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C O N F I D E N T I A L PANAMA 000153 
 
SIPDIS 
 
C O R R E C T E D COPY - PARA. NO. CHANGE 
E.O. 12958: DECL: 02/11/2019 
TAGS: ECON PGOV PM PREL
SUBJECT: PANAMA: NEW THINK TANK AIMING HIGH 
 
Classified By: Classified by: Ambassador Barbara J. Stephenson for reas 
ons 1.4(b) and (d). 
 
------- 
SUMMARY 
------- 
 
¶1. (C) Panama's newest think tank, the Foundation for the 
Economic and Social Development of Panama (FUDESPA) on 
January 15 presented its brain-child, a document entitled 
"Public Policy Proposals: Popular Elections, May 2009" that 
is designed to influence the government plans of candidates 
running for office in the May 3 elections.  The proposal 
offers diagnoses, recommendations, and cautionary 
pronouncements on what FUDESPA's experts judge to be Panama's 
five most critical policy themes: 1) the education system, 2) 
security, 3) mass public transit, 4) energy, and 5) human 
development.  FUDESPA Executive Director Jose Chen Barria 
separately told POLOFF that FUDESPA had not formally met with 
the candidates' advisers.  He added that he had little hope 
that leading presidential candidate Ricardo Martinelli would 
pay serious attention to the proposal.  FUDESPA is a 
well-meaning and well-connected organization, but policy 
dialogue has gotten short shrift in a campaign fundamentally 
about personality.  It is unlikely that FUDESPA's ideas will 
hold serious sway in the three-month slugfest before the 
election.  However, if it can overcome its growing pains and 
strengthen its overall capacity, FUDESPA has potential to be 
a solid catalyst for U.S. programs and priorities.  End 
summary. 
 
------------ 
A GOOD START 
------------ 
 
¶2. (C) FUDESPA was founded at the end of 2007 with $50,000 
contributions from 12 to 15 individual high-roller donors 
from the business sector, including Martinelli and former 
Panamenista presidential primary candidate and banker Alberto 
Vallarino.  Other key donors included Transparency 
International Panama Chapter president Roberto "Bobby" 
Eisenmann, real estate developer Herman Bern, and businessman 
Felipe Rodriguez.  In April 2008, it held its introductory 
event, featuring speakers from other think tanks in the 
region (and USAID) that discussed how best to contribute to 
formulating public policy and building democratic 
institutions in their respective countries. 
 
¶3. (C) FUDESPA's real coming-out party was a January 15 
breakfast, attended by ECONCOUNS, to present to the 
Panamanian political class and business elite its findings 
on:  1) the challenges facing the GOP, 2) recommendations for 
corrective public policies, and 3) the costs of inaction. 
The event counted among its attendees many political class 
and business luminaries, including Revolutionary Democratic 
Party (PRD) vice-presidential candidate Juan Carlos Navarro 
and then-Panamenista Party Presidential candidate Juan Carlos 
Varela (and current running mate to Ricardo Martinelli under 
his grand opposition "Alliance for Change" banner). 
Conspicuously absent were the two leading presidential 
candidates: Martinelli and the PRD's Balbina Herrera.  In a 
long-winded and ponderous main event, FUDESPA's leadership 
revealed what they found to be Panama's five most crucial 
policy themes: 1) the national education system, 2) public 
and citizen security, 3) mass public transit, 4) energy 
policy, and 5) human development and equity.  Polling has 
regularly identified them as voters' top concerns. 
Coordinators from working groups set up to discuss each theme 
presented their findings and recommendations, that were 
collected in FUDESPA's 311-page document entitled "Public 
Policy Proposals: Popular Elections, May 2009." 
 
--------------------------------------------- ------- 
PUBLIC POLICY PROPOSALS: FIVE BOILED-DOWN PRIORITIES 
--------------------------------------------- ------- 
 
¶4. (C) In January 2008, FUDESPA convened groups of experts 
from the spectrum of Panamanian politics, civil society, and 
the business world to decide on the top challenges facing the 
Panamanian state.  FUDESPA's Board of Directors boiled their 
list down to the five most pressing and established a working 
group and coordinator for each.  The groups were tasked with 
devising corrective public policy proposals, with the goal of 
having candidates for political office work the proposals 
into their own government plans.  The following are brief 
summaries of the five sections that comprise "Public Policy 
Proposals." 
 
¶A. National Education System (12-member working group) 
--------------------------------------------- --------- 
 
"Education is a key step toward overcoming inequality and 
poverty," FUDESPA asserted.  FUDESPA was established "to 
offer tools to help take firm steps toward closing the gap 
between 'the Panama that we have' and 'the Panama that we 
want,' and believes that education warrants special 
consideration."  FUDESPA's main objective is to expand access 
to education and improve quality standards of education 
through a variety of public policies and actions, including: 
 
-- integral retention and reinsertion policies targeting 
vulnerable populations 
-- the implementation of obligatory basic education and free 
education laws 
-- bilingual education programs where applicable 
-- update and strengthen national evaluation capacity and 
standards 
-- provide more medical, mental health, and nutrition 
resources 
-- stricter minimal training standards for new teachers, 
including a "New Educator Profile" 
-- decentralization of the national system 
-- renovation of school buildings. 
 
The education section has by-far the most specific action 
recommendations, that target 1) access and coverage, 2) 
learning objectives, 3) standards and evaluation, and 4) 
student support (i.e. teacher training, school 
infrastructure).  Despite recent advances, FUDESPA reports 
that many children lack access to education, and that between 
30 and 40% of classrooms are in average or poor condition. 
Long-term financial investment in education should be 
accompanied by integral changes to significantly transform 
the education system. 
 
¶B. Public and Citizen Security (eight-member working group) 
--------------------------------------------- -------------- 
 
"There is a general perception that Panama is becoming 
saturated with delinquency; the question is whether this is 
increasingly becoming a reality," begins the security 
section.  The security working group was tasked with 
exploring four thematic areas: 1) policies for a security 
administration system, 2) national security, 3) prevention 
and social justice, and 4) public security and policing 
groups.  Key recommendations were to: 
 
-- create a "Security Administration System," comprised of 
three new bureaucratic security offices 
-- elevate the current Vice Ministry of Public Security to a 
cabinet-level office that would then coordinate the public 
forces, including the Panamanian National Police 
-- create a permanent commission in the National Assembly to 
discuss security issues 
-- help crime prevention by encouraging civic groups to 
"strengthen values." 
 
Panama is far safer than many of its regional neighbors, but 
is experiencing a troubling up tick in crime; FUDESPA argues 
that rising crime rates jeopardize investment and put at risk 
the benefits of Panama's recent economic success.  Many of 
the policy recommendations represent efforts to 
institutionalize security oversight and place security 
concerns more squarely on the government's radar.  (Comment: 
POLOFF met separately with security working group member 
Jaime Abad, who was dismissive of the effort.  Abad 
complained that the group lacked expertise and wasted an 
inordinate amount of time on esoteric points without arriving 
at useful guidance.) 
 
¶C. Mass Public Transportation (three-member working group) 
--------------------------------------------- ------------- 
 
About 46% of Panama's total population lives in the capital, 
which suffers inadequate, unsafe, and inefficient public 
transportation that contributes to daily snarled traffic, 
long commute times, and loss of productivity.  FUDESPA's key 
recommendations in its extensive public transportation 
section are to: 
 
-- develop an Integrated Mass Transit System in the capital 
-- constructing dedicated lanes for buses, and devising a 
pre-paid integrated fare system 
-- purchase 400 new buses and vet and reinsert current bus 
drivers into the new system 
-- add 180 traffic lights 
-- improve pedestrian infrastructure 
 
FUDESPA assesses that excessive time in transit amounts to 
productivity losses of $560 million per year, and that a 
reduction from an average of 1.5 hours to 30 minutes would 
reduce this loss to $371 million.  The book also provides 
extensive documentation of previous studies on transportation 
problems and fixes.  (Comment: Renovation of the capital's 
transportation grid is a much-debated topic, and efforts to 
fix it will probably be a high-profile, early priority for 
the next administration.) 
 
¶D. Energy Policy (five-member working group) 
-------------------------------------------- 
 
FUDESPA assesses that Panama relies on hydrocarbons for about 
45% of its electricity production, and that this is 
unacceptable, given the country's potential for more 
hydro-electric generation.  FUDESPA recognizes that long-term 
policies for sustainable energy-generation are a national 
security concern, and policy objectives include ensuring the 
wide availability of electricity at lower prices through 
increased use of renewable energy sources, and reducing 
energy consumption in general.  Key recommendations include: 
 
-- creating more hydro-electric and other renewable energy 
production facilities 
-- promotion of laws restricting importation of older, less 
fuel-efficient cars 
-- short- and long-term steps toward a more efficient 
transportation grid 
 
¶E. Human Development (seven-member working group) 
--------------------------------------------- ---- 
 
FUDESPA defines human development as "the process of 
expanding people's capacities, and widening the range of 
things that people can do.  Poverty, in contrast, is the 
privation of people's fundamental capacity to achieve a 
dignified and decent life."  The bulk of the Human 
Development and Equity section includes reprints of a 
consulting group's study and a 2008 Economic Commission for 
Latin America and the Caribbean (ECLAC) "Social Panorama" 
report.  The objectives described by the working group 
include "achieving greater equity in capacity and opportunity 
for the poor and those in social risk," and to "generate 
social mobility by constructing more cohesive social 
institutions that transcend governments."  The key 
recommendations are to: 
 
-- require commitments and political will from the candidates 
-- strengthen the Ministry of Social Development as the 
promoter of social policy 
-- strengthen the social element of representational 
democracy; "the development of the country is everyone's 
responsibility" 
-- restructure state efforts; the global financial crisis 
requires a re-assessment of the use of state resources. 
 
The risks of non-action include the perpetuation of 
clientelist practices (the lack of a professional civil 
service results in "cleaning house" every election year and 
limits the possibility for building long-term strategies), 
and losing out on the development opportunities presented by 
recent economic growth. 
 
------------------------- 
PANAMA'S FIRST THINK TANK 
------------------------- 
 
¶5. (C) "In Panama there are no think-tanks - by that I mean 
there are no organizations that are truly insulated from 
political or business interests and are dedicated to 
improving the country - and we will be the first one," 
FUDESPA's Executive Director Jose Chen Barria told POLOFF on 
February 9.  Many civil society organizations work on one 
specific topic or toward a political goal, he said, "but our 
strength is that we have participants from across the 
political spectrum and not from just one ideological 
viewpoint."  Chen Barria expressed pride that FUDESPA was 
supported by individuals and not by interest groups or 
unions; in his view this provides the organization insulation 
from partisan interests.  When asked about FUDESPA's 
sustainability, Chen Barria referred again to the individual 
donors and said he was not worried; "Our donors are big-shots 
who have the freedom to do what they want and are not tied to 
specific parties, interests, or governments." 
 
¶6. (C) Chen Barria revealed that FUDESPA had not had formal 
meetings to date with either of the presidential campaigns, 
and that his next step would be to approach all of the 
incoming legislators shortly after the May elections to 
present to them the proposal book.  "They'll get elected and 
then say 'well now what do I do?'  That's when we'll turn up 
with this book that shows them what they should do."  Chen 
Barria asserted that, were he to win the election, Martinelli 
would "have a majority in the Assembly one way or another, 
either by votes or with money - I'm sure of this.  If the 
Alliance doesn't win enough seats and he needs to pay to have 
PRD deputies on his side, he'll do it." 
 
------------------------------------------ 
TIES TO MARTINELLI'S "ALLIANCE FOR CHANGE" 
------------------------------------------ 
 
¶7. (C) Echoing a concern among business leaders, Chen Barria 
leaned in and told POLOFF, "Listen, Martinelli might be 
crazy, but we have no idea what Balbina would do as 
president.  We don't want an Evo Morales, a president 
beholden to Chavez, in Panama."  Chen Barria acknowledged 
Martinelli's role in founding FUDESPA; "Martinelli gave us 
the money and said that our proposal will be his governing 
platform," implying that Martinelli did not want to be 
bothered with coming up with a plan on his own.  (Comment: 
Martinelli released his government plan on February 11; a 
review of its content will follow.)  Asked if Martinelli 
would govern with FUDESPA's guidance, Chen Barria responded, 
"Ricardito is a friend of mine, and he's not a man concerned 
with details.  He's a big-decision guy, 'just give me an 
executive summary' he'd say, and he will make a decision." 
 
------- 
COMMENT 
------- 
 
¶8. (C) Broad consensus among Panamanians over the need to 
address the five policy priorities identified in FUDESPA's 
proposal already exists.  Panama has a fair share of 
established policy-prescriptive NGO's, such as the National 
Council of Private Enterprise (CONEP), the Panamanian 
Association of Business Executives (APEDE), and the 
Panamanian chapter of Transparency International, that cover 
a variety of issues.  But each tends to focus on a few 
specific topics rather than taking a broad, integrated 
approach to public policy.  The Agreements of the National 
Dialogue (Concertacion) is a 2007 document written by a group 
of government officials and leaders of civil society, 
religious, and business groups advocating proposals to 
overcome social and territorial inequities.  The Concertacion 
is widely referenced as a solid gameplan for long-term social 
development and is an important antecedent to FUDESPA. 
FUDESPA's value-added is not so much its identification of 
problems or specific proposals to resolve them, but rather 
its aspiration to fill Panama's "think tank gap."  Though 
presently the campaign is devoid of a substantive policy 
debate, FUDESPA's work could prove useful in the 
post-election period, should the ideas and proposals for 
which FUDESPA advocates gain traction.  Seen in this light, 
its plan to target all the incoming deputies with its 
playbook seems like a good first step.  The support of 
Panama's new president will be essential in Panama's highly 
centralized presidentialist system if FUDESPA's proposals are 
to take root.  Chen Barria's assertion that FUDESPA is a 
group with no political interests is less-than convincing; 
FUDESPA's business-oriented founders clearly favor 
Martinelli.  Chen Barria was not shy to point out, in part 
because of her "unpredictability," the business elite's fear 
of an Herrera presidency.  Though fears that Herrera would be 
a "Panamanian Evo Morales" are overblown, local business 
leaders generally believe that Herrera would squander the 
economic progress that the country has made in recent years. 
FUDESPA's proposals are neither overtly partisan nor 
particularly ideological, a reflection of the political 
reality that broad consensus exists not only on what Panama's 
most pressing challenges are, but also on solutions to those 
challenges.  What is missing, however, is government capacity 
to fix big problems like education and transportation.  Since 
Martinelli is among FUDESPA's financial backers, it stands to 
reason that FUDESPA would have Martinelli's ear if he wins 
the presidency.  The birth of FUDESPA represents a step in 
the right direction in the maturity of Panamanian civil 
society.  As Chen Barria pointed out, Panama has a dearth of 
think tanks and "political thinkers," and FUDESPA has the 
potential to serve as a catalyst for the type discussion of 
salient issues that we would like to see bloom. 
 
STEPHENSON