Envío Digital
Central American University - UCA  
  Number 275 | Junio 2004



Does Torrijos Bring More of the Same?

In Greek mythology, Adonis was so beautiful and so sure of it that even the gods fought over him. In the following interview, a prestigious Panamanian economist argues that his country’s politicians suffer from “Adonismo.” He also identifies some of the the limitations facing Martín Torrijos as he prepares to take power.

William Grigsby

Juan Jované is a strong defender of grassroots unity built on horizontal relations and devoid of people seeking to hog the limelight. A passionate follower of Gandhi’s philosophy of non-violence and an exceptional communicator, Jované is also one of Central America’s most renowned economists, a fierce critic of neoliberalism and a powerful proponent of the idea that it is possible to build another world. His honesty, dignity and honor have helped shape a personality that tends to unite people and generate consensus. At 58, he is the essence of the Panamanian people’s dignity and nobility.

Jované has been intensely involved in all of Panama’s important processes over the last 30 years, from his participation in General Omar Torrijos’ team of economic advisers to his recent administration of the governmental Social Security System (CSS). A university professor by vocation, he was also on the team of economists advising Henry Ruiz as planning minister during the Sandinista government in the eighties. But not even he could convince the Sandinistas to build an economy that really served the people, or that doing so would take more than political will, mammoth projects or indulging the whims of the political elite.

If you really want to know Juan Jované, you also have to know his partner, friend, confidante and critic, Margarita del Pilar González. An expert in organizing and directing work, Pilar was also in Nicaragua during the first years of the Sandinista revolution to help build the new Nicaraguan state. The parents of two sons—Miguel and Juan Antonio—who have also grown up to be brilliant professionals, Juan and Pilar remained leftwing and fully immersed in grassroots struggles without compromising themselves by joining small-minded and often apostate parties.

A noble chapter in the
Panamanian struggle

Between May and October 2003, as director of the CSS, Professor Jované was at the center of one of the most energetic and righteous chapters of Panama’s grassroots struggle in recent times. It began with his steadfast opposition to the Fund’s privatization and his insistence on proposing a national solution to the crisis affecting the institution, thus confronting President Mireya Moscoso. He then infuriated her by refusing to bow to two of her baser whims: naming her nephew to a key post and letting her illegally take US$500 million from the Fund to finance the ruling party’s election campaign.

The President finally removed Jované from his post in September. The transparency of his four-year administration, during which he worked closely with CSS workers, doctors and nurses and with unions and professional associations, was recognized on September 12 by 10,000 Panamanians who spontaneously took to the streets demanding his reinstatement. It was the biggest national protest since the US invasion.

Many analysts argue that Moscoso’s refusal to back down effectively buried the electoral chances of her Arnulfista Party, which suffered a humiliating defeat on May 2. Professor Jované, in contrast, spends a lot more time these days on his supermarket runs because everyone wants to shake his hand, talk to him and ask his opinion on any issue related to national life.

Jované hates the way the Left’s political stars seek the limelight. These people label themselves vanguardists and leaders, but their intolerance and sectarianism emulate capitalist bosses. This year he worked hard to help set up the Broad Popular Front, an initiative prevented from flourishing by those he terms “Adonises.” To protest the divided celebration of International Workers’ Day on May 1, he went to neither event.
Sitting on the simple verandah of their home in Panama City in one of the four rocking chairs Pilar bought 20 years ago when they were living in Nicaragua, Juan Jované talked about everything from Torrijismo to humanity’s future. Beyond the reality of post-electoral Panama, his conclusions offer important insights into the situation facing Central Americans.

“The elections are
administrative rather than political”

Grigsby: Martín Torrijos has been elected President of Panama. Does this change what’s happening in Panama in any way? Can we expect any changes when he takes office, or will we simply see more of the same?
Jované: I think it will be more of the same, for several reasons. First, no candidate tried to present a national project that was any different than the one implemented in this country since the invasion. Guillermo Endara’s government reactivated the “structural adjustment” process and passed the first privatization law. Then a change of government brought in the Democratic Revolutionary Party (PRD), with Ernesto Pérez Balladares as President, which consolidated what Endara had done and took privatization a step beyond selling off state businesses. The PRD actually privatized the telephone and electric companies then tried to privatize water, but things didn’t go well with that. It also proposed the first attempts at privatizing Social Security, but didn’t have time to conclude it.

Then came Mrs. Moscoso’s government and the return of the Arnulfista party, which promised it wouldn’t do more of the same, but very clear aspects of her five years in power demonstrate that she in fact intensified the same policy. For example, for the first time in the country’s history, her Cabinet decreed that private businesses could get their hands on social security funds. There came a moment in which she had to choose between the CSS and the Complementary Fund, and she opted for the latter. She actually initiated the institutionalizing of this policy in the Central American Free Trade Agreement (CAFTA) with the United States.

This clearly amounts to developing the same model, a trend that won’t change now, but rather will continue to be deepened. That’s why we argued that the elections should be called “administrative” rather than “political,” because the style of politics is not at stake; it’s already been defined. Each of these governments has just tried to administer that particular style of politics.

Does this mean that the people don’t have their own leaders and proposals?
I wouldn’t say that they have no proposals; I think they do. For example, progress
was made in the CSS case; at a favorable moment during the struggle, all the sectors (workers, teachers, pensioners and retired people, the professional associations, the community and neighborhood councils) were brought together and they came up with a comprehensive document containing what they all thought should be done with the social security system.

But nothing similar has been achieved with other issues. Typically, so many people want to be chiefs and there’s such friction among the grassroots sectors that it’s hard for this to jell the way it should. For something like this to have any strength, it must mesh into some kind of political force; not necessarily a party, but a very broad front or movement able not only to resist neoliberalism, but also to go further and propose alternatives. But unfortunately, this hasn’t happened in Panama. And as long as this remains the case, we’ll end up with more of the same. We hee in Panama say that elections are like choosing between Pepsi Cola or Coca Cola. You can choose the brand name, but the taste of the product has been chosen for you.

Financing campaigns is vote buying

Does this mean that politics has been privatized, too, that it’s also a piece of merchandise?
I think so. I recently read Joseph Stiglitz’s latest book, in which he looked at whether or not there’s vote buying in the United States. Votes are obviously not bought directly, but he argues that people make donations that finance media campaigns to convince people to vote for a certain candidate. He also says, and I agree with him, that while this is not direct vote buying, it does amount to the use of economic power to sway the political results. Isn’t that very close to the definition of vote buying?
We’re more refined now in the case of Panama. Vote buying here used to involve taking people’s voting cards, giving them a ballot, then making sure they’d voted a certain way before paying them and returning their card.
How much might an election campaign cost? Millions of dollars are spent in the media, money that was donated by private individuals who will subsequently have influence on the governments. It’s not so far different from buying votes… I agree with Stiglitz that this is on a par with the former, crasser vote-buying.

“The PRD has renounced its past”

Martín Torrijos appears as the heir of his father’s progressive ideas. Does Torrijismo still represent a current of political thought in Panamanian society?
Actually, it could. But does it? You have to look at the PRD-Popular Party alliance that won these elections. While the PRD provides the structure and most of the votes, the Panamanian Popular Party provides the ideological shape in my opinion, and it’s just as neoliberal as Aznar’s party in Spain. In terms of political votes, the Popular Party climbed on the PRD bandwagon, but from the ideological point of view, things are the other way around, with those in the PRD renouncing what they understand as a populist past that could be dangerous to air, and instead lining up behind a party with underlying neoliberal theses. It is these theses that are going to prevail in the PRD government.

Can we give them the benefit of the doubt, that it was an electoral tactic and things might change once they take office?
I don’t think so, because if they’d wanted to change things, if they’d wanted to do something different than neoliberalism, the political campaign would have been the perfect time to raise people’s awareness of the need for a change in that direction and prepare their followers for it. But none of the parties touched on any such issues in their political campaigns.

Could it have been to avoid frightening “Uncle Sam”? It amounts to the same whether you frighten them before or after. I think it would be bad politics as a candidate to hide a decision not to follow neoliberal policies and then, the day after taking office, announce that I’m not going to sign CAFTA. I’d end up worse off by acting that way because I’d be trying to do something that I didn’t tell my electorate beforehand, and people would be disconcerted.
No, I don’t think it was an electoral tactic. I think a lot of care was taken. The PRD ideologues understand breaking with the past as a way to become palatable to the Americans and not generate any friction. They want to avoid anything that might look bad to the international financial institutions, particularly those doing the evaluating, because here in Panama people are afraid of what they might say. In our judgment, the PRD has promised not to touch those interests. We’re faced with more of the same. Furthermore, no promises were made during the campaign. Nobody can complain when they don’t do something different to neoliberalism because they never promised they would.

How can one explain
the workers’ fear?

How much has Panama changed 14 years after the invasion?
Fortunately, the Canal was handed over. That is an historic fact that’s there for all
to see. It represents a victory for General Torrijos, who had the vision to recognize that it was something that could be achieved. Beyond that, I think that all the other changes that have been made are not necessarily positive for the population.

Here, as in other countries, it was said that privatization would be a positive thing, but anyone can see that isn’t true by looking at their telephone or electricity bills. It was also said that opening up the economy to the outside world was the healthiest thing to do, but then our industry virtually disappeared. Panama was promised that finance was something we’d do well in because we’d proved we were good at it. But things didn’t go well for us in finance either, because the Panamanian banks and finance companies slashed employment when they understood that they had to go out and compete. As a result, there are probably fewer people working in the finance sector now than in 1998. But only speaking in such relative terms, without hard figures, only hides the reality; the fact is that 30% more people are unemployed today than in 1998.
In addition, work has become increasingly precarious. When I made social security inspections in the shops on Central Avenue, the workers were afraid of being registered because work was so precarious that if the CSS representative officially registered them, the bosses would lay them off the following day so they wouldn’t have to pay in to the system. When I went back to inspect two weeks later, someone else had the job who wasn’t registered with social security either. I saw construction workers fleeing across a river to avoid being registered during the inspection.

One has to wonder why workers wouldn’t want the right to health and professional risk insurance coverage. They’re afraid that given the massive unemployment they’ll be bumped if they claim their rights.
It was like a game of cat and mouse, because a new inspection had to be made, and when it was, there were other workers there who then got thrown out as well… Why was this happening? Because of a change to the Labor Code, which previously provided workers with a certain amount of stability so the bosses couldn’t act this way. But as workers no longer have that stability, those who are registered simply get sacked as it costs more to have a registered worker than one who isn’t. The process that is making work increasingly precarious in Panama is very strong. All the Central Avenue shops divide their work force into two or three groups, and draw up staggered three-month contracts, rotating in a new group when the previous one’s contract is up, all to avoid having to pay any worker benefits. In a situation that precarious, you don’t dare protest.

Or to unionize?
Even less likely. These rotations also have an anti-union function. If by staggering the rotations you mix different groups of workers who are only there for three months at a time, they don’t get to know each other well enough even to imagine being able to form a union. And everything is heading in that same direction.

“This model attacks all workers”

The state has a hospital here —the San Miguel Arcángel—that appears to be public, but is in fact private. When I was in the CSS we inspected it and found that this state-owned hospital had 16 private enterprise operations, 12 of which didn’t even have a social security contribution number. They weren’t just concealing their workers; they hadn’t even applied for a contribution number so they could register them, the vast majority of whom were contracted for professional services. Contracted workers have no stability. They don’t have the right to social security, to holidays, to anything at all. What kind of workers were they? Mainly nurses and nurses’ aides. Seeing that, you realize that this model attacks the living conditions of all workers, not just the least qualified.

But when you visit Panama, you can see a real difference compared to the standard of living or commercial development in countries with high levels of extreme poverty, such as Nicaragua. The monthly minimum wage here is $260 compared to less than $50 in Nicaragua. Proportionally speaking, isn’t Panama better off than the rest of Central America?
I couldn’t say, because these things can also be relative. Yes, the minimum wage here is 210 to 220 balbaos [or dollars], but that doesn’t even cover the basic food basket. Some people say that the full basket of essential goods in Panama could amount to between 500 and 600 balboas for a family of four to five, although there’s a lot of debate about this. The raw fact is that Panamanian workers don’t earn enough to live on. They may earn more than Nicaraguans, but they also have to spend more.
Another problem is the kind of work being created. There are no promotion opportunities in the kind of work available in this country; they’re dead-end jobs. People working as waiters have nowhere higher to go and will still be waiters in 20 years time. This kind of work won’t resolve the country’s situation either.

The canal isn’t a source
of wealth to Panama

Mexico, Brazil, Venezuela and Ecuador have petroleum and can therefore resolve their situations better than we in Nicaragua can. Since Panama hasn’t managed to get off the ground despite having the canal, who’s benefiting from the profits? Where’s the wealth being concentrated?
To start with, the canal isn’t a source of wealth for Panama. What does ownership mean? Several possible things: the rightto use, enjoy and have at your disposal. Who’s the real owner of the Panama canal? If the elements of ownership include not only use and management, but also enjoyment, then the profits should be Panamanian. But to avoid getting into trouble with the “neighborhood bullies” it was established in the Constitution that the canal could only cover its own costs.

The Canal Authority cannot establish a transit tariff that exceeds the costs. It can add a little extra to widen the canal, for example, but it cannot maximize its profits. This means that all of the canal’s potential benefits and profits amount to a subsidy for the canal users. And who are the big users? The United States, Japan and now China. So what in fact is happening is that to a certain degree the canal, Panama’s resource, is being used to subsidize the economic development of those three countries.

So Panama can’t charge more than it costs to send a boat from one side to the other?
That’s exactly the problem. Following the invasion, a whole chapter of Panama’s Constitution was drawn up on the canal, including the establishment of that very principle. The forces that invaded Panama were so smart that they put it in the Constitution. And it’s not easy to change because it’s not just a simple change in tariff policy. Furthermore, even though the canal generates a certain income for the Panamanian state, an important part of that income is obviously being used to service the foreign debt when you consider that the government earmarks 33 of every 100 balboas to that end. Meanwhile, Panamanians keep waiting for something to trickle down.

In sum, despite having such an important resource, we have denied ourselves the right to generate any surplus with it and are thus subsidizing the big navigation companies and capital that use it. On the other hand, any fiscal income is ploughed into servicing the debt.

“The canal’s not being put to
the most social use possible”

I believe that Panama should have a differentiated policy, because poorer countries like Nicaragua or Ecuador would be in big trouble if Panama decided to raise the toll. As a developing country, we have to think asymmetrically. I can’t dish out the same treatment to such countries, knowing they have to be treated with kindness, so to speak. We can’t be looking to maximize profits on merchandise destined for them, because we’ll only be increasing their problems. But the United States or Japan shouldn’t benefit from the same subsidy.

General Torrijos summed up the whole idea behind recovering the canal when he spoke of achieving “the most social use possible from the Panama Canal.” But this principle is not being applied. We’re still subsidizing international navigation and using part of the resources generated by the canal to service our foreign debt, while not producing any real benefits for the country.

Couldn’t the canal be the springboard for Panama’s development?
Yes it could, but various things would have to change first, including the constitutional vision. No country has ever been socially transformed by the guy who knows most about economics. If that were the case, the problem could be resolved by holding a competition to see which economist was the wisest. The problem is political in nature, and this limitation will clearly continue as long as there’s no change in the country’s political conception.

But it would also depend on trying to use the canal and the country’s geographical position as the basis for other things. While the canal’s ownership did end up in Panamanian hands, we still have the
same problem: property is not abstract, but concrete, implying the power of use, usufruct and disposal. Panama doesn’t have usufruct right over the canal. It denied itself that right under pressure from the canal’s former owners. Nor can it dispose of it. So while Panama is now the canal’s legal owner1, the US is still its real owner.

Continued US presence in the canal

Does this mean the US doesn’t need military bases in Panama, if it already has a constitutional regime that guarantees it the canal?
That’s right, and it works out cheaper. It could cost between $7 and $10 billion to widen the canal. As the owner, Panama would have to double its public debt to build a third set of locks. And even if it did so, the new canal would continue under the same old system, without generating any profits for us. It would still operate on what the Americans call a “nonprofit basis” that would only cover the costs.

And there’s something else. If you wonder who will build the new locks and you look at the new trade agreement between Central America and the United States and the one currently being negotiated with Panama, the United States is exerting a lot of pressure for public works to be opened up to foreign capital. Take a good look at this business arrangement: we run up a debt of $10 billion and the canal continues operating under a regime in which it will take us who knows how long to pay it off because we can’t maximize our profits. And who’s going to walk away with the building profits? US businesses! And to top it all, the new locks would flood extensive areas inhabited by peasants who would also have to be displaced. It seems that Panama spent 100 years fighting for political sovereignty only to end up on the verge of losing it again, this time in the economic sphere, which is where things are decided in today’s world.

The Adonism of many politicians

Is no Panamanian political force aware of this problem or willing to change it?
Something new would have to emerge in this country. I think there are sectors that are aware of this need, but there’s a lack of desire to struggle among the grassroots sectors and a kind of political “Adonism” among those who claim to represent them. These Adonises spend half their time saying how good they looked when they talked on television. But the problem isn’t image, it’s how we transmit ideas to the population and how it appropriates them. and based on that, how we can organize and create a political force that at least starts talking about what’s going on.

Panama is going to face a big problem, because it’s already being said that when the plans for widening the canal are ready next year a referendum will have to be called to determine whether or not to build the locks. That’s a political reality, and perhaps a more important one than the elections that have just taken place. This time it won’t be a question of whether people were organized to participate as a part of a different electoral option, but whether we’re going to be organized for one of the country’s defining moments: the spending of billions of dollars to build a third set of locks for the canal, with all that implies.

When that moment comes, we’ll have a Canal Authority and a government with a lot of resources at their disposal telling the people, “We’re going to widen the canal and when we do there’ll be a bonanza.” On the receiving end, we’ll have the grassroots sectors blocked out by media propaganda and their own lack of organization, because of the political “Adonism” we practice. We’ll only be able to reach people through the one route left open to us: going directly to them to explain what all this means.

“The essence of Torrijos’
thinking is recoverable”

Let me ask you again. Is there any Torrijista thinking left in Panama? Is it recoverable?
The problems are new ones, but I think that the essence of that thinking is recoverable, and a doctrine could be extracted from it. And that’s the doctrine of a country that feels itself to be a country and tries to develop in its own benefit. We’re obviously not in the 1970s, when there were different problems. Torrijos didn’t have to face some of the current contradictions, because it was easy to get loans at that time. If you wanted to build more schools, you could avoid a tax reform that challenged the rich by really imposing taxes on them. Instead, you opted for indebtedness, which was easier at that time. If you wanted to build hospitals, you looked for international credits and were given them. That doesn’t happen now. If you want to build public works today, you have to slap a progressive income tax on the people who earn more. But that’s quite the opposite to what they’re doing in our countries, where they’re imposing value added tax and consumer taxes, looking to place the burden on ordinary people rather than the wealthiest.
The ultimate essence of Torrijos’ thinking was to achieve a “more collective use of the canal” and to fight against poverty in the country. And those ideas can obviously be recovered. In fact, they would form part of any alternative development plan.

“Panamanian identity is in danger”

Is there a Panamanian identity?
I had a chance to visit the real Panama. And people really do feel Panamanian, part of a country. I wouldn’t say that’s been broken yet. The problem is that it could break, and not just here. Globalization has produced such extreme polarization that we could reach a point where there are two Panamas: one connected to the Internet and the other to poverty, two groups of humans that lose their common base. And under such conditions nationality really will be lost.

This is happening throughout the world, because globalization is producing certain areas that are well linked to the world market, where things are going relatively well, while other areas are being left behind. We are beginning to see a phenomenon in which people in certain areas say, “Why do I have to pay taxes to support those who are coming out badly with globalization?” That’s something we really have to worry about.

A policy of equity is almost equally based on an economic and a political sense. Economically, equity has its own value, it’s own end; it is the objective of development. And politically, it has to be asked whether a nation really exists anymore if the population has become so differentiated. Or whether perhaps we would have to speak of two nations within the nation. It seems to me that if this is the case, Panama’s identity could be in danger.

“We’re heading towards
national security democracies”

Are the coming five years under Martín Torrijos going to be years of frustration for the people as well as more of the same?
That’s one of the concerns, and not just in Panama. This globalization model is generating increasing frustration. When you’re given the choice between Pepsi Cola and Coca Cola you end up seeing that neither one adds up to much. This is eroding governance and people are feeling more and more frustrated.

I’d venture to say that we might end up with “national security democracies,” in which everyone who speaks out against neoliberalism is seen as a terrorist. I see things moving in that direction and that’s worrying. The important thing is for us to open up alternatives in another direction.

In the chapter titled “The Power of Economic Reasoning” in his book Getting
It Right: Markets and Choices in a Free Society
, Harvard University professor Robert J. Barro, from the second generation of neoliberals, asked whether democracy is good or bad for the economy. Having originally said he’s not sure, he went on to state that it’s bad up to a point because income starts to be distributed. He then added that it’s good only as far as the case of Carlos Salinas de Gortari in Mexico. That’s literally what he said. Then he went even further, claiming that if it doesn’t work, there are always strong-arm regimes that don’t have the defects of democracy because they implement what really matters: market freedom. And he gives three appalling examples: Pinochet’s Chile, Fujimori’s Peru and the Shah’s Iran.

The system is currently in a phase that we could term formal democracy, but it could move off towards a national security democracy, or something even worse if it keeps on going.

Too many vanguards
and not enough militants

The responsibility doesn’t fall just to governments already bereft of any national or social soul. It’s also our responsibility. And the question facing us is whether we believe in these ideas. What are we doing in response to this situation? In addition to saying all this is bad, we have to abandon the idea that we’re the vanguard. Here in Panama there are more vanguards than militants, because everyone has a superiority complex. This is a historical problem.

We have to build networks, networks and more networks, in which each member organization participates in a movement and sets about constructing an alternative development model, without losing its own personality. I believe this a gamble we have to take. It will take a lot of work, and at times we’ll find that we’ve taken a few steps forward only for someone to come along and say no, forcing you a few steps backwards. It’s a lifelong commitment and I believe that the most important element in assuming it is to believe in two basic ideas: that our countries are worth being countries; and that the people living in them should live well rather than badly. The problem is that we agree that these two goals are good and true… as long as I’m the vanguard. These two goals are so simple they’re not even radical. If we take them seriously and genuinely commit ourselves to mobilize in that direction, something has to change.

William Grisgsby is a Nicaraguan journalist and envio's special reporter in Panama.

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