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INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS PANAMA 001842 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CEN TELLO 
 
E.O. 12958: N/A 
TAGS: ECON ETRD
SUBJECT: NATIONAL DEVELOPMENT PLAN: REALITY OR GIMMICK? 
THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED.  PLEASE HANDLE 
ACCORDINGLY. 
 
REF: PANAMA 1782 
 
¶1. (U) SUMMARY.  Hoping to boost the odds of a favorable 
outcome on the October 22 Panama Canal (Canal) expansion 
referendum, President Torrijos on August 16 announced plans 
to hold a national dialogue for establishing a national 
development plan (NDP).  Support for an NDP enjoys broad 
support across Panama's political spectrum and numerous 
political, business, labor and civic groups have made an NDP 
one of their key demands.  Although business and political 
parties have responded cautiously to the announcement, 
calling it overdue and necessary, Torrijos' announcement is 
nonetheless viewed widely as simply an attempt to garner 
support for the Canal expansion.  Almost no one expects a 
meaningful NDP to be completed within the next two months. 
End Summary. 
 
--------------------------------------------- ------ 
GOP Links Referendum to a National Development Plan 
--------------------------------------------- ------ 
 
¶2. (SBU) In a hastily organized August 16 event, Torrijos 
announced the start of a national dialogue on an NDP.  No 
details or outline of such plan were discussed.  Torrijos' 
first mention of an NDP was made on August 12 when he said he 
would hold a meeting to establish the framework for a Pact of 
National Coordination on Development.  Prior to August 12, 
Torrijos resisted efforts to engage in any NDP dialogue until 
after the October 22 referendum.  Torrijos acknowledged he 
was responding to political, business and labor leaders' call 
for an NDP in connection with any Canal expansion.  Torrijos 
asked the United Nations' Development Programme (UNDP) to 
organize the national dialogue, something he now referred to 
as a matter of state.  UNDP representative Jose Eguren said 
on August 21 that he would begin consulting with various 
civic leaders to begin formulating the process for the 
national dialogue.  On August 31, Eguren told Emboffs that he 
believes Torrijos genuinely wants to pursue the NDP.  Eguren 
did not believe the GoP would risk harming its relationship 
with the UN by enlisting UNDP's participation in a token 
process aimed solely at achieving a political win.  Torrijos 
also named Enrique Iglesias, former Inter-American 
Development Bank President, to supervise the national 
dialogue. 
 
--------------------------------- 
Mixed Reaction to NDP Announcement 
--------------------------------- 
 
¶3. (U) An NDP has been a central demand of certain political 
parties and business groups.  Juan Carlos Varela, President 
of Partido Panamenista, the country's second largest 
political party, told Ambassador on August 29 that voter 
approval of the expansion would be difficult without the GoP 
concurrently outlining an NDP, that it would be impossible to 
conclude such a plan by October 22, and that therefore it 
would be best to postpone the referendum for two to four 
months.  Varela said people in the interior are inclined to 
vote "no" because they were concerned with decentralization, 
security, education and inflation.  Varela told Ambassador 
that Torrijos could demonstrate that he was a "statesman" and 
lift the canal debate above political partisanship if he 
advanced a serious NDP and postponed the referendum to allow 
for a full discussion of an NDP. 
 
¶4. (U) Members of the Panamanian Business Executives 
Association (APEDE) told EconOff that they regret having 
given their unconditional support to the expansion.  They 
asserted that they had not received anything in return. 
Members told EconOff that they should have withheld their 
support in exchange for a GoP commitment to develop an NDP. 
APEDE was one of the early supporters of the expansion, 
hosting a nationally televised town hall meeting featuring 
the Panama Canal Authority's (ACP) Administrator and various 
members of its senior management.  After the Torrijos 
announcement, APEDE's ex-President Enrique de Obarrio said 
that the important thing was to have a thorough debate on 
development and ensure mechanisms were in place to monitor 
the expansion project. 
 
¶5. (U) The Colon Free Zone Users' Association, while an 
expansion supporter, also sought an NDP.  At an August 8 
event in Colon attended by Torrijos, Users' Association 
President Severo Souza said the association supported the 
expansion not because it was needed, but because it would 
increase economic activity and the increased revenues 
received by the GoP could go towards social and economic 
development plans. 
 
 
¶6. (U) Although National Liberal Republican Movement 
(MOLIRENA) President Gisela Chung said the national dialogue 
was long overdue, her party nonetheless announced its 
opposition to the expansion on August 27.  Neftali Jaen, 
representative of the expansion opposition group Grupo 
Independiente por el No, said the group was open to 
supporting the expansion after Torrijos' announcement but 
cautioned that the ideal would be to delay the referendum 
until the NDP national dialogue was concluded.  Ricardo 
Martinelli, Partido Cambio Democractico's President, said the 
NDP should be included in the constitution.  Radical 
political movement, the National Front for the Defense of 
Economic and Social Rights (FRENADESO), claimed the Torrijos 
announcement was politically motivated and refused to 
participate in any NDP discussions. 
 
--------------------------------------------- ------------- 
Canal Expansion Advocates Fail to Connect on Social Issues 
--------------------------------------------- ------------- 
 
¶7. (U) Illustrative of the linkage between the expansion and 
the concern over the state of the country's infrastructure 
was a forum held by the Smithsonian Tropical Research 
Institute (STRI) discussing the environmental impact of the 
expansion.  STRI scientist Stanley Heckadon acknowledged the 
expansion would have some minimal environmental impact, but 
maintained that it was environmentally viable.  However, 
during the question and answer session, almost every question 
focused on problems with Panama's water and sewage system. 
Many questioned why so many areas have no potable water or 
adequate sewage systems.  At the end of the event, two 
individuals who claimed to have been undecided said they were 
now against the expansion because the country needs first to 
address the issues of water management and urbanization. 
This scene has been repeated in numerous events attended by 
EconOff in recent weeks.  ACP officials have been bombarded 
with questions regarding social spending, education, 
unemployment and poverty.  ACP members usually attend these 
events without officials from other GoP ministries and are 
left to respond to many questions that are outside the ACP's 
competence. 
 
--------------------------------------------- ----- 
Comment: NDP Efforts Unlikely to Win Over Skeptics 
--------------------------------------------- ----- 
 
¶8. (SBU) Torrijos announced the NDP effort when the GoP was 
especially nervous about the referendum.  The GoP appears to 
be seeking support in any way possible.  The public's desire 
for an NDP is founded both on the lack of faith in the GoP to 
use Canal revenue's for the general good and a fear the GoP 
will use Canal revenues to bolster the ruling Democratic 
Revolutionary Party's dominance.  Both supporters and 
opponents of the expansion want the NDP to specifically 
designate to which programs Canal revenues will be allocated 
in order to mitigate the GoP's ability to misappropriate 
funds.  With only about a month before the referendum, a 
meaningful NDP cannot be completed in time.  To date, there 
has not even been an agreement as to a timetable or outline 
for the NDP national dialogue.  Even Torrijos has 
acknowledged that an NDP cannot be finalized before the 
October 22 referendum.  At best, we may see some agreement on 
the allocations of Canal revenues to certain social and/or 
infrastructure programs.  While Torrijos himself remains 
popular and the most recent poll suggests the "yes" vote has 
gained momentum (REFTEL), the principal objections to the 
expansion revolve around lack of faith in the GoP, the 
inability of the GoP to use Canal revenues to improve 
infrastructure and address social ills, and a deeply-rooted 
mistrust of the government. 
ARREAGA