Panama’s pushy president riles his country’s politics

President of Panama, Ricardo Martinelli (left) and Panama's Vice President Juan Carlos Varela in Panama City, Panama.
President of Panama, Ricardo Martinelli (left) and Panama's Vice President Juan Carlos Varela in Panama City, Panama. Zuma Press/MCT

PANAMA CITY, PanamaPresident Ricardo Martinelli dislikes the politician elected as his vice president. He’s belittled his courage, exhorted him to resign and slapped a $30 million libel suit against him.

Martinelli’s feud with Vice President Juan Carlos Varela is just one chapter in the tale of a onetime supermarket tycoon with an energetic and sometimes erratic style who is upending traditional politics in Panama.

Even his friends describe Martinelli as impatient, occasionally discourteous, and given to outbursts.

Yet his tenacious drive is also transforming the capital of this country, with its growing number of 60- and 70-story oceanfront high-rises and namesake canal that is crucial to world trade. Workers are rushing to build a 9-mile-long metro rail line, which will be partly underground. Work should be done in 2014 on the $1.8 billion system, the first subway in Central America.

The project has helped Martinelli rebound in popularity from a brief free fall earlier this year caused partly by his rupture with the vice president.

When Martinelli, 60, came to office in 2009, he seemed to be on the cusp of a trend of Latin American voters turning to business tycoons for their administrative acumen. In Chile, voters in 2010 elected Sebastian Pinera, an airline and television magnate, to lead that country.

But the skills needed for business decisions do not always translate into the political arena, a fact that seems to be underscored with the case of Martinelli, who is in the third year of a five-year term.

“Perhaps what makes some people think he’s rude, a jerk and impetuous is that he’s trying to do a lot,” said lawmaker Jose Munoz Molina, a former president of the National Assembly and a close friend of Martinelli’s. “When you are in business, you want things to move fast.

“In Panama, there’s a lot of bureaucracy,” he said. “To do something, you have to go through, like, 20 steps. This puts the president in a bad mood.”

To win election in 2009, Martinelli, who heads the relatively young Democratic Change party, entered into a political marriage with Varela, head of the Panamenista Party, a long-established party. The implicit accord was that Martinelli would serve a term, then Varela would run for president in 2014 with the support of Martinelli’s party.

But after 26 months, the accord faltered. Martinelli fired Varela from his concurrent post as foreign minister in August 2011, and members of Varela’s party started leaving the administration.

Tensions between the two boiled over in May as an Italian bribery scandal cast its shadow over Panama. A court case in Italy revealed allegations that an aide to former President Silvio Berlusconi had paid bribes on behalf of an Italian company, Finmeccanica, for some $250 million in contracts in Panama. Martinelli and Berlusconi, both right-wing populists who’d entered politics after building business empires, are fast friends.

On May 9, Martinelli’s lawyer filed a libel suit over Varela’s allegations that Martinelli had pocketed $30 million from a Berlusconi confidant, Valter Lavitola, who is now imprisoned in Italy. The suit seeks $30 million in damages. That same day, Martinelli exhorted Varela to “be a man” and quit the vice presidency.

Varela is now in outright opposition to the government. He accuses Martinelli of buying off politicians and of seeking to stack the Supreme Court with cronies in a bid to modify the constitution and seek re-election, which Martinelli denies he’ll do.

The battle has not yet reached supermarket aisles, where both would suffer. Martinelli made his fortune building Super 99 into Panama’s biggest chain of supermarkets. For his part, Varela is the third generation of a wealthy family that distills liquor often sold from the shelves of Super 99 stores.

Both Martinelli and his spokesman, Luis Eduardo Camacho, did not respond to email and telephoned requests for comment.

Varela, who seeks to run for the presidency in 2014, suggested in an interview that Martinelli has undermined Panama’s democracy.

“He won by a democratic route but he’s deviated from the system using the mindset of the business world,” Varela said. Martinelli enters the final stretch of his presidency “with many public works projects under his belt but serious questions about the lack of government transparency and his commitment to democracy.”

One analyst, Salvador Sanchez Gonzalez, said Panamanians wanted a leader cut from a different mold when they turned to Martinelli, yet have not been entirely happy with his style.

“It is one thing to be dynamic, energetic and decisive, but another to know how to build coalitions with other groups,” Sanchez said.

Opposition among civil society and indigenous rights groups and opposition political parties has grown, coinciding with Martinelli’s apparent rising exasperation that foes seek to thwart his plans.

“It can be very frustrating for a person used to making decisions. It can seem like torture,” said Sanchez, head of the Center for Democratic Initiatives, a citizens group that promotes democracy in Panama.

A poll from the Dichter & Neira firm, released last week, found that 42 percent of Panamanians believe Martinelli is doing a “good” or “excellent” job, up from a low in February of 33 percent. But that’s still off the two-thirds approval rate he had when he took office.

Martinelli does much worse when it comes to perceptions of how he governs. Fully 80 percent of those polled said the Martinelli administration has “little” or “no” transparency, and more than seven out of 10 said the government doesn’t respect freedom of expression.

A watershed moment came June 19, when Martinelli’s party tried to enact laws in the National Assembly to permit the sale of $3 billion worth of government shares in the electric and telecommunications sector and to name three new judges to the Supreme Court.

Opposition legislators rose in protest, tossing chairs and shoving ruling party lawmakers. A melee outside the assembly led riot police to arrest some 40 people.

It marked a severe setback for Martinelli, who withdrew the proposals.

Yet economic winds fill Panama’s economic sails. The nation grew at 10.6 percent last year, the highest in Latin America, and is on target to grow 8 percent this year and 7.9 percent next year. And Martinelli has used government resources for subsidy programs that may rebuild his popularity.

In one new plan, 180,000 rural people over age 70 receive a payment of $100 each month, said Munoz Molina, the Martinelli ally and former National Assembly president. Other plans give inexpensive laptop computers to all high school students and provide $20 a month to needy families of students.

Even critics grudgingly acknowledge Martinelli’s energy.

“He tries to sell the image that he is a ‘doer,’” said Milton Henriquez, head of the centrist Peoples Party, one of three parties that in June formed the United Front for Democracy in opposition to Martinelli.

Backed with the government’s deep pockets, Martinelli has co-opted opposition lawmakers, swelling the ranks of the Democratic Change party from 18 to 37 seats in the unicameral 71-seat National Assembly. The defections have drawn speculation over what inducements Martinelli and his aides might have used.

“His attitude is that politicians are for sale and all there is to discuss is the price,” Henriquez said.

Workers, meanwhile, are rushing to finish the metro system by early 2014, giving Panamanians a few months to savor the costly transportation improvements before they go to the polls.

Even though cost overruns have pushed the metro system from $700 million to close to $1.8 billion, economist Adolfo Quintero said Martinelli is likely to employ a populist tactic in his waning months in office.

“He’ll offer three months of free rides on the metro,” Quintero said.

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