New President Elected in Panama: Vows to Close Migrant Trail and Revive Economy

Electing a Pro-Investment Government

On Sunday, the Republic of Panama elected a new president. The incoming leader has pledged to cut off a significant portion of the Latina American migrant trail that leads to the United States and to restore the country's standing as a desirable place for investment. "We'll promote a government that's pro-investment, and pro-private enterprise," said the newly elected president, Jose Raul Mulino, in his victory speech.

Victory for Former Security Minister

Mulino, who served as the former security minister, won the election with an estimated 34% of the vote. He was a late addition to the race, stepping in for former President Ricardo Martinelli, who was barred from running due to a conviction for money laundering and a nearly 11-year prison sentence. The conviction stemmed from Martinelli's use of public funds to purchase a media firm, which subsequently gave him majority ownership. Despite living in the Nicaraguan embassy in Panama City, where he has been granted asylum, Martinelli remained an influential voice in the campaign, advocating for Mulino. After casting his vote, Mulino paid a visit to Martinelli at the Nicaraguan compound.

Plans to Curb Illegal Migration

Mulino, whose term will start on July 1, has promised to tackle the enormous influx of illegal migration that passes through Panama on its way from South America to the United States. In 2023, over 500,000 migrants traversed Panama, with the majority being Venezuelan. Mulino, 64, campaigned on the promise of not allowing thousands of illegal migrants to pass through Panama without control. Fulfilling this promise will necessitate significant attention to the notorious Darien Gap, a 60-mile stretch of roadless swamps, mountains, and rainforest that serves as the only land connection between South and Central America.

Addressing Economic Challenges

In addition to tackling migration issues, Mulino has pledged to address the country's economic challenges, which have led to credit downgrades. The closure of a single business, the $10 billion Cobre copper mine run by First Quantum Materials, has significantly impacted Panama's economic and fiscal outlook. The mine accounted for 5% of Panama's GDP and 1.5% of the global copper supply. The Supreme Court deemed the company's contract, which it acquired through a hostile takeover, unconstitutional in December. Mulino faces the challenge of striking a new deal and getting the mine operational again to bring money into the economy and taxes into government coffers.

Restoring Canal Operations

Panama has also been economically affected by a drought that has lowered water levels in Gatun Lake, a crucial component of the Panama Canal route. The reduced water level led to restrictions that cut canal transits and total tonnage. Restoring the canal to normal operations will require finding a new water source. One proposal involves building a $900 million water reservoir, a project the US Army Corp of Engineers explored in the late 1990s. If approved, construction is expected to take five years.

Addressing Civil Unrest

In 2022, Panama experienced its largest civil unrest since the end of dictator Manuel Noriega's rule in 1989. The unrest included strikes by teachers and construction workers and fiery roadblocks by demonstrators protesting rising prices and government corruption. The situation was exacerbated when members of the ruling Democratic Revolutionary Party were photographed celebrating the start of a new legislative session with $340 bottles of Macallan whisky. Order was restored after President Cortizo ordered 10% government payroll cuts and imposed price controls. However, Mulino, the President-Elect, may not fully understand that government market interventions are not a long-term solution for prosperity and stability. One of his proposed economic solutions is to increase the country's minimum wage.

What are your thoughts on this article? Do you think the newly elected President Mulino will be able to fulfill his promises? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.