Uncertainty persists in the stalled contract negotiations regarding the copper mine, and the US State Department might redraw the political map
The contract negotiations between the government and First Quantum, the owner of Minera Panamá, are still not progressing. The main pending disagreements are royalties and depletion deductions, the scope of the easement, the procedure by the state in the event of the administrative termination of the contract, and "upward price protections" that would forbid the state from enjoying greater contributions in the case of high copper prices or production volume. We continue to be optimistic about a settlement within the next couple of months, with the caveat that any agreement must obtain the National Assembly's approval (or rejection).
GDP data through September 2022 shows higher-than-expected growth mainly due a rebound effect. Construction (specifically public and associated with low-income housing projects), financial intermediation, and tourism (hotels and restaurants) stood out for their year-over-year growth in the third quarter of 2022. Although mining still represents about 7% of GDP, it only grew 4% in the last quarter, decreasing from the first quarter. Despite the persistence of the rebound effect, the post-pandemic recovery is still among the weakest in the region.
Secretary Antony Blinken announced the designation of former President Ricardo Martinelli for his "involvement in significant corruption", meaning the cancellation of his visa to the US. This "designation" is a consequence of the trial of Martinelli's sons in New York eighteen months ago on money-laundering transactions. Blinken's statement altered the political game in Panama. The probability of Martinelli's being in the race for 2024 is fading rapidly due to the reputational costs that would be incurred by any possible political allies and the private funding of his campaign, among other issues. If Martinelli decides not to run, the winners are those candidates who are behind him now in the polls, especially Vice President José Gabriel Carrizo (PRD, the government’s party), Rómulo Roux (Cambio Democrático), José Blandón (Panameñismo), and Ricardo Lombana (Otro Camino). However, do not count Martinelli out because his dominant strategy is to run (and win), thereby shielding himself temporarily from convictions.
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