Here's for a happy and prosperous New Year!

Ricardo Martinelli, an effigy for burning. It's a good sign, not
an insult, for a politician to be a muñeco. Photo by Eric Jackson

Out of the blue, almost

2008: changed equations

Ricardo Martinelli wasn't exactly an unknown. The supermarket tycoon, one of the richest men in Panama, had served in the cabinets of PRD President Ernesto Pérez Balladares and Arnulfista President Mireya Moscoso, and he ran for president in 2004. But he finished in fourth place, with a single-digit percentage of the vote in 2004 and this time last year the polls and pundits were predicting that the PRD would retain its hold on the presidency in the May 2009 elections. Now the polls show President Torrijos with a mostly negative approval rating, his party's standard-bearer standing at about where Noriega's candidate ended up in 1989, and Martinelli the front runner by about 10 points. Two days before Christmas the MOLIRENA party bolted from its alliance with the Panameñistas (formerly known as the Arnulfistas, after the late Dr. Arnulfo Arias), crossing over from Juan Carlos Varela and essentially giving the de facto "opposition primary" victory to Martinelli. It remains to be seen whether Varela and former President Guillermo Endara remain in the race, but it's looking ever more likely that these candidates won't even garner enough support to be spoilers.

The Democratic Revolutionary Party's decline

In Panamanian politics the central story of 2008 is the collapse of the PRD back down to its usual rock-solid base, which is not enough to win a national election that polarizes down to a two-way race. Thirty percent in a four-way race in which the third and fourth place candidates can't muster 20 percent of the vote between them adds up to a big defeat, and although things may change between now and May, that's the direction in which the trends are moving. They are moving that way for three main reasons:

1. A series of scandals engulfed the PRD all year long. It started out with trouble in Panamanian education. The government was already reeling from a massive embezzlement scandal at the Educational Quality and Equity Fund (FECE), with the worst of it centered in San Miguelito, among Balbina Herrera's entourage from when she was mayor of and then legislator from that city. Then, at the end of the school year the Torrijos administration announced that it would enact curriculum reforms that all but eliminated physical education, the arts and the teaching of history in the public schools. True to his established modus operandi, the president got a naive American musician who came here for the Panama Jazz Festival to sing the praises of the Torrijista administration's support for the arts, but nobody here was fooled and the government had to back down in the face of the teachers' unions. In March the start of the school year was delayed in many schools because a program to remove irritating fiberglass insulation from ceilings was a sad tale of work partially done, work paid for but not done, substandard work and hardcore corruption in the awarding of contracts.

After the educational scandals simmered down, it was revealed that more than 35 tons of bronze sculptures were cut apart in and stolen from a storage room run by the first lady's office. All the snotty "I knew nothing" pleas from the top administrators, the media control which prevented any reporters who would ask the woman flat-out if she stole that stuff, and all the finger-pointing at menial employees --- some of them known gangsters given jobs by the first lady, some of them members of the Presidential Guard --- failed to convince Panamanians that Doña Vivian is not a crook.

Then, atop a bunch of pending cases of cops and government-backed company goons having killed labor activists, Daniel Delgado Diamante was forced out of office when it became known that as a military officer during the dictatorship he slew a subordinate.

The year ended with Panama losing its preferential agricultural import duties from the European Union because Balbina Herrera's brother --- who on the basis of that relationship was made Panama's ambassador to the EU --- failed to file a simple document asking that they be extended.

Those were just the big scandals --- all of the improperly issued permits, giveaways of public property to well connected individuals, steered contracts, crooked court decisions, legislators making asses of themselves and so on were like a rhythm guitar against the drumbeat of corruption.

2. There was an increasing public perception that Panama is returning to the standards and practices of the old dictatorship. Martín Torrijos's faction lost the PRD internal elections in January. They took nearly two weeks to count the vote and still he lost, so largely through a series of promises and threats people were bought or intimidated and in the provincial and national rounds the president did better. However, the smell of rigged elections and the sense that the president was no longer able to lead his own party lingered.

Balbina Herrera reneged on her promise to support Juan Carlos Navarro and ran against him for the presidential nomination. In the course of the year the Electoral Tribunal banned one of Navarro's TV ads without even giving him a chance to be heard, and came out with a series of rulings that allows Balbina to use public funds for her presidential campaign. The latest twist is a determination that although it's illegal to use public funds to promote a candidate, the Electoral Tribunal has no jurisdiction over the president and thus all public funds that flow to Balbina's campaign through the presidency are "legal."

Through various means, particularly a purge of infrequent voters and very early deadlines to register, the government eliminated somewhere around 100,000 voters from the poll lists. They were kind of maladroit about it, eliminating a number of PRD public officials who found out about it when they weren't allowed to run in the party's internal elections. It ended up with Balbina claiming victory by an 11 percent margin on primary night, and when the votes were counted --- again after a prolonged process, despite Navarro's quick concession --- it turned out that she had won by maybe four percent.

Then, with all of the expectations of a 1984-style election theft in the cards, President Torrijos issued a set of decrees that militarized the nation's law enforcement agencies. The US Department of Defense loved it, the US Department of State denied that the Americans had anything to do with it, the aging Civilista leadership took to the streets in small protests, but the main thing was that Panama was and is gripped by a crime wave and the security decrees are perceived as having no effect on this.

That Balbina Herrera was a notorious member of Noriega's Dignity Battalions, that when the US troops invaded in 1989 the first place he went was to her house, and that there are still memories of the death threats she issued against the dictatorship's opponents when she was mayor of San Miguelito --- and at least one case in which the threats were carried out --- added up to a determination by a plurality of Panamanians that Balbina would be toxic for democracy and must not be elected in May.

Margarita Henríquez, the New Year's muñeco. Photo by Eric Jackson

3. All the old tricks seemed to turn stale in 2008.

Let's understand who Martín Torrijos is. Yes, he's the son of the late military strongman, General Omar Torrijos. But in his own right he had, shall we say, modest accomplishments before coming to the presidency.

His most important private sector job? He was shift manager at a McDonald's restaurant in the United States.

His highest academic credential? He has an MBA from Texas A&M.

His most astute political alliance? The PRD's recruitment of its old foes, the former Christian Democratic Party that's now known as the Partido Popular, was just a side agreement to that --- he married Vivian Fernandez, the daughter of "Tony Fergo," who founded Panama's ad agency cartel. Yes, there were other alliances: with the operators from his father's and later Manuel Antonio Noriega's old political patronage machine; with construction, banking and real estate interests; with a depleted rump of the Liberals. But the ad cartel and the mainstream media which depend on it for their income have formed the backbone of the president's political power. He used this dominance to great effect during the 2006 canal expansion referendum campaign.

However, the newspapers that were most obsequious in their coverage during that referendum lost circulation, and La Estrella, run by estranged Christian Democrats, played the story reasonably straight and stole a march on the opposition.

Balbina Herrera has a phalanx of reporters on her payroll and Martín Torrijos doesn't tolerate reporters who ask hard questions. Sycophants started publications like the syrupy English-language Panama Post, but even with those it became ever harder for the corrupt reporters who were allowed close to the PRD leaders to keep their jobs in the private newspapers. Yes, they still dominated commercial television news, but people stopped watching that stuff and programming directors cut back on news. Many of those reporters known or suspected to be on the take from the PRD gravitated toward jobs as government publicists.

Add in the fact that the president tended to be abroad ever more frequently --- he's by far the president who has spent the most time out of Panama --- and unavailable for comment on breaking news. Moreover, add to that exhaustion with his penchant for making, or having his surrogates make, absurd announcements to reporters and political figures abroad who know little about Panama, and getting those people to repeat it and somehow validate it for publication back home. (The Panama Canal's amazingly improved safety record is the most outstanding example of this.) That tactic was exercised a few too many times and editors back here stopped treating that stuff as news.

The militarization of law enforcement, Daniel Delgado Diamante's attempt to file criminal charges against La Prensa for its coverage of the old homicide case that the dictatorship swept under the rug, the rescission of Mireya Moscoso's pardons of more than 70 journalists and Balbina Herrera's promise that she'd do away with hostile Internet websites reminded the mainstream press of the bad old days, when newspapers were taken over and newsrooms were smashed up by military goons.

La Prensa, which had been taken over in a 2001 PRD-Christian Democrat shareholder coup, changed its editorial orientation and started to hammer the government with a series of investigative reports. El Panama America and its owners never liked the PRD in the first place and started to take off their gloves. La Estrella's owners and publisher became further alienated from the Partido Popular, which saw huge defections to the Martinelli camp all year long.

But still, there was television, where the PRD and the ad cartel are supreme rulers.

Panama won its first ever Olympic gold medal in September, with a large percentage of Panamanian eyes affixed to the television when Irving Saladino made his historic long jump. But athletes excluded from the team over arcane politics, Panamanian Olympic officials absent from the games because they had criminal charges hanging over them and couldn't convince a judge to let them travel abroad, and the infamous offer of PRD legislator Franz Wever (who's also the head of Panama's baseball federation) to show a crowd of reporters his penis negated any possibility of the politicians to play up their patriotism by association with Saladino's feat. That a Chilean white racist building manager then locked Saladino, the national hero, out of his apartment for being black set an unflattering context for what's going on in Panama of late. Here's a government of a country where whites are a single-digit minority, allied with an ad cartel whose members generally insist on blonde models, an administration closely allied with foreign developers and real estate people for its urban construction "miracle" --- which also, by the way, collapsed in 2008 --- looking bad for its associations despite their efforts to identify themselves with the black hero.

So the symbolism didn't work when they tried to glom onto the celebrated athlete? They tried roughly the same thing again as a talented 17-year-old singer from Chitre, Margarita Henríquez, climbed her way to the top of TV's "Latin American Idol" contest. The girl's good but the contest is imported garbage culture --- a crude imitation of a US imitation of a European show and vaguely offensive for many people who may not be all that religious but remember something from Sunday school, catechism or instruction in Judaism or Islam about not worshipping idols. Once again we also saw the ad cartel's preference for light-skinned faces. In the final rounds there was "voting" by phone calls to a switchboard, as in a big promotion for the telephone companies. Henríquez won, a huge "patriotic" celebration was organized and Panama City traffic, already annoyingly disrupted by many things, ground to gridlock for a motorcade from the airport down to the TV station, where a first lady mired in the scandal about the stolen sculptures awaited but avoided addressing the small crowd on live television.

At about that point, Martín Torrijos's approval rating went negative and Ricardo Martinelli overtook Balbina Herrera in the polls. Panamanians had seen enough of contrived "news" and had gone beyond the point of tuning it out to holding it against its creators and beneficiaries.

We could talk about crime, we could talk about inflation, we could talk about corruption and all of that would be true and relevant, but it seems that the worst news of all for the current administration and its component political parties during 2008 was that the public finally got tired of their bread and circuses.

Martinelli's rise

Ricardo Martinelli never stopped campaigning after the 2004 elections. He continued his "walking in the shoes of the people" photo opportunities, distributing shoes, groceries, a wheelchair for a cabbie left crippled by wounds suffered in the course of a robbery and so on. Probably in dollar terms he came nowhere close to matching the president's giveaway events, but then he wasn't taxing the public either. He also appealed to the youth with free rock and regueton concerts. In the bread and circuses contest, Martinelli held his own.

Ricardo Martinelli is a successful businessman, who was a guest at the Republican National Convention in Minneapolis, generally espouses a neoliberal "free trade" set of economic policies and talks tough about crime. Mostly, though, he doesn't talk about ideology. He maintained his silence, for example, during the raucous argument over a proposed sexual and reproductive health law that raised the hackles of religious conservatives. Meanwhile, he has welcomed refugees from all political parties into his Cambio Democratico, whose only unifying principle seems to be to elect Martinelli.

In his competition for leadership of the large anti-PRD electorate, there was a time when it looked like Martinelli would have to strike a deal with another prominent businessman, Panameñista Alberto Vallarino. But Vallarino, who was calling for a grand opposition alliance, had bolted from the Arnulfista movement in 1999 and run against Mireya Moscoso and Panameñista primary voters held it against him, electing party president Juan Carlos Varela, of the Hermanos Varela distillery fortune, as their candidate instead. Varela has never held public office of any sort, and campaigned on his party's traditional role as one of the two major forces in Panamanian political life. Really, it was like a right-wing mirror image of the tired games on the left, wherein one faction declares itself the vanguard and tries to destroy all leftist activity or initiatives that it doesn't lead. Before the primary Vanguardia Moral's Guillermo Endara and Martinelli said that they would seek a deal with Vallarino if he won the Panameñista primary, but they wouldn't deal with Varela.

With the publicity boost of a hotly constested primary, Varela caught up with Martinelli in the polls. That, however, turned out to be ephemeral, especially when Varela did little to reach out to other parties. The National Liberal Republican Movement (MOLIRENA), desperate about its continued existence, jumped onto the Varela bandwagon without receiving much in return, but starting as a trickle and then becoming a flood there was a movement toward Martinelli.

Martinelli boosted this trend with a series of attack ads against Varela --- criticizing his inexperience, taking him to task for opposing the 2006 canal expansion proposal and so on. Varela, probably because his campaign coffers were short of funds to respond in kind, "took the high road" and failed to respond to the attacks. Although he could have turned those arguments around and painted Martinelli as a member of a discredited generation of the political class, talking about some negative aspects of Martinelli's times as Minister of Canal Affairs and Social Security director, Varela's decision to remain all but silent fed a public perception that not only is he inexperienced, he's a wimp.

Meanwhile the PRD primary boosted its candidates to the top of the polls for a brief moment, but within a few weeks Martinelli emerged as the front runner, with Varela down to 15.1 percent and Endara at 3.5 percent in a mid-November poll taken for La Prensa. Few of the legislative candidates in any circuit for any party were generating much enthusiasm and Varela's hand-picked candidate for mayor of Panama City, Bosco Vallarino, was coming across as a shallow demagogue who makes inaccurate charges of corruption and offers impractical programs for the city. As the Varela slide continued --- down to 13 percent in an early December poll taken for El Panama America, with one percent for Endara and Martinelli opening up a 10 point lead over Herrera --- the MOLIRENA National Executive Committee met on December 23 and broke off the party's alliance with the Panameñistas.

There may be other shoes yet to drop, but the stampede has already happened. Martinelli is the overall front runner and the only viable opposition presidential candidate for next May's election.

* * *

2008 was also an electrifying year in US politics, and the switch from Bush to Obama will likely have some profound effects on Latin America in general and Panama in particular. We have already seen one change: within the American community here, which used to be predominantly Republican, Democrats Abroad ran the GOP off the field.

(What Obama intends to do with respect to US policy in the Americas really can't be judged by his appointments, as they differ with one another on issues like the NAFTA model of free trade agreements. We know that the president elect is a cautious politician who has never been to Latin America and would probably not be amenable to doing too many controversial things with respect to this region. But word from Washington is that in the halls of Congress some of the venerable stone pillars of US policy in the region, like the War on Drugs and the Cuban exile movement's veto power, are seriously eroded.)

We have also seen a growth of Panama's Canadian community, and although it includes all sorts of people coming here for various reasons, this increase has also undermined the influence of the belligerent rednecks in Panama's English-speaking community, which was never mainly composed of white American expats in the first place. That said, along with some retired mounties, a noted consumer activist, journalists and popular small businesspeople, we have also attracted the erstwhile Grand Wizard of the Canadian Ku Klux Klan, who came here to pitch a sales pyramid scheme called Emerald Passport. Note that the ones who are defending The Wiz and Emerald Passport are Americans.

And all the real estate flippers? They're gone. There are still some serious foreign real estate developers at work here, but they're mostly working in certain niches for the long term, and bracing for a few tough years on the high end of the market. Were there not all the drug money laundering distorting the effects of supply and demand, it would be a buyers' market in Panamanian real estate at the moment. Ignore the hype about how Arab tycoons who got their teeth kicked in speculating on Dubai real estate are coming here next. Notice that the bond rating agencies have downgraded Trump for his Dubai imitation under construction here. Take everything with a grain of salt and realize that if it's too good to be true it almost certainly is, but there are still some deals left in Panamanian real estate and there is a basic unmet demand for middle class housing in this country. The problem is whether the foreigners who might be expected to buy can afford to move here from where they now are. Thus real estate people tell me that the trend is for more European, Canadian and South American buyers and fewer retirees seeking to move here from the USA.

* * *

This front page comes to you way late --- at the buzzardly old age of 56 I find myself needing the occasional holiday off, and the occasional sick day, and unable to pull the all-nighters that I used to do 10 years ago --- but there are some goodies herein. Those of you who signed up for the email updates will have known this.

During the long production process of this issue, the world did not stand still --- even if Panama's Legislative Assembly officially declared a standstill to time itself in order to violate the constitution. (I kid you not. It's improper to have the votes passing proposed legislation on second and third reading on one day, so as December 30 ran out the sage deputies declared that time was standing still, so that they could pass what they wanted then and then pass it again in a few minutes.) Rumors that Rubén Blades will star in the science fiction movie based on this astounding event are greatly exaggerated.

Most ominously, Israel and the Palestinians are at full-blast war again, and I find myself in accord with most of world opinion, but at odds with most US opinion, about these events. Might anyone consider that Hamas walked into provoking what they knew would be a carnage in order to torpedo the hopes of Fatah leader Mahmoud Abbas, whose term as president of the Palestinian Authority ends January 9, for an extension of his time in office? Might anyone consider that Ms. Livni and Mr. Barak walked into a war that they knew would solve nothing of consequence in order to look tough and gain a few points on the front runner in Israel's upcoming elections, the Likudnik jihadi Mr. Netanyahu? On both sides, this is as cynical and ugly as political calculations get.

Then, with the New Year, Russia turned off the gas to the Ukraine. Let's hope we don't get a war over that.

The Catedral Metropolitano in Panama City's Casco Viejo. Photo by Allan Hawkins

So isn't there any good news? Well, of course there is.

On January 17 the cathedral you see above will be the scene of the grand finale free concert of the 2009 Panama Jazz Festival, which is still expanding in both its entertainment and educational missions. Those of you shivering in the Great White North who can get the time off and afford to come here to catch it should order your airplane tickets right now.

Herein there are tales of good deeds and worthy efforts by the British Aid Society, the Casita de Mausi, the crew of the USS Swift and some people trying to rectify an intolerable situation at an old folks' home in Bocas.

Yes, life in Panama includes many an opportunity for salacious reporting. The article on sex and money is not one of those.

We just had our 14th birthday and our aim is to be a useful institution for Panama's English-speaking community, including those abroad who have historic ties to Panama or are just interested in what's going on here. "Here" is The Crossroads of The World, and especially in our opinion sections (both English and Spanish) we look around at Latin America, the Caribbean and beyond. We run columns by high school kids and photographs by a talented but semi-homeless Vietnam vet. We publish details of Panamanian popular culture like holiday recipes (which you need not have a holiday to enjoy) and Kuna legends. We acquaint newcomers to the natural world around them. We provide a forum for people to sound off. As in "community newspaper."

Enjoy.