Report May 2019
PANAMA Presidential and legislative elections
Post-election report
Political Analysis Regulatory Information Service
EXECUTIVE SUMMARY
The presidential and legislative elections of the Republic of Panama took place May 5. Laurentino Cortizo (Revolutionary Democratic Party) is emerging as winner with 33.18% of the vote, versus 31.04% so far for Rómulo Roux (Democratic Change). If the trend continues as the remaining votes are counted, Cortizo is set to become President of Panama for the 2019-2024.
DL4AMERICAS.ORG The elections took place amid widespread public disapproval of the government of Juan Carlos Varela, who is seen as having been too preoccupied with infrastructure projects to the detriment of social policies to tackle inequality.
Against this backdrop, citizens were drawn to the presidential candidate that was most committed to narrowing the wealth gap across the country.
DIRECTORIOLEGISLATIVO.ORG What was the vote for?
On Sunday, May 5, presidential and legislative elections were held in Panama to elect the President of the Republic, two Vice Presidents and 71 Deputies for the 2019-2024 term.
Electoral calendar
The Political Constitution of the Republic of Panama dictates that the President should hold office for five years (Sec. 142). According to the Panamanian Electoral Code, elections shall be held "on the first Sunday of May in the year in which they are to be held" (Sec. 286).
This year's vote was held Sunday, May 5.
Will there be a second round?
In line with the Constitution, the President is elected by majority and direct vote (Sec. 172). Therefore, there is no second round of elections for the presidential elections of the Republic of Panama.
How are presidents voted in?
By free, equal, universal, secret and direct suffrage.
Who were the candidates?
There were seven candidates for the presidency: Laurentino Cortizo (Revolutionary Democratic Party), José Blandón (Panamanian Party), Rómulo Roux (Democratic Change), Saúl Méndez Rodríguez (Broad Front for Democracy); and Ana Matilde Gomez, Marco Ameglio and Ricardo Lombana as independent candidates.
When does the next administration take office?
The winning presidential candidate, along with the elected legislators, are set to take office Monday, July 1, 2019, for a five-year term.
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Political context
● Varela's relationship with the National Assembly. Throughout his term in office, President of the Republic Juan Carlos Varela has only had the support of 16 of the Assembly’s 71 deputies. From 2014 to 2018 he was able, however, to mitigate this via a parliamentary alliance with the opposition - specifically, 26 legislators of the Democratic Revolutionary Party (Partido Revolucionario Democrático -PRD).
However this changed when, in early 2018, the National Assembly rejected Varlea’s picks for new Supreme Court justices. The Comptroller General's Office launched an investigation into PRD legislators as a result of this, criticised by the ruling party as an act of "political persecution". PRD consequently went on to break its parliamentary alliance with the ruling party in mid-2018.
In response, Varela sought to align with another opposition party, Democratic Change (Cambio Democrático) which holds 23 seats. However, this was to little avail since Democratic Change, too, was under investigation by the Comptroller's Office, which led to tensions between the two parties. The overall disconnect between the Executive and Assembly led to the latter failing to approve a law to criminalise tax evasion - a priority for the government - and to a hasty last-minute approval of the national budget for 2019.
In sum, Varela has had governance problems in the National Assembly throughout his tenure, which were further accentuated in the past year. Due to this, most of the government’s main actions were driven by the Executive branch as opposed to the legislature, such as concerning public works projects and price caps on foods.
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Political context
● Panama Papers. On April 3, 2016, the German newspaper Süddeutsche Zeitung published leaked encrypted confidential documents belonging to Panama-based law firm Mossack Fonseca, revealing the concealment of company properties, assets, profits and tax evasion of heads of state and government, world political leaders, politically exposed persons and personalities from finance, business, sports and art. Several of Mossack Fonseca’s clients had hired it to set up “shell corporations” in tax havens which were revealed to have been used for illegal purposes, including fraud, tax evasion and the avoidance of international sanctions.
The fallout from this led to a drop in global confidence in Panama’s financial system, which as a result contributed less to its GDP in 2017. In turn, this caused Panama to be blacklisted for money laundering, with both the Financial Action Task Force against Money Laundering (FATF) and the Organization for Economic Cooperation and Development (OECD) urging the Panamanian government to tighten national laws on tax evasion.
Varela spoke out against the FATF and OECD's labelling of Panama as a tax haven. He vowed that Mossack Fonseca would be investigated by the Attorney General of the Republic and promised to strengthen laws on money laundering.
That last pledge turned out to be hard for Varela to keep, however, to the point that tax evasion as a criminal offence in Panama was only established by law as recently as January 2019, three years after the scandal. Legislators have defended this by claiming not to have been properly informed, notably by Minister of Economy and Finance, Eyda Varela de Chinchilla, that the new regulations were needed for Panama to remain an international financial center. Following the enactment of the new legislation, both the FATF and the OECD removed Panama from their tax haven blacklists.
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Main candidates Seven candidates were in the running for the May 5th elections. Below you will find a profile of the three main ones:
Laurentino Rómulo Roux
Democratic Cortizo Change Revolutionary Democratic Party
33,18% votes cast* 31,04% Businessman, age 66. Lawyer, age 54. votes cast*
Cortizo received a bachelor's degree in Roux graduated from Babson University in business administration from the University of Boston with a Bachelor of Science degree. He Norwich, USA. Also he has a Master's degree in then graduated with a Doctor of Laws degree Business Administration and a PhD in from Miami University. He also earned a International Commerce and Marketing from master's degree in business law from Santa the University of Texas, USA. Maria La Antigua University and a master's degree in business administration from In 1981, Cortizo worked at the Organization of Northwestern University in the United States. American States (OAS). From 1986 to the present, Cortizo has held management In the private sector, Roux worked from 1994 to positions at Grupo Cortizo, Panablock (building 2009 as a lawyer at Morgan & Morgan, where materials company) and Hacienda Hermacor he represented public and private sector clients. (high genetics cattle). At the firm, he served as a representative for project finance, as well as in cross-border He was a member of the Legislative Assembly banking and telecommunications transactions. for the former Solidarity Party in two legislative periods (1994-1999 and 1999-2004), being During Ricardo Martinelli's administration president of the Assembly between 2000 and (Cambio Democrático - 2009-2014) he was 2001. As a deputy, Cortizo was president of the president of the Board of Directors of the Agricultural Affairs Committee and president of Panama Canal Authority. He was then Minister the Trade Committee. of Canal Affairs (2009-2012). In 2012, Roux assumed the chairmanship of the Committee In 2004, during the presidency of Martín for the Transformation of the Drinking Water Torrijos (Partido Revolucionario Democrático - and Sanitation Sector. That same year he 2004-2009), he was Minister of Agricultural became Minister of Foreign Affairs. Development, but resigned in 2006 because he disagreed with the clauses of the Free Trade In 2013 he resigned from the ministry to run as Agreement between the United States and a presidential pre-candidate in the Cambio Panama that urged Panama to relax its Democrático party. However, he was phytosanitary and zoosanitary measures vis- surpassed by José Domingo Arias. In 2018, à-vis the United States. Roux won his party's primaries, becoming the Centro Democrático's candidate for the 2019 general election.
*Preliminary results published by the Electoral Tribunal.
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DL4AMERICAS.ORG Main candidates (continuation)
Ricardo Lombana Independent
19,15% votes cast*
Lawyer, age 45.
Lombana obtained a law degree from the University of Panama in 1998. He then completed a Master's Degree in International and Comparative Law at George Washington University (United States) in 2000, and completed two intensive programs in international law at Oxford University (England) and Harvard University (United States) during 2001.
In April 2002, the candidate began working in the public sector as the first special delegate for freedom of expression for the Office of the People's Advocate. Between 2004 and 2007 he was first Counsellor and then Consul General at the Embassy of Panama in the United States. After completing his diplomatic duties, he served as Deputy Editor-in-Chief of the newspaper La Prensa between May 2007 and June 2008.
Lombana continued in the private sector as an associate of Galindo, Arias & López for five years, until 2013 when he became managing partner of his own firm: Lombana Law & Media. Currently, he continues to practice as a lawyer, arbitrator and media consultant.
*Preliminary results published by the Electoral Tribunal.
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DL4AMERICAS.ORG Government Plan
Laurentino Cortizo “Uniendo Fuerzas” (Uniting Forces) Action Plan
33,18% votes cast*
● Economy. Create a "Panama Mission" Plan to promote national growth and bolster the country's international image. This will be a public-private alliance that will attract investment. It will seek, among other things, to combat inequality and promote equity in income distribution.
● Financial Services. Create a team to develop a plan to adapt and promote the sector.
● Finance. Set up a body tasked with transforming the financial system. In particular, this will promote the use of new financial technologies, creating a special regulatory framework for entities focused on innovation.
● Creative industries. Introduce to Congress a bill to promote the knowledge industries. The objective is to promote national entrepreneurship, harnessing the technologies of the 21st century.
● Science and Technology. Higher and growing national budget allocations to Science, Innovation and Technology. The goal is to raise this to 1% by 2024.
● Nutrition. Promote national food production and its distribution in different national food programmes. Among them, the "Study without Hunger" school feeding program stands out.
● Another pledge is to create the Secretariat for Integrated Early Childhood Care, which will coordinate actions at the state level to improve the level of care, especially as regards nutrition.
To see the complete government plan, click here
*Preliminary results published by the Electoral Tribunal.
DIRECTORIOLEGISLATIVO.ORG
DL4AMERICAS.ORG Government Plan
Rómulo Roux “Lo bueno vuelve” (the Good Comes back) Action Plan
31,04% votes cast*
● Commerce and Production. Enable training centers and supply markets to lower prices and improve the quality of agricultural products.
Create Agricultural Free Zones.
Regulate imports to prevent them from entering during local product harvest periods.
Urge the Agricultural Marketing Institute to purchase surplus agricultural produce to help compete against imports.
● Finance. Promote financial services as an engine for the country's growth.
Create policies to consolidate the ecosystem of financing for digital entrepreneurship or crowdfunding.
● Logistics. Create logistic-industrial parks, mainly in the country's hinterland.
Convert the Colon Free Zone - port and industrial zone with tax benefits - into an integral logistic center through the expansion of the activities it carries out and the integration with the rest of the logistic channels of the country.
● Labor. Create 400,000 new jobs
Strengthen the National Secretariat of Disability to improve the labor insertion of people with disabilities.
To see the complete government plan, click here
*Preliminary results published by the Electoral Tribunal.
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DL4AMERICAS.ORG Preliminary results
Ricardo Laurentino Cortizo Rómulo Roux Lombana Revolutionary Democratic Independent Democratic Party Change
Ballots counted: 95,96%*
33,18% 31,04%
19,15% 11% 16,63%
Others
*Source: self-made graphic based on preliminary results published by the Electoral Tribunal.
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DL4AMERICAS.ORG Main candidates’ ideological orientation
+ Voting intention
40%
35%
30%
33,18% 25% 31,04%
Free trade 20% Left Center-left Center Center-right Right
15%
19,15%
10% Economic interventionism
5%
0%
- Voting intention
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Most voted candidate by province
Bocas del Toro Ngäbe-Buglé Colón Guna Yala
Coclé
Panamá
Darien
Chiriquí Herrera Embera Wounaan
Veraguas Los Santos
Laurentino Cortizo Rómulo Roux
33,18% votes* 31,04% votes*
Cortizo, most popular in rural communities. The PRD candidate obtained the largest number of votes in rural Panama. This is partly due to his electoral pledges on promoting national food production, seen by many as neglected in Panama, and his promise to cut the wealth gap.
Romulus Roux, favored in the Canal area. The candidate of the Democratic Change party was the preferred choice of Panamanian businesspeople as well as urban voters. Several of Roux's proposals were aimed at this segment, such as his plan to turn the Colon Free Zone -a port and industrial zone with tax benefits, adjacent to the Panama Canal- into an integral logistics center.
*Preliminary results published by the Electoral Tribunal.
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DL4AMERICAS.ORG Statements by the three leading candidates
Laurentino Cortizo
33,18% votes*
"The victory is ours, but it is not the victory of a person or an alliance, this is the victory of an entire country. Today we assume a great responsibility, together we are going to join forces to transform Panama".
Rómulo Roux
31,04% votes*
"Today [May 5] we are not going to accept any results...[...] We're going to have a public count of the ballots until we determine what happened here today".
Ricardo Lombana
19,15% votes cast*
"Today almost 400,000 Panamanians have said no to corruption. [...] When the Tribunal recognizes a winner, we will make the call to the next president-elect congratulating him and recognizing his triumph".
*Preliminary results published by the Electoral Tribunal.
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DL4AMERICAS.ORG LEGISLATIVE ELECTIONS What was elected?
In conjunction with the presidential elections, Sunday, May 5 the parliamentary elections in Panama to select the 71 legislators to occupy the National Assembly for a five year term, were held.
For the election of deputies, the national territory is divided into so-called electoral circuits: 13 “plurinominal” circuits and 26 “uninominal” circuits.
An uninominal circuit is an electoral constituency from which a single deputy is elected, while a plurinominal circuit elects two or more deputies.
For this year's elections, 571 deputies ran for the parliamentary elections.
Bocas del Toro: 2 Ngäbe-Buglé: 3 Colón: 5 Guna Yala: 2
Coclé: 5
Panamá: 25
Panamá Oeste: 8
Chiriquí: 9 Herrera: 3 Darien/ Embera Wounaan: 2 Veraguas: 5 Los Santos: 2
TOTAL: 71 deputies
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Current composition of the National Assembly
Throughout Varela’s government, his ruling party, the Partido Panameñista, has been in minority, possessing only the third largest representation of legislators (16 out of a total of 71 Deputies). This has led to frequent blocking of Varela’s agenda, and has forced his administration to negotiate with the opposition over new legislation.
Ruling Party (17) Opposition (54)
Panamanian Party (16) Revolutionary Democratic Party (26)
Popular Party (!) Democratic Change(23)
MOLIRENA (3)
Alliance Party(1)
Independent (1)
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG How will the Assembly be composed?
The RDP would have the first minority. Laurentino Cortizo's party will have the largest number of seats in the National Assembly compared to the other parties. However, if the trend continues, the PRD would have a majority of its own, and will not need to negotiate with other blocs to pass its bills.
Cortizo will have more political power compared to Varela to impose his agenda in parliament. In the event that the presidential electoral trend is reversed and Roux is declared president, he will have a reduced margin of maneuver to impose his own agenda, and will have to manage electoral alliances to promote his policies.
*
Democratic Change(17) Revolutionary Democratic Party (29) Panamanian Party (8) MOLIRENA (1) Independent (4) Not Assigned (12)**
* Own elaboration based on the preliminary results of the scrutiny published by the Electoral Tribunal. ** Pending benches waiting for results in some electoral circuits.
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DL4AMERICAS.ORG
Projections
● Cortizo is positioned as the favourite. Although the official declaration of the electoral results by the Panamanian Electoral Tribunal is still pending, Cortizo surpasses Roux by 40,000 votes. There are still fewer than 123,000 valid votes to count, so the court will not declare a winner "until the result is reversible.
● The Financial System as part of the government agenda. The two main government candidates agree on the need for legislating around new financial technologies, which will be a priority for whoever wins. Cortizo would create a working group to develop a Fintech law, while Roux aims to create policies to consolidate crowdfunding.
● National food production. The presidential candidates that got the largest number of votes agree to promote national food production and to prioritize this over imported rival products. Cortizo announced that they will implement national food distribution in school feeding programs. Romulo Roux, on the other hand, is focusing on primary food production, proposing to regulate (constrain) imports during domestic product harvest periods.
● Logistics. As Panama is a central node in the world logistic system, the three candidates have proposals to leverage this. Cortizo is keen to improve processes and technological platforms to modernize logistics systems nationally and establish an integrated logistics system, interconnecting ports, the Colón Free Trade Zone, financial institutions, transportation and private enterprise. Roux proposes to create logistic-industrial parks, mainly in the interior of the country.
The alignment in the manifestos of the main candidates points to shared priorities around which there is likely be scope for collaboration once the new government takes office July 1.
DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG BUENOS AIRES Avenida Entre Ríos 258 3E (1079), Argentina Tel. + (5411) 5218-4647
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