Conflicts & War

Anger over inflation, corruption spurs Panama’s biggest protests in decades

By Giovanna Ferullo M.

Panama City, Jul 21 (EFE).- Panamanians angered over high prices of basic items and entrenched corruption have taken to the streets in a wave of anti-government protests that began two weeks ago and are being described as the largest in decades.

Amid food and fuel shortages triggered by the road-blocking demonstrations, trade unions finally settled on a list of demands that includes a lowering of the price of gasoline, food, medicine and electricity, more funding for education and greater efforts to combat corruption.

“Our country is facing a trying situation that was exacerbated by the pandemic. (The problems) had been heating up more and more and finally reached a boiling point,” the president of the civil organization Ciencia en Panama, Ivonne Torres, told Efe.

The protests erupted on July 7 and have continued even after President Laurentino Cortizo approved temporary subsidies to bring down the price of fuel and some food items and pledged a 10 percent reduction in spending.

Those measures though have been slammed by unions and business associations as insufficient, although the parties are preparing to enter a round of negotiations mediated by the Catholic Church.

The spike in gasoline and food prices, which the government has blamed on the Covid-19 crisis and the war in Ukraine, sparked an initial teachers’ strike that gained momentum thanks to support from social sectors, indigenous groups and the powerful Suntracs construction union.

Suntracs’ leader, leftist ex-presidential candidate Saul Mendez, told Efe that although external factors have recently exacerbated the situation, the cost of living in Panama has been rising for years.

He says the root cause is an economic model that maximizes business profits at the expense of an increasingly impoverished population.

Panama’s annual inflation rate came in at 5.2 percent in June, an increase in consumer prices that is atypical for that dollarized country.

In a statement, Ciencia en Panama noted that the Central American nation has a service-based economy and “salaries that do not reflect workers’ productivity or dignity.”

The protesters also have focused much of their ire on graft, shouting slogans demanding an end to the “theft” of public money; for his part, acclaimed Panamanian singer-songwriter and activist Ruben Blades wrote in a communique that the problem is pervasive within a state apparatus that has “institutionalized corruption.”

In remarks to Efe, Jose Eugenio Stoute, a member of the organization Poder Ciudadano, echoed those sentiments, saying that entire families of lawmakers are benefiting from bloated public contracts and receiving exorbitant salaries.

Five business associations, meanwhile, demanded that authorities provide “a road map for implementing austerity plans that show a willingness to change” and the “best possible management” of public funds.

“It’s urgent that the executive, legislative and judicial branches ruthlessly target all acts of corruption, do away with privileges and the lack of transparency,” the business associations said in a public statement.

Cortizo’s administration insists that it is battling corruption and says of soaring debt levels – which have risen by more than $16.5 billion in just three years – that they are the result of large social assistance payouts.

Panamanian agroindustry, meanwhile, says losses during the current crisis total around $500 million in that sector alone. But the impact is even greater when considering the impact on stores that are not receiving goods due to the roadblocks.

The protests erupted at a time when Panama was starting to recover from a massive, pandemic-triggered economic contraction of 17.9 percent in 2020. The country’s gross domestic product grew 15.3 percent in 2021 and 13.6 percent in the first quarter of this year.

The Moody’s credit rating agency said recently, for its part, that although the government has proposed an austerity policy, subsidizing gasoline and temporarily expanding certain social programs will have a fiscal impact in Panama and may lead to a failure to meet annual deficit reduction targets. EFE


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