business & economy

One of these factors is a changing perception of who speaks against such a project. The earliest vocal opponents were farmers who stand to be displaced if the Western Watershed in parts of Panama Oeste, Colon's Costa Abajo and northern Cocle province are flooded. Those dissident campesinos have been supported by the left, most actively by liberation theology Catholic activists but also by the same constellation of organizations to be found in FRENADESO. Viewed that way, the decline in the “no” camp parallels the recently waning fortunes of the radicals, which spiked to their highest point in many years during last June's strike against Law 17. The effectiveness of the farmers' arguments also may be affected by repeated assurances by President Torrijos and the ACP that the expansion plan will not involve a new lake west of the canal.

However, there have also been a number of decidedly non-radical business and professional leaders who question the economic assumptions put out by the ACP and warn that the project will likely burden Panama with a large debt that can't be amortized from canal revenues. The most notable exponent of that point of view is former deputy canal administrator Fernando Manfredo. US government estimates that the project will cost around twice as much as the canal authority estimates, ACP moves to get out of the power generation business, unpopular tax policies and an increase of about 50 percent in the national debt over the first 15 months of the Torrijos administration all feed into the concerns of those in the business sector who are receptive to Manfredo's arguments.

It appears that most of the business community is still in the “yes” camp, as they are persuaded by the arguments of former President Nicolás Ardito Barletta and others that the financial impact of a project of this magnitude would ripple through the national economy with a multiplier effect that would benefit all sectors. Other elements in business, industry and the professions, though skeptical about Barletta's predictions and the ACP's arguments that a canal expansion can be financed entirely through ship toll revenues, figure that even if it would take tax increases and austerity moves to finance, the alternative of letting the nation's principal industrial asset wither away into obsolescence is unacceptable.

The Electoral Tribunal, with whom ACP executives recently met to discuss the possibility of a canal referendum in 2006, have warned that public funds can't be used for a “yes” campaign. What that means is obscure, as the ACP has already spent a lot of money on publicity to lay the political groundwork for a canal expansion project. It is still likely, however, that in a privately financed referendum campaign the supporters would have substantially more money that opponents.

What ought to be a concern for both the ACP and the Torrijos administration is the historic tendency of Panamanian voters to take any referendum on any subject as a vote of confidence in the president at the time. Martín Torrijos may be riding high in the polls at this moment, but as we have seen over the course of 2005, the public mood is volatile. Moreover, there is a tendency in contested referendum campaigns for support for the proposition in question to decline as election day approaches. Thus a 57.9 percent showing for the ayes as against 19.3 percent for the nays before the proposal to be voted upon has actually been revealed is not as insurmountable a lead as it might appear at first glance.