The Economist
JUST seven years ago, both Ricardo Martinelli and the Democratic Change (CD) party he founded in 1998 were political afterthoughts in Panama. The conservative supermarket magnate finished fourth in the 2004 presidential election with just 5% of the vote, and CD took just three of 78 seats in the legislature.
Mr Martinelli saw an opening in the following campaign in 2009, when both of the two main parties, the centre-left Democratic Revolutionary Party (PRD) and centre-right Partido Panameñista (PP), were mired in corruption scandals. But in recognition of CD’s lack of local electoral machinery, he negotiated an alliance with the PP. In exchange for their support, he agreed to make Juan Carlos Varela, the PP’s leader, his running mate. He also promised to name Mr Varela foreign minister, and to let him run on the alliance’s ticket for president in 2014.
The strategy worked: the alliance won 60% of the vote for president and 57% of the legislature. But Mr Martinelli has proved an ungrateful victor. Last month he announced that CD would run its own presidential candidate in 2014, and sacked Mr Varela from his post as foreign minister. And he is now pushing a plan for electoral reform that would probably enable CD to win in 2014 without the PP’s support.
No sooner did Mr Martinelli take office than he set about trying to make CD into an independent, dominant political force. His first order of business was attacking the PRD—the party of Martín Torrijos, who beat him in the 2004 presidential race. He encouraged prosecutors to investigate former PRD ministers and party officials, leading to a series of criminal charges against them. He also courted the PRD’s legislators, promising them public spending in their districts, committee assignments and future jobs in government if they switched sides. Nine of the PRD’s 26 lawmakers duly shifted their allegiances, giving a legislative plurality to CD—which was only the third-biggest party in the Assembly following the 2009 elections—and leaving it just three seats short of an absolute majority.
Now the president is seeking to free himself from the shackles of his alliance with the PP. Mr Martinelli has proposed an electoral reform that would replace Panama’s current first-past-the-post presidential elections with a two-stage system, which would require a run-off if no one wins an outright majority. The bill might well amount to electoral suicide for the PP. The current model creates a strong incentive for parties to form alliances, since any united front is likely to beat a collection of divided rivals. But if CD only needs to finish second to reach a run-off, it could probably do without the PP. For this reason, Mr Varela has strongly opposed the proposal.
His troops, however, have not lined up behind him. Although Mr Martinelli has not convinced any PP legislators to change parties as their PRD counterparts have, he has been able to co-opt enough of them to undermine the PP’s discipline. Seven of the PP’s 19 legislators have voted in favour of the bill in its preliminary readings. They are still supporting it even now that Mr Martinelli has broken with Mr Varela. One of the defectors, Osman Gómez, said he was disobeying his party in order to safeguard government spending on projects in his district. Others accuse the president of threatening them with disclosure of financial mismanagement if they vote against his plan.
Mr Martinelli’s abrupt break with the PP has come at a political cost. Alberto Vallarino, the finance minister credited with earning Panama an investment-grade credit rating, is leaving the government. He has called the president’s electoral-reform plan a threat to democracy. Mr Martinelli’s approval rating has tumbled by more than 20 percentage points, from 67% in August to 46% in early September. In recognition of growing concern in the country about his power grab, he announced last week that he would hold a referendum on the electoral reform—precisely the method that Mr Varela sought in the first place. But even though Mr Varela’s demand has now been met, his dismissal as foreign minister was far too humiliating for him to mend fences with the president.
Despite these setbacks, the headstrong Mr Martinelli is likely to keep charging ahead. The opposition suspects his ultimate goal is a constitutional reform that would allow him to run for re-election. The president insists he would do no such thing. But after his string of broken promises to Mr Varela, his credibility has seen better days.
Trabajadores están en pie de guerra por cambios
PANAMÁ. “Vamos a modificar la legislación laboral para que sea más flexible”, anunció ayer el ministro de Economía y Finanzas, Alberto Vallarino, en el Foro “Perspectivas de Inversión en un mundo post-recesión” organizado por “The Economist” en el Hotel Intercontinental Playa Bonita.