economy

It's the sort of improvisation to which Panamanians have become accustomed. In an interview with the Chile-based international magazine AméricaEconomía, President Martinelli announced several public policy initiatives that had not been previously discussed with the Panamanian people or even within the parties of the ruling government alliance. The president said that he'll privatize the post office, change the electoral system and remain politically active after his presidency but not seek re-election, reduce the power of political parties, change the import duties on cars, promote the production of ethanol from sugar cane, bring US Customs inspections to passengers boarding at Tocumen and bring Silvio Berlusconi's soccer team to Panama. He told the mainly foreign readers of the publication a couple of whoppers that he would not get away with in Panama: he said that his administration had cut the crime rate in half; and, notwithstanding government purchase orders that specified that certain items had to be the president's Ricamar food packaging company brand, he said that:

I do not sell anything to the government, nothing. I do not sell a single nickel to the government and do not want to sell the government, not to sell it a penny. In fact I'm not interested in selling to the government.

The big trouble, however, started when Martinelli announced that he would end "control previo," the system by which most government expenditures have to be approved by the Comptroller General before a check may be issued. According to the president, the only country in the world other than Panama that has this is Haiti, which he described as "a country in Africa."

Martinelli did not get called on the idiot geography or the implicit race-baiting. Former Comptroller General Carlos Vallarino, however, said that the Latin American countries of Costa Rica, Argentina, Chile, Nicaragua and Paraguay also require their comptrollers' prior approval of government expenditures.

The ensuing debate did not linger on fact checking, and in part the reason that it didn't was that Comptroller General Gioconda de Bianchini jumped in, repeating the Haiti allegation and unveiling plans to, ministry by ministry and institution by institution, remove the prior controls. But wouldn't a good presidential appointee follow her boss's directions in such fashion?

There are problems with it. First of all, the Comptroller General is not a presidential appointee. The National Assembly fills that position, both in the nomination and final approval phases. It's supposed to be a check on abuses by the executive branch.

But Mrs. Bianchini came to her present job from her prior post as the top accountant for Ricardo Martinelli's private business empire. At the time of her selection, a number of critics panned it as an executive power grab at the expense of the legislative branch. Martinelli's coalition also controls the legislature, so the disappearance of investigations involving alleged peculations by members of the parties in the ruling coalition during prior administrations when entrusted to Bianchini's care can not in fairness be entirely attributed to the president. However, he was the one who referred those investigations to her. PRD deputy Leandro Ávila pointed out, on behalf of the opposition, the encroachment on legislative powers.

The PRD's problem, however, is that even with the prior approval of expenditures and contracts there was severe and widespread looting in the Ministry of Education when that party held power from 2004 to 2009. "The country was robbed with prior control," the president shot back at his critics. Education Minister Lucy Molinar chimed in, saying that her first instinct upon hearing the news that prior control would be eliminated was one of panic, but that upon reflection she realized that the ministry has a parallel control system to the Comptroller General's, one that she has fixed and is now avoiding the abuses of the past, and that really, the government doesn't need the extra layer of bureaucracy.

Part of the business sector also applauded the president's decision, which began to be implemented with a Comptroller General's decree exempting the Ministry of Public Works and the Ministry of Health from prior controls. (Earlier, Bianchini had relaxed controls on the Electoral Tribunal, National Lottery, municipal governments and several other institutions. Controls are also coming off of the Ministry of Education, the Ministry of Economy and Finance and most state-owned enterprises.) The president of the Panamanian Business Executives Association (APEDE), Francisco De Ycaza, opined that prior controls on spending hadn't been effective for their stated purposes and argued that so long as government spending is done according to the law and that mechanisms are in place so that this can be verifiable, it's better to have less bureaucracy. APEDE has for many years complained that companies doing business with the government have to suffer through long delays in getting paid.

One big problem for the president is that this controversy comes at a time when Panama has seen repeated revelations about apparent influence peddling and self-dealing in government contracting, an increased propensity to do government business without any bidding procedures or in ways that make bidding meaningless and uncompetitive has sparked a lot of public comment, and polls indicating that a growing number of Panamanians are unwilling to give this administration the benefit of the doubt. An even bigger problem is that the argument divides the parties in the Martinelli coalition.

Former Comptroller General Rubén Darío Carles, a member of the MOLIRENA party that's part of the ruling alliance and is likely to merge into the president's Cambio Democratico party, noted that the Comptroller General has a constitutional duty to oversee and regulate public spending that is independent of presidential control, and that prior control on spending is important to the carrying out of this function. In an op-ed column in La Estrella Carles called prior control a "constitutional norm" that should not be discarded without a thorough debate.

Former Comptroller General José Chen Barría, an independent who served under Arnulfista President Guillermo Endara, pointed out in La Estrella that prior control of public spending is necessary to carry out the comptroller's duty to prevent the hiring of persons who by law are banned from working for the government due to their convictions for various sorts of crimes.

Former Comptroller General Alvin Weeden, a disaffected member of the Panameñista Party, which is a major partner in the government coalition, told El Panama America that he feels betrayed by the Martinelli administration and that "I am like hundreds of thousands of Panamanians who are seeing their money thrown onto a casino roulette wheel." On KW Continente radio, he said that elimination of prior control is "a disaster in which we will not only see scandals, but will be living within a scandal."

It also turns out that, although he has been given more freedom by the removal of prior controls, Minister of Public Works Federico Suárez had sent a note to Mrs. Bianchini urging her not to lift those restrictions.

The likely opposition presidential candidates, both from the PRD and from the left, have uniformly panned the elimination of prior controls as a weakening of the nation's defenses against corruption. The PRD's 2009 standard bearer, Balbina Herrera, mocked the move as a matter of turning the representatives of the Comptroller General in the various state institutions into "mere spectators." Leftist labor leader Genaro López, in his weekly column in La Estrella, warned Martinelli: "Don't ask us to remain silent in the face of such irresponsibility."