- Panama is experiencing significant economic challenges marked by a sharp decrease in GDP growth, high inflation, and the impact of environmental factors like droughts on the Panama Canal, which are crucial to the nation’s economy. The country's credit rating was recently downgraded to junk status due to fiscal and governance issues.
- The upcoming election is mired in controversy and legal challenges, most notably the disqualification of former President Ricardo Martinelli on corruption charges. José Raúl Mulino, inheriting Martinelli's support base, is now a leading candidate, advocating for economic revitalization and controversial measures like closing the Darién Gap to stem migration into the US.
- The president will be elected by plurality vote in a single round, which could result in a leader assuming office without a strong mandate, potentially complicating governance in a polarized political environment.
As Panama approaches a pivotal presidential election on May 5, 2024, the nation finds itself at a significant crossroads marked by economic challenges, political controversies, and critical social issues. This election is set against a backdrop of intense legal and political volatility, particularly following a period of economic deceleration and severe judicial scrutiny of political figures.
Panama, historically a regional leader in GDP growth due to its strategic geographic position and the economic activity generated by the Panama Canal, is experiencing a pronounced economic downturn. The International Monetary Fund forecasts a decrease in growth to just 2.5% in 2024, down from 7.3% the previous year. This downturn is further compounded by droughts likely intensified by El Niño effects, which have strained the water supply and diminished the operational capacity of the Panama Canal.
Compounding these economic challenges are rising inflation and stagnation, contributing to widespread public discontent. The downgrade of Panama’s credit rating to junk status by Fitch in March 2024 highlights the severe fiscal and governance issues the country faces. Public and investor sentiments have been particularly inflamed by controversial decisions, such as the closure of the country's largest copper mine last year, exacerbating the nation's economic and social tensions. The incumbent president, Laurentino Cortizo, is highly unpopular with the populace holding him responsible for the country’s woes. He is however barred by constitutional limits from seeking a second consecutive term meaning political change is inevitable.
The legal and political landscape leading up to the 2024 Panama elections has been notably tumultuous, with pervasive corruption and governance failures at the forefront of the public discourse. A pivotal development was the disqualification of former President Ricardo Martinelli, whose conviction for money laundering and subsequent 11-year prison sentence underscored the entwined nature of political power and legal accountability in Panama. Martinelli remains a popular figure, despite his legal woes after presiding over formidable economic growth during his 2009-2014 tenure. His disqualification radically altered the political terrain, propelling José Raúl Mulino, his former running mate, into a leading position for the presidency under the right-wing Realizando Metas (Realizing Goals) party in February. Mulino’s main rivals are lawyer Ricardo Lombana and former president, Martin Torrijos.
As the elections neared, legal uncertainties surrounding Mulino's candidacy arose, creating a significant backdrop of tension. Just two days before the election, Panama’s Supreme Court issued a crucial ruling affirming Mulino's eligibility, despite challenges related to his candidacy's constitutionality. The Court's decision, which cited the defence of democratic values such as "the right to elect and be elected" and "political pluralism," has effectively ended the ambiguity over his campaign. This ruling is instrumental in maintaining Mulino as a central figure in the race, supported vociferously by Martinelli, who continues to exert influence from within Nicaragua’s embassy in Panama, where he has been granted political asylum.
Mulino, representing continuity with Martinelli's policies, promised to restore Panama's economic prosperity and implement stringent measures to control migration through the Darién Gap, a major issue given its role as a transit route for migrants heading to the United States. His previous roles as foreign and justice minister, along with his controversial tenure as security minister marked by a violent crackdown on indigenous workers in 2010, adds significant complexity to his candidacy. Despite these controversies, Mulino has led the polls with a substantial margin, reflecting a political environment where voters are deeply concerned about economic issues and corruption, which remain defining issues across all campaigns. This intricate weave of legal rulings, political history, and electoral dynamics set the stage for an election deeply reflective of Panama's ongoing struggles with governance and reform.
Panama's presidential election system, which determines the winner by a plurality in a single round, can lead to the election of a president with only a modest portion of the total votes. This method, devoid of a runoff, might result in a leader lacking a strong mandate, especially in a politically divided environment like Panama's. Such a scenario complicates governance, as the elected president may struggle to enact policies without broad electoral support. This can hinder effective negotiation and coalition-building with other political factions in the National Assembly, ultimately affecting the stability and predictability of governance. The system encourages multiple candidates to run, potentially fragmenting the political landscape further and complicating both pre- and post-election coalitions.
The 2024 Panamanian elections represent more than just a political contest; they are a critical juncture for the country's future direction in terms of governance, economic policy, and international relations. The new administration will inherit a nation fraught with economic challenges and deep-seated political divisions, necessitating adept governance to navigate Panama through this turbulent period. The outcome of these elections will likely resonate beyond Panama's borders, influencing Central American regional stability and international economic dynamics.