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Viewing cable 09PANAMA184, PANAMA: MARTINELLI'S "GOVERNMENT PLAN FOR CHANGE"

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Reference ID Created Released Classification Origin
09PANAMA184 2009-03-06 15:38 2011-05-31 00:00 CONFIDENTIAL Embassy Panama
VZCZCXYZ0000
RR RUEHWEB

DE RUEHZP #0184/01 0651538
ZNY CCCCC ZZH
R 061538Z MAR 09
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 3078
INFO RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHDC
RHMFISS/JOINT STAFF WASHINGTON DC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHEHAAA/NSC WASHDC
C O N F I D E N T I A L PANAMA 000184 
 
SIPDIS 
 
E.O. 12958: DECL: 03/06/2019 
TAGS: ECON PGOV PM PREL
SUBJECT: PANAMA: MARTINELLI'S "GOVERNMENT PLAN FOR CHANGE" 
 
Classified By: Classified by: Ambassador Barbara J. Stephenson for reas 
ons 1.4(b) and (d). 
 
------- 
Summary 
------- 
 
1. (C) Leading presidential candidate Ricardo Martinelli of 
the Alliance for Change on February 11 released his 
"Government Plan for Change," that lays out 179 proposals 
designed to "make a better Panama reach everyone" (que un 
mejor Panama llegue a todos).  The document is flashy, 
includes big color photographs of the candidate out on the 
campaign trail engaging with everyday Panamanians, and is 
well-written and easy to follow.  The plan divides 
Martinelli's agenda into four thematic sections: 1) Social, 
2) Economic, 3) Institutional, and 4) the Environment and 
Natural Resources.  High profile policy proposals include: 
 
-- a promise to roll back last year's security reform decree 
laws, and replace them with a new "Safe Streets" 
comprehensive security program; 
-- a plan to give a $100 monthly stipend to elderly 
Panamanians who do not receive a pension; 
-- plans to build a new mass transit system in the capital, 
and 
-- a promise "to strengthen democracy and modernize the 
State," by modifying the constitution to restructure the 
judicial, legislative, and electoral systems. 
 
The long-anticipated plan, released a few weeks after chief 
rival Balbina Herrera of the ruling Democratic Revolutionary 
Party (PRD) presented hers, is designed in part to alleviate 
concerns that Martinelli lacks a governing strategy. 
Martinelli's plan touches on the spectrum of Panama's 
challenges, but gives little depth on many issues, and lacks 
specifics on the constitutional changes he wants to make. 
Like Herrera's, the plan lacks discussion of the means to 
fund its proposals.  The plan's overall "change" and outsider 
rhetoric, high-profile promises, coupled with an emphasis on 
development through economic and business policies reinforce 
Martinelli's efforts to cast himself as an unusual political 
beast: a right-wing populist.  Indeed, Martinelli is 
consciously striving to create a populist movement for 
change.  End summary. 
 
----------------------------- 
In Hard Times, a "Change" Man 
----------------------------- 
 
2. (SBU) "We know that hard times are coming and the next 
government will have to face the most serious global economic 
crisis in 80 years.  I'm not perfect, but I know how to 
generate wealth and employment; and I understand how the 
economy works, which is what we need to overcome this 
crisis," begins Martinelli's "Government Plan for Change," 
released to the public on February 11.  After a short 
introduction that highlights Martinelli's mantra of bringing 
change through "the people's" social movement, the 35-page 
tabloid newspaper-style document breaks down Martinelli's 
approach into four policy sections: 
 
-- Social, 
-- Economic, 
-- Institutional, and 
-- the Environment and Natural Resources. 
 
The plan is economics-heavy; twice as many pages are 
dedicated to economic and business proposals than any other 
section.  The layout is basic and easy to follow:  each 
section contains several sub-headings featuring from three to 
eleven specific proposals.  There are a grand total of 179 
proposals.  The conclusion highlights that economic 
conditions are ripe in Panama, and that a "good 
administrator" with public and private sector experience is 
needed to usher in "better times." 
 
---------------- 
Social Proposals 
---------------- 
 
3. (SBU) Martinelli charges that the Torrijos Administration 
has not delivered on the people's basic necessities and 
asserts, "There is no justification for why Panama, with some 
of the highest indicators of economic growth in the region, 
shows signs of deterioration in its healthcare, education, 
and security systems."  The Social Section contains the 
Alliance for Change's proposals on poverty, education, 
healthcare, and "vulnerable groups."  The proposals strive to 
"change the path of deterioration and set off on the road 
toward a society that makes possible, without discrimination, 
a dignified life for all Panamanians."  Key goals include: 
"rescuing" the country's poor by equipping them with quality, 
"first world" education, improving health standards and life 
expectancy, and preventing domestic violence and 
discrimination. 
 
4. (SBU) "Despite advances in the fight against poverty, 
great inequalities persist in Panama," and the plan seeks to 
improve upon the status of "so many Panamanians with an 
uncertain future" through several proposals, including: 
 
-- scholarships to allow children to attend school and 
receive two hot meals per day; 
-- raising minimum salary standards in the most rural areas; 
and 
-- "deepening and strengthening" the Ministry of Social 
Development's existing Opportunity Network Program. 
 
5. (SBU) According to the Plan, the education system has not 
received the attention that it deserves, and has reverted to 
a state of "mediocrity and obsolescence."  The Alliance for 
Change proposes to: 
 
-- design a new long-term education policy; 
-- increase internet access in schools, especially in rural 
areas; 
-- improve primary education by: transforming teacher 
training, encouraging English and information technology 
instruction, creating Schools of Excellence in each province; 
-- decentralize the education system, including the creation 
of local planning boards; 
-- facilitate school attendance by providing scholarships and 
building dormitories; and 
-- create a Ministry of Higher Education. 
 
6. (SBU) Martinelli's healthcare proposals include a variety 
of programs aimed at improving overall health and better 
administration, such as: 
 
-- restructuring the public hospital system; 
-- new training programs geared toward decentralization of 
services, improved merit evaluatation systems, and a Safe 
Hospitals Program to ensure operability during natural 
disasters; 
-- better planning among public health providers to improve 
efficiency; 
-- developing nutrition, anti-drug, exercise, and sex and 
reproductive health education programs; and 
-- implementing a Certification and Re-certification Law to 
ensure healthcare providers are properly trained. 
 
7. (SBU) Programs designed to reduce discrimination and 
protect the elderly fall under the "Vulnerable Groups" 
section.  Proposals include to: 
 
-- provide a $100 stipend to elderly citizens who do not 
receive a pension (Comment: The Plan does not specify a 
recipient age, but Martinelli advertisements stipulate that 
the bonus will go to those over 70); 
-- launch the Housewife Support Program, designed to 
integrate housewives into the labor market; 
-- revise national legislation to eliminate any parts 
considered exclusionary, and introduce new 
anti-discrimination standards; and 
-- establish a Ministry for Indigenous Affairs (Ministerio 
Indigena), responsible for creating a five-year plan to 
address problems facing indigenous populations. 
 
------------------ 
Economic Proposals 
------------------ 
 
8. (SBU) The plan argues, "The great majority of Panamanians 
do not perceive any benefit from the economic growth; on the 
contrary, the situation for some has noticeably worsened. 
(This stems from) politicians putting personal and partisan 
interests ahead of the interests of the country and their 
continuing lack of interest to solve the people's problems; 
(they are unable) to resolve problems because they don't 
understand how the economy works."  The economic section is 
the most extensive of the four, and includes proposals on job 
creation, re-vitalization of agriculture, tax reform, small 
and medium-sized business, infrastructure, tourism, maritime 
business activities, competitiveness, and technological 
innovation.  Policy goals include "ensuring that more money 
is at Panamanians' disposal so they can attend to their 
necessities with dignity," reducing consumer costs, and 
raising salaries.  The following are highlights from the nine 
economic subsections. 
 
9. (SBU) "Private investment is the main tool for job 
creation; however, the children of poor families or of 
parents with little education are condemned to miss out on 
the benefits of the economic growth, creating a vicious cycle 
that we should break."  Job creation policies include to: 
 
-- create three new programs aimed at youth training and 
employment (i.e. internship-type programs, youth academic 
preparation programs); 
-- establish industrial parks for specialized activities such 
as pharmaceuticals and microchip production; and 
-- strengthening "labor intensive" tourism activities. 
 
10. (SBU) "To achieve food security, we must carry out a 
State Agenda that allows the modernization of agricultural, 
forestry, and livestock activities," and Martinelli's plan 
seeks to "reclaim the land for the benefit of all, and 
especially for marginal populations in remote areas." 
Policies designed to modernize agriculture include: 
 
-- creating the National Land Institute to provide free land 
titling services; and 
-- supporting agricultural export industries through by 
creating a new office tasked with promoting products for 
exportation, and a group to negotiate competitive tariffs. 
 
11. (SBU) The plan argues that a simplified and fair taxation 
system is "of vital importance to the reactivation of the 
economy.  The Martinelli Administration is committed to the 
revision and simplification of our tax legislation in order 
to achieve equity in tax payments with greater attention to 
the contributor."  Key proposals include: 
 
-- lowering the maximum income tax rate to 20%, granting a 
$600 per child tax credit, and maintaining the tax amnesty 
policy for those making less than $10,000 per year; and 
-- a flat tax for businesses. 
 
12. (SBU) The Infrastructure section argues that Panama 
should make use of its high economic growth to solidify its 
infrastructure development, and points out the asymmetry of a 
capital city "full of luxury skyscrapers, but facing a 
population lacking decent housing; the lack of good planning 
holds back the growth of the country." Martinelli aims to 
"give a new face to the capital and the rest of the country" 
through policies to: 
 
-- assign the necessary resources to provide universal home 
access to potable water; 
-- begin an aggressive home construction program to reduce 
the "housing deficit," cited at over 150,000; 
-- build roads between cities to increase connectivity and 
tourism; 
-- expand the network of international airports; 
-- provide free wireless internet access to the whole 
country; and 
-- replace the capital's present electric, telephone, and 
cable lines with an underground system. 
 
13. (SBU) "The Grand Alliance for Change has special interest 
in strengthening the tourism industry ... in order to 
generate dividends to be reinvested in social and economic 
benefits for the population."  To do this, the plan calls for: 
 
-- countering the negative effects of the global financial 
crisis, by following the Master Plan for Sustainable 
Development of Tourism, 2007-2020; 
-- creating a Special Office for Tourism Investment to avoid 
bureaucratic delays; 
-- providing incentives for rural, medical, and eco-tourism 
development; and 
-- addressing security problems that affect tourism by 
creating a special airport security unit, strengthening the 
Tourism Police, and increasing security on airport roads. 
 
14. (SBU) According to Martinelli's plan, "maritime 
activities" represent 20% of Panama's GDP.  Goals include 
converting Panama into the region's top resource for maritime 
logistics through the provision of efficient and competitive 
services to international business though proposals to: 
 
-- update the National Maritime Strategy, and establish a 
"National Consulting Council for Maritime Affairs;" 
-- make budget provisions for a building to house all the 
Panama Maritime Authority (AMP) offices under one roof and be 
accessible to the public 24 hours a day; and 
-- improve instruction at the Maritime University and provide 
more scholarships for poor students. 
 
----------------------- 
Institutional Proposals 
----------------------- 
 
15. (SBU) This section contains proposals on public security, 
urban transportation, governability, corruption, and foreign 
policy.  The main goal of the proposals is to "fill the void 
that has impeded Panama from becoming a 'Modern State' where 
compliance with the law and judicial order prevail."  Key 
proposals are as follows. 
 
16. (SBU) The Public Security sub-heading acknowledges polls 
that reveal that insecurity is the most troublesome issue 
facing Panamanians.  Martinelli's response is a National 
Citizen Security Plan, called "Safe Streets" (Calles 
Seguros), a program designed to address the many facets of 
security, including prevention, re-socialization of 
offenders, and "the establishment of a society where law and 
order prevails."  Key security proposals include to: 
 
-- "replace the anti-democratic, militaristic Decree Laws 
with the Safe Streets plan;" 
-- modify the penal code to "fight criminal impunity," and 
provide more resources to the Public Ministry and the 
judicial system to help speed investigation and prosecution; 
-- increase police salaries, boost police presence on the 
streets, and set up more "technical vigilance equipment;" 
-- create an Internal Affairs Unit to monitor the 
professional and transparent conduct of security personnel; 
and 
-- promote a Citizen Watch Program (to be funded by seized 
money laundering and drug money). 
 
17. (SBU) "Urban transportation has become one of the most 
critical problems in Panamanian society .... and it is 
imperative to remove politics from transportation and to 
establish a fast, comfortable, and safe mass transit system." 
 Martinelli's plan calls for: 
 
-- requesting bids for construction of a mass transit system 
within the first six months of his administration; and 
-- stricter enforcement of existing traffic laws, and using 
cameras to catch violators. 
(Comment: Mass public transit in Panama City consists of a 
fleet of independently-operated old U.S. school buses, called 
"Red Devils" (Diablos Rojos), that are infamous for hazardous 
driving.  While the text of the Government Plan does not 
specify the type of mass transit system to be constructed, it 
includes "illustrative photos" of light-rail train cars. 
Martinelli has publicly advocated building a Metro.) 
 
18. (SBU) The plan defines "Governability" as the 
"juridical-political condition that ... allows the balanced 
and effective execution of government duties;" but that 
"Panama has not been able to reach this balance and the 
mistrust among the government and citizens is obvious." 
Proposals to fix this relationship are to: 
 
-- facilitate governability and "to strengthen democracy and 
modernize the State," by making "the necessary modifications" 
to the constitution in order to restructure the judicial, 
legislative, and electoral systems; 
-- change the method of selecting Supreme Court Magistrates 
to be based on an assessment of the "capabilities, 
professionalism, and moral solvency of the candidates;" and 
-- public servant training programs on human rights practices. 
 
19. (SBU) Concerning corruption, Martinelli argues, "The 
people want to know how their tax money is spent, and they 
reject the abuse of public funds...corruption weakens moral 
and ethical standards to the point that it affects all of 
society and particularly the development of new leaders." 
Anti-corruption proposals include to: 
 
-- eliminate the Social Investment Fund and remove the budget 
from the Office of the First Lady; 
-- expand the Transparency Node to include information on 
salary, expenses, and use of state property on all government 
officials, including the president; and 
-- create an Investigation Unit to assist the existing 
Anti-Corruption Secretariat. 
 
20. (SBU) The plan argues that Panama plays a lead role in 
international politics, given its enviable geographic 
position.  Panama's foreign policy is largely geared toward 
improving its trade relations and foreign investment, and 
Martinelli wants to equip Panama's diplomatic posts with the 
resources to facilitate this effort.  The plan notes, "In the 
interest of gaining more benefits from future free trade 
agreements, we will encourage measures to encourage 
incentives for foreign investment."  These policies include: 
 
-- an assessment of foreign missions to assist with 
reapportionment of diplomatic personnel; 
-- to promote measures that allow incentives for foreign 
investment; and 
-- to make the necessary efforts to join the Asia-Pacific 
Economic Cooperation (APEC). 
 
------------------------------------------- 
Environment and Natural Resources Proposals 
------------------------------------------- 
 
21. (SBU) The Environment and Natural Resources section 
includes proposals covering energy policy, urban policy, 
conservation of protected areas, and environmental policy. 
The Plan recognizes that environmental degradation must be 
addressed, and embraces "a development style that respects 
the natural and social environments, where today's generation 
can satisfy its necessities without putting at risk the 
capacity of future generations to satisfy theirs."  The Plan 
dubs this approach Sustainable Development. 
 
22. (SBU) Energy Policy proposals seek to confront the high 
cost of living by relying more on Panama's own natural 
resources for electricity-generation, including: 
 
-- by "making better use of the 49% of state involvement in 
electricity generation" to favor construction of new 
hydroelectric facilities; 
-- bring the use of renewable resources (i.e. hydro, solar, 
wind, biomass and others) to 80% of total energy generation; 
and 
-- lower energy demand by 10% through incentives to 
businesses using energy efficient technology. 
 
23. (SBU) The Urban Planning sub-section outlines proposals 
to "convert our cities into safe and pleasant places to live, 
that put the citizen first with good public transportation, 
well-maintained streets and sidewalks, and good public 
services such as sewage, water treatment and electricity," 
such as to: 
 
-- establish in all urban areas a solid-waste disposal system 
based on "pyrolysis" methods of electricity generation; 
-- promote the use of hybrids and automobiles powered by 
bio-fuels; revised emission standards; and 
-- boosting projects to clean the Bay of Panama, and 
water-cleaning projects in several cities. 
 
24. (SBU) About 34% of Panamanian land is considered 
"protected," but much of it lacks incorporation into the 
overall economy, according to Martinelli.  Proposals to 
incorporate this territory that are compatible with the 
principles of conservation include: 
 
-- better titling to end land disputes; and 
-- promote cooperation among landowners and the private 
sector in ecotourism and sustainable production projects. 
 
25. (SBU) Proposals to prevent the loss of biodiversity and 
preserve natural forests include: 
 
-- deforestation reduction efforts, such as revision of the 
Agrarian Code, government support to landowners for 
regeneration, and direct reforestation projects; and 
-- promotion of sustainable lumber usage, such as for use in 
finished products for export. 
 
26. (SBU) The final sub-section outlines "a government-led 
'Cultural Change' needed to harmonize society and its natural 
surroundings, to facilitate relations between the government, 
the private sector, civil society, and the community."  To 
reach the goal of Sustainable Development, proposals include: 
-- strengthening the National Environmental Authority (ANAM), 
the leader of government institutions covering environmental 
policy, laws, and regulation; and 
-- to create the National Sustainable Development Council, 
comprised of private sector and NGO representatives, as a 
mechanism for consultation and coordination on the 
environment. 
 
----------------- 
Where's the Wonk? 
----------------- 
 
27. (C)  The plan is a 179 point wishlist designed to show 
that Martinelli and his Alliance for Change have been 
thinking about what they want to do to improve Panama, and to 
add substance to their "change" mantra.  The Plan was 
released with much fanfare -- leaders of the five allied 
parties wearing matching shirts featuring the plan's logo 
were all on hand at the February 11 ceremony -- and an 
advertising campaign to showcase the higher-profile contents 
of the plan has followed.  A shortcoming of the plan is that 
in many cases, it lacks consideration of how the proposed 
changes would be carried out.  Especially glaring is the lack 
of specifics on proposed constitutional changes that are 
mentioned breezily as a means to re-vamp three fundamental 
systems of government.  The plan physically looks good; it is 
colorful, attractive to the eye and is easy to follow, in 
contrast to Herrera's more sterile and technical plan. 
Martinelli's plan, however, is short on social programs to 
directly benefit the poor, a strong suit of Herrera's plan. 
The page dedicated to "the fight against poverty," for 
example, contains six proposals, but is dominated by a 
photograph of Martinelli handing out a plate of rice (to 
presumably needy people).  Instead of direct 
poverty-reduction programs, Martinelli highlights his 
business-oriented approach to development, and twice the 
space is dedicated to the economic section than any other. 
 
------- 
Comment 
------- 
 
28. (C) Martinelli maintains a wide lead in the polls.  He 
has given us his policy playbook, but it is not clear on how 
he intends to go about implementing it.  The proposals are 
generally well-intentioned, but would carry more weight if 
the plan featured more explanation on sources of funding, 
implementation, and the political partnerships he intends to 
forge to see them through.  Panama lacks a professional civil 
service; a mass house-cleaning may come with the new 
president, who would then need to build up a new bureaucratic 
apparatus.  In response to this expectation, the Martinelli 
campaign took out a full-page ad in La Estrella, a leading 
national daily newspaper, refuting the "rumors that (the 
Alliance for Change) would kick out all public servants." 
The ad goes on to state that the Alliance will "change the 
PRD government mentality of sweeping aside anyone who is not 
of their party; we will govern with the best, wherever they 
come from, as long as they put the interests of the people 
first."  Nonetheless, lacking an established party base, 
Martinelli may struggle to find good help.  He has the 
support of his coalition parties on paper, but it is unclear 
how loyal these partners would be down the road with 
Martinelli at the helm. 
 
29. (C) The Martinelli plan's flash appeal and one-upmanship 
on Herrera's plan that lacked panache shows again that he is 
winning in the style category.  Substantively, Martinelli's 
plan does not break new ground.  (Even constitutional reform 
has been knocking around for years as the opposition desires 
to cleanse the existing constitution of the last remnants of 
the military dictatorship that drafted the current magna 
carta.)  The bottom line in the campaign is to convince the 
electorate that a candidate can be trusted to follow through 
on the grand promises coming from both camps.  Martinelli's 
pitch that he will follow through by way of business-oriented 
development and that a break from the status quo is necessary 
to achieve it.  Martinelli is selling himself as a 
no-nonsense outsider who can get things done by shaking up 
the system; this approach to the election, coupled with his 
background and government plan steeped in business-oriented 
social development, suggests that he is painting himself as a 
right-wing Populist.  His campaign has focused on setting 
himself apart from the traditional party system -- or the 
other side of the coin to Herrera's campaign based on 
continuity of PRD stewardship and tradition.  The real story 
of Martinelli's platform is not the substance of policy 
proposals, but rather his challenge to shake up Panama's 
political system, infuse it with a change dynamic, and 
re-cast the way Panama is governed.  These have been winning 
campaign tactics, less clear is whether Martinelli's brand of 
populism will translate into a successful governing model. 
 
STEPHENSON