Election Advisory Series | Panama

Thank you for joining us. Can you provide some background on the recent election in Panama? 

Manuela: Panama’s presidential election was held on Sunday 5th May and was surrounded by uncertainty due to the president-elect– José Raúl Mulino’s potential disqualification. The Supreme Court of Justice held an extraordinary permanent session at the beginning of May to decide whether Mulino was eligible to run because he was not selected as his party’s candidate through a primary. The court agreed to allow him to participate only two days before the election.

To give a brief background, on 5th May voters cast their ballots to choose the president and vice president, 20 deputies to the Central American Parliament, 71 deputies to the National Assembly, 81 district mayors, and representatives of other electoral roles. The presidential election was a single-round vote featuring eight candidates.

Although polls predicted a tight race between the eight candidates, with four candidates polling in double digits: José Raul Mulino won comfortably with almost 35% of votes, and the runner-up, Ricardo Lombana, received about 25% of the more than 3 million votes cast. The election, one of the most intricate in the country’s history, recorded a high voter turnout of over 77%. 

In the legislative election, the independent group came out on top by winning 21 seats. This significantly increased from their previous five seats in the current legislative assembly. Ex-President Martinellis’s Realizando Metas party secured 13 seats. 

But there’s been some controversy over the selected candidates, right?

Manuela: The uncertainty sparked by former president Ricardo Martinelli’s influence in the campaign was significant. Despite being disqualified from running for office due to his conviction for money laundering and his ten-year prison sentence, he was initially leading the polls, and his popularity was leveraged by his former vice-presidential candidate, José Raul Mulino. According to an April survey by IPEC- Instituto Panameno de Estudios Civicos-, 65% of voters believed Martinelli would still be in charge under a Mulino presidency. Martinelli’s disqualification also cast a shadow over the entire election and raised concerns about the country’s political landscape, highlighting the issue of corruption and impunity in Panama’s political system.

So within this uncertain economic environment, the country chose Martinellí’s candidate, José Raúl Mulino as its new president – can you tell us a bit about his background and what appealed to voters? 

Nour: Of course, José Raul Mulino was a former minister of public security and government and justice who was Martinelli’s vice-presidential candidate. Mulino´s candidacy was announced in late March after Martinelli’s disqualification. This is almost a year after other candidates announced their candidacies and parties´ primary elections. 

Mulino was considered a safer option because he offered experience, a profile of repressing protests, and was the most economically friendly of the eight contenders. 

Mulino´s presidential plans are not clear to the public. He did not attend any of the 6 presidential debates and focused on advocating for expanding the police force, reintroducing a radar system to detect drug trafficking boats, and closing the Darien Gap, a significant gateway for migrants.

Panama’s current immigration policy is focused on systematically transferring US-bound migrants through the country, onto neighbouring Costa Rica. Closing the Darien Gap would require a significant investment into security forces. However, a similar plan had US approval in the past, and could come as a part of broader US economic support for Mulino.

Mulino’s campaign focused on convincing voters that he could replace Martinelli, who oversaw an economic boom. According to a recent poll by IPEC, 65% of voters believed Martinelli would still be in charge under a Mulino presidency. Mulino promised to commute Martinelli’s sentence if elected. Despite lacking charisma and popular appeal, Mulino benefited from Martinelli’s vociferous support.

For his part, Mulino has made clear that clearing Martinelli’s charges is a priority of his administration. In fact, he’s said that he would explore giving Martinelli a presidential pardon, although pardons in Panama can only be used for political crimes. In that event, Mulino has said that at the least he would be able to approve Martinelli’s asylum request to Nicaragua.

Mulino’s campaign is centred around bringing Panama ‘an administration of hope, of employment’ and bolstering democracy. He is viewed as a figure who can steer the country away from the menace of crime and reduce food prices to aid the underprivileged. Despite a constitutional challenge to his candidacy. 

While the population is willing to accept correction policies, they call for severe punishments for corruption. We have to point out however that Martinelli was convicted of money laundering, making this seem hypocritical. The ascent of Mulino’s candidacy has unfolded in tandem with Martinelli’s legal saga, with Martinelli advocating for Mulino via social media platforms from the confines of the Nicaraguan embassy.

What does a Mulino presidency mean for foreign investors? What has he pledged to do so far?

Manuela: As Nour mentioned, Mulino is set to face multiple socio-economic challenges as he steps into the presidency on July 1. The president-elect will have to address issues such as the reduction in economic projections due to the shutdown of the Cobre Panamá mine, the Panama Canal’s drought crisis, and the mounting deficit in the pension system. 

To tackle these challenges, Mulino has promised to run a pro-business administration and attract more foreign investment to help boost the country’s GDP growth. In his short campaign, he pledged to expand the Panama City Metro, improve the highway system, and increase accessibility to drinkable water nationwide. But with a divided National Assembly, Mulino will have to create an alliance of various political parties to support his policies and require agreement from all parties for any proposed reforms.

Overall, Mulino is likely to conduct an open-to-business policy incentivising foreign investment in the country as Martinelli did from 2009 to 2014. However, experts predict that it will be difficult to replicate the boom times of former President Ricardo Martinelli’s tenure.

What comes next? 

Nour: Mulino will face several challenges, such as improving economic growth, reducing corruption, and addressing migration. The country’s infrastructure development, including the Panama Canal and its expansion, will also be a key area of focus, not to mention what will happen with environmental issues. 

Corruption is the topmost concern for its citizens. In a recent survey conducted by Gallup, 57% of Panamanians expressed their worries about corruption in the country. This sentiment is unsurprising given Martinelli’s money-laundering case.

The new president must address several critical issues and work towards improving Panama’s economy and society.

We will continue to keep a close eye on the Panamanian political climate and how the National Assembly turns out, and remain available for our clients to help them make sense of the environment within the context of their business operations in the country. 

Photo by MARTIN BERNETTI/AFP via Getty Images