If you’re interested in the thoughts of an old sceptical CPA who’s lived in Panamá for seven years, then read on. There’s good news and bad news in the past few days all of which has impact on those of us from the States who live and do business in Latin America.
The good news is that Panamá bucked the recent political trend and elected a conservative successful businessman President of the Republic by a huge margin, rejecting a candidate thought by many to be tied to anti-US holdouts from past administrations. Most of us foreigners merely get to observe the process, and it was calm and peaceful and carried out efficiently with the Tribunal Electoral announcing the victor a little more than two hours after the polls closed. I live near one of the polling places and the cars were lined up for at least a km most of the day – without the usual horn-honking impatience shown by so many drivers daily. About 74% of the eligible voters turned out to have their voice heard when and where it counts – at the ballot box.
President Elect Martinelli won on a platform pledging change in education, health and transportation. I’m a former college professor and the father of a 12-year old attending private school in Panama, and I applaud any efforts to bring the educational system in this country up to international standards. I hope he succeeds in overpowering some entrenched and reluctant syndicates whose policies have resulted in Panama high school graduates getting about an 8th grade education – according to the local evaluations. That failed education system should be an embarrassment for a democratic nation with the vast economic resources and geographic advantages that Panamá possesses.
The health issues that locals face most foreigners aren’t exposed to. We use private hospitals and health plans and get world class care at discount prices. Too bad the local citizenry can’t afford even that, because the quality of the care is top notch if you can afford to pay a little extra for it. But for the locals who depend on the CCS system it is apparently the usual problem with nationalized health care – long lines and decisions made by bureaucrats not physicians (this should be a warning to the USA on its plans to modify the existing system in the States).
Transportation is a difficult issue. Many of the short term adjustments are easy to see, but would be difficult to implement. Some that I have witnessed in several cities the size of the Capital City have worked very well such as strictly limiting the on-street parking during high volume hours, or restricting large trucks from the city streets during the day. The concept of a rail-based city-wide metro transit system is a very long term development project that could make matters a great deal worse for a decade while it is being constructed but once in place is most useful to the workers who rely on buses that are often tied up in slow moving traffic making their daily commute a much longer process than it could be. Cities like Miami have tried and had mixed results. Atlanta has a much more effective city wide transportation system built around a subway system that is clean and efficient. I can only wish the new administration luck and support in trying to accomplish that goal.
So much for the good news and for those of us who choose to live in Panamá I think it is very good news.
The bad news is from the North.
The Obama Administration seems determined to treat any business not paying USA income taxes on its world-wide earnings with distrust that borders on criminal intent. They seem to want to completely change the American system of justice that has worked since the USA Democracy was founded – the presumption of innocence. There are only four countries that I am aware of who use the Napoleonic Code - that legal system which requires the accused to prove their innocence: France, Spain, Italy, and Costa Rica.
The US Treasury Department under the prior administration was successful in threatening the long-held stalwart of banking secrecy, Switzerland, to break its promise. The USA would love to have a permit to go on a fishing expedition. So far, Panamá, which has much less to loose by annoying the USA, has held fast to its argument that it has sovereignty over its banking and unless given substantial evidence of possible criminal activity, they will not provide banking records of anyone’s account.
I suspect that getting passage of the pending US-Panamá trade agreement will hinge more on the banking issue than the labor issues that make good press coverage for senators and congressmen from industrial states in the rust belt. But since nearly everything that goes north gets into the USA duty free now, and some Panamanian agricultural businesses stand to lose some sales if US beef, for example, were imported without heavy duties as they are now, that Panamá won’t push the issue. The real losers in that scenario are the retirees who chose to live here and don’t like paying $17 a pound for a good steak and have to settle for a locally grown lean piece of beef for $3.50 a pound. It is decent range feed beef, healthy too but not as tender or flavourful as the beef that corn fed cattle produces. So we’ll just have to bite that bullet I think. The good news is we pensionados get a discount at the restaurants (but not the grocery store). So eat out and make the restaurateurs at Jimmy’s or Gauchos happy while enjoying that great Argentinean steak.
On balance, the Republic of Panamá is a terrific place for extranjeros to live and do business. The Panamanians have just proven to be a thoughtful, calm populace rooted comfortably in democracy. And the rule of law still holds here even if it does take a while.