Is Panama an Illusion?

(This is the second blog of a series written about "Living in Panama". Please refer also to "Is Panama Safe?",  "Pros and Cons of Living in Panama",  and "Further Notes on Panama Living")

What is the real story on Panama?  Does anyone really know whats going on here?

I have been in the middle of some interesting discussions today on the local Panama political issues.  Having been woken up at 7:45AM last Saturday morning by screaming protesters on megaphones shouting slogans in Punta Pacifica…I have been forced to read and face some of Panama`s political realities today, like the current political uprisings in Colon.  In 8 years of living here I have always sensed this cultural and political undercurrent that does not support the kind of modern face we have  revolutionizing the skyline of Panama City. Let’s face it, Panama is still a country in its infancy of a little more than 100 years since its breakaway from Colombia.  Even that breakaway was brokered more by foreign powers like the USA than by a local sovereign decision, revolt or ¨Declaration of Independence¨.

Panama is an interesting place no doubt…a small sample country of multiculturalism and racism.  It is a mirror in a small way of the issues confronting our whole world. A large majority are poor, uneducated and backward compared to first world countries.  Except primarily for the singular effect of the Panama Canal…these hundred years have not really brought development of a cohesive, singular culture or country.  Instead, it is a small country made up of small groups of a vast variety…from the indigenous native Indians such as the Cuna, Embera,  Ngäbe-Buglé and others from pre-Colombian times, to the Spanish families spanning back to when Panama was part of the Spanish empire for 300 years (1538–1821). Then, on top of that you have the variety of West Indians, Caribbean and Asian migrants who were encouraged to come build the Panama Canal at the turn of the 20th Century, making this country a very diverse and unique country at the hub of Latin America.  That diversity alone accounts for a lack of cohesion and unity among all those calling themselves ¨Panamanian¨.

One could argue that the REAL Panama is only just beginning, and like any newborn country or person…a sense of identity and solidarity with the rest of the world is difficult to define.  We have in the past decade seen a huge modernization of Panama City from a structural and development standpoint.  We are currently in the middle of the biggest canal expansion in the world since the canal opened in 1914.  Yet, underneath all the changes and Billions of dollars of investment in the country, there lies some fundamental lack of definition of what it means to be ¨Panamanian¨.  To some, Panamanians are defined by the post Bolivarian revolt for independence from Colombia which is celebrated on November 3 each year.  For others, their family roots are in the migration for building the canal.  For still others, they claim their identity to Panama as ¨Zonians¨,  having been born and raised in the Canal Zone which had a completely different set of laws and culture from the rest of Panama…primarily based on North American influence and European origins.  In this short history of an independent nation, one can question whether the vast majority here have ever been truly free and independent…meaning having equal access to markets, the rule of law and freedoms of expression most usually associated with the USA system of constitutional rights.

Recent history reveals three key eras of leadership and control of Panamanian governments.  From 1903 until 1968, Panama was a constitutional democracy dominated by a commercially oriented oligarchy which came to be controlled by mostly Spanish and Jewish families who owned most of the businesses and money flow outside of the USA government and canal resources. During the 1950s, the Panamanian military began to challenge the oligarchy's political hegemony and Panama became more of a military junta run by Omar Torrijos as a revolutionary of ¨the people¨, and later continued by Manuel Noriega after Torrijo`s mysterious death in an airplane crash. The most recent era began with the 1989 USA invasion which was prompted by a number of USA interests to back the restoration of democracy from the hands of the militarist Noriega regime. One would now argue that the oligarchies are back in control of big business and this reflects many back door deals to gain advantage of the investment interests in Panama.  After all, Panama is STILL the largest financial center in Latin America in terms of volumes of dollars and numbers of banks and financial institutions domiciled here...which to me is about the only explanation for current development levels.

So, how is it that with all this modernity…we still have constant social unrest?  We have socialist or communistic labor and student groups demonstrating and blocking the streets at will.  We have Indigenous people blocking the only highway connecting the city with the Interior as the only way they can think of to protect their Comarca private lands and water sources from mining, hydro dams and other commercial interests in the interior.  Now we have the ¨Coloneses¨ up in arms over privatization of public properties in the largest duty free zone in the hemisphere. While some would say you have similar scenarios throughout Latin America, I see Panama as being quite small to be so full of such dissension and political unrest.

While the army was deactivated after the 1989 invasion,  the current militarization of the police force based on justifications of the ¨drug war¨ or even potential guerrilla infiltration from the Darien border with Colombia has one wondering if we are not reaching new levels of a military buildup in this small country.  The dance between the President, the legislature, the courts and the police have one´s head spinning in the press on a daily basis. Some days it is hard to know who is in control of this country whose population is smaller than Greater Chicago.  For me, it doesn't take much to turn a small country like this into a broiling hotbox of contention and violence.

There is no doubt we are seeing increasing instances of crime in Panama.  Along with that come increasing police training and activation.  Every couple years we see massive police and security checks on most main roads in Panama.  Maybe a page they learned from Colombia of the past 20 years or so?  And now this week we see a new level of conflict over the Free Zone property rights in Colon.  With reports of 48 people arrested, several injuries and one dead child of 9 years of age…it reminds one that peace and tranquility is but an illusion, even here in small, beautiful Panama.

The distance between the haves and have nots has definitely increased during my past 8 years here. Cost of living in my personal experience is up 30-40% depending on what lifestyle you maintain here.  That is roughly 8% per year…and much higher than government indicators want you to believe. Believe me, the locals pay levels have not gone up at those percentages.  Yes, unemployment is lower than it used to be, but cost of living is higher.  The poorer populations are being pushed OUT of the city with rising real estate prices and transportation costs…yet most of the jobs are IN the city.  Commuting to Panama right now is every commuters nightmare.  Many of us are now choosing to work from home offices instead of trying to commute to an office.  Transportation is gridlocked most days, and the Panamanian aggression and law breaking behind the wheel is at an all time high.  

Average costs of new condos in Panama are around $2000 per Meter, yet rental prices do not support those prices if you are looking for real income. Who is going to buy all these myriad of developments STILL going up in the middle of the other dark, uninhabited towers?  Does somebody know something I don´t about coming hoards of tourists or businesses to Panama?  Where are they going to find the trained workers to fill all these offices they are building across the street from me? I personally don’t see it…and I like to think I get around. Billions have been spent on infrastructure…but educational spending as percentage of government expenditure is at the bottom of the barrel regionally according to these statistics. This fact will grow to be one of the most limiting factors in Panama´s future development potential.

So, what happens if the people or the industries don’t come as planned to Panama?  What happens if the American dollar is devalued against other currencies ( I have already seen the Colombian peso rise over 35% in value over the dollar the past 4 years)?  What will happen if a more Leftist leader comes to power in Panama and leads a Venezuelan style ¨Bolivian¨ revolt against the oligarchy or the perceived or real imperialism of the USA and other foreign powers over Panama? What happens if to meet its new gorging debt obligations, Panama is forced to levy new taxes and austerity measures on the people who can least afford to pay those debts?  We have already seen huge tax increases in Panama the past 5 years…from VAT to corporate to excise taxes on ¨luxury items¨.  At what point do we start seeing a reverse emigration of moneyed people and industries going to other countries in the region because of these combined causes?  I already know a number of foreigners and businesses who have reversed their decisions to domicile in Panama based on many of these issues.

I have been discussing some of today’s issues at a distance with people who I am convinced would rather see Panama and Panama City pull back from the modern city it is becoming.  There are many new voices of socialism and redistribution in Panama media and politics.  I sense a fire brewing…and I don´t see current leaders doing anything to douse those fires of insurrection and violent revolt.  Killing a 9 year old in Colon doesn't help…and militarism alone is not a medium or long term solution to the problem.  Yet, there seems to be no one capable right now to lead the wide range of interests in Panama in a unified direction.  If you watch the local news each day…and worse yet watch the Government Assembly in action on the local cable network…you will begin to realize how divergent and conflicted the interests are in Panama.  As throughout much of the developing world,  people are in a ¨gimme gimme¨ mode towards their governments.  They vote for whoever offers the most temporary support, or ¨candy¨ as I call it.  No one votes for reality or tough policies of correcting debt or corruption.  No one seems too excited about constitutional rights to due process of law. Only if you have enough money can you get access to due process…and that’s not just in Panama.

¨The People¨…in Panama and elsewhere…are insecure and angry.  If the powers that be do not take heed and salve some of their issues and wounds, there will soon be a ¨Latin spring¨ that could make the Arab one look like milk toast.  When that happens…I want to be somewhere else.