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### Viewing cable 09PANAMA339, PANAMA: TORRIJOS SOCIAL PROGRAMS TO CONTINUE UNDER

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09PANAMA339 | 2009-04-27 20:08 | 2011-04-11 00:12 | CONFIDENTIAL | Embassy Panama

`

    VZCZCXYZ0002
    RR RUEHWEB

    DE RUEHZP #0339/01 1172032
    ZNY CCCCC ZZH
    R 272032Z APR 09
    FM AMEMBASSY PANAMA
    TO RUEKJCS/SECDEF WASHDC
    INFO RHEFDIA/DIA WASHDC
    RHMFISS/CDR USSOUTHCOM MIAMI FL
    RHMFISS/JOINT STAFF WASHINGTON DC
    RUEAIIA/CIA WASHDC
    RHEHAAA/NSC WASHDC
    RUEKJCS/SECDEF WASHDC

` `

    ..C O N F I D E N T I A L SECTION 01 OF 03 PANAMA 000339

    SIPDIS

    E.O. 12958: DECL: 03/12/2019
    TAGS: ECON PGOV SOCI PM
    SUBJECT: PANAMA: TORRIJOS SOCIAL PROGRAMS TO CONTINUE UNDER
    NEXT ADMINISTRATION

    Classified By: Classified by Ambassador Barbara J. Stephenson for reaso
    ns 1.4(b) and (d).

    -------
    Summary
    -------

    ¶1. (C) Both leading presidential candidates have acknowledged
    the success of some social programs initiated during
    President Martin Torrijos' term, and have agreed to continue
    certain programs after the next administration is sworn in on
    July 1.  Programs earmarked for continuity by ruling
    Revolutionary Democratic Party (PRD) candidate Balbina
    Herrera and Alliance for Change candidate Ricardo Martinelli
    include the Network of Opportunities ("Red de
    Oportunidades"), the Community Development Program (PRODEC),
    and the National Institute of Vocational Training for Human
    Development (INADEH).  Although Torrijos's Agro Compita
    subsidized food program and the recently-inaugurated
    Farmacias Compita subsidized medication program are not
    mentioned in either candidate's government plan, both have
    publicly expressed support for them.  Herrera has run on a
    platform stressing continuity, and she and senior
    administration officials constantly trumpet the PRD's
    hallmark social welfare successes under Torrijos's watch.
    Despite his "change" mantra, Martinelli is keen to piggy-back
    on Torrijos's social successes.  End summary.

    ----------------------------------
    Popular social programs to live on
    ----------------------------------

    - The Network of Opportunities (Red de Oportunidades)

    ¶2. (SBU) The Network of Opportunities is a monthly
    conditional monetary transfer program that aims to reduce
    extreme poverty by facilitating access to education and
    healthcare for the poorest Panamanians.  (A December 2008
    report notes that more than 500,000 Panamanians -- out of a
    total population of about 3.3 million -- are "affected by"
    extreme poverty. UN statistics show a 11.7% extreme poverty
    rate.)  Families enrolled in the Network receive a monthly
    stipend upon the conditions that children attend school and
    adults comply with medical appointments.  A December 2008
    report shows that the Network of Opportunities had spent a
    total of $43 million on transfers to a growing number of
    families over two years.  By the end of 2008, 70,599 families
    in 591 of 621 precincts (corregimientos) received transfers,
    which translates to about 400,000 total beneficiaries of the
    program.  Last year the dollar amount of the transfers was
    raised from $35.00 to $50.00 per family per month.  Extreme
    poverty is concentrated in the three indigenous comarcas
    (Ngobe Bugle, Kuna Yala, and Embera Wounaan), where $18
    million of the budget was spent.  The remaining $25 million
    was allotted to the nine provinces that make up the country.
    As Torrijos noted in his March 1 "farewell" address to the
    National Assembly, enrollment into the program continues:
    75,157 families and counting receive the transfer as of March
    ¶2009.  Herrera lists raising the number of Network of
    Opportunity beneficiary families to 85,000 in her government
    plan's list of "100 Promises," and specifies expanding the
    program to reach all of the country's poor indigenous
    populations.  She upped the ante in a recent interview by
    saying that she would extend the program to 150,000 families.
     Martinelli's Government Plan for Change explains that his
    administration would "deepen and improve" the Network of
    Opportunities, independent of the political clientelism that
    he says has marred the program and the Torrijos
    administration.

    - The Community Development Program (PRODEC)

    ¶3. (C) Established in 2006, PRODEC is funded by $50 million
    drawn annually from surplus Canal revenues.  Its more than
    3,000 grassroots infrastructure development projects are
    derived from community input gathered from site visits, or
    "public consultations," sometimes carried out by president
    Torrijos himself.  PRODEC projects are largely aimed at
    improving roads, but also include projects to improve access
    to drinking water, rural electrification, and education
    infrastructure.  Minister of Presidential Goals Luis Blanco,
    the defacto head of PRODEC, met with POLOFF and emphasized
    that although PRODEC has been criticized for moving slowly,
    projects worth about $40 million have been completed.  "The
    problem," Blanco said, "is that the projects need to be
    local, and there's a lack of local capacity to undertake the

    PANAMA 00000339  002 OF 003

    projects -- it is one thing to do a project here in the
    capital, but another in the rural areas.  We want to bring
    infrastructure as well as employment to the lesser-served
    areas, but it is hard sometimes to find local people
    qualified to do the work."  This, according to Blanco,
    explains why PRODEC has completed only 581 of the over 3,000
    approved projects, and has spent only a portion of the $200
    million in its budget.  Despite these difficulties, Blanco
    emphasized that PRODEC is geared toward helping each
    corregimiento in the country equally.  Herrera's government
    plan is mum on PRODEC, but as it is a PRD-originated program
    Herrera would be unlikely to alter it as president.
    Martinelli proposes that "in addition to PRODEC's $50
    million, a fund be created from Canal revenues to improve the
    country's water access, with an emphasis on marginalized
    populations."

    - The National Institute of Vocational Training for Human
    Development (INADEH)

    ¶4. (SBU) INADEH is a government-sponsored job skills training
    program that provides classes to any Panamanian free of
    charge.  In 2008 INADEH invested $92 million on its training
    programs, and in February INADEH held a ceremony to mark the
    500,000th training certificate earned by an INADEH
    participant.  INADEH has facilities throughout the country,
    and courses run the gamut -- from cooking to literacy to
    electronics -- but the Torrijos and the GOP put special
    emphasis on training in heavy-machinery operation to assist
    the Canal expansion effort.  Herrera's governing plan
    includes a nod to "intensify" INADEH training programs to
    help generate employment; Martinelli's government plan
    discusses expanding INADEH to include administration and
    language training to improve human capital in the tourism
    sector, and a "corrections plan" aimed at assisting the
    reinsertion of criminals into society.

    ---------------------
    On board with Compita
    ---------------------

    ¶5. (SBU) Two government-sponsored programs under the
    "Compita" moniker make necessities available to poorer
    Panamanians at low prices.  The GOP's Agricultural Marketing
    Institute purchases in bulk basic food products such as rice,
    lentils, flour, coffee, and oil and re-sells them to
    consumers under the Agro Compita brand at prices as much as
    30% lower than the market price.  The program was launched in
    the fall of 2007 to counter rising food prices and inflation.
     Agro Compita "Econo-packs" containing a variety of food
    staples sell for $9.45, and are available at periodic
    "Producer Fairs" throughout the country.  Organizations can
    also make large requests for packs (e.g. to hand out to
    employees) via telephone.  Three "Farmacias Compita,"
    Ministry of Health-operated pharmacies, opened earlier this
    year to provide reduced-price medications to low-income
    Panamanians.  Two pharmacies are in metro Panama City and
    together serve over 500,000 residents according to media
    reports.  The third pharmacy is located in San Miguelito, a
    largely poor district outside the capital.  Detractors call
    the program an election-year ploy designed to generate
    support for Torrijos's ruling Revolutionary Democratic Party
    (PRD).  Herrera has praised and voiced support for the
    Compita programs; although they are not mentioned in his
    government plan, Martinelli has said publicly that he would
    continue the two Compita programs.

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

    ¶6. (C) Legacy-minded Torrijos administration officials tend
    to trot out in speeches and publications the updated numbers
    of families enrolled in the Network of Opportunities, or
    workers trained at INADEH as examples of positive social
    welfare initiatives.  As the election approaches, the GOP has
    continued to trumpet its social development successes in an
    attempt to rally flagging public support for Herrera and the
    PRD.  It is also no secret that Torrijos has his eye on
    running for president when he is next eligible in 2019.  He
    views these social programs as an important part of his
    legacy and the recipients of the programs as core
    PRD-supporters down the road.

    ¶7. (C) But both Martinelli and Herrera are making grand
    social development promises.  Martinelli is signaling that

    PANAMA 00000339  003 OF 003

    his "change" agenda does not necessarily extend to some of
    Torrijos's high-profile social development initiatives; but
    delivering on the "change" mantra while simultaneously
    keeping the current administration's popular programs up and
    running may be a challenge.  If Martinelli wins, he is
    expected to replace the vast majority of the 15,000 PRD
    government workers with loyalists from the five parties that
    make up the Alliance for Change.  But Post has not seen
    signals that the Martinelli camp is making preparations to
    fully assume the responsibility of governing the country and
    administering the social programs.  The extent to which these
    programs have been institutionalized after only a few years
    in operation is unclear, but a disruption in service
    provision due to bureaucratic and leadership changes could be
    a serious gaffe for the new president.
    STEPHENSON

`