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FM AMEMBASSY PANAMA
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INFO RUEAIIA/CIA WASHDC
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RHMFISS/JOINT STAFF WASHINGTON DC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L PANAMA 000194 
 
SIPDIS 
 
E.O. 12958: DECL: 03/05/2019 
TAGS: ECON PGOV PM PREL
SUBJECT: PANAMA: TORRIJOS TRUMPETS ACHIEVEMENTS IN FINAL 
ADDRESS TO NATIONAL ASSEMBLY 
 
Classified By: Classified by: Ambassador Barbara J. Stephenson for reas 
ons 1.4(b) and (d). 
 
------- 
Summary 
------- 
 
¶1. (C) In his final address to the National Assembly before 
the end of his term, President Martin Torrijos touted his 
administration's greatest achievements, acknowledged the 
cooperation of the Assembly, and called on the next 
government to build upon these successes.  (Note: 
Constitutionally, Panama's president is required to address 
the opening of the annual session of the chamber and then 
address it again six months later into the session's term.) 
His high notes included: 
 
-- fiscal reform that "put the house in order" and generated 
investment and new jobs; 
-- the success of new social welfare programs; and 
-- the "strong blow struck against poverty and inequity" 
during the last four-and-a-half years. 
 
Torrijos's swan song was designed to remind the public of 
this Revolutionary Democratic Party (PRD) government's 
successes and to promote the continuity of his social 
programs.  Unfortunately, having neglected to address the top 
issues on voters' minds - rising crime and eroding purchasing 
power - Torrijos's speech rang hollow for much of the general 
public and is not resonating on the campaign trail.  End 
summary. 
 
----------------------------- 
Swan Song Hits the High Notes 
----------------------------- 
 
¶2. (SBU) Torrijos began his 15-minute March 1 speech before 
the National Assembly by memorializing an Assembly deputy who 
had died in an automobile accident the day before. He went on 
to thank the Assembly's "political goodwill" that allowed 
cooperation on four policy successes: 
 
-- fiscal reform "that was needed to tackle an urgent social 
deficit, and has generated savings that have given 
consistency to a social investment policy that has begun to 
show results in the fight against poverty and hopelessness;" 
Torrijos noted that the reform "allowed us to achieve during 
our administration the highest infrastructure investment in 
the history of the Republic;" 
-- preventing the collapse of the shaky Social Security Fund 
(CSS).  (Comment: The CSS was in danger of collapse following 
the 2006 poisoned cough syrup scandal when 100 Panamanians 
died.  The CSS provides healthcare services to 2.8 million 
Panamanians.); 
-- expansion of the Canal; and 
-- the "modernization of the Panamanian state through the 
creation of new institutions to adapt the country to our new 
reality." 
 
¶3. (SBU) After thanking the Assembly, Torrijos proceeded to 
sing his own praises, stressing that the last four-and-a-half 
years have "brought Panama a prosperity as it has never 
experienced before," and that, "the country was able to 
recover from the anxiety that we lived with before.  The 
country now is different; it has a course and direction." 
Torrijos is particularly proud of the Canal expansion effort, 
which was approved in a 2006 referendum, and noted that over 
$200 million in Canal revenues finances more than 3,200 
social investment projects under the Community Development 
Program (PRODEC).  Similarly, he touted the "unprecedented 
generation of public and private sector investment," that led 
to 210,000 new jobs, and a decrease in the unemployment rate 
from 12.4% in 2004 to 5.6% at the end of 2008, the lowest in 
60 years.  Torrijos also highlighted one of his banner 
programs, the Opportunities Network (Red de Oportunidades), 
created in 2005 to help fight poverty.  According to 
Torrijos, the program has helped provide some 402,000 poor 
Panamanians with services such as vaccinations for children, 
healthcare and education access, and has registered some 
20,000 children into the Civil Registry. 
 
¶4. (SBU) Torrijos prefaced his concluding remarks with a 
personalized summation of his tenure, stating that, "I 
resolved problems that other governments simply preferred to 
ignore, and I did it without divisiveness, with the benefit 
of all Panamanians in mind; we never asked anyone what party 
 
he belonged to (as a precondition) for enrollment into social 
programs."  (Comment: Both leading candidates have stated 
disapproval of such practices and partisan-oriented 
governing.  The PRD has had to defend itself against 
allegations that the government's social programs were only 
made available in some circumstances to PRD loyalists.  The 
media has published allegations that as Minister of Canal 
Affairs in the previous administration, presidential 
front-runner Ricardo Martinelli of the Alliance for Change 
was complicit with the practice of providing "empty" jobs 
(botellas) to party loyalists.) 
 
-------------------- 
Keep Up My Good Work 
-------------------- 
 
¶5. (SBU) Addressing future governments, Torrijos shared his 
concern that his social programs continue and expressed his 
fear that that they would become casualties in a bitter 
political fight.  Anticipating an ugly election season, 
Torrijos counseled, "Electoral periods are not meant to 
destroy the advancements of the country, they should serve to 
perfect them; no one should think that threats or 
intimidation are valid instruments to win an election."  He 
also made a special point to stress to "the future governing 
authorities" that to be effective, programs like the 
Opportunity Network need continuity and deepening over time. 
(Comment: The campaign platforms of both of the leading 
presidential candidates, Ricardo Martinelli and the PRD's 
Balbina Herrera, specifically mention continuity of the 
Opportunities Network program.)  Torrijos went on to say that 
he hoped, "The thousands of people (receiving such 
assistance) who today are able to dream again," as well as 
the more than 500,000 Panamanians who receive training 
through the National Vocational Training Institute for Human 
Development (INADEH) and the 183,000 youths enjoying 
Institute for the Formation and Improvement of Human 
Resources (IFARHU) scholarships, are not "frustrated in their 
aspirations." 
 
--------------- 
Unstruck Chords 
--------------- 
 
¶6. (C) The media universally declared Torrijos' speech to be 
a (premature) farewell address; Torrijos has four months 
remaining in his term.  In particular, the media noted that 
Torrijos had failed to address the issue weighing most 
heavily on Panamanian minds: rising urban crime.  Crime 
stories, particularly concerning rising drug violence, have 
grabbed local headlines as of late.  A recent eye-catching 
story reports that Colombian and Mexican drug cartels are 
increasingly duking out their squabbles in Panama, and that 
this dynamic has contributed to an up tick in nationwide 
murders, from 444 in 2007 to 593 in 2008.  Also, 
transportation was not mentioned, even though traffic 
congestion in the capital has become exponentially worse 
under Torrijos's watch and has emerged as a hot-button issue. 
 The speech also passed over education and healthcare reform, 
two other leading campaign topics. 
 
------- 
Comment 
------- 
 
¶7. (C) Today's Panama is indeed, economically at least, 
better off than the one Torrijos inherited in 2004.  The 
country has maintained an average of 8% growth over the last 
four years, and widely-cited UN figures indicate that poverty 
dropped from 37% in 2001 to 29% in 2007.  Torrijos is 
rightfully proud of this legacy, and it stands to reason that 
he wants to see continuity in these successes (especially 
since is it widely believed that he will make another run at 
the presidency in 2019 when he is next eligible).  It also 
plays into Herrera's campaign strategy stressing continuity 
of PRD policies.  But the conspicuous problems of rising 
crime and a stifling transportation situation in the capital, 
along with sagging government approval ratings are putting a 
damper on Torrijos grand finale.  Torrijos's solid personal 
approval ratings hover around 50%, but overall "national 
government" approval ratings in January checked in at 41%. 
By taking a pass on crime discussion, Torrijos is probably 
trying to keep one of the blemishes of his administration 
under the radar.  But a fundamental problem for the PRD is 
that the continuity talk is not resonating.  Despite 
Torrijos's successes, the PRD may need to change its tune to 
 
reinvigorate Herrera's flagging campaign if it is to gain the 
ground it has lost to Martinelli's "change" bandwagon. 
STEPHENSON