Panama president’s wife sets sights on power

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Nearing the end of a presidency that saw his country become one of the world’s fastest growing economies, but which was also marked by allegations of corruption and the erosion of judicial independence, Panama’s Ricardo Martinelli is not about to bow out.

The supermarket tycoon is barred from running for a second term in Sunday’s presidential elections but his conservative Democratic Change party has made his wife, Marta Linares, vice-presidential contender in an attempt to promote the candidacy of his chosen successor, José Domingo Arias.

The polls are tight, but show Mr Arias ahead of Juan Carlos Navarro, a centre-left former mayor of Panama City, and Juan Carlos Varela, the centre-right vice-president who broke with Mr Martinelli three years ago and is now mired in a money-laundering scandal.

The rise to prominence of former first ladies has become common in Latin American politics. Argentina’s Cristina Fernández succeeded her husband Néstor Kirchner; in Nicaragua, Rosario Murillo is the public face of the administration of her husband, Daniel Ortega; former first lady Margarita Cedeño, was elected vice-president of the Dominican Republic; while in Peru many believe Ollanta Humala’s wife, Nadine Heredia, actually governs the country.

Yet in Panama, the candidacy of Ms Linares, who has no political experience, is seen by many as a naked attempt by her billionaire husband to maintain his grip on power. “This is unconstitutional. Arias is a figurehead, so Martinelli is essentially re-electing himself through his wife,” says Miguel Antonio Bernal, a professor of constitutional law at the University of Panama.

While Panama’s constitution bans a president’s blood relatives from seeking the country’s two top jobs, some lawyers say spouses are a grey area. Critics have appealed to the Supreme Court to ban Ms Linares from office, although Ernesto Cedeño, a Panamanian lawyer, says there is no impediment to her candidacy.

Mr Martinelli boasts that he has accomplished more than previous presidents and, with an approval rating of 60 per cent, many Panamanians appear to believe him.

A $15bn public investment programme, equivalent to a third of Panama’s economy, has seen the building of roads, bridges and Central America’s first metro, as well as the separate $5bn expansion of the Panama Canal, a work begun by his predecessor.

A real estate boom has, meanwhile, left Panama’s capital looking like a Dubai of the tropics, with gleaming skyscrapers, banks and the regional headquarters of multinationals, such as Procter & Gamble and Maersk.

The infrastructure programme has helped expand economic growth to an average 8 per cent a year. Frank de Lima, finance minister, says that even if public debt rose from $10bn to $18bn, by next year Panama’s economy would have doubled in size since the start of the administration.

He also estimates that revenues from the enlarged canal – where work had ground to a halt in a dispute over cost overruns, but has started up again – will climb from $1bn to $4bn a year by 2025.

“This is a government in which, in its majority, the president and his ministers come from the private sector. They have a more proactive mentality, that things have to get done now,” says Mr de Lima, who sees Panama’s future as a logistics and financial services hub, much like Singapore.

Unlike Singapore, however, analysts say that in the 25 years since a US military intervention toppled dictator Manuel Noriega, Panama’s institutions have remained weak and prone to corruption.

Felipe Chapman, a former chief executive of Panama’s stock exchange, says: “In this government, the expansionist process of public spending has only been aimed at lifting the president’s approval ratings.”

Isabel Saint Malo de Alvarado, Mr Varela’s vice-presidential candidate and a former UN Development Programme representative, believes that during Mr Martinelli’s administration there has been a “deterioration of the rule of law, which could negatively affect private investments [and] hence hinder future growth”.

Mr Martinelli has called accusations that he took kickbacks in exchange for government contracts “a soap opera” and no formal charges have been filed against him.

Nonetheless, in Transparency International’s annual corruption ranking, Panama has fallen from 83rd in 2012 to 102nd in 2013, while the World Economic Forum puts Panama’s judicial independence in 118th place, out of 148 countries.

“Thanks to Martinelli, we are in the process of returning to our lost status as a banana republic,” says Ramón Ricardo Arias, a lawyer who heads Transparency International’s chapter in Panama.

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