The massive protests rocking Panama over a copper mine worth around 4% of the country’s GDP are the latest sign of discontent among Panamanians, casting doubt on the future of mining and posing a major challenge for the government of President Laurentino Cortizo before the elections next May.
(In context: The reasons that led Panama to experience an unprecedented social protest).
In the demonstrations, which began in early August and intensified over the past week, teachers and construction unions They joined indigenous and environmental groups to block roads and demand that the new mine contract be cancelled.
The mine, which is the largest operating copper exploitation in Central America, is owned by the Canadian company First Quantum Minerals (FQM). Dozens of protesters have been arrested on charges including assault and property damage, and several police officers have been injured as traffic comes to a standstill at logistics centers across the country.
Cortizo, a centrist who cannot run for re-election, has faced low approval ratings, at just 18%, amid latent frustration over corruption, lack of transparency and poor social services. Environmental policy has also received renewed attention as a severe drought hits the country, limiting navigation through the Panama Canal.
(Also: Thousands of migrants on their way to the United States were stranded due to protests in Panama).
On October 20, Congress approved a new contract for the Panama Copper mine. The new agreement is more favorable for Panama and includes a huge increase in royalties, reaching an annual minimum of $375 million. Cortizo celebrated the contract on October 24, saying: “We made the right decision, not the easiest one. “After a difficult and complex negotiation for more than two years, an agreement was reached… which guarantees much better terms and conditions for the country.”
The president stressed that the government would not tolerate “vandalism or calls for anarchy” and that crimes committed by protesters would be prosecuted. He added that the agreement will secure more than 9,000 jobs and that its revenues will keep the social security system of the country, allowing a national dialogue about how to spend the money from that system.
Little credibility
But others see a broader dynamic. The mining agreement “was proposed by a government with little credibility and approved by legislators widely considered corrupt,” he said. Enrique de Obarrioformer president of the Panamanian Association of Business Executives, who now directs the Latin American and Caribbean Network for Democracy.
De Obarrio explained to Americas Quarterly that the new contract was processed by expedited approval in Congress, with minimal public participation, which fueled suspicions of clientelism. The Supreme Court of Panama voided the mine’s previous contract because it lacked a transparent public bidding process. Opponents claim that the new agreement also does not comply with transparency standards and have already filed multiple judicial appeals.
The protests quickly escalated due to “broad public dissatisfaction with a highly corrupt and callous political system,” said Carlos Guevara Mann, a political science professor at Florida State University’s Panama campus. “A large majority cannot make ends meet due to the spiraling cost of living and poor public services,” he told AQ. In the eyes of the public, the government has failed to make significant progress on these issues, even after last year’s mass demonstrations.
(Keep reading: Panama bans metal mining indefinitely amid several protests).
2024 elections
Panama has been relatively a history of economic success in Latin America in recent decades, with rapid GDP growth and a decrease in poverty from 48.2% in 1991 to 12.1% in 2019. But this positive trend began to reverse in 2017, with increases in informality and unemployment , according to the World Bank. According to the United States Department of State, the country has the fourteenth Gini index –which measures inequality– highest in the world.
The World Bank predicted earlier this year that poverty would fall to pre-pandemic levels by 2025 due to GDP growth expected to reach 6%, although that scenario was largely based on the copper revenues that now they are questioned.
The protests are also influencing the May elections, harming the party PRD of Cortizo and benefiting candidates less linked to the country’s traditional politics, de Obarrio told AQ. For now, the favorite is the former conservative president Ricardo Martinelli (2009-2014), who in July was sentenced to more than ten years in prison for charges related to money laundering.
Martinelli denies any wrongdoing, but is still appealing and has not yet been jailed. On October 24, a higher court confirmed the sentence. His enduring popularity is due to the perception that he knows how to respond to citizens despite being part of a compromised ruling class, de Obarrio said.
Camila Aybar, a Panama City-based youth activist who supports the protests, said they are happening essentially because people feel they have not been consulted about the controversial mine. “Panama has not decided whether or not it wants to be a mining country,” she told AQ. She and other protesters are calling for a national referendum on mininglike the one held in 2006 and which approved by an overwhelming majority the Panama Canal expansion project. This referendum could be included in the May elections.
Indigenous and environmental groups fear that the mine will irreparably harm Panama’s rainforest, a vital part of the Mesoamerican Biological Corridor, and contaminate drinking water. On the other hand, the use of water in the mine worries current and former officials of the Canal. Jorge Luis Quijano, former head of the Panama Canal Authority, stated in August that although the mine’s water consumption does not currently affect the Canal’s water levels, it could do so in the future.
(You can read: Panama Canal will reduce ship crossings starting Friday due to the drought).
All of this adds to skepticism that the government’s decision to greenlight the mine is in the public benefit. Even the Episcopal Conference of Panama spoke on October 25 calling for the cancellation of the contract and a new national dialogue on the mine.
RICH BROWN
AMERICAS QUARTERLY
Supreme Court will have the last word
Although President Laurentino Cortizo announced that he would call a referendum in December to repeal the mining law, the Panama electoral court He denied the possibility of resorting to the mechanism, alleging that there is no rule in the country that contemplates this type of popular consultation.
Now, and after the Parliament of Panama gave up on repealing the contract in the second debate, it will be the Supreme Court the one in charge of determining the future of the agreement. The court will have to respond to several lawsuits filed for alleged unconstitutionality in the norm approved by Cortizo.
Panama, paralyzed
- More than 200 million dollars are the estimated losses in the tourism sector due to the protests.
- 68,000 people have canceled their visit to the country until now.
- 13 million of dollars the hotel sector has lost due to cancellations of its reservations.
- Between 70 and 90 million of dollars a day the multiple road blockages cost the Panamanian economy.
- More than 6 million of dollars are reported in losses only in the Colón Free Zone.
- 1,000 trucks They accumulate in the border area between Panama and Costa Rica without being able to transport merchandise.
- 8,000 migrants Illegals are stranded in Panama, waiting for the bus service to be provided again.
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