News of Interest

ISTHMIAN UPDATE
News of the Panamanian Peninsula

An Underdeveloped Country?
First time visitors are often amazed with the impressive skyline, first-class serviceds and relatively high standard of living of Panama City’s multi-cultural society – a sharp contrast with the lifestyles of most Central American capitals. According to a recent study, the perception of prosperity in Panama is, in many aspects, not very far from reality. Panamanians are among the most educated, healthy and potentially wealthy individuals in the world.

The 2005 World Report on Human Development released in Panama City in mid-October stated that Panama ranks 56th amongst a total of 177 countries and territories. The list of top countries, headed by Norway, goes from 1 to 57. Due to improvements in its macros-economic standing and overall educational and health levels, Panama has been able to jump five notches in one year, from No. 61 to 56 (last year’s scores showed a sharp decline from the development levels of previous years).

The study, of course, failed to address the country’s poor wealth distribution scores which many economists consider to be among the worst in the region. For example, residents of Paitilla and Marbella (exclusive neighborhoods reminiscent of Miami or Manhattan) enjoy a lifestyle similar to Spain or France, whereas thoswe who live in places like San Miguelito, Curundu’ (six miles from Paitilla) and the Gnobe Bugle’ Native American territories (western Panama) are compared to the populations of Haiti and some of the poorest countries in Africa. In other words, the richest 10% of the population controls 65% of the country’s wealth, and the poorest 10% only gets 2.5% of the resources.

Despite these inequities, no one can dispute the growing prosperity of Panama’s middle class, fostered by the country’s open social structure and the growth of the financial, maritime and trade sectors in recent years. Even members of the less affluent blue-collar population are well off when compared to their Central American counterparts. It is not a secret that many of these Panamanians have developed the bad habit of discarding furniture every two years in order to purchase new sets just in time for the Christmas holidays.

FRENADESSO Expands Horizons
The National Front for the Defense of the Social Security System (FRENADESSO), one of the most radical organizations taking part in the talks to amend controversial Law 17 (which seeks to save the country’s dying social security institutions) has announced that it plans to broaden its scope of action to target other “hot topics” of the country’s economic and political spheres, such as the project to widen the Panama Canal and the signing of free trade agreements with various countries. Earlier this year, FRENADESSO led a month-long national strike seeking to overturn Law 17 which, among other things, raised the age of retirement in order to save the social security system. After weeks of street protests and riots, president Martin Torrijos postponed the execution of Law 17 in order to gain more consensus. FRENADESSO encompasses a number of public sector organization.

Inflation Grows
To the average Panamanian, the term “inflation” is a foreign word – a reality affecting “far away” countries where the life savings of millions can disappear overnight. However, with the rising prices of oil, Ishtmians are having to pay more attention to their pocketbooks. A recent economic report showed that, for the first time in 23 years, inflation rates in Panama have reached 3%. The last time that happened was in 1982 when the oil crises of the late 70’s and early 80’s inflated prices by 4.2%. Inflation has risen sharply in the food sector (3.6%), housing (5.8%) and education (2.1%).

The cost of public transportation is also going up. Panama’s National Transport and Traffic Authority recently announced price increases in 105 bus routes of the interior provinces – between 5% and 20%. In order to reduce costs, the government has prompted a substantial reduction in the price of fuel and has implemented a change in the working hours of the public sector in order to curtail traffic jams. As of this writing, the cost of a gallon of premium unleaded gasoline in Panama City ranges from US $2.76 to US $3.13, a sharp reduction from a staggering US $4.00 per gallon in early October.

Panama has historically enjoyed inflation rates between 1%-2% due to the use of the U.S. Dollar as legal tender and a relatively solid service sector which comprises the Panama Canal, Colon Free Zone, international banking, a fledgling tourism industry and a well developed seaport system. These factors continue to foster positive economic growth levels and gives the country a measure of stability.

Justice Is Served?
For 15 years, Evidelio Quiel, a retired captain of the defunct Panama Defense Forces, lived a “respectable” and comfortable middle class life in San Jose’ Costa Rica. A businessman with interests in the high tech industry, Quiel recently won a bid to offer services to a government agency. However, a month ago Quiel’s secret past came back to haunt him back in his native country. Convicted to a 20 year prison sentence for taking part in one of the most terrible massacres of the Norgiea years, Quiel was tried in absentia, since he was able to sneak across the Costa Rican border with ease sometime after “Operation Just Cause”.

Quiel, 50, was one of Noriega’s closest aides. On October 3, 1989, two months before the U.S. Military invasion of Panama, Quiel and other officers massacred the leaders of a failed coup attempt against the former “strong man”, Noriega. Quiel is expected to be extradited back to Panama to begin serving his 20 year sentence within a month or so. Noriega is scheduled for release from a Miami prison in 2007.

Reprinted from The Visitor/El Visitante – November 4-17, 2005