Is Nito’s Social Security “dialogue” collapsing?

Members of the SUNTRACS construction workers’ union block the road in Penonome. This militant union and the CONUSI labor federation of which it is a part have rejected the Social Security “dialogue” from the outset, characterizing it as being designed as a “me talking with me” process among the business elite. The other major labor federation, CONATO, stated out in the process but withdrew when they came to a similar conclusion. SUNTRACS photo.

Talks stall, parts of labor and business talk outside of the process

by Eric Jackson

Monday, April 12 was perhaps a fateful day for President Cortizo’s Social Security dialogue process. The Social Security Fund (Caja de Seguro Social or CSS) is approaching insolvency.

How quickly is a good question, but the 2006 “reforms” delivered much of its deposits to banks that in many cases squandered rather than profitably invested them, successive managements have looted the assets both on the health care and pension sides, employers deducted from paychecks and kept the money, and the dubious plan of 15 years ago was that working people who were told that they would not be eligible for any significant pensions from what they had already put in or could put in would keep paying into the system.

The informal sector of Panama’s economy thus grew — about half of the work force here does not pay into the CSS. From the start the “dialogue” was the business sector and those who do their bidding, with both those unions that initially participated and a number of the politicians who also were there at the start withdrawing as the plan unfolded and the government promoting it became increasingly unpopular.

The basic premise was / is that the rich do not pay taxes. It thus got into an extended and arcane discussion about “methodology,” with breathless and well-nigh incomprehensible reports in rabiblanco media like La Prensa about its progress. It’s about how many people will lose the ability to ever get a retirement or disability pension, how much more will get deducted from workers’ paychecks and how high the retirement age will be set. On the day that these things get announced, social disturbances are to be expected.

Labor and campus militants have been in the streets about it off and on for weeks, with police riot squads getting rougher with the students than with the workers. Perhaps the police can explain why that is, but so far they haven’t.

On April 12, La Estrella’s lead story was about how folks from the CONATO (National Council of Organized Workers) delegation that had left the talks some weeks before approached CoNEP (National Private Enterprise Council) representatives with a proposal to restart the process. CONATO would scrap this “round table” in which management greatly outnumbers labor and replace it with a tripartite process that puts all business in one corner, the government in general in another and a labor delegation that includes the International Labor Organization (ILO, a United Nations entity).

The United Nations secretary general, the World Bank and the International Monetary Fund represent an emerging world consensus that the old neoliberal notions of lower taxes, lower wages, “free trade,” fewer regulations and subsidies that are supposed to provide incentives for rich people to invest are wholly inappropriate to the situation at hand. It is thought that with the ILO at the table, the premise that Panama’s richest people pay no more in taxes as part of a CSS rescue plan becomes a nonstarter.

According to La Estrella, CoNEP said that it would analyze the CONATO proposal instead of rejecting it out of hand.

Later, at that day’s “dialogue,” an agreement on “methodology” that had been expected did not materialize. The decision was postponed, at least for a couple of days. One reason for that was that of the 27 business sectors remaining in the process, only 11 were represented that day.

We shall see what, if anything, Nito Cortizo might jam through the talks, and then through the legislature. Indications are, however, that Plan A is off the rails. Any Plan B, however, would be constrained by the actually dire condition of the Social Security Fund. Also it would be constrained by the government’s unpopularity, which is not measured by any good public polling during the epidemic but which is manifested on the streets and in many other ways every day.


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