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Panama: Election rebuff for Martinelli a rum business


Main image: the product range of Varela Hermanos, the rum distillers owned by the Varela family

The May 2014 general election frustrated the efforts of their outgoing president, Ricardo Martinelli, to maintain political control of Panama. They hit him where it hurts most, in a surprising move, by voting for his worst enemy – the current vice-president Juan Carlos Varela.

Against the odds and running third in the polls, centre-right politican Varela, 51, was elected with 39 percent of votes compared with 31 percent for José Domingo Arias, Martinelli’s sponsored candidate. Some 27 percent of voters opted for centre-left politician Juan Carlos Navarro, a former mayor of Panama City between 1999 and 2009.

‘Today Panama won, today democracy won,’ Mr Varela said in his victory speech. As has been the case since 1989, when Manuel Antonio Noriega was ousted in the U.S. invasion, Panama’s citizens have chosen once more to turn against the ruling-party candidate.

Panama’s thriving economic climate boasts an average GDP growth of more than eight percent in the last five years, combined with an unemployment rate that fell to a forty-year low in 2013. President Martinelli also invested over $15 billion in developing infrastructure during his term in office. However, these successes have not been sufficient to continue Mr Martinelli’s control of power.

As the Constitution of Panama does not permit two consecutive presidential terms, the conservative politician made every effort to ensure the triumph of his chosen candidate, along with his wife Marta Linares de Martinelli, who ran for the vice-presidency with Arias.

These actions were seen by political opponents, and arguably by many Panamanians, as a veiled attempt at re-election. The people of Panama instead chose Varela to take the reins, despite Martinelli’s heavy investment of over $15,000 million in developing infrastructure to improving the life of many citizens.

Once allies, now enemies

Ricardo Martinelli, leader of Cambio Democrático (CD), and Juan Carlos Varela, president of Partido Panameñista (PPa) won the 2009 election and formed a coalition government.  

Varela was appointed as both vice-president and as Foreign Minister and was at first designated as the coalition’s candidate for 2014. Two years later, the political alliance had disintegrated, culminating in Varela’s dismissal by Martinelli.

‘[Varela] neglected his functions as foreign minister because he had four positions: foreign minister, vice-president, president of PPa and presidential candidate’, Martinelli commented. The former foreign minister refuted the allegations, and took his party out of government. He remained as vice-president by default, as the post is obligatory by constitution.

As president, Martinelli increased the executive’s control  over the legislative and judicial powers, policies which were strongly opposed by Varela. The two politicians have since become sworn adversaries with fundamental differences stemming from the origin of each of their fortunes.

Police guard one of Martinelli's 'Super-99' supermarkets during a 2012 march by indigenous protestors against mining. Photo: PanamaGuide.comBoth Martinelli and Varela are rich magnates turned politicians. The president of the CD is the owner of a supermarket chain, who earned his fortune over the past few decades. Unlike Varela – whose family is the owner of a rum distillery – he does not come from the country’s traditional oligarchy. ‘What is he complaining about if I sell his spirits in my supermarkets?’ said Martinelli about Varela.

Varela the man

A Roman Catholic father of three, Varela is ideologically conservative, economically liberal and a strong defender of social policy.

His political campaign centred upon accusations of corruption directed at Martinelli. Varela promised greater transparency in politics: ‘Whoever wants to do business should grab their things and go to the private sector,’ Varela once said of Martinelli. Among his campaign pledges were to gain control of rising food prices, launch changes to the constitution to ensure the effectiveness of a separation of powers, and focus efforts towards tackling poverty and inequality. ‘Five years of prosperity, social peace, consensus, dialogue and unity are coming. Panama’s wealth will be at the service of all,’ he pledged.

Varela, who takes office on July 1, will not have an easy task during his five-year presidency. With the PPa functioning as a clear minority within Congress and the expansion of the canal meeting with problem after problem, he will have to demonstrate great political skill if he is to keep the promises he has made.

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