My Review of President Varela’s First 100 Days

Panama's Vice president and Minister of the Exterior Varela speaks about the situation in Honduras at a news conference in Panama City

President Juan Carlos Varela, who was inaugurated as Panama’s new President on July 1st, 2014, completed the 100th day of his term on October 8th. The 100 days mark of any leaders term is usually a good time to evaluate the progress they’ve made so far in beginning to implement their agenda. Usually new leaders like to start big and implement major initiatives at the beginning of their terms, and President Varela is no exception to that. Now admittedly, I am not as big a watcher of Panamanian politics as American politics, since I don’t hold the right to vote in Panama. But based on what I’ve seen happen in the country so far, I’ll be giving my thoughts on how his first 100 days have gone.

To understand President Varela’s first 100 days, you have to understand a bit about this year’s Panamanian presidential election. Panama elects a president every 5 years by a plurality of the popular vote, and the incumbent president is not allowed to run for reelection. Panama had three major presidential candidates in this years election: Housing Minister José Domingo Arias of the ruling Cambio Democrático (CD) Party, Former Panama Mayor Juan Carlos Narvaro of the Partido Revolucionario Democratico (PRD), and Vice President Juan Carlos Varela of the Panameñista Party. For most of the election, it was viewed as a tight two person race, with Arias holding a slight lead over Navaro, and with Varela back in third. Varela was not given much of a chance to win the election. However, because of a perfect storm of events in the closing weeks of the election, including strong debate performances by Varela and a misuse of funds scandal with the CD party,  and Varela rose to popularity, defeating Arias by a fairly decisive 39-31% margin.

Because the vote for Varela was mostly a vote against what voters perceived as corruption in the government of CD President Ricardo Martinelli, Varela’s political party did ride the same wave of victory that he did, particularly in the National Assembly (Panama has a single legislative body that functions as it’s Congress). Panameñista finished in third place in the assembly, taking only 12 or 71 seats. PRD took 21, while CD had the most at 29, but placed short of a majority (this count leaves us several seats short of the full 71, but they are either minor parties or I couldn’t find them in the most recent election results). Panameñista and CD are both considered Center-Right parties, while PRD is considered Center-Left (although I’ve learned in Panama not to expect left and right wing to mean what I’m used to it meaning in the US). Ideologically speaking, it would have made sense for Panameñista and CD to form an alliance in the National Assembly. However, there is tremendous bad blood between the two parties that was sparked over a falling out between Varela and Martinelli while Varela was serving as Martinelli’s VP. I think the Bloods and Crips gangs in America probably get along better than CD and Panameñista do. Because of this, Panameñista formed an alliance with PRD that gave the two parties power sharing in the Assembly and gave PRD several other government positions. So Panama is really being ruled by a somewhat strange left-right hybrid than by one specific ideology.

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So how is Varela doing in his first 100 days? He has several successes that he can claim to his name, the biggest being his signature campaign program, which was emergency price controls on basic food items to make the cost of living more affordable for the average Panamanian. He took action on this issue on the first day of his presidency, signing an executive order to control prices on 22 basic food items. You can find the full list here (in Spanish). So far, the price controls seem to be working fairly effectively. Despite a little bit of an adjustment period that saw some unstocked shelves (which the opposition was always quick to snap a picture of), inventory levels have stabilized, and I’ve always seen plenty of availability for price controlled goods at every store I’ve shopped at. This is partially because Varela has also put into place some subsidies for food producers so they can keep the prices lower and supermarkets can still make some profits. The price controls also do not appear to have raised the prices of non-price controlled items, or to have led to shortages in other areas of the food supply. Venezuela type food shortages that were warned by political opponents didn’t come to pass. While it seems like the price controls may have not reduced prices for the average Panamanian quite as much as promised (the $58 a month in savings promised ended up being an average of $26.45), they do seem to have provided some relief to Panamanian families. The initial price controls are in place for 6 months, and it is unclear if Varela will extend them beyond that time.

President Varela has also expanded some social programs that serve Panama’s poor. In my opinion, for a country with a decently well funded government and a large population of poor people, Panama has traditionally done very little in the way to aid those who are struggling the most. Varela has taken some steps in the right direction, particularly expanding the popular Cien para los Setenta (100 for 70) program, which he had a hand in crafting under Martinelli’s government. The program, which provided 100 dollars a month to Panamanians 70 and over who did not have social security or a pension, has been expanded to 120 a month and the eligibility age has been dropped to 65. My wife’s 93 year old grandfather is a beneficiary of this program, so the boost in income has been nice (a little goes a long way for Panama’s poor). Also, while it has not passed yet, the Assembly is debating and planning to pass a program that gives $480 in subsidies to poor expectant mothers to support health and well being during pregnancy and the baby’s infancy. This proposal has received a lot of scorn from political opponents, particularly the CD party, but it’s worth noting that CD had a more generous subsidy for single and expectant mothers planned as part of their campaign plans.

Education is another big obstacle Varela is tasked with tackling. It is too early to grade his performance on this one, as his main program, “Panama Bilingüe,” which is expected to train 10,000 Panamanian teachers in English overseas, is only kicking off. Teachers from that program will begin travelling overseas in January. Education in Panama is a big problem, consistently ranking near the bottom in global studies. English language proficiency is also poor, ranking almost dead last in a recent study. It remains to be seen if Panama Bilingüe will accomplish it’s goals, but the idea at least seems right, where Panama’s teachers can learn English properly from good foreign institutions, as opposed to just receiving sub-par training in Panama.

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Infrastructure development also continues under President Varela, as he officially commissioned the second line of Panama’s Metro, while announcing plans for the third. The contract to the management company to oversee the construction of Line 2 has been awarded, and the line is expected to be operational in 2017. This is good news for Panama, as Line 1 has been a huge success so far, but only serves a limited area of the city. When lines 2 and 3 are completed, more than a million Panamanians should be in close access to a metro station. After delays earlier this year due to cost overruns and construction strikes, the expansion of the Panama Canal seems to be back on track, slated to open for business in the beginning of 2016. While the Panama Canal Expansion is not managed by the Panamanian Government, it’s timely opening will be important for President Varela, as he will need the tax revenue from new canal business in order to support infrastructure spending plans. 

While there have definitely been some accomplishments during Varela’s first 100 days, this does not mean that all is rosy.  The alliance between PRD and Panameñista is tenuous at best, and there has already been some talk of PRD breaking off if certain leaders demands aren’t met. These parties are traditionally political enemies, so long term successful governance will be tough to achieve. He also faces tough budget deficits left by his predecessor, which will limit his ability to spend on new projects. There is also widespread skepticism if Varela is fulfilling his biggest campaign promise, which is to clean up corruption that he claimed was rampant in the old administration. While it is still somewhat early to tell if this objective is successful, big sweeping reform has been slow moving, and there is some concern that this may be a scenario of “meet the new boss, same as the old boss.” If Varela wants to fully win over the Panamanian people (something he definitely has not done in the first 100 days), he needs to start taking bold action to clean up the government.

There also has been a slow, but still alarming, rise of anti-immigrant sentiment in Panama politics under the Varela administration. One of the successes President Martinelli had was that he greatly expanded the ease in which people could live and immigrate to Panama. This spurred a lot of Panama’s foreign investment and played a big hand in its economic growth. However the PRD has always been somewhat skeptical of foreigners, and the Panameñista Party has not been particularly friendly either. Last month, President Varela announced that the popular immigration fair Crisol de Razas will end after this month, and no new fairs will be held in the future. While this in and of itself isn’t a huge deal (Crisol de Razas was always a very generous amnesty program), Panama could see major negative economic repercussions if more anti-immigration measures are taken, particularly if there is a tightening of the Friendly Nation Visas or how long people can stay on a tourist visa.

Overall I think President Varela has made several positive moves in his first 100 days, and I certainly don’t think it’s the failure his opponents are painting it out to be. I think the price controls ended up being a positive for the country, and the expansion of social services programs will benefit Panama’s most needy. I am also encouraged that his education initiative will have a long-term benefit for Panama. However, if President Varela really wants the remainder of his term to be successful, he should focus more on combating corruption, and roll back any anti-immigrant sentiment that is taking hold in his government.

Posted in News.

2 Comments

  1. Very well articulated Michael. I love how you have jumped in and embraced this beautful country with all your heart.

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