Global Policy Forum

By Robin Emmott

Vultures circle overhead at Panama City's putrid refuse mountain on the edge of town as droves of half-naked men, women and children roam the garbage dump looking for anything they can eat, drink, use or sell. As Panama's economy suffers its worst downturn in more than a decade and with unemployment around 18 percent, more penniless people arrive every day to join the hundreds of scavengers who already live and work at the rubbish mountain. "It's humiliating, but it's a way to survive," says one rubbish collector, who gave his name only as Euclides.

After 3-1/2 years in office, Panama's populist President Mireya Moscoso of the Arnulfista Party, who was voted in on a platform of poverty reduction, is seen as another Latin American leader who failed to live up to promises to help the destitute. Many Panamanians are disillusioned with the inability of successive governments to reduce the nation's gulf between rich and poor, one of the most pronounced in Latin America.

With campaigning for the next president already under way a full 15 months before elections, Panama's voters are apparently moving to the left, inspired by the recent victory of Brazil's socialist President Luiz Inacio Lula da Silva, newly elected Lucio Gutierrez of Ecuador and Chile's left-leaning Ricardo Lagos. "People want change and so the election race has begun very early this time around. There is a real disenchantment with the parties that have run Panama for the past 50 years," said Raul Leis, analyst at political consultancy Ceaspa.

ENTERING THE FRAY

Enter Guillermo Endara of the Liberal Party, a lawyer and former president who is rapidly gaining support among Panama's blue-collar voters. Coming to the fray as an alternative to the traditional Arnulfista and Partido Revolutionario Democratico (PRD) parties, Endara is promising a Lula-style mix of socialism and wealth redistribution, while still keeping international financial markets happy. "I've got nothing against prudent fiscal management of the economy. But it is also time we did something for Panama's poor," Endara said at his sea-front apartment in Panama City.

Many voters say the free-market PRD policies of privatizing state-owned companies in the 1990s, when the party was last in power, pushed up the cost of living in Panama and failed to improve the lot of the poor. The populist Arnulfista Party, formed in the 1940s by former president Arnulfo Arias, is seen as lacking any clear ideology, and is perennially criticized for tailoring its policies for the benefit of Panama's oligarchy. That point is not lost on Endara. "The role of the state is to protect the weak. Why in Panama are we always protecting those who are already so strong?," the 66-year-old candidate told Reuters.

WEALTH GAP

More than 1 million Panamanians or 40 percent of the population live in poverty with 25 percent living in extreme poverty and surviving on around $50 a month. The proportion has barely changed since 1970 despite successful endeavors to make Panama an international transport and financial hub with economic growth as high as 9 percent a year during the 1990s.

Although Panama is classed as a middle-income country, the richest 20 percent of the population earn 60 percent of the country's annual income while the poorest fifth earn just 2 percent, according to United Nations and World Bank studies. University of Panama professors Ivan Quintero and William Hughes calculate a group of about 80 people, many linked by business and family ties, control around half of the country's annual gross domestic product, some $5.5 billion. "This means the economically powerful will always be in power no matter who is in government," Quintero and Hughes wrote in their recent study "Who owns Panama?"

Endara, whose support in opinion polls has risen to about 30 percent since announcing his candidacy in January, says he wants to try to break down Panama's oligarchy. He aims to channel government revenues into education, housing for the poor and support for the agricultural sector, which employs a quarter of Panama's working population. In line with Lula of Brazil, he is also skeptical about the benefits of an Americas-wide free trade area slated for 2005. "We've got to protect our industries and the people who work in them," Endara said

"PANAMA NEEDS A REVOLUTION"

Endara's closest challenger is likely to be Martin Torrijos of the PRD who trails him slightly in opinion polls. Torrijos is son of Omar Torrijos who ruled Panama from 1968 to 1981. Three Arnulfista contenders including former Foreign Minister Jose Miguel Aleman are expected to compete in a primary to select the party's candidate, and minor parties are also likely to field candidates. Endara is seen as a credible figure because as president in 1989 to 1994 he rebuilt Panama's trampled economy after the dictatorship of Gen. Manuel Noriega in the 1980s. Endara won the May 1989 election but was kept from the presidency as the results were annulled by Noriega. Endara was installed as president by the United States in December 1989 after the U.S military invasion to oust Noriega. Endara aims to revitalize the economy once again if elected.

The economy under Moscoso's Arnulfista Party averaged just 1.6 percent growth a year since 1999, compared with 5 percent during the 1990s, according to Finance Ministry data. But his critics say he will struggle to bring about real change in Panama, where the sight of new sports cars flashing past one-legged beggars is all too familiar. "Panama needs a revolution to bring change. But the poor are ultimately too disorganized to challenge the oligarchy," says sociologist and political analyst Danilo Toro at the University of Panama. "I wouldn't vote for any president. They are all crooks that do nothing for the people," says 33-year-old Gabriel as he fills up bags of discarded laundry detergent on Panama City's garbage mountain, which he later hopes to sell.

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