An
underdeveloped country?
First-time visitors are often amazed with the impressive skyline,
first-class services and the relatively high standard of living of
Panama City’s multi-cultural society –a sharp contrasts
with the lifestyles of most Central American capitals. According to
a recent study, the perception of prosperity in Panama is, in many
aspects, not very far from reality. Panamanians are among the most
educated, healthy and potentially wealthy individuals in the world.
The 2005
World Report on Human Development, released in Panama City in mid
October, stated that Panama ranks 56th amongst a total of 177 countries
and territories. The list of top countries, headed by Norway, goes
from 1 to 57. Due to improvements in its macro-economic standing and
overall educational and health levels, Panama has been able to jump
five notches in one year, from No. 61 to 56 (last year’s scores
showed a sharp decline from the development levels of previous years.)
The study,
of course, failled to address the country’s poor wealth distribution
scores which many economists consider to be among the worst in the
region. For example, residents of Paitilla and Marbella (exclusive
neighborhoods reminiscent of Miami or Manhattan,) enjoy a lifestyle
similar to Spain or France, whereas those who live in places like
San Miguelito, Curundú (six miles away from Paitilla) and the
Gnobe Buglé Native American territories (western Panama) are
compared to the populations of Haiti and some of the poorest countries
in Africa. In other words, the richest ten percent of the population
controls 65% of the country’s wealth, and the poorest 10% only
gets 2.5% of the resources.
Despite
these inequi-ties, no one can the growing prosperity of Panama’s
middle class, fostered by the country’s open social structure
and the growth of the financial, maritime and trade sectors in recent
years. Even members of the less affluent blue-collar population are
well-off when compared to their Central American counterparts. It
is not a secret that many of these Panamanians have developed the
"bad habit" of discarting furniture every two years in order
to purchase new sets just in time for the Christmas holidays.
FRENADESSO
expands horizons
The National Front for the Defense of the Social Security System (FRENADESSO),
one of the most radical organizations taking part in the talks to
amend controversial Law 17 (which seeks to save the country’s
dying social security institutions) has announced that it plans to
broaden its scope of action to target other "hot topics"
of the country’s economic and political sphares, such as the
project to widen the Panama Canal and the signing of free trade agreement
with various countries. Earlier this year, FRENADESSO lead a month-long
national strike seeking to overturn Law 17 which, among other things,
raised the age of retirement in order to save the social security
system. After weeks of street protests and riots, president Martín
Torrijos posponed the execution of the Law in order to gain more consensus.
FRENADESSO encompasses a number of public-sector organizations.
Inflation
grows
To the average Panamanian, the term "inflation" is a foreign
word –a reality affecting "far-away" countries where
the life savings of millions often disapear within a 24-hour period.
However, with the rising prises of oil, Ishtmians are having to pay
more attention to their pockets. A recent economic report showed that,
for the first time in 23 years, inflation rates in Panama have reached
3% The last time something like that happened here was in 1982, when
the oil crisis of the late 70’s and early 80’s inflated
prices by 4.2%. Inflation has risen sharply in the food sector (3.6%),
housing (5.8%), and education (2.1%.)
The cost
of public transportation is also going up. Panama’s National
Transport and Traffic Authority recently announced price increases
in 105 bus routes of the interior provinces –between 5% and
20%
In order
to reduce costs, the government has prompted a substantial reduction
in the price of fuel and has implemented a change in the working hours
of the public sector with the purpose of curtailing traffic jams.
As of this issue, the cost of a gallon of premium unleaded gasoline
in Panama City ranged US$2.76 and US$ 3.13 –a harp reduction
from a staggering and unprecedented US$4.00 per gallon in early October.
Panama
has historically enjoyed inflation rates between 1%-2% due to the
use of the U.S. dollar as legal tender and a relatively solid service
sector which comprises the Panama Canal, the Colón Free Zone,
an international banking center, a fledging tourism industry and a
well-developed seaport system. These factors continue to foster positive
economic growth levels and gives the country a measure of stability.