Aug 13, 2014

Still Impressed with President Varela

I continue to watch the local news every night anticipating some kind of announcement that will raise red flags and destroy my infatuation  for the new president and his cabinet.  It hasn't yet happened.  I remain favorably impressed. 

Beginning with the most trivial observations...He, his wife, his support staff, and his new cabinet know how to dress commensurate with their professional stations. It's nice to see Panama's commander in chief dressed to convey that he respects his position and demands the same deference in return.  Golf shirts, guayaberas and rumpled sports jerseys are passe.  Suits and crisply starched white shirts are in.  

The President's calm, reserved, straightforward, and compassionate demeanor with the press is reassuring.  Educated, intelligent, well-thought responses to impromptu questions from reporters are much appreciated.  Recent TV interviews with both Vice President, Isabel St. Malo, and Minister of Economy and Finances, Dulcido de la Guardia, also reveal a professional quality that is very encouraging.  

But appearance isn't everything, one would be apt to say, and I don't disagree. What I especially like about what I'm observing is the openness and honesty displayed by all members of this administration regarding issues the public should know about.  No flippant responses saying nothing.  No empty promises or thinly veiled threats.  Widespread public education regarding issues that are both concerning and commendable about Panama's social, cultural, and financial matrix.  And a seemingly genuine devotion to improving the quality of life for the average Panamanian.  Social reforms, affordable housing, cleaning up the ghettos, focus on converting gang members to productive citizens through occupational rehabilitation and amnesty for surrendered firearms, increased subsidies for retirees with no social security benefits, increases in general scholarship funding for all school children, etc.  A democrat's dream! 

This evening I listened to discussions regarding concerns over the looming budget deficicits and anticipated electric rate increases due to decreased governmental subsidies.  As was brought to the public's attention last month, Panama's proposed electricity budget was 165 million, when the actual needs are around 500 million.   People have been told their bills would go up and there's been an aggressive campaign to educate the public regarding energy conservation, as well. An announcement of the changes and how they will impact the average household is anxiously awaited, but tonight the populace was advised it would be another 2-3 months before announcement, as the administration continues to study the issue in depth to arrive at the most reasonable and tolerable solution for everyone.   

Even more concerning, however, was the declaration by the Minister of Economy and Finances, Sr. De la Guardia, that the legal budget for the country for the entire year of 2014 was 1330 million balboas, and in the first trimester, ending on June 30, the country had already exhausted funds totaling 1500 million balboas.  This was due, he elaborated, to the prior administration's inflated reporting that overestimated state income and omitted significant recurrent expenses, among other things. When asked by the reporter how this was going to be dealt with, and how increased social subsidies and reforms were going to be financed in light of the apparent crisis, he responded that plans were being drawn up regarding the sale of certain government real estate holdings and suspension of credit as first line actions, followed by a taking the matter to the national assembly for consideration of a change in the law, if need be, to address the issues and outstanding debt. Not being even-moderately well versed on economic themes, I can't delve further into that matter, but merely wanted to compliment the current administration for informing the populace of the matters at hand. 

In contrast to this attitude of openness, Frank de Lima, the former Minister of Economy and Finances under President Martinelli, quickly spoke out against Sr. De la Guardia, calling him irresponsible for making the matter public. He emphasized that the Ministry of Economy and Finances is a technical entity whose function is to guarantee compliance with Panama's law of Social Fiscal Responsibility, and that the Martinelli administration, in it's five years of governance did comply with the limits of the law, despite the budget deficits. He made a point of saying that Sr. De la Guardia, as vice-minister in 2012, entered into that year's budget proposal, a 400 million balboa income estimate that wasn't reached, and yet they still complied with the limits of the law.  He went on to say that Sr. De la Guardia should concern himself more with generating and increasing employment, something he claims the Martinelli administration addressed and which is now showing a decline. My understanding of this issue, however, is that Panama has a very good employment rate, and in fact, has to import workers from other countries for the canal expansion and other projects due to the lack of local workers. 

There has been much criticism of the prior administration's practices regarding financial matters. One high-profile example entails the distribution and utilization of government funds in excess of an authorized 110 thousand balboas to leaders of small rural provinces. The amounts distributed to 150 of these "directivas" amounted to millions of dollars per province, and the application of these government funds toward community improvements aren't readily apparent. Sr. De la Guardia mentioned a through audit of these cases will be implemented and the outcome of that audit made public.