PANAMA: POLITICAL ANALYST WARNS OF ROUGH

S E C R E T PANAMA 000330 NOFORN SIPDIS E.O. 12958: DNG: CO 04/21/2019 TAGS: ECON PGOV PM PREL SUBJECT: PANAMA: POLITICAL ANALYST WARNS OF ROUGH POST-ELECTION PERIOD Classified By: Classified by: Ambassador Barbara J. Stephenson for reas ons 1.4(b) and (d). -------------- Summary -------------- ¶1. (S//NF) Ruling Revolutionary Democratic Party (PRD) leaders expect Alliance for Change presidential candidate Ricardo Martinelli to win the May 3 presidential election, pro-PRD political commentator Jose Blandon, Sr. told POLOFFs on April 20. --The Torrijos administration's own internal PRD polls showed that Martinelli might win by as much as fifteen points--an unprecedented margin--over the PRD presidential candidate Balbina Herrera and secure more than fifty percent of the presidential vote for the first time in Panama, Blandon explained. --Furthermore, Blandon said that polling at the circuit and precinct level indicated that the PRD would lose control of the National Assembly. Some PRD National Assembly Deputies such as former National Assembly President Pedro Miguel Gonzalez and Majority Leader Leandro Avila who were believed to have had safe seats would be defeated; "They have tough races that are too close to call and the momentum seems to be with the opposition," Blandon explained. --Blandon also commented that if Martinelli won and if his alliance took control of the National Assembly, President Martin Torrijos would face an extraordinarily difficult political situation both inside the PRD and the National Assembly for the duration of the transition period that would culminate with the July 1 inauguration of Martinelli. --A Martinelli victory would also present major challenges for Martinelli's alliance partner, the Panamenista Party, as this party that was accustomed to top billing grappled with its second string status. A Martinelli victory has the potential to be a seismic event that will realign the tectonic plates that compose Panama's political geology. Panama faces the prospects on July 1 of a Martinelli force that is striving to find its sea legs while Panama's major political parties- the PRD and the Panamenista Party- struggle to re-orient themselves to the new political reality. The Torrijos Administration's final weeks in office may present the best opportunity to grapple with tough bilateral issues, most notably the U.S.-Panama Free Trade Agreement (FTA),as it may be up to a year before a Martinelli Administration would even have the capacity to do so itself. End summary. -------------- PRD Expects Opposition Victory -------------- ¶2. (S//NF) "Martinelli will win the May 3 presidential election, and possibly by as much as fifteen points over Balbina Herrera, which would be a historic accomplishment for Panamanian politics," pro-PRD political commentator Jose Blandon, Sr. told political officers during lunch on April ¶20. Blandon added that for the first time in Panamanian history, Panama might elect its President with more than fifty percent of the vote. (Note: In Panama, the candidate who receives the most votes wins an election; there are no provisions for subsequent rounds of voting in the quest for fifty percent plus one majorities.) He commented that internal PRD polls foreshadowed a bleak picture for Panama's largest party as the PRD expected to lose the presidency and would likely lose control of the National Assembly. He predicted that the "pendular effect" in Panama--in which the PRD and the opposition (read: Panamenista) party alternated control of the executive every five years--would hold true this year. ¶3. (S//NF) Blandon explained that in-fighting within the ruling PRD had prompted several internal divisions and factions that had complicated the PRD's ability to advance a unified campaign to support PRD presidential candidate Balbina Herrera. Furthermore, Blandon asserted that these factional and internal divisions affected National Assembly races and even local contests. Positioning themselves for the most advantageous position in the party after the May 3 general elections, PRD VP candidate Juan Carlos Navarro had, for example, allied with former President Ernesto "El Toro" Perez Balladares, standard bearer of the party's right wing, and was attempting to draw centrist party members toward him and away from President Torrijos and First VP and FM (and Navarro's cousin) Samuel Lewis. President Torrijos and his centrist followers, particuarly Lewis, constituted the PRD's moderate center. (Note: Later the same day in a radio interview in a response to a question about his post-July 1 plans, Lewis said he planned to return to his businesses and to lay the ground work for a political future, remarks widely interpreted as the first sign that he plans to run for president in 2014). Even the left-leaning Tendency (Tendencia) faction of the PRD had been split, Blandon said, between followers of National Assembly Deputy Hector Aleman and of Herrera. -------------- Martinelli's Uncertainty as a Leader -------------- ¶4. (S//NF) "Martinelli's greatest strengths are his management skills. He knows how to run a smart campaign, but as President he may make hasty decisions," Blandon commented, contrasting Martinelli's perceived hands-on, man of action style with Torrijos' more pensive and deliberate style. Unlike Torrijos who vacillated while trying to make up his mind, Blandon said, Martinelli knew how to act decisively but lacked political experience. Blandon cautioned that Martinelli's decisionmaking style might hurt him in the end, especially if he made decisions too quickly about critical issues such as strengthening Panama's economy during the global economic downturn. Blandon said that Martinelli's campaign manager, Jimmy Papadimitriu, might help him to step back and analyze situations before making rash decisions. "Jimmy is Martinelli's most influential advisor and the only one who can talk sense to him and get him to slow down," Blandon added. Nonetheless, Panama's next President would need to address several looming problems such as public transportation, inadequate healthcare, and a poor education system. Blandon commented that insecurity was a problem in Panama, but it has become overemphasized by the local press. -------------- Difficult Transition Period -------------- ¶5. (S//NF) Blandon commented that if Martinelli wins the presidency on May 3, Torrijos would come under immediate pressure from within the PRD and would face a challenging transition period. Nonetheless, Blandon said that Martinelli and Torrijos had an open line of communication, a channel that would be critical for managing a way ahead through Panama's two-month transition period from May 3 to July 1. If the PRD lost both the presidency and a majority in the National Assembly, Torrijos' days as Secretary General of the party would be numbered. "He would not survive as Secretary General of the PRD. Balbina would not last as the party's President. Basically, election night could be the 'night of the long knives' in the PRD," according to Blandon. -------------- Disarray and Challenges in Martinelli's Camp -------------- ¶6. (S//NF) "A strong Martinelli victory will be like a shock wave across Panama's political structure," Blandon posited. While it would touch off an internal power struggle in the PRD, it was also having an impact on the Panamenista Party, Panama's largest opposition party. Life-long Panamenista Party member former President Guillermo Endara had already bolted the party to establish his own Moral Vanguard of the Nation (VMP) party, taking with him many old-line Panamenistas. Former President Mireya Moscoso and her camp followers had not only been tangling with current Panamenista Party President and Martinelli VP running mate Juan Carlos Varela over his efforts to "reform" the party following the Moscoso years, but were having difficulty fathoming how it came to be that the "glorious" Panamenista Party accepted second billing in the Alliance for Change grand opposition alliance. Finally, Varela and Panamenista Party primary challenger Alberto Vallarino had only just smoothed over their differences; "They remain competitors too though." (Note: Varela is rumored to be penciled in to be FM while Vallarino may be slotted for Minister of Economy and Finance.) ¶7. (S//NF) Though Martinelli was shaking the foundations of Panama's political order, Blandon explained that Martinelli lacked the personnel and political capability to put in place a new political structure. The Martinelli administration would be challenged to manage the competing interests of his opposition alliance. "It will be at least a year before the Martinelli Administration is fully operational," Blandon assessed. "I'm worried about governability as Panama transitions from one political order to an undefined new order." -------------- Navarro's Political Advisor -------------- ¶8. (S//NF) "The evening of May 3 will be a very interesting night in the PRD," PRD VP candidate Juan Carlos Navarro's political advisor Ivan Gonzalez told POLCOUNS on April 22. While asserting that Herrera still had a chance at winning on May 3 - "Our tracking polls show us closing the gap. If we are within 5-6 points by next Wednesday, we can be competitive," - Gonzalez acknowledged that a PRD victory was increasingly becoming a long-shot. He also acknowledged that the PRD would likely lose control of the National Assembly. Gonzalez confirmed that Navarro was allying himself with former President Ernesto "El Toro" Perez Balladares and trying to pull moderates away from Torrijos and Lewis. He predicted that the Tendency (Tendencia) faction would split between Aleman and Herrera. -------------- Comment -------------- ¶9. (S//NF) Martinelli's likely victory on May 3 is shaping up to be a seismic event that could cause the tectonic plates of Panamanian politics to shift dramatically. This seismic event will set off fissures and after shocks in the two plates that have dominated Panamanian politics for the past forty or more years, the PRD and the Panamenista Party. PRD insiders are clearly preparing for an electoral drubbing and key party movers and shakers are maneuvering for the best position possible for the post-May 3 world. While generally perceived as a pro-PRD analyst, Blandon's assessment of the impact of a Martinelli victory on Martinelli's alliance partner is on the mark. Going forward, however, the Torrijos Administration, until its final day in office on June 30, will be the most viable partner for advancing key U.S. interests, such as the bilateral Free Trade Agreement (FTA). The new era of Panamanian politics that will open on July 1 will be characterized by a new Martinelli force striving to find its sea legs while two powerful forces with deep roots in Panamanian politics -- the PRD and the Panamenista Party -- will be looking for their bearings too. STEPHENSON