Conflicts with PRD Heat Up in Panama
Conflicts with PRD Heat Up
Cabinet Salary Increases, Export Zone Decree Spur Political Opposition
A series of measures by the government of the Revolutionary Democratic Party (PRD) has spurred intense opposition from different sectors, from organized labor to business groups, farmers and students.
President Ernesto Pérez Balladares and his cabinet generated a political storm in October with the announcement that cabinet members and other high officials had doubled their salaries from $5,000 to $10,000 a month. Labor unions, students and opposition parties staged demonstrations against the raises, and President Pérez Balladares declared “political war” in response.
The church’s Social Action Commission said that the raises “add to the already difficult levels of violence that are mortally wounding Panamanian society.” The commission pointed out that in Panama, “20 percent of the richest people receive more than half of the national income, which is generated by the sweat of the majority, while 20 percent of the poorest people receive less than 3 percent of national income.”
In a bone to organized labor, the government raised the minimum wage by 6.1 percent to $207 a month. But several unions said the increase is still not enough to cover the basic cost of food, estimated at 250 dollars a month.
The controversy came only two months after an 11-day general strike and street disturbances that included four deaths and 132 injuries, and in the midst of internal criticism of “exploratory talks” between Panama and the United States on the future of military bases in Panama.
Legislation by Decree and Export Zones “Foment Discrimination”
On New Year’s Eve the Legislative Assembly, where the PRD and allied parties have a slim majority of deputies, hurriedly approved powers to legislate by decree for the executive branch. The move was immediately attacked by opposition parties. Arnulfista Party leader Mireya Moscoso called the decree power “immoral” and said the PRD government was becoming a civilian dictatorship.
The government defended the extraordinary powers by saying that the legislature has many bills to address, and that any decrees can be revised after the Assembly returns to regular session in March.
The Cabinet’s first use of the powers was a decree on January 11 which grants exemptions from some articles of the Labor Code to export processing plants which Taiwanese investors plan for former U.S. military bases on the banks of the canal. The decree exempts investors at Fort Davis, near the Caribbeancity of Col—n, from the Labor Code’s requirement to sign contracts with unions, and reduces payment for overtime. The decree will be in effect for five years, with possible extensions until the year 2005. Strikes will be prohibited during the processing of grievances by either employers or workers.
The National Confederation of Organized Workers (CONATO) immediately threatened to take legal action against the decree, in both national courts and before the U.S. Commerce Department. CONATO said it had accepted changes in the Labor Code last August to attract foreign investment, but “we cannot accept that Taiwanese and other investors now want different rules to set up in Panama.” The law foments discrimination and puts workers into two classes, said apparel workers union leader Julia Suira: those with rights under the Constitution and its laws and those who don’t have those rights.
If the U.S. were to accept a claim by CONATO, products produced or assembled in the special export zones would be barred from the United States. The Panamanian Workers Central took similar action in 1992 against a special labor law for export assembly plants, which put at risk Panama’s trade benefits under the Caribbean Basin Initiative.
President Pérez Balladares insisted that the decree only seeks to generate new jobs. “No one will put a revolver to a worker’s head to accept that job. There is absolute freedom to accept it or not,” he said.
Meanwhile, a December 20 government decree lowering tariffs on 40 agricultural and livestock imports has drawn protests from producers, who say importers will put thousands of rural Panamanians out of work. The decree went into effect almost immediately, on January 1.
“Ten days is not enough time to become efficient, adopt new technology, negotiate with the banks or creditors and become competitive,” complained Graciano Cruz, spokesman for a group of non-traditional agricultural exporters. Cruz said the decree was imposed by the World Bank in order to obtain a $45 million credit.
“We have to be serious in the [economic] restructuring process and fulfill all that the government has promised, because Panama’s name in international financial markets is at stake,” Economy and Planning Minister Guillermo Chapman explained.
Onion growers said that the lowered tariffs mean they will lose this year’s crop and eventually disappear as producers. Ten thousand farmers who depend on onion sales will be forced to end production and move to other areas, they said.
The Chiriquí coordinator of the National Agricultural Union objected both to the suddenly lowered tariffs and to the decree’s provision for an end to import quotas and permits, which he said endangers crops in the ground and those in preparation.
The producers emphasized that they do not insist on maintaining high tariffs, but on keeping tariffs at the levels agreed during negotiations with the World Trade Organization, which governs international trade. That agreement allowed for higher tariffs and a longer transition period.
Sources: El Panamá América, 11/29/95, 1/3, 1/12, 1/13, 1/14, 1/18/96; Latinamerica Press, 11/23/95; La Prensa, 1/2, 1/10, 1/17/96.
