Poor Governance, Sassy Corruption
The Republic of Panama has been seriously affected by the state of national emergency caused by the COVID-19 pandemic. It is one of the countries with the longest and “tougher” lockdown measures, where thousands of workers have been suspended from their daily work and hundreds of businesses have been closed.
The country is being dragged down by the unfavourable shock against the world economy and the lack of formal and informal jobs in various labour sectors in the region.
The Minister of Labour announced that as part of the effects of the pandemic, it is estimated that unemployment in Panama will reach up to 20%, doubling the current unemployment rate. This number has been calculated according to the figures of the International Labour Organization.
In this context, for this year 2020, the World Bank and the Economic Commission for Latin America and the Caribbean (ECLAC) estimate that Panama’s economy will register a contraction of 2%. Nevertheless, the International Monetary Fund (IMF) forecasts that Panama will be among the countries least affected by the new coronavirus pandemic. Yet, I believe it all depends on how the Panamanian government structures its plan to reopen the local economy, but so far all we have seen is poor governance and corruption at its peak.
Although Panama has a strong economy, one of the fastest-growing in the region, the Government’s support provided to families affected by the quarantine does not reflect prosperity at all, and in fact, weaker economies have offered better subsidies to their population. The government has been giving out monthly physical or digital vouchers of $80 per family or bags of food with products valued at between $18 and $21 since April, as part of the so-called “Plan Panama Solidario”.
The Republic is recognized by the International Monetary Fund (IMF) as the richest nation per capita in Latin America and the Caribbean. Panama only contributes 0.3 % of the GDP per capita in monthly bonuses and has one of the highest cost of living in the region.
So, the question is, where is that 3% annual GDP growth reflected?
The most vulnerable population emphasizes that these bonds are unfair, and this is an expression of hard and pure inequality. The Plan Panama Solidario aid has not reached all Panamanians, and where it has reached, it has become insufficient, opening more the inequality gap.
The COVID-19 pandemic is leaving the most vulnerable citizens with much concern, leaving the country with billions in foreign debt, still seeing an increase in cases, and all this is causing an accelerated fall in the economy.
On the other hand, I would like to talk about the “alleged corruption” of the public health system in Panama.
Recently, the newspaper “La Estrella de Panamá” ~one of the largest, if not the largest newspaper in Panama~ presented a study on possible overcharges in the purchase of medicines for the hospitals of the Ministry of Health, these overcharges, according to the study, ridiculously exceed the prices compared to what the Social Security Fund pays.
The average difference of the 12 products with the highest price of the Ministry of Health against those of the Social Security Fund is %1800, that is, 18 times more expensive.
This information comes from a comparative chart accessed by La Estrella de Panama, where an exaggerated overprice of the same product can be seen, despite the fact that the same supplier supplies both institutions.
For example, one of the drugs that highlighted a huge difference was Nystatin, which the Ministry of Health accepted a bid price of $1.57, while the Social Security Fund pays $0.04 for the same product.
These differences are extremely serious. The Minister of Health, Rosario Turner, said she had no answers at the moment and promised to carry out the corresponding analyses to inform the population. However, this reminds us of the recent case in which the government bought about 100 ventilators for patients infected by coronavirus, where there was later criticism in local media and social networks for cost overruns. The purchase of the ventilators was almost 50 thousand dollars per unit. And it was shown that they cost between 6 and 7 thousand dollars.
Although it was not admitted, this case led the vice-minister of the presidency, Juan Carlos Muñoz, to present his resignation, which was accepted by the president of the republic, Laurentino Cortizo, at the end of April. But these purchases where in charge of the Vice President of the Republic, Jose Gabriel Carrizo, and are being investigated by the Public Ministry. On top of that, the Civil Society is demanding Carrizo’s resignation as minister of the presidency.
