The Tico Times / May 9, 2011
By Larry Luxner
WASHINGTON — Panamanian President Ricardo Martinelli says his nation has made enormous strides in the fight against corruption, crime and drug trafficking in the three years since his May 3, 1999, landslide election victory.
Speaking to a packed crowd last week at Washington’s Woodrow Wilson International Center the day after meeting with U.S. President Barack Obama at the White House, Martinelli said his no-nonsense “law and order” approach has yielded impressive results.
“This is the first time Panama has ever been run by a businessman,” said the 59-year-old Martinelli, a self-made millionaire and chairman of Panama’s Super 99 grocery chain. “Usually in Latin America, the politicians become businessman after they leave office, but this was the other way around.”
Martinelli was visiting the United States in order to urge the White House and Congress to push for a free-trade agreement between the two countries, which — if passed — will dramatically increase U.S.-Panamanian trade and attract foreign investment, he said.
“We don’t expect any difficulty at all getting it approved. I believe it will go through in the next 60 to 90 days. It’s a no-brainer. I don’t see how little Panama can hurt the U.S. job market. On the contrary, it will create more jobs for the U.S. economy.”
The president boasted that his government has cracked down on price-fixing, illegal kickbacks, tax fraud and corruption within Panama’s police force — a problem that seems to have grown with the arrival of thousands of foreign workers taking advantage of Panama’s rapidly expanding economy, which grew 9% last year.
“We regularized a lot of illegal immigrants that were here,” he said. “They were using our schools, our hospitals and our roads but were paying no taxes. That was also a big source of corruption. Every time they were stopped in the streets and asked for IDs, they bribed the officers.”
Now, he said, visitors are permitted to stay in Panama for up to 180 days before having to renew their visas.
“We can proudly say that when we got into power, there was a lot of insecurity, homicide rates were going up and the police were badly motivated because they were not paid well enough. The first thing we did was increase police salaries by 25%.”
He added that “Panama is going to be the showcase of programs like facial recognition at the airport, whereby any person who goes there will be connected to databases like FBI and Interpol, and we’ll be able to tell if he’s a drug dealer or a killer.”
According to Martinelli, Great Britain seized 12 tons of cocaine last year, and the United States 28 tons. By comparison, he said, “in one year, Panama catches well over 75 tons. And every ounce of cocaine we seize means less drugs and less crime in the streets of the United States.”
The fact that Panama shares a jungle border with Colombia — the world’s largest source of cocaine — makes it Central America’s first line of defense against drug traffickers.
“We don’t need money. We have all the resources to combat trafficking,” Martinelli told his largely sympathetic audience. “We recently bought six patrol boats from Italy worth more than $200 million. We’re also buying radars and helicopters in order to engage the narco-traffickers. Close to 7% of our people have dual U.S.-Panamanian citizenship, so whatever we do in security helps reduce crime and drug trafficking in the U.S.”
Martinelli, whose five-year term of office expires in mid-2014, said Panama now ranks as the second-most competitive economy in Latin America after Chile, and is one of the few countries in the region with investment-grade bond ratings. As such, expanding Panama’s service-based economy is a top priority for his administration — and the planned $5.3 billion expansion of the Panama Canal will pump tens of billions of dollars into the country in coming decades.
“The canal represents 8% of our GDP, and this year, the Colón Free Zone will do $27 billion in business,” he explained. “And regarding the canal’s expansion, more money is being spent in the United States than in Panama, because all U.S. ports will have to increase their draught in order to accommodate the world’s largest ships. In Port Elizabeth, N.J., a bridge worth over $1 billion has to be built to accommodate post-Panamax ships. The East Coast of the U.S. will greatly appreciate the expansion because it’s very difficult to get merchandise from China, put it on a truck. It costs money and pollutes the environment instead of going through the canal.”
In short, said Martinelli, “if I pay, you pay. If I don’t pay, then you don’t pay. We got our house in order by tying the knots, closing the loopholes and telling people the hanky-panky was over, and by telling the drug traffickers there’s no more tolerance for them. We are catching them and sending them back to Colombia. Everybody’s paying taxes now. Our tax base has increased substantially.”
At the same time, a dramatic increase in tourism — two million foreign visitors are expected to visit Panama this year — has generated revenues to pay for badly needed improvements, including an expansion of Panama City’s Tocumen International Airport.
“Before, if I wanted to go to Aruba or Buenos Aires, I’d have to fly through Miami. But our local airline Copa has bought 39 planes, and Panama is now one of Latin America’s largest hubs. By 2014, well over 14 million passengers will go through that airport,” he said. “Panamanians coming into the U.S. will soon be able to put their passports through a machine in Panama and won’t have to go through Customs once they arrive into the United States.”
On top of that, he said, “you can now find any brand of hotel in Panama from A to Z. Even a Waldorf-Astoria is being built. It’s a new country and everything is being done through a vision of change — but the change has to start from within.”
Asked about potential terrorist attacks against the Panama Canal, Martinelli does not appear to be losing much sleep over that issue.
“The Panama Canal is a neutral place. This waterway serves humanity, but to tell you the truth, it’s almost impossible to say that the canal is fully protected. Look what happened on 9/11,” the president said in response to a reporter’s question. “I don’t believe the canal is on the agenda of any terrorist group. We work in close coordination with the shipping companies, but if someone puts a bomb on a ship and detonates that bomb within the locks in a kamikaze attack, nobody can do anything about it.”