Panama elects new president with pro-investor agenda and pledge to shut migrant trails
- In Reports
- 03:03 PM, May 06, 2024
- Myind Staff
Panama has elected Jose Raul Mulino as its new president, who was favoured by investors. He drew voters with his pledge to revive the once-stellar economy, crack down on drug cartels, and shut down migration routes to the US.
Mulino, standing in for fugitive former leader Ricardo Martinelli, was elected president after Martinelli was banned from participation and sought asylum in the Nicaraguan embassy due to a conviction for money laundering being upheld by a court.
With 94% of votes counted, Mulino, a 64-year-old lawyer, secured 34% of the vote, surpassing his nearest rival Ricardo Lombana, who garnered 25%. The electoral authority declared Mulino the winner, with all other main candidates conceding defeat.
In his victory speech, Mulino assured supporters of his commitment to a pro-investment and pro-private enterprise government.
He will assume office on July 1, succeeding President Laurentino Cortizo, who was ineligible for reelection. Early indications from congressional elections showed a divided legislature.
Panama has faced challenges including unrest, credit rating downgrades, decreased water levels in the Panama Canal, and the closure of a significant copper mine. Mulino pledged during his campaign to pursue nominal economic growth of 7% through public infrastructure projects and incentives for foreign investors.
Throughout much of this century, Panama boasted the strongest economy in Latin America, yet it is projected to grow only 2.5% this year, as per the International Monetary Fund.
Investors are closely monitoring whether Mulino will devise a solution to reopen First Quantum Minerals Ltd’s $10 billion copper mine. After enduring months of violent protests, the Supreme Court ruled in December that a contract for the mine violated the constitution, mandating its closure. The project constituted 5% of the gross domestic product, serving as a significant source of tax revenue and exports.
Lombana cautioned against renegotiating the mine contract, fearing street protests. Fitch downgraded Panama to junk status due to fiscal deficits worsened by lost copper revenue. S&P and Moody's rate Panama just above junk, but further downgrades loom without reforms and mine reopening.
Mulino faces challenges balancing environmental concerns and community protests while securing new water sources for the Panama Canal post-drought. Panama's debt trades with junk-like risk premiums due to fiscal concerns, per JPMorgan Chase & Co.
Mulino's policies may influence the US presidential election, particularly regarding migration concerns. He pledged to close migration trails between Colombia and Panama, a route used by over half a million migrants, mainly Venezuelans, aiming for the US.
Additionally, he vowed to combat drug trafficking, drawing on his tenure as security minister under Martinelli's administration from 2009-2014. Martinelli's money laundering conviction and subsequent disqualification from running for president further shape the political landscape.
Image source: ANI
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