Change and Hope in Panama
(baumanblog.sovereignsociety.com) Very few presidential candidates in any nation come back from a crushing defeat with only 5.3 % of the vote, to win a landslide victory five years later by over 60%.
But, as I predicted, supermarket tycoon Ricardo Martinelli (above) did just that Sunday when he and his conservative coalition party swept to victory in Panama's presidential election, bucking a trend of radical left-wing leadership in other parts of Central and South America.
Bucking a Trend
Unlike in El Salvador recently, where the left-wing Farabundo Marti National Liberation Front (FMLN) won the presidency after 30 years of conservative party rule, or in Ecuador, where leftist Rafael Correa recently won re-election vowing to push forward with a "socialist revolution," change in Panama came in the form of a supermarket tycoon who touts himself as the free-market conservative.
Martinelli, the winning candidate of a center-right alliance led by his Democratic Change (CD) Party, is the multimillionaire owner of Panama's largest supermarket chain "Super 99" and a former government minister of Panama Canal affairs. This was his second run at the presidency. In 2004, he finished last out of four candidates with only 5.3% of the vote.
One of Panama's richest men, with interests in a major Panamanian bank, real estate, hydroelectric energy, plastics and sugar, Martinelli's wealth is estimated at hundreds of millions of dollars. The son of Italian immigrants, (he holds dual Panama/Italian citizenship), the U.S. educated business leader's fortune is self-made. He was almost financially ruined by looting of his supermarkets during the brutal 1989 U.S. military invasion of Panama ordered by President George H.W. Bush.
American Educated
Martinelli, 57, has many ties with the United States, as do many Panamanians.
He graduated from Staunton Military Academy in Virginia, holds a BA in business from the University of Arkansas and an MBA from INCAE Business School in Costa Rica. He is married to Marta Linares and they have three children: Ricardo, Luis Enrique and Carolina.
With such a large win, Martinelli hinted at a unity government in his election victory speech, something that would be unusual in Panama politics.
"Both winners and losers must work to improve the country," he said. "This is a victory for all the people of Panama, and I make a call to all our opposition -- to all the parties that opposed us -- that you all are all Panamanians. Tomorrow we have to start a new day." He said he would work for a national unity government because "that is what the country is counting on. I want to govern with the best citizens, followers and members of other parties to improve many things in Panama."
Supports a Flat Tax
The president-elect pledged to bring foreign investors into tourism projects, cruise ports and airports, and direct more government spending to public infrastructure such as a subway in Panama City, the capital. He promises fiscal discipline and a close relationship with the United States and has pledged to simplify the country's tax code with a 10 to 20% flat tax.
A coalition of conservative parties that backed Martinelli in the election won a majority of congressional seats on Sunday, which should help the new administration push through tax and spending plans.
Martinelli said finalizing a the pending free trade treaty with the U.S. is one of his major priorities.
The trade deal was signed in 2007 but has been held up in the U.S. Congress by Democrats, first because of American unions complaints about Panama's supposedly unfair labor laws. The Obama administration said in March that it would work to win Congressional approval of the deal with Panama, but has done little since, even though the U.S. is Panama's largest trading partner with 2008 bilateral trade of US$5.5 billion. .
More recently Democrats in the U.S. Congress came up with a new complaint against Panama echoing the Obama, G-20, OECD attacks on offshore tax havens. Panama is one of the world's leading tax havens, (and one the Sovereign Society recommends).
Tax Haven Issue
Martinelli's economic team disagrees with U.S. lawmakers who say Panama has failed to deal with tax evasion. Panama only taxes income earned within the country.
person identified by the press as "a member of Mr. Martinelli's team" said such worries were unfounded. "The perception that Panama is a tax haven is totally false," Frank De Lima, Mr. Martinelli's top economic adviser, told Reuters. (If Lima really believes that stupidly false statement, he should be fired forthwith for ignorance).
De Lima also said the new government will be open to sharing tax information with U.S. authorities, hardly an encouraging sign for Panama's banking and offshore professional community for which banking secrecy is a major drawing card for business. Panama is a leader in the offshore financial world, and the leading banking center in Latin Americium south of Miami. Its financial privacy laws have played a major part in its success.
Unlikely Rumor
A Panama City rumor has it that outgoing President Martin Torrejos (left) and his losing PRD majority in Congress might attempt to reach some tax information agreement with the U.S. before leaving office, but that appears highly unlikely.
A Panama news report on Wednesday stated: "There is concern in various professional associations about the possibility that the current government might yield to these pressures and complete deals that affect the financial system and international services offered by Panama."
President-elect Martinelli and the new conservative congress are due to take office on 1 July, and they are expected to defend strongly Panama’s traditional offshore financial and banking sectors.
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Original Source: baumanblog.sovereignsociety.com
Date Retrieved: May 8, 2009.
