PANAMA: NEW PRESIDENT AND NATIONAL ASSEMBLY ASSUME

UNCLAS PANAMA 000547

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PM
SUBJECT: PANAMA: NEW PRESIDENT AND NATIONAL ASSEMBLY ASSUME
POSTS

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Summary
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1. (U) Ricardo Martinelli became the fifth democratically
elected President of Panama in the last 20 years on July 1,
while Secretary of the Interior Ken Salazar led a White House
delegation to the inauguration ceremony. In his inaugural
address Martinelli defended Panama's economic model, stated
his intention to end corruption and delivered a list of
promises to improve the lot of Panama's poor. President
Francisco Zelaya of Honduras attended the ceremony, together
with the presidents of Mexico, Colombia, Costa Rica, El
Salvador and Taiwan. Zelaya's presence attracted attention,
but did not become a major distraction. After the
inauguration Martinelli joined the Presidents of Mexico and
Colombia in announcing a trilateral agreement to combat
regional organized crime (septel). Earlier in the same day,
the new National Assembly, where Martinelli's coalition
controls 44 of 71 seats, was sworn in. End Summary.

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Economic Progress, Government Reform, Free Trade
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2. (U) Ricardo Martinelli was sworn in as President of
Panama on July 1st. Secretary Salazar led a White House
delegation, together with Congressman Gregory Meeks,
Principal Deputy Assistant Secretary for Western Hemisphere
Affairs Craig Kelly, Freddy Balsera, Managing Partner of
Balsera Communications, and Jim Swigert, Senior Associate and
Regional Director of Latin AMERICA and Caribbean Programs for
the National Democratic Institute. Martinelli pledged during
his speech to use his business expertise to reform Panama's
bureaucracy and fight government corruption. He emphasized
free market ideals in contrast with "the changing ideologies
currently existing in Latin America". Martinelli said he
wanted to pursue free trade agreements with the U.S., Europe
and other Latin American countries to create jobs for Panama
and declared his intent to make Panama "the best place in
Latin AMERICA to do business". He reiterated several of his
campaign promises, including pay raises for law enforcement
personnel, $100 monthly payments for the unpensioned elderly,
and a subway project to create employment and solve Panama
City's transportation problems. He also said he would begin a
massive land titling project and a low income housing
initiative.

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President Zelaya Crashes Party
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3. (U) President Zelaya arrived in Panama the day of the
inauguration to represent Honduras. Zelaya drew some
attention but did not become a major distraction.

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Fighting Regional Crime
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4. (U) Immediately following the inauguration ceremony
Martinelli joined Mexican President Felipe Calderon and
Colombian President Alvaro Uribe to announce an alliance to
fight regional organized crime and narcotics trafficking.
Specific terms were not disclosed, but Martinelli, calling
organized crime a "scourge" that drives away investment and
jobs, emphasized information sharing and cooperation among
the three countries.

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Legislative Strength for New Executive
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5. (U) Earlier in the morning, in a prelude to the
Presidential inauguration, 71 deputies of the new Panamanian
National Assembly took the oath of office. Jose Luis "Popi"
Varela, brother of incoming Vice President and Foreign
Minister Juan Carlos Varela, was elected President of the
Assembly by a vote of 44 to 27.
STEPHENSON