Is Panama about to snap?

Drummers who often gather by the full moon turn out to protest against the corruption and abuses at the National Secretariat for Children, Adolescents and Families (SENNIAF). Panamanians are protesting about many things, with perhaps the labor mobilization when cutbacks to Seguro Social retirement pensions are announced the most explosive thing lurking out there. But in this photo we see the deepening cultural and generational aspect of the discontent. Photo from Samy Cartman’s Twitter feed.

Is Panama at the tipping point of a collapse?

by Eric Jackson

Will the gringos come to the rescue? Will the chinos? If it’s the latter, what sort of fits would the former throw?

On a governmental level, the Biden administration may decide that stability in Panama and the region will require some sort of debt relief and aid package akin to the Marshall Plan. But Joe Biden, although he managed to pass a $1.9 trillion emergency COVID relief plan in the tradition of the New Deal and the Great Society, did so with solid GOP congressional opposition and some Democratic defections that doomed key provisions. Bailing out some other country will always be a harder sell on Capitol Hill. The old Panamanian expectation that salvation comes from the USA was shattered by Trump presumptions that COVID-19 was all a Chinese hoax. That expectaation was also unmet because the United States is not in a financial position to do some of the things it used to do – at least not while waging wars all over the planet at the same time.

But will the Americans come flying in not in US Air Force cargo transport planes, but in passenger jets full of tourists with money to spend in Panama?

Not so much, it seems. The Tocumen Airport Authority told La Prensa that it expects three years of losses ahead. La Estrella reports that half of Panama’s hotels are up for sale, that the sector owes some $630 million to the banks and has few prospects of early recovery. Several local franchises, like the Riu hotels, have already filed for bankruptcy.

That’s a problem for the Cortizo administration, which has been taking the advice of a reckless Chamber of Commerce that would let the public schools die and open up all places and businesses that have survived with few special precautions. The infection and death rates have bottomed out now, but they went up for the second spike with the lifting of many restrictions at the end of last year and the start of this one.

The saner voices in business community, like the usually more conservative National Private Enterprise Council (CoNEP), are urging the vaccination of all people here as top priority and a precondition to any real economic recovery. Those who make private business plans rather than indulge in government boondoggles project that the crowds won’t be coming to or through Panama until the COVID plague is substantially eradicated both in this country and in Latin America and the Caribbean generally. They take a glance at the cruise industry’s decisions for some of the indications, but also at the changes that the epidemic has wrought or at least accelerated. The Colon Free Zone, for example, was thanks to the Internet getting ever fewer in-person buyers before the virus hit and now online business has grabbed bigger market shares while at the same time leaving much of Panama outside the zone where it will be possible to do business in that way.

The debt is at record levels and moving up quickly, not up to a total public debt of $38.907 billion. Estimates are that in 2020 Panama’s Gross Domestic Product fell between 11 and 14 percent. Those would surely be underestimates that don’t take much account of the informal economy in which about half of working Panamanians labor. So do international financial institutions project around a 5.5 percent economic growth in 2021 as compared to last year? That gets us nowhere nearly out of the hole. For the whole region, the UN’s Economic Commission for Latin America and the Caribbean is talking about years of economic doldrums just from the debts run up during the epidemic.

The political caste, meanwhile, continues with its delusions, peculations and improbable schemes. Paying for new modular hospital units and accepting used ones? Paying 10 times the price for hospital beds? That was last year’s news. This coming week the new scheme will be the creation of a new International Investment Authority. It’s not that Panama has all of these foreign investors beating on our doors – the pounding is by PRD activists seeking jobs in a new government agency.

The net social and political effect is fragmentation.

If the traditionally stodgy Partido Popular says that it’s now for a new constitution, there are these other factions that say that they are also for that, but that the newcomers’ intentions are really that nothing much changes. The growing consensus is not around some new alternative, but that things can’t can’t continue as they have been going.

Perhaps nothing much will change, we will have another “lost decade” and a new generation will arise to lead Panama in some other direction after that passes. Perhaps some incident, trivial or huge, will reset the paradigm. Nobody really knows. But that vague feeling of instability in Panama is at the moment palpable.


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