Panama

Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post covers April 6 to April 12.

Peru’s unpopular congress and attorney general move to undermine 2026 elections; APEP kicks off, focus narrowed; Protests could hold back Latin America’s role in the green transition.

BRICS becomes BRICS+, though not all may join; Latin America looks West, not East, for its technology; more frequent droughts promise more slow downs in the Panama Canal.

Hot winters in the Andes and Southern Cone threaten Latin America’s advantages; Panama, Costa Rica, Mexico aim to ride U.S. semiconductor industrial policy coattails; Colombia’s new ceasefire agreement remains fragile.

Peru shows no economy is insulated from politics forever; Panama and few others bat above the average on anticorruption; Xóchitl Gálvez puts opposition on the map ahead of Mexico’s 2024 presidential elections.

Washington is hoping it can force asylum seekers to stay south of the border.

The seventh Summit of the Americas begins today in Panama City, Panama. Taking place every three years, it brings together leaders throughout the Western Hemisphere. This summit’s central theme is “Prosperity with Equity: The Challenge of Cooperation in the Americas,” addressing issues including education, health, energy, the environment, migration, security, citizen participation, and democratic governance. This is also the first summit Cuba attends. Yesterday, I participated in a CFR media call presided by Justin Vogt, deputy managing editor of Foreign Affairs, offering a preview of the summit. You can listen to the call here.

December 20 marks the 25th anniversary of Operation Just Cause, better remembered as the U.S. invasion of Panama. Set off by the death of an off-duty Marine lieutenant by Panamanian security forces, the invasion represented the final step in a deteriorating relationship between the United States and Manuel Noriega—once a CIA informant and close ally, later a defiant dictator, undone by the winding down of the Cold War and his own brazen corruption. The lopsided confrontation ended by early January of 1990, when Noriega surrendered to U.S. authorities. He was then extradited, tried, convicted, and eventually sentenced to twenty years in U.S. federal prison for drug-trafficking, racketeering, and money-laundering. Noriega left a devastated economy and society. During his last years the nation defaulted on its debt and fell into a deep recession, with GDP plummeting 13 percent. Panamanians living on just $2 a day rose to nearly a third of the population. Under the new democratic government led by Guillermo Endara—who most thought won the nulled 1989 presidential elections—Panama began to improve. After the United States lifted its sanctions foreign direct investment returned, especially into the country’s services sector. The U.S. military, always a strong presence due to the canal, as well as others, could again visit, boosting consumption.  Panama’s economy, and in particular its middle class, began to recover. 1999 represented an economic turning point for the country, as the United States returned the canal to Panamanian ownership and control. Today, upwards of 13,000 ships pass through the canal’s locks each year, paying on average roughly $250,000 a trip (which they wire to the canal a couple days before entering the line). This direct influx of money (netting the federal government some three million dollars a day) is complemented by a huge supporting transportation and logistics service sector that, combined, have helped Panama grow an average of nearly  7 percent a year since it gained control of the passageway—faster than any other Latin American country during this time period. Still, while the country as a whole has gotten richer, not everyone has benefited. Panama’s middle class remains small and inequality high. The sleek skyscrapers that fill the cityscape sit alongside neglected cinder-block apartments. Outside Panama’s urban areas, over 40 percent of the population lives in poverty. Panama’s richest 20 percent of the population controls nearly 60 percent of the nation’s income—a disparity that rivals neighboring countries such as the Dominican Republic and Honduras. With an expanded canal set to open in early 2016, commerce will only increase (capacity is set to double). While bringing in greater revenues, as well as likely investment, this growth will further tax Panama’s already overburdened infrastructure, including bridges, roads, and even sewer systems. The challenge will be to make its economic growth sustainable and inclusive, finding more ways for average Panamanians, and especially those in areas far away from the canal, to share in the benefits from their country’s continuing economic boom.

Last week I was in Panama, and had the good fortune of visiting the Canal. In its Centennial year, it is a truly impressive feat of engineering, some forty-eight miles long, rising and falling some eighty-five vertical feet (roughly eight stories) overall through three lock systems and six different chambers. Its storied construction is captured eloquently in David McCullough’s The Path Between the Seas—a great read for those interested in this piece of history. The Canal has been a huge source of growth for Panama. Upwards of 13,000 to 14,000 ships go through the locks each year, paying, on average roughly $250,000 for passage (which they wire to the Canal a couple days before entering the line). This direct influx on money (netting the federal government some $6 million a day) is complemented by a huge supporting transportation and logistics service sector that, combined, have helped Panama grow an average of almost 7 percent a year since it gained control of the passageway in 1999—faster than any other Latin American country during this time period. Still, while the country as a whole has gotten richer, not everyone has benefited. Panama’s middle class remains small and inequality high. The sleek skyscrapers that fill the cityscape sit alongside neglected cinder-block apartments. And outside of Panama City’s metropolitan area (where just over one third of the country’s population lives), almost 70 percent of the population lives in poverty (as measured by ECLAC). In fact, Panama’s richest 20 percent of the population control over 60 percent of the nation’s income—a disparity that rivals neighboring countries such as the Dominican Republic and Honduras. With an expanded Canal set to open in 2015 commerce will only increase; many expect the Canal to double its capacity by 2025. While bringing in even greater revenues, as well as likely investment, this growth will further tax Panama’s already overburdened infrastructure, including bridges, roads, and even sewer systems. The challenge will be to make its economic growth sustainable and inclusive, finding more ways for average Panamanians, and especially those in areas far away from the Canal, to share in the benefits from their country’s continuing economic boom.