UCLG COUNTRY PROFILES

Republic of

(República de Panamá)

Capital:

Inhabitants: 3.320.000 (2006)

Area: 75.517 km²

constitution, operate in a limited and 1. Introduction separate way but in harmonious collaboration.

As far as local government is concerned, it was on Panama land that the Spanish founded the first city on firm ground, Santa María la Antigua del Darién. On the 25th of September Vasco Núñez de Balboa discovered the Southern Sea (the Pacific Panama is a country in Ocean ) which he confused with the bordered by the Caribbean Sea to the Caribbean Sea, traveled on land and north, the Pacific Ocean to the south, the revealed the strategic importance of the Republic of Colombia to the East and the isthmus for the first time. With the Republic of to the west. It discovery of the Southern Sea came the covers 75.517 km², and has an additional foundation of the first city in Panama, 2.210 km surface area of water. Total: known today as Panama La Vieja. On the 78.200 km. The country’s most important 15th of August,1519 Pedrarias Dávila river, due to its huge influence on the (Pedro Arias de Ávila) founded the city of economy, is the 125 km long Chagres Panama, which grew quickly due to its River, which is vital to the working of the geographic position, which allows for the Panama Canal. The political constitution isthmus to be crossed easily. sets forth in article 3 that “the national territory may never be handed over, sold In 1903 the Municipal Council of the City of or transferred, either temporally or Panama, assembled together in a Town partially to other States.” Meeting, decided to declare the separation of Panama from Colombia in its own right The nation of Panama is organized into an and even though they were henceforth and independent and sovereign state, called in the first Constitution conceived of as the Republic of Panama. Its government is fundamental pieces of the new State, unitary, Republican, democratic and political administrative centralism and the representative. The state exercises public lack of resources undermined any power via the legislative, executive and possibilities of the municipalities’ gaining judicial bodies, which, according to the further strength. UNITED CITIES AND LOCAL GOVERNMENTS COUNTY PROFILE: PANAMA

The National Constitution of 1946 outlines municipal development1, four fifths of the an autonomous municipal system equipped country’s municipalities have low to very with resources as the fundamental pillar of low levels of development, which are the the Panama state, but in practice no result of huge administrative, financial and significant change in the condition of the developmental deficiencies. Only eight councils has been apparent. In the municipalities can boast a medium level Constitution of 1972, reformed in 1978 and and only four can be described as in 1983, law 106 of 1973 and law 52 of the operating at a high level. (Colón, David, 12th of December 1984 concerning Panamá y San Miguelito). This correlates Municipal Rule, the concept of the council with the Relative Development Ratings in as a local unit of development is honored, which 5.9% of the districts (the four but with responsibilities limited to areas mentioned) occupy the medium-high such as maintenance (ornato), category, 23.5% the medium, 61.8% the administration of cemeteries, low, and 8.8% the very low, which slaughterhouses, markets, public and demonstrates a significant weakness in the residential cleaning. majority of the country’s councils. Constitutional reform and the current The nationalist revolution headed by decentralization process should lead to a General Omar Torrijos transformed reversal of this trend. economic and political structures during the course of a decade (1972-1982); Under the government of Martìn Torrijos subsequently a conservative (2004-2009), the problems of local authoritarianism was reinstated, but at the government in Panama’s national history end of the nineties, democratic have taken on greater relevance, playing a liberalization took place that was supported part in constitutional reform, and being by the recuperation of the sovereignty of central to the debate on State the Panama Canal on the 1st of January democratization policies, as well as playing 2000. The Republic of Panama is currently a role in the national debate and passing through a process of significant referendum on the Panama Canal political change, notably the constitutional extension. Nowadays the municipality and reform in 2004 and the referendum about the problems of local development are the extension of the Panama Canal, in relatively strong issues on the government October 2006, which was approved of by agenda, whilst also gaining more political 80% of participants interviewed for the significance, after a decade of demands by enquiry. the different parties to move ahead with the process of state decentralization. Until 2004 the Council was trapped between a centralist central government, an economy going through a transitional 2. Territorial Organization period of metropolitization, a low impact provincial government controlled by the Panama has an estimated population of centralist system and poor representation 3.30 million inhabitants (2005). The on a local level, due to the Community majority of the population is of mixed Board’s particular structure and the low origin (native and Spanish descendants) impact the Local Board had on it. Most of the country’s councils continue to be 1 IPADEM: The Municipal Regime in Panama: IPADEM-1994. vulnerable. According to a typology of 2 Herrera, Ligia. Regions of Socioeconomic Development in Panama 1980-1990 Panama: CELA 1994 Pages 16-18

II UNITED CITIES AND LOCAL GOVERNMENTS COUNTY PROFILE: PANAMA representing 58%, but there is a diversity policies. It does not rely on public assets or of other ethnic groups made up of black have any taxation powers and the 14%, white 8.6%, indigenous 6.7%, Asian, Constitution does not set out any clear 5.5% and other groups 7.1 %. The annual responsibilities for it. growth during the period 1995-2000 was 1.6%, one of the lowest in Central In terms of the council, the notions America. At this pace, it is estimated that historically used most in reference to local the number of inhabitants will have government in Panama, are those of doubled by the year 2045. municipal autonomy, mayoralty and municipality. The Council is the The population density is notably high in autonomous political organization of the the coastal region of the Panama Gulf, in community established in a District. The the peninsula of Azuero and above all, in Municipal Organization is to be democratic, the metropolitan areas of the of Panama according to the constitution, but it adds, it City and Colón. The urban population is to respond to the essentially represents 56% of the total number of administrative character of the local inhabitants in the country. government.

The territory of Panama is divided The municipal level of local government politically into Provinces, these in turn into has a relative degree of autonomy, Districts and the Districts into taxation powers and defined areas of “Corregimientos” or village areas. The law responsibility. The Municipal Council is a may create other political divisions whether decision-making body appointed by to subject them to special regulations or popular election, made up of at least five for motives of administrative convenience members, who may be Representatives of or public service. The provinces will have the Corregimiento or Town councilors in the number of districts that the Law sets the case that the representatives do not forth. reach the required minimum of five members. (National Constitution, article The political division of the Republic of 234). Panama in 2007 included 9 provinces, 75 districts or councils, 5 indigenous regions Local authorities are elected directly, by and 620 corregimientos. means of two ballot papers that the mayors and the representatives of the The province is a local entity, which acts as corregimientos respectively place. Ballots a mediator between the council and central by application are via political parties and government. It is under the charge of the free application with a governing period of Governor who is named or removed by the five years. The local electoral calendars executive body and who presides over the coincide with the national ones (President Provisional Council which is made up of and legislators). The type of representation mayors, representatives, town councilors in the Municipal Council is by Electoral and provincial leaders of governmental District and the re-election of municipal agencies, who have limited functions, posts is consecutive. being more instruments of consultation, and responsible for coordinating The corregimiento is the political base government action in the province. There managed by the Community Board, made is no legislative body at this level, with the up of one representative of the appointed Governor responsible for corregimiento by direct popular vote who carrying out and coordinating functions and presides along with the head of the

III UNITED CITIES AND LOCAL GOVERNMENTS COUNTY PROFILE: PANAMA corregimiento and five locals chosen and of Panama in the south and the city of named by the representative, whose aims Colón in the Atlantic, even though there is are to promote community development. no administrative rule or government in The Community Board organizes Local either of these metropolitan areas. Boards made up of members chosen by their communities or neighborhoods and With regard to territorial reform, the encourages committees to resolve social approval of the referendum on the and economic community problems but extension of the Panama Canal, obtained have no influence over the organization or on the 22nd of October 2006 (78% working of the Community Board. approval), will certainly have an effect on territorial restructuring. Initiatives are in Recent changes in the organization of progress, that are linked to the new policy power and in citizen conduct in Panama of decentralization, currently being fuelled indicate that the municipal organization is by the government of president Martin starting to take on an increasingly political Torrijos (2003-2009). role, more in line with local government models. A transition from the current model of local government appears to be 3. Local Democracy taking place in one form or another. 3.1 – The local political system Average municipal public expenditure per Panama’s political parties exert a strong inhabitant is 10 dollars per year (2002). and direct influence on local elections due But Panama is the country with the highest to the high degree of political ideological public budget in the region (7 billion dollars development and modernization that the in 2007), which, with a mere 3.2 million political parties have had in the last few inhabitants, has the highest average public years. Political pluralism in local elections municipal expenditure at 1.875 dollars, is limited by the predominance of the two- even higher than Costa Rica. party system. Two important political powers participate in local elections: the Municipal public expenditure represents traditional right with a neo-liberal approach approximately 0.7 % of the GDP. and the social democratic left represented by the Revolutionary Democratic Party. The proportion of local municipal public Both parties have taken turns in the expenditure to total public expenditure is exercise of power since 1992. barely 4%, the lowest in the region, because there are no transfers established The municipal governments of Panama are by law in Panama. the only ones in this region, along with Costa Rica, that have weak executive It is estimated that the proportion of local powers. It needs to be kept in mind that it municipal public expenditure on investment was only recently, in 2004, that to total State public expenditure on civil constitutional reforms were made to investment is the lowest in the region. municipal rule. The executive functions are better defined, but they need to be put into There is no administrative rule or practice if they are to be consolidated and government for the capital, separate from strengthened. The election of municipal the rest of the country in Panama, though authorities is also carried out by the steps are being taken in this direction. It is system of proportional representation, nevertheless important to mention that thereby guaranteeing the representation of there are two metropolitan areas, the city

IV UNITED CITIES AND LOCAL GOVERNMENTS COUNTY PROFILE: PANAMA minorities; this is how the electoral Law yet to be established in Panama. But the regulates it. dynamic that local democratization is generating should see these being applied The change in the attitude of citizens with in the near future. regard to municipal rule is very recent, after an interregnum of several years The existence of traditional institutions (1982-1996), since prior to that (1972- such as the indigenous regions is 1982), Panama had a nationalist revolution significant in Panama; they have their own in which municipal territories were given system of representation and participation great importance under the system of in place that is recognized in the political corregimientos. The constitutional reforms constitution and in municipal laws and made in 2004 have given rise to new enjoy a type of local-regional rule; they are processes of evaluating municipal rule to even represented in the National Assembly. include the citizen, which is being further stimulated by the government’s decentralization policies. 4. Relations Between Central and Local Levels 3.2 – Citizen Participation 4.1 – General Issues Numbers of citizen participation in local In Panama’s constitution local government elections have been high in the last 10 concepts were strengthened by the reforms years in Panama (1996-2006), remaining made in 2004, with more emphasis being on average above 50%. The municipal placed on its meaning and importance elections take place alongside the elections within the State structure. for deputies and for President and Vice- president of the Republic. The Ministry of Government and Justice and the Ministry of the Presidency are the Because of the slight political and economic main players with regard to the power that the councils exerted until two relationship between central government years ago, the procedures of direct structure and local government. The democracy have hardly been applied. provincial governors, named by the Nevertheless the legislation surrounding President of the Republic, play the most the establishment of these procedures is important mediatory role between the extensive. corregimientos and the municipalities.

In Panama the existence of democratic Just as in other Central American forms of representation and participation at countries, the councils have legislative a lower level than the council is a novelty. powers, which means they can have their In this country it is not the exception but own rules for matters within their the rule, given that representation arises in jurisdiction. The National Assembly in turn constituencies smaller than the council, is entitled to legislate over local such as the corregimientos. government. This State institution has been very active and transcendent in the New practices or experiences that boost last two years (2004 to 2006) having citizen participation, like communication elevated decentralization to the and information networks and constitutional realm and introduced communication via the Internet, already important reforms to municipal rule. seen in other Central American countries such as Guatemala and El Salvador, have

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4.2 – Supervision of Local Government in strengthening local government and citizen participation. There is no defined administrative body that is responsible for supervising council The reforms that were implemented in development plans. The National Finance 2004 have also led to a reduction in and Accounts Office now undertakes conflict, which usually occurred when the taxation tasks within a new judicial mayor’s position as a local authority was framework, as a result of the reforms destabilized. made to the Constitution.

In matters concerning the conditions and 5. Local Responsibilities (Areas of practice of destitution, revocation and Responsibility) dissolution, the constitutional reforms reinforce the defense of municipal Municipal responsibilities in Panama are authority, giving mayors greater stability. mainly the following: to create and Even before the reforms, municipal maintain the companies and services of government in Panama had only marginal public use, particularly water, electricity, powers. The State model in this sense telephones, gas, transport, sewage and rested in institutions by sector, which were drainage; to lend these services, whether charged with responsibilities that were directly or by concession and in the latter typically municipal. With the reforms put case, preferably via public bids or by into action and the expression of political means of agreements with other state will translated into more tax resources for entities. The local government may also the councils, important changes are municipalize public services to offer them beginning to happen which should soon be directly; build slaughterhouses, markets, grouped together under the umbrella of a crematoriums, public cemeteries and new law on decentralization and see regulate their services; build, upkeep and further reforms made to the municipal improve squares, parks, paths and code. municipal public roads; undertake the collection, destruction or exploitation of 4.3 – Guarantee of local government waste and refuse; regulate matter relating autonomy; rights and interests to municipal construction and public services taking into account general laws Local government in Panama now has on health, urbanism and others. explicit constitutional rules to defend its rights, but because they were only recently The structural weakness, however, of local implemented, the political processes still governments has been so pronounced that require consolidation. Mayors now have they have barely been able to exercise more financial, administrative and political legal powers or any great autonomy in power. This constitutes a fundamental decision-making on fundamental issues of move forward after many years of local development. A lack of municipal stagnation. financing has also contributed to this weak structure. The distribution of As part of the democratization and responsibilities tends to be as follows: modernization process, two societies: the Association of Panama Councils –AMUPA- Planning. The municipalities do not have and the national Association of any express mandate. According to Representatives of Corregimientos have legislation, this responsibility could been taking an increasingly important role

VI UNITED CITIES AND LOCAL GOVERNMENTS COUNTY PROFILE: PANAMA potentially fall more to the Provincial three areas of responsibility in this matter, council. which are the following: i) to formulate proposals for local taxes (such as municipal Education. To spread culture and cooperate contributions) that have to be approved by in the costs of administration of primary National Congress; ii) to collect the local schools, industrial, vocational, fine arts and taxes that have been approved by National specialist schools, libraries, museums and Congress, both as a result of municipal specialist academies. This is a initiatives and on the initiative of complementary area of responsibility along legislators; iii) to set and approve taxes (or with the Ministry of Education. rates) for public services provided in the respective councils. Numbers ii) and iii) Health Services The municipalities are constitute the efforts of Panama’s generally responsible here and expected to municipalities, which are paramount since cooperate in the maintenance of the health there are no specific money transfers from and public assistance services. the government to the municipalities. The making of a policy on transfers is currently Water Supply. Municipal authority, in in progress. For this reason, tax collection coordination with the sector’s institution of for Panama’s municipalities represents 96 the State. % of all their income and expenditure.

Energy Supply. Public lighting is a Until now, the lack of a defined framework municipal responsibility. of fiscal co-liability between central government and municipal governments Public Transport. There is no express has been much more evident, although the responsibility in this respect. constitutional reforms are beginning to change this tendency. Support to Business Development. There is no express responsibility in this respect. Besides this, there has never been a tradition, as there has in the rest of the Three tasks of local government that are Central American countries, of external considered somewhat centralized: the subsidies being made to the municipalities. provision of health services, education services and public transport. 6.2 –Administration of Local Government Staff As regards the central-local dimension and their relationship (including institutional Due to the marginal character that aspects: agreements, contracts…) the municipalities have, up until now, had in fundamental services are highly centralized Panama, the number of employees and and there is a lack of institutional municipal civil servants is minimal and regulations in place to advance their there is no information available in this decentralization. respect. It is clear that the main cities have better professional and administrative capacities, and that in the small councils 6. Local Financing and Human there is a large deficit in terms of human Resources resources.

6.1 –Local Government Income The integrity of the elected authorities and Only the National Assembly can approve civil servants has always been in question taxes in Panama. Local governments have by citizens due to the secular corruption of

VII UNITED CITIES AND LOCAL GOVERNMENTS COUNTY PROFILE: PANAMA municipal administration that begins at the The following issues stand out among the level of the corregimiento, which relies on existing axes of debate: a) The intention to the complicity of authorities at a higher promote a process of decentralization, level, who should be guarding against which should be accompanied by a clear corruption. profile on how to strengthen municipal autonomy and restructure the State to give As for the Administration of human greater power to the councils, to local resources, it is really only in the big cities development, and to citizen participation; that the concept of improving the quantity b) The issue of defining alternative and quality of the professional workforce is methods of financing local governments, being applied. including the possibility of adding a specific clause in a law of decentralization or forming a specific law of a financial nature; 7. Summary c) the consolidation of the indigenous regions’ own political forms; e) the political The model of local autonomy in force three strengthening of local governments in decades ago in Panama was aimed at order to improve municipal cooperativism recovering representative democracy, with a view to defending municipal starting at a local level, and consolidating a autonomy, but also to being able to make democratic rule of political parties (in spite an impact via a decentralizing policy that of the authoritarian interregnum that took could transform the centralist structures of place on the death of General Torrijos), but the State in favor of local governments’ the latter model came to the end of its greater territorial, financial, jurisdictional cycle. The recovery of Panaman and political autonomy. sovereignty over the interoceanic canal, the increase of the social and economic Rokale Cardona Recinos demands of the population, especially to Executive Director of the Central-American tackle poverty; the challenges of Development Institute - IDELCA globalization and the expectations of greater democratization of politics, constitute decisive factors that represent an historic opportunity to push forward a public policy of total democratic decentralization, in the long term, with solid meaning and content for both State and Nation.

The constitutional reforms of 2004 have elevated the decentralization of the State to the constitutional realm and established important changes in local rule, with moves now being made towards its democratic restructuring. There is a framework of institutional reforms in progress that could end up thoroughly reforming the current local power structure.

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