Highlights
– Panama elects President from the conservative bloc
– Martinelli aims to improve infrastructure and international relations
– Focus on strong pro-investment path will reinvigorate economic growth in the long-term
On the evening of May 3, 2009 election polls determined conservative candidate of the Alliance for Change, Ricardo Martinelli, won the presidency with 61 percent of the vote, against 37 percent for rival Balbina Herrera of the ruling Revolutionary Democratic Party (PRD).
Martinelli will remain a United States (US)-friendly executive, who will focus on increasing and diversifying foreign investments that will strengthen Panama’s economic security over the long-term.
Platform
Martinelli’s victory is largely accredited to sinking approval of former center-left president Martin Torrijos, under whom Panama experienced rising crime rates and high inflation.
Martinelli, owner of Panama’s largest grocery chain and other agriculture and banking companies, was able to run a self-financed campaign, where he promised to guide Panama through, and out of, the world economic crisis by means of his self-proven conservatism. He also claimed he would focus on continued education spending and health care for the poor.
• Martinelli’s coalition won 37 seats in the 71-seat National Assembly, with Herrera’s bloc gaining 23.
Government Initiated Expansion
While Torrijos’ administration did launch an ambitious US$5.25 billion expansion plan for the Panama Canal and maintained favor with foreign investors, Martinelli appears to be even more pro-business. Martinelli will continue canal expansion efforts, but will further concentrate on developing highways and subway systems, especially the sclerotic networks of Panama City – a reform Torrijos disappointingly failed to tackle.
• The Panama Canal facilitates an estimated five percent of world trade, most in goods between China and the eastern coast of the US. Martinelli will prioritize relations with both major exporters.
Martinelli also proposed expansion of a massive public works program “to return Panama to growth.” He will concentrate on areas of primary concern to the populous that include public security, education, and health. Additionally, Martinelli will act to lower crime rates and increase security in urban areas.
Trade Outlook
President Martinelli indicated to local media sources he would “adjust” Panama’s US-oriented trade policies, arguing they resulted in many lost opportunities with Europe. Martinelli may intend to review relations with China, likely looking towards long-term investment strategies – China is the second largest user of the Canal and has a history of heavy investment in the country.
Martinelli also highlighted his interest in broadening trade with Colombia and Costa Rica and likely views relations with both as fostering strong strategic partnerships in the long-term. Martinelli will remain a US-friendly president, with a strong-willed and disciplined strategy towards establishing diversified and increased foreign investment accounts that will strengthen Panama’s economic security over the long-term. Crime and rising commodity prices will remain a lingering problem for Martinelli in the near to medium-term.
