Panama’s largest protests in decades force government to address soaring prices

Panama’s teachers returned to the classroom on Tuesday after a month-long strike that sparked the country’s largest mass demonstrations since the fall of dictator Manuel Antonio Noriega in 1989.

While protests across the country have subsided since the government of President Laurentino “Nito” Cortizo announced a series of price control measures last month, tensions remain high as civil society groups negotiate with the government over plans to address entrenched issues of inequality, corruption and the high cost of living. 

“The people are out in the streets, and they’re tired of all of these blows to their wallets,” said Luis Arturo Sánchez, secretary general of the teachers’ association in the province of Veraguas, before declaring an indefinite strike on July 4.

Construction workers, Indigenous groups and everyday Panamanians, frustrated with the soaring price of basic goods like food and gasoline, soon joined the striking teachers in demonstrations across the country. Protesters erected roadblocks at some of the country’s main thoroughfares, including the Pan-American Highway, causing enormous traffic backups and some fuel and food shortages.   

Demonstrators in Panama also expressed outrage over a viral video that showed lawmakers from the ruling Partido Revolucionario Democrático celebrating the beginning of the legislative period with $340 bottles of whiskey.

“Pour a drink and hope the people don’t notice,” they chanted. 

In an effort to quell the unrest, the government negotiated a series of price control measures with the country’s unions that froze the price of gasoline at $3.25 per gallon and aimed to reduce the cost of a basic food basket by 30 percent.

However, popular discontent runs deeper than anger over the dollarized country’s growing rate of inflation, which accelerated to 5.2 percent in June, but pales in comparison to global inflation in places like Sri Lanka and Argentina, where the high cost of living has also sparked protests in recent months. 

“In Panama, behind every technical decision, there is a political decision to favor those who earn the most,” said economist Maribel Gordon on the first day of negotiations. “The level of income tax evasion is over 64 percent, and that collection then falls on the workers.” 

While Panama is one of the richest countries in Latin America, it has one of the highest rates of inequality in the region. More than one in five Panamanians live in poverty, and unemployment in the country is at nearly 10 percent. Corruption is also rampant in Panama, which ranks 105 out of 180 countries in the Corruption Perceptions Index.

For now, the Catholic Church has been mediating negotiations between government officials and civil society groups, who’ve outlined eight priorities for reform, including measures to mitigate the high cost of goods, funding for education and government transparency.  

“We need to congratulate ourselves on having demonstrated once again that dialogue is the way to find solutions,” said José Domingo Ulloa Mendieta, the archbishop of Panama, on Wednesday. “Together, we’ve restored social peace.”

Yet even as protests have quelled, highways have reopened and teachers have returned to the classroom, analysts like Carlos Barsallo — ex-president of the Panamanian chapter of Transparency International — have expressed skepticism at the potential for transformational change. 

In an interview with EFE, Barsallo said that he expects negotiations to only “put the fire out temporarily,” and that the crisis will probably “repeat itself if the deeper problems are not resolved.”