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08PANAMA103 31 January 2008 Confidencial Embassy Panama

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DE RUEHZP #0103/01 0312214
R 312214Z JAN 08

C O N F I D E N T I A L PANAMA 000103



E.O. 12958: DECL: 01/31/2018

Classified By: POLCOUNS Brian R. Naranjo. Reason: 1.4(d)


1. (C) Asserting that Panama need "reinvention," Panamenista
presidential nomination contender Marco Ameglio said he would
call for a constitutional assembly (constituyente) during the
first 18 months of his presidency to "redefine the republic."
"Today, I am issuing a 20-month plan, not a 60-month plan
(the length of Panama’s presidential term), for how I will
govern when I am elected," Ameglio declared on January 23.
Speaking to the Panamenista Party’s traditional rural and
working class base, Ameglio’s speech was considerably more
populist than recent addresses made by fellow contenders
Alberto Vallarino and Juan Carlos Varela His call for a
constituyente was the last of series of proposals that
included: the elimination of the CAIR, essentially an
alternative minimum tax (AMT); the reduction in the cost of
electricity by re-negotiating concessions; opening a public
bid process to reform Panama City’s public transportation
system; and increasing investments in law enforcement to
combat crime. While non-traditional leftist Panamanian
groups, inspired by Chavez, make a constituyente a central
element of their proposals, the center-right Panamenista
Movement for Action (MAPA) and the respected president of
Panama City tabloid "El Siglo," Ebrahim Asvat, have given the
constituyente greater respectability. While he remains a
long-shot candidate to secure the Panamenista Party’s
presidential nomination, Ameglio is the first mainstream
candidate to call for a constituyente, thus moving this
proposal into the "legitimate" political debate. It remains
to be seen, however, how much resonance his constituyente
proposal will have. End summary.

"Charging Ahead (Voy de Frente)!"

2. (SBU) Adopting the mantra "Charging ahead (Voy de
frente)!," Panamenista presidential nomination candidate
Marco Ameglio laid out on January 23 a plan for governing
should he be elected President. Noting that Panama needed a
president who "will confirm and demonstrate his ability and
sincere determination to change the country, not waiting for
sixty long months of government during which that
administration dilutes itself with lies and excuses and
passing the blame to others," Ameglio said, "What I propose
is very different. I present to you a proposal that will be
executed and fulfilled in one third of that time, in twenty
months." Ameglio then reviewed a series of proposals in the
following areas:

— Gasoline and fuels: Ameglio called for cutting in half
the tax on fuel, including gasoline. The impact of this tax
cut would be financed with the "excellent" tax income
generated by Panama’s economic growth and by a "fiscal
reform" that would "guarantee" better distribution of the
GOP’s tax income. Additionally, he said he would name a
presidential advisor during his first 90 days to develop
plans for alternative fuels, develop of new energy resources,
and develop a national plan for efficiency and energy savings.

— Electricity: In the face of rising electricity costs and
the growing threat of electricity shortages, Ameglio proposed
reviewing and renegotiating concession contracts with
electricity distributors and generators in the first six
months in office. Ameglio asserted that the "state" would
act as the consumers’ representative. Furthermore, he
proposed that the GOP re-purchase Fortuna, Panama’s largest
hydroelectric generator, to "reduce directly and in favor of
the consumers" the price of electricity.

— Public Transportation: Also within the first six months
in office, Ameglio said he would hold an international
bidding process to implement a modern transportation system
for Panama City. Such a system would be "based on the
efficient use of electricity" and would cover the entire
metropolitan areas. Panama’s hydroelectric resources would
power this electric public transportation system, "ensuring
that transportation prices were kept low and that Panama
would not depend on the high cost of imported fuel."

— Job Creation for Youth and Senior Citizens: During his
first month as president, Ameglio said he would propose a

"First Job" bill to support youth between the ages of 18 and
25 who had not previously worked. Under this legislation,
private companies would be provided "attractive incentives"
to hire new entrants into the job market. Also, he said he
would create a Retired Executive Program through which senior
citizens could earn additional income by providing advice to
companies in need.

— Public Debt: During his first 18 months in office,
Ameglio said he would go to the "financial organizations" to
propose "reordering and refinancing" of Panama’s public debt.
Ameglio said his objective was to free up financial
resources for greater investment in social services,
particularly the fight against poverty. (Comment: This,
despite the fact that the Torrijos Administration has done
well to produce the GOP’s first budget surplus in a decade to
reduce Panama’s debt-to-GDP ratio from about 70 percent in
2004 to approximately 54 percent today. End Comment.)

— Healthcare: Ameglio voiced strong support for a "unitary"
healthcare system, but provided few details. Such a system
would combine the healthcare services currently provided
separately by the Ministry of Health and the Social Security
Service (CSS).

— Education: Ameglio promised to increase, "by no less than
five percent each year," investment in education. He would
build new schools and recondition dilapidated schools.
Additionally, he would build housing for students who needed
to study far from home and install internet facilities in
every school nationwide.

— Law Enforcement: During his first year, Ameglio would
increase investment in law enforcement by five percent.
Hiring an additional thousand police officers, Ameglio said
he would also invest in training, equipment, and modern
technology. Finally, he said he would improve the salary
scale of the police.

— Tax Relief: During his first ninety days, Ameglio said he
would eliminate the CAIR, an alternative minimum tax (AMT)
that was highly unpopular with Panamanian middle class
professionals. He asserted that the CAIR had been "expensive
and unjust for small businessmen and professionals."

— Salary Adjustments: During his first sixty days, Ameglio
said he would introduce a draft general law on salaries that
would establish an annual mechanism to establish salary
adjustments so that salaries keep pace with the cost of

"Reinvent the Republic" Through a Constituyente

3. (SBU) In order to advance "true reform," Ameglio said
that he would "convoke a constituyente as provided for in
Panama’s current constitution" within his first 18 months in
office. The key objectives of this constitutional assembly
would be: "to design a political system that guarantees
greater citizen participation," to establish "a more
expeditious and truly independent judiciary;" and to create a
"legislature that is more representative, efficient, and
capable of responding to the great expectations of the
Panamanian people."

The Crowd

4. (C) Absent from Ameglio’s event were any A-list
Panamenista luminaries. Politically, this night belonged to
the B-list Panamenistas: mid-rank party bosses, former
Moscoso-era mid-level officials and a few hundred average
Panamenistas. Ethnically, in a country where darker skin
complexion remains a significant indicator of social status,
the crowd that Ameglio drew was primarily from the indigenous
and Afro-Panamanian communities and included many average,
darker skinned Panamanians of various mixed backgrounds.
Economically, Ameglio’s crowd was significantly more blue
collar and middle class than events held by Varela or
Vallarino. His programmatic offers were squarely aimed at
addressing this segment of the population’s major concerns:
economic difficulties, law and order, and greater opportunity
to share in Panama’s economic boom. It will be interesting
to see whether Ameglio’s constituyente message resonates with

this base that appears more concerned with bread and butter


5. (C) Unlike other countries in the hemisphere, Panama did
not re-write its constitution after the restoration of its
democracy following over twenty years of military
dictatorship. Limited constitutional reforms have been made
(e.g., outlawing Panama’s military), but for the most part
Panama’s constitution remains the constitution established by
dictator Omar Torrijos. While Bolivarian inspired leftists,
mostly contained on the campus of the University of Panama,
advocate for a Chavez-style constituyente, this kind of
populist proposal has not gained traction. Seeing the
political confrontation that has transpired in Venezuela,
Bolivia, and elsewhere, Panamanians who generally prefer a
more consensual style of politics prefer to steer clear of
classist clashes. Also, the anti-globalization rhetoric that
accompanies chavista-style politics is anathema for a country
that literally lives at and off of one of the world’s most
important crossroads.

6. (C) Concerned about re-balancing Panama’s
presidential-centric political system, the Panamenista
Movement for Action (MAPA), a loose gab-fab primarily
composed of upper-middle and lower-upper class dentists and
doctors with little political experience, have slowly
gravitated over the past year and a half toward embracing a
constituyente. MAPA leader Jorge Gamboa, a dentist, told
POLCOUNS January 9 that a constituyente was the "only way to
fix what is broken in Panama: the courts, the national
assembly, the lack of decentralization." Gamboa and fellow
MAPA leader Manuel Cambra, a physician, attended Ameglio’s
speech and were ecstatic at his constituyente proposal.
Aware of the explosive connotation the word constituyente had
in Latin America today, Cambra said on January 23, "We have
to do this and do it in a Panamanian way. There is no other
way to truly strengthen our institutions."

7. (SBU) Echoing MAPA’s sentiment, the president of Panama
City daily tabloid "El Siglo Ebrahim Asvat, a Harvard-trained
attorney and President Torrijos’ former advisor on strategic
goals, wrote in his weekly column on January 14, "Every day I
am more convinced that as a nation we need to travel down the
road to a constituyente. I consider it the only way that we
Panamanians have to guarantee ourselves the governmental
structure in keeping with thetimes." Continuing, Asvat
added, "This (current) centralized system of government and
of the political parties is carrying us toward a kind of
oligopoly of power where the political forces reach agreement
to distribute power and to mete out the sinecures of public
office." A constituyente would not be a cure-all, Asvat
writes, but "would enable Panama to rebuild its political
institutions." The work of a constituyente would be to
"recompose" the judiciary and the legislature as well as to
reform the civil service, determine the degree to which the
state should intervene in the economy, strengthen the
"guarantee for social rights, especially education, health,
housing, and the retirement and pension system."


8. (C) Ameglio is trailing badly in the race to win the
Panamenista presidential nomination. His presidential
aspirations are being crowded out by Juan Carlos Varela and
Alberto Vallarino, both of whom are better funded and who
enjoy significant political support from key sectors of the
party. Nonetheless, Ameglio may have an impact on the race.
His 20-month plan is a unique effort to enter into a
"contract" with his supporters. Indeed, he released signed
copies of his proposals that were published the following day
in major newspapers. The content is aimed at what the voters
tell pollsters are their most significant concerns: the
economy, law and order, education, transportation, and
healthcare. Many economists — and his competitors for the
Panamenista presidential nomination — will take aim at the
interventionist nature of his economic proposals. As for the
constituyente, post will continue to monitor this concept
that has migrated from Panama’s non-traditional left, to the
doctors and dentists of MAPA, then to the pen of a thoughtful
and mainstream commentator and now to the proposals of a

right-of-center politician.