CIVICUS discusses recent protests in Panama with Lina Vega Abad, president of the board of directors of the Foundation for the Development of Citizen Freedom, a civil society organisation that defends fundamental freedoms and strengthens democracy through citizen training and accountability and transparency advocacy.

A year into President José Raúl Mulino’s administration, Panama is facing a growing social crisis. Protests began when two issues converged: changes to the pension system and the agreement of a military memorandum of understanding with the USA. Unrest has been exacerbated by long-standing dissatisfaction with the quality of public services and the lack of progress in fighting corruption.

What triggered the social unrest?

A new pension law was the main trigger, but the agreement with the USA was the final straw that brought people out onto the streets. The agreement would allow US military personnel to return to their former bases in Panama – a highly sensitive issue that stirs nationalist sentiments. Although the Panamanian government had little room to refuse Donald Trump’s demands, President Mulino handled communication on this issue poorly.

Discontent also grew when Mulino announced his intention to reopen a copper mine that had been closed due to public pressure during the previous administration, prompting new groups to join the protests.

Why did the pension law generate so much opposition?

Panama’s pension system, created in the 1950s, is bankrupt. Due to demographic changes, the population has aged, and there are not enough active workers to fund pensions. All previous governments have been aware of this structural problem but avoided addressing it due to the high political cost of much-needed reform. The last reform was in 2005.

Mulino, who unexpectedly came to power after the favourite candidate, former President Ricardo Martinelli, was convicted of money laundering, decided to tackle the crisis because he has no political capital of his own to protect. After months of debate, Congress finally approved a diluted version of the executive’s bill, which postpones the crisis instead of resolving it.

The approved law does not raise the retirement age, as the initial bill proposed, but it does require people to work longer to obtain a pension similar to one they would previously have qualified for. This has been strongly rejected. The law also increased private sector contributions, a measure that was better received.

Politically motivated groups are also involved in protests. Powerful unions, such as Sunstrac in the construction sector and teachers’ unions, are linked to radical leftist movements. Although these movements lack electoral support, they have a great capacity for mobilisation, which enables them to escalate protests.

How has the government responded to the protests?

The government decided not to yield to pressure from unions, who demanded the repeal of the pension law from the outset as a condition for suspending their strike. At the same time, the government reactivated legal proceedings against union leaders that had stalled for years. Sunstrac’s leader sought asylum in Bolivia, while authorities arrested another union leader.

As Mulino sought support from business leaders and politicians, protests grew. Teachers blocked streets, including the Inter-American Highway, the country’s main road. The government tried to use police to clear the roads, sparking violent clashes.

The situation became critical when banana workers in Bocas del Toro, a Caribbean province where the multinational banana company Chiquita operates, joined the protests. When the workers refused to back down, the company shut down its operations and fired all its employees, intensifying the protests and bringing further violence. The province was isolated from the rest of Panama, so the government made the extreme decision to declare a state of emergency and suspend fundamental rights for nine days.

The events that occurred in Bocas del Toro during this time, when the security forces were able to act without the constraints of the rule of law, are now under investigation. The Ombudsman’s Office has submitted a report on the excessive use of force, and the courts must now rule on the allegations being made.

What role is the USA playing?

The military agreement with the USA intensified the protests. Although Panama has reached other agreements with the USA since the formal departure of its army in December 1999, including for joint action on health and security, this agreement occurred amid Trump’s threats to reclaim the Panama Canal. It was only natural for this to cause concern and unrest throughout the country.

Additionally, the new US ambassador’s attitude has been seen as provocative, as he’s touring the country and repeating Trump’s rhetoric.

Mulino has sought to downplay the agreement, saying it’s similar to others signed since 1999. However, this agreement is unprecedented: no US president has ever threatened to retake control of the canal as Trump is doing.

Regarding migration, the Panamanian government claims to have effectively closed the Darien Gap, the migration route from South America to the USA. This has reduced migration, bringing negative economic effects for the communities that depended on this activity. Most disturbing, however, is the agreement that turns Panama into a centre for the deportation of migrants rejected by the USA. This decision has been strongly rejected.

What impact has this had on the political landscape a year into the government’s term?

Mulino inherited Martinelli’s electoral base. Martinelli was a popular leader due to the economic boom that occurred during his time in office. But Mulino didn’t inherit Martinelli’s charisma or political apparatus. Many important positions are still controlled by followers of Martinelli, who has now turned against him.

Polls show strong disapproval of his administration, particularly due to high unemployment. Nevertheless, I believe he did the right thing when he took the initiative to reform the pension system. It was a pressing issue with a direct impact on Panama’s finances that could not be put off any longer. It remains to be seen whether Mulino will be able to strengthen institutions, reduce impunity and address structural inequalities deepened by clientelism and inefficiency. The context is adverse, and his room for manoeuvre is limited.