Panama: after protests, will the government keep its promises?
As in many other countries, rising costs of essentials have driven people to protest in Panama. High prices came on top of years of anger at corruption, economic inequality and poor public services, belying the country’s reputation for stability and prosperity. Weeks of protest won fuel price cuts and caps on the costs of essential items, but less progress has so far been made on addressing structural issues such as corruption and inequality. The political elite risks losing legitimacy, paving the way for populism, unless it meets the moment with a firm commitment to reform and follows up on its promises.
Talks continue in Panama on the many pressing issues raised by close to a month of protests that brought the country to a standstill. Thousands took to the streets in the biggest protests in decades, angered at the rising cost of living, with food and fuel prices soaring.
On 19 May the People United for Life Alliance, a coalition that includes social movements and labour unions, handed in a list of 32 demands to the government. Among the demands were limits on price rises, increased pay and pensions, support for Indigenous rights and improved education spending.
The need for action seemed clear. By July, fuel costs had increased by almost 50 per cent since the start of the year. Inflation in general has gone up and unemployment is at around 10 per cent. President Laurentino Cortizo blamed it on the pandemic and Russia’s war on Ukraine, but many saw government culpability in unchecked high-level corruption.
Outside observers often paint Panama as an economic success story compared to many of its neighbours. It’s one of Latin America’s richest nations – but also one of its most unequal. Spiralling prices may mean little to the wealthy minority but bring hardship to many.
The protests were both about immediate problems, such as the cost of fuel and the basic food basket, and structural issues, such as inequality and corruption. The immediate issues were the catalyst that caused social discontent with the structural problems to boil over.
The state’s ability to respond to pressing needs is undermined by corruption and high levels of elite tax avoidance and evasion. The two presidents who preceded Cortizo, from two different parties, have both been accused of corruption as part of a far-reaching scandal involving Brazilian construction company Odebrecht. People see corruption as endemic regardless of who happens to hold power.
A lightning rod for anger came in a widely shared video showing ruling party politicians celebrating the start of a parliamentary session by downing bottles of whisky costing US$340 each – a luxury clearly out of reach for almost everyone else.
Teachers to the fore
Teachers were at the forefront of protests. Education spending has long been a hot political issue. A law passed as long ago as 1946 mandates the government to spend six per cent of GDP on education, but the reality falls far short: at the last count education spending was less than four per cent of GDP. This leaves teachers struggling and perpetuates the gap between the richest and poorest.
On 6 July, teachers launched a national strike, saying the government hadn’t responded to the 32 demands. The strike was initially planned to last three days, but teachers stayed away from their classrooms until 2 August, by which time the government had conceded some of the protesters’ demands.
Those four weeks saw multiple marches, roadblocks and strikes organised by unions and social movements, soon joined by Indigenous groups making demands for land rights and an end to settlements on Indigenous territories. Demonstrations concentrated in the central Veraguas Province, where protesters blocked the Pan-American Highway, the key artery that connects Panama to the rest of the continent. Roadblocks caused food and fuel shortages.
The government backed down in stages. On 11 July it announced a fuel price cut and a cap on the price of 10 essential products. Protests continued. An agreement it struck on 16 July with some protest leaders to clear the roadblocks in return for a second fuel price cut fell apart when union bosses consulted with protesters and got the clear message to keep mobilising.
The protests saw moments of tension. There were reports of security forces using teargas and firing pellets at protesters, causing eye injuries. Some protesters attacked journalists. Over 100 people were arrested in the first three weeks of protest. On 23 July, two Indigenous leaders were attacked in Horconcitos district. In Pacora district, farmers confronted protesters who blocked the road. Truck drivers went on strike to protest against roadblocks and demand the government ensure their safety.
The roadblocks finally ended on 26 July, by which time the government had committed to cap the prices of 72 basic goods and hold a series of dialogues with social movements. On 2 August, teachers went back to school.
In the series of talks that have followed, mediated by the Catholic Church, there has been some progress but many issues remain unresolved. The government has pledged finally to comply with the law to increase education spending to six per cent of GDP by 2024. But thorny issues like corruption and the high cost of healthcare – Panama has the region’s highest medicine prices – remain unaddressed. Meanwhile business leaders complained of being excluded from the talks – they have been invited to the next phase – and the likely cost of government commitments.
Voices from the frontline
Eileen Ng Fábrega is Executive Director of the Panamanian Chamber of Social Development (CAPADESO), a network of civil society organisations that promote social development in Panama.
The protests were both about immediate problems, such as the cost of fuel and the basic food basket, and structural issues, such as inequality and corruption. The immediate issues were the catalyst that caused social discontent with the structural problems to boil over. This led to protests on issues such as health, education, poverty and food insecurity.
Although different groups expressed different priorities and had different ways of mobilising, I personally consider most of their demands to be legitimate, as they are a reflection and consequence of structural inequalities in our country and of frustration at blatant corruption that robs Panamanians of the possibility of satisfying their needs and achieving better living conditions.
While many protesters were part of organised groups, such as teachers’ and workers’ unions and Indigenous groups, there was a much broader social mobilisation, in person and online, which prompted the country at large to discuss more deeply about how we have reached this turning point.
The government tried to negotiate or to open separate negotiations with some of the groups or coalitions involved. Under pressure, it set up a Dialogue Roundtable to analyse the immediate issues. Since July the Roundtable has been in the process of negotiating with various parties involved in the protests, representing some, but not all, sectors of society.
Facilitated by the Catholic Church, the Roundtable has reached certain agreements, such as freezing the price of fuel and some basic goods. One agreed point that has been particularly relevant for CAPADESO’s member organisations, many of which work with children and focus on education, is the commitment to allocate 5.5 per cent of GDP to education by 2023 and six per cent by 2024. If invested in items such as teacher training, catching up on learning lost during the pandemic and decent infrastructure, this budget allocation could drive real educational transformation.
The government has now informally announced a next phase of negotiations to address other, structural issues with the participation of civil society groups, including CAPADESO, and the private sector. We believe this dialogue will be key to agreeing on a comprehensive, inclusive and sustainable development vision for our country. Dealing exclusively with short-term issues, on the other hand, will likely result in another social explosion.
This is an edited extract of our conversation with Eileen. Read the full interview here.
The global pattern
As prices soar, leaving many struggling to get by, people around the world are taking to the streets to protest and demand governments do more to protect them. The protests in Panama follow in the footsteps of major mobilisations this year in Ecuador, Iran, Kazakhstan, Sierra Leone and Sri Lanka, among other countries. Many more are sure to come.
As in Panama, people pushed to the edge quickly make the connection between their hardship and corruption, economic mismanagement and political failure. Protests about rising prices are often also about deeper issues of public integrity and state capacity.
Those who were surprised by Panama’s social explosion this year can’t have been paying attention. While the 2022 protests were on a bigger scale than demonstrations in the years before, the signs were all there: 2021 saw multiple protests against corruption, the poor quality of education and the lack of protection for labour rights.
The pandemic further drove public anger: in 2021 students protested at changes in the government’s social support scheme, while an investigative journalist revealed that private companies were running an illicit vaccination scheme for the wealthy – at a time when under 20 per cent of the population were vaccinated.
On International Human Rights Day, 10 December 2021, unions and social movements marched to demand jobs, a higher minimum wage and better education and healthcare. The year before, cuts to the education and healthcare budget sparked mass protests led by students that the government reacted to with excessive force. 2020 also brought several protests against university budget cuts alongside demonstrations against poor pandemic support and the lack of protection for frontline workers.
Protests keep happening in Panama because problems run deeper than the current surge in inflation. Scepticism about what the latest rounds of talks may achieve and whether the government will keep its promises appear well founded. Only genuine action to tackle corruption and improve essential public services will disprove those who believe the government, regardless of its political colour, only works for the wealthy.
The next election is due in 2024 and the constitution prevents Cortizo running for a second term. If he could, he’d be highly unlikely to win. A recent opinion poll showed that 81 per cent of people disapprove of him, and support for the vice president is even lower. As the election approaches, people may well look to populist candidates who position themselves as outsiders ready to take on established elites. The lesson for the political class should be clear: act on public concern now, or prepare to be kicked out.
OUR CALLS FOR ACTION
The government of Panama should stick to its promise to increase education funding.
The government should commit to challenging corruption and work to rebuild public trust in state institutions.
Economic policies must protect the poorest people from the impacts of rising food and fuel prices.
Cover photo by Reuters/Erick Marciscano