks of concrete and other missiles down at the cops. Méndez said he was going to the scene to mediate an end to the standoff, but he was charged with attacking national security and held incommunicado in solitary confinement for six days.
There were allegations of police brutality, some of them apparently documented on television. ("Apparently," because one rarely sees the entire event on video.) On Avenida Balboa TV viewers saw a police officer fire a shotgun, and near the Palacio de las Garzas it was alleged that presidential guards fired pistol shots, but nobody was treated for gunshot wounds. One group of police officers, sent into the fray without protective riot gear, was shown throwing rocks back at construction workers. Cops who broke into one CSS hospital in search of strike supporters arrested seven ambulance drivers, roughing some of them up in front of TV cameras.
Education Minister Doris Rosas de Mata closed the public and private schools in Panama and Colon provinces for the following day. That did keep some of the students out of the streets, but meanwhile she found herself facing a wildcat public school strike across parts of the Interior and a call for a national teachers’ strike vote the following Wednesday. The educators’ walkout grew, most of the public schoolteachers in the metro area didn’t return to classes on Monday, and two days later a national strike was duly called by the teachers’ delegates.
In another series of votes, most of the nation’s labor unions called for a general strike on September 23, with the September 18 rallies in Panama City and David as a kickoff event.
The September 18 demonstrations were the biggest labor protests in more than a decade, eclipsing those held during the Pérez Balladares administration when the Labor Code was reformed to the unions’ detriment.
Meanwhile, the government, the opposition and many of the nation’s business groups have been on a publicity counter-offensive. Radio and television have been flooded with government ads denouncing Jované and denying that privatization is a possibility. The president called in the nation’s clergy to swear before God that she wouldn’t privatize the Social Security Fund.
But Jované said that many of its health services have already been privatized.
On the Debate Abierto show, Arnulfista legislator José Isabel Blandón blasted Jované for alleging that his party’s government intended to raid the CSS cash reserves, claiming that no such proposal had been put on the table.
But then a few minutes later, Blandón defended the use of those reserves to buy government bonds as a good investment.
On September 17 the CSS board of directors, with labor and retiree representatives dissenting, passed a 2004 budget. It called for $1.592 in spending, some $275 million more than the budget that Jované had proposed, and included subsidies for the Ministry of Health’s semi-privatized operations. It included some $360 million from the cash reserves for “investments.” On the revenue side, it projected income of 6.5 percent from cash reserves on which the National Bank of Panama actually pays 1.8 percent interest.
Although the specific bond sale has yet to be announced, by all appearances the budget does pave the way for the Moscoso administration to go on an election year spending spree with hundreds of millions of dollars from the Social Security Fund’s cash reserves.
However, it may be wishful thinking for Mireya to expect that her anointed successor José Miguel Alemán, who’s running in single digits in public opinion polls, will win many votes by showing up at all those ribbon cuttings. For one thing, the very construction workers who stand to get jobs as the result of increased public spending are the most adamant opponents of what’s being done at the CSS. And then there’s this matter of a general strike between now and the breaking of any Mireyista piñata.
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