PANAMA PRESIDENT TORRIJOS'S POPULARITY NOSE-DIVES

C O N F I D E N T I A L SECTION 01 OF 02 PANAMA 001415

SIPDIS

DEPARTMENT FOR WHA/CEN
SOUTHCOM ALSO FOR POLAD
VANCOUVER FOR CG ARREAGA

E.O. 12958: DECL: 07/01/2015
TAGS: PGOV PREL ECON PM POLITICS FOREIGN POLICY
SUBJECT: PANAMA PRESIDENT TORRIJOS'S POPULARITY NOSE-DIVES

REF: A. PANAMA 1377


B. PANAMA 0629

Classified By: Ambassador Linda E. Watt for reasons 1.4 (b) & (d).

SUMMARY AND COMMENT
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1. (C) Panama President Martin Torrijos's popularity
plummeted in the wake of the June 1 passage of the Social
Security (CSS) reform package pushed through the National
Assembly by his Democratic Revolutionary Party (PRD). Less
than one in four Panamanians now believe that Torrijos is
doing an adequate job as president, down from 80% when he
took office ten months ago. In response to six weeks of
unwavering labor pressure, Torrijos suspended implementation
of the reforms on June 22 in favor of a 90-day National
Dialogue (reftel A). When that move failed to bring
FRENADESSO (National Front for Defense of Social Security)
and SUNTRACS (Sole National Union for Construction and
Related Industry) to the bargaining table, and after a
surprise intervention by the Catholic Church, on June 27
Torrijos suspended the law for 90 days. Although many
observers credit Torrijos with making a politically astute
decision to back down, his new-found willingness to negotiate
the controversial CSS reforms has not yet improved his public
image. Instead, to many he appears weak and indecisive, as
he did when he delayed making a decision on Supreme Court
reforms in March with the creation of a 180-day Justice
Commission (reftel B). The challenge for Torrijos is to find
a way to regain the political initiative and recoup the
credibility he has lost with the Panamanian people. End
Summary and Comment.

Torrijos's Popularity Sinking Fast
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2. (SBU) Public opinion polls continue to show a steep slide
in the president's popularity. According to Dichter and
Neira/Latin Research Network, a 34 percentage-point drop in
popularity coincided with the passage of CSS reforms in the
beginning of June. From October 2004 to June 2005, President
Torrijos's approval rating has dropped from 80% to 24%. In
March 2005, his post-fiscal reform approval rating in the
midst of the Supreme Court crisis held at 58%. CSS reforms
have been enormously unpopular, with more than 80% unhappy
that the reforms were passed in a rush and at midnight. When
asked whether the reforms positively or negatively affected
the public's view of the president, 86% responded that they
negatively affected the public's view.


3. (SBU) When President Torrijos announced May 18 reforms to
the CSS law (Law 17),he knew that his proposals would draw
criticism. Faced with a collapsing pension and medical
system, his approach called for all sectors to give up
something. "Shared sacrifice" was his motto, hoping to get
popular support for longer periods of payroll contributions,
increased worker and employer contributions and later
retirement ages. To shorten the period of unrest, the
president rushed the legislation through the legislature,
completing passage in just 10 days.


4. (SBU) Popular unrest, however, did not die down and
opposition groups, students, labor unions, even the Catholic
Church, took aim at the government for failure to consult the
population on such an important and sweeping reform proposal.
For six weeks, civil protests against Law 17, including
demonstrations throughout the country, caused massive traffic
delays and business closures at a substantial cost to the
country's economy. When Torrijos appeared uncompromising in
the face of popular rejection of Law 17, Archbishop Jose
Dimas Cedeno gained influence by pushing dialogue, compromise
and unity.

Too Little, Too Late?
--------------


5. (SBU) Editorial opinion and comment in the media have been
generally critical of the government for its initial failure
to consult and its slow response to a burgeoning problem of
public security. At the same time, media did not withhold
criticism of the more radical sectors of the protest
movement, faulting them for violent tactics and intransigence
in the discussions. Although most observers believe it was
the right move, Torrijos's offer to consult after the fact
has also drawn criticism for the half-hearted manner in which
he approached it. Also, Torrijos can still reactivate the
current law, with no additional changes, after the 90-day
period of National Dialogue is over, or whenever he wants.
For their parts, FRENADESSO and SUNTRACS apparently plan to
push for their maximum program, as suggested by their
continued refusal to come to the table until the suspension
of Law 17 is published in the National Gazette, Panama's
equivalent of the Congressional Record.

The Catholic Church Enters the Fray
--------------


6. (SBU) Torrijos's June 22 and June 27 announcements
regarding CSS suspensions were both precipitated by public
pressure brought to bear by the Catholic Church, particularly
by Archbishop Jose Dimas Cedeno. Cedeno has consistently
increased his influence making policy statements regarding
the need for dialogue, compromise and unity. The Episcopal
Conference, Ecumenical Committee and the Council of
Pastors/Rectors all attempted to play the role of mediator
during the unrest. Eleven days after workers in the
construction, health and education sectors went on strike,
the Panamanian Episcopal Conference called on all parties to
open venues for dialogue. On June 14, under growing pressure
from the Catholic community and for fear of an economic
standstill due to the strike, Torrijos proposed that all
sectors involved, including the Episcopal Conference, become
involved in a national dialogue. On June 21, in its most
influential move, the Church asked for suspension of the law.
Archbishop Cedeno requested publicly that Torrijos suspend
CSS reforms.

Comment
--------------


7. (C) Though unions such as FRENADESSO and SUNTRACS, who
many suspect of having ulterior political ambitions, do not
enjoy wide popular support for their negotiating tactics,
they have also not alienated the populace. Many sectors of
society believe they have legitimate concerns about CSS
reforms that have not been addressed by the GOP. Torrijos's
challenge will be to convince middle class and professional
Panamanians--represented by the teachers and physicians--that
they have few interests in common with the SUNTRACS radicals,
whom Torrijos needs to isolate. On the other hand,
Torrijos's popular decline is not without a price. His loss
of popularity may damage his administration's capacity to
successfully pursue other policy goals. For example,
according to La Estrella de Panama, support for Canal
expansion has dropped 10 percentage points from 72% to 62%
since the beginning of CSS reforms. A failure by Torrijos to
successfully bring this chapter to a close on his terms
already has delayed the holding of a referendum on Canal
expansion at least until March 2006.

WATT