Envío Digital
Central American University - UCA  
  Number 162 | Enero 1995



Top Down Economic Plan Designed for Few

What’s the direction of the economic policy of the Torrijista PRD, now in power? In a document that has had an undeniable echo, Panamanian lay ministers are seriously questioning the new government’s economic plan. And they are making proposals. There follows a summary of what is contained in that document.

Cáritas Panama’s Social Pastoral National Office Team, Panama

With a banner headline befitting top level bureaucratic documents "Public Policies for Integral Development: Social Development with Economic Efficiency" the country's new economic plan was unveiled at the end of October. Planning Minister and key proponent of the plan, G. Chapman, claims to be independent of party politics, but he has always been identified as one of Panama's key neoliberal ideologues. How can the Democratic Revolutionary Party (PRD) a member of the Socialist International have named this man to direct its economic policy? We don't know all the intrigues of the current dominant group, but the powerful international financial forces the US, the World Bank and IMF, and other colleagues have most probably been pushing the neoliberal line. In principle, the idea was to discuss the economic proposal nationally but, in reality, the plan is already being implemented.

A Huge Rock and a Stoning

A stoning best describes what this plan will mean for the Panamanian people. With an increasingly desperate situation for half the country, the economic plan lays out an anti grassroots methodology of top down consultation. What happened to the PRD slogan "The people to power"? The plan doesn't even begin to talk about solving the government's structural problems, doesn't indicate how it intends to reduce poverty, doesn't say the first thing about responding to the challenges of dismantling the foreign military bases, doesn't present statistics to accompany or clearly illustrate its objectives, debt servicing continues to have priority over social problems, etc., etc.

The plan is like a huge rock heavy, hard, confusing and ambiguous which, with one blow, has disillusioned many of those who voted to bring back the party of Omar Torrijos and end the barbarities of the Endara government.

And Just Distribution?

The methodology that the government proposes to use contains a clear contradiction. On the one hand, the document underscores part of President Pérez Balladares' first speech when he declared it "possible to produce agreements aimed at democratically reconstructing the state, towards modernity and efficiency... considering the involvement and participation of all Panamanians and broad consultations with all those sectors that could be affected by the governmental measures." But, further on, it states that what is needed is "a vision of the country towards the future that emanates from above, is optimistic and comprehensive, but that society feels is possible."
It is obviously the government's obligation to prepare a development proposal, which perhaps explains the term "from above." What is not clear is how the government is promoting the "involvement and participation of all affected sectors." On a number of occasions, Planning Minister Chapman participated in debates in academic surroundings and with representatives of the industrial sector. But no governmental initiative has been made public that would create space for other productive sectors farmers, urban and rural unions, small and medium business people to express themselves and make their opinions heard. So, what type of consultation is the government talking about?
The economic plan does not recognize the real problems facing the country when it lays out economic growth as the only focal point of discussion and does not sufficiently address the problem of distribution of wealth. This is quite serious, considering that Panama occupies one of the first places on the world list of countries with poor distribution of wealth. According to the document's own statistics, "The income of the richest 20% of the population is 45 times greater than that of the poorest 20%." In a later section, it states, "Some 20% of Panamanian families do not have incomes larger enough to allow them to eat properly, while an additional 25%, although able to eat, cannot satisfy their other basic needs."
Obviously, Panama's generalized poverty is directly related to the distribution of national wealth. It is thus impossible to find the road leading to development without first resolving the structural problems of inequality.

The Disposable Poor?

A series of ambiguities in the plan indicate a lack of clarity about the objectives it intends to reach. This is a serious omission, given that the new President has already established "clarity of objectives" as an indispensable condition for the successful reconstruction in this case, economic of our country.
In one example of this ambiguity, the plan proposes the "drastic reduction of poverty and extreme poverty" among its general objectives, but does not present any concrete statistical goal. Some might feel that an 80% reduction is "drastic," while others would settle for 20%. What is the government's goal? We don't know. What criteria is it using to evaluate the results obtained if the goals are not met? That is not clear. Is this ambiguity not due to the fact that, to neoliberals, the poor are, in the end, "disposable"?
Another ambiguity in the plan revolves around its fiscal policy options. The document states that the priority will be "attending to social problems and generating savings sufficient to finance public investment" while recognizing the "importance of the foreign debt problem and the need to confront it." Up to that point, there's no real problem. But the government touches only tangentially on the problem of debt relief, a fundamental condition for any serious attempt at national development. Thus, the proposal would seem idealistic, with little possibility of success, as it does not take into account the development of relations that has taken place in recent years between the underdeveloped countries and the international financial institutions.
It is a gap in the document but, in reality, things have already been clarified. In preparing its annual budget, the government clearly its true priority: servicing the foreign debt.

And What it Doesn't Say

The most serious issue is not what the document says, but rather what is not written. There are a number of serious omissions, knowing that our country has national and historic challenges that must be met, rather than avoided.

Some of these omissions are the following:
* Not a word is said about the challenge implied in achieving national sovereignty by dismantling the foreign military bases, as well as the economic challenge this means.

* Nothing is said about the land tenure problem. If a large part of the poverty is found in the rural areas, this problem cannot be avoided.

* The serious and progressive deforestation of Panama's forests is not addressed.

* There is no discussion of how to relieve the tremendous debt burden, something that is particularly important given that much of the national budget is earmarked for this.

With All and For All

Panama's problem is structural and will not be resolved without drawing up a project in which all sectors of society are represented and take part. As a nation, Panama should have the opportunity to collectively come up with a truly national project, which includes all aspects of society and is, more than anything, viable. A reasonable and necessary criterion for preparing this project should be a broad consultation in which each sector of our society has the opportunity to express its opinion, with the certainty that this opinion will be taken into account.

Do we still have time to take this path? It is of great concern that the announced policies have already begun to be implemented in a unilateral fashion. The cooperativization of the Telecommunications Institute (INTEL) and the discussion and approval in the Legislature of the Constitutional Title regarding the Panama Canal are only two of these unilateral measures.
It is urgent that the implementation of these measures of the new economic plan be halted in order to reformulate a development strategy that includes everyone, through an authentic and participatory national debate. But this will only be effective if the government demonstrates the will to promote this kind of initiative and takes the opinions of the majority into account. This kind of working methodology seems slower, but it is the essence of authentic democracy.

It is Easier to Copy

It is easier to copy than to create. But our responsibility is to create, to invent our own history and our future. Walking down this path, we should give much importance to the use of the resources that we have. Like other countries, Panama can and should produce its own food, it should be the architect and engineer of its own housing, and the guardian and builder of its own culture. This is our challenge: to look inside ourselves and begin building a model of society that opposes selfishness and individualism expressed in growing illicit economic activities, corruption, contraband and drug trafficking.

In the model of society we hope to build, social elements and human beings should be the very heart rather than the periphery of our national project.

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