Three weeks into the social uprisings: causes, consequences, and perspectives
Social uprisings began on July 4, when a group of teachers from ANADEPO (representing over twenty educational, civil, farming, transportation and student associations) and AEVE (a teachers' union), based in the provinces of Chiriquí and Veraguas in western Panama, closed the main arteries of communication for merchandise and individuals. The protesters complained of the high (and increasing) cost of gasoline at the pump, and the increasing prices for food and medicine. The country's west soon ran out of fuel coming from the eastern ports. The east suffered shortages of the food coming from the west. The whole country felt the pinch of the strike. SUNTRACS, a construction workers' union, the most powerful and organized anti-establishment group in the country (led by Saúl Méndez, a confessed Marxist) joined the cause on July 13. Then, the mobilization extended to Panama City. Public schools canceled classes.
Protesters emphasized the corruption of the government and the Legislative Assembly. This discontent with corruption (noticeable during the pandemic, but not alien to previous administrations) is the reason that 74% of individuals approved the demonstrations by mid-July. Other issues of political economy entered the discourse: skewed income distribution and the power of interest groups in shaping economic and social policy, with blame on the “neo-liberal economic model” of Panama as the root of these evils.
President Cortizo approved a subsidy on fuels and price caps on ten basic food items immediately after his return to Panama from a medical checkup on July 8. The hard-core groups considered these proposals insufficient. A dialogue was convened in the city of Penonomé, where anti-establishment protesters (the core of the group) asked for more transfers. The discussions may last for more days, or even weeks. Street blockades and disruptions in the transportation of food and fuel are easing.
In this report, we assess the possible economic and fiscal impact of the month-long crisis (still ongoing), discuss the potential winners and losers, and present our perception of the road ahead. This report is divided into four sections: (1) the background of the current crisis; (2) the economic and fiscal implications of the disturbances; (3) our evaluation of the winners and losers so far; and (4) the road ahead.
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