[Update] Tight Finish Seen In Panama Presidential Election

By The Maritime Executive 05-04-2014 10:34:00

Panama's vice-president, running as an opposition candidate, won the presidential election on Sunday after a campaign in which he took credit for outgoing leader Ricardo Martinelli's successful economic policies but promised a cleaner government.

Juan Carlos Varela of the center-right Panamenista Party (PP) helped Martinelli get elected as president in 2009 but later fell out with him. He has vowed to cut the cost of living, reduce poverty and tackle corruption.

Panama's election tribunal pronounced Varela the winner after he secured almost 40 percent support with more than 60 percent of votes counted.

He had a comfortable lead over his two main rivals, ruling party candidate Jose Domingo Arias and left-leaning former Panama City mayor Juan Carlos Navarro of the Democratic

Revolutionary Party (PRD).

A young crowd of Varela's supporters celebrated at a Panama City hotel as his victory was announced.

Varela, 50, inherits an economy that has grown rapidly in recent years and oversight of a major expansion of the Panama Canal, which briefly stalled earlier this year in a row with the building consortium over costs.

Martinelli, a supermarket magnate, has pushed the canal expansion and other infrastructure projects that helped spur economic growth. But his reputation was tarred by allegations that his government gave contracts and other favors to friends and business interests.

Varela alluded to corruption during his campaign, saying he would "not buy political backing".

No major changes in policy are expected. All the main candidates had similar platforms so the campaign focused more on personalities than proposals.

"I am so overwhelmed, I can barely find words," said Agustin Cerru, 54, as sounded the horn of his car, a Varela banner flying from the window. "A lot of people didn't think we were going to win."

Pollsters had put Varela in third place, though not far behind his two main rivals in what was expected to be a very close race.

Many voters voiced dissatisfaction with the ruling Democratic Change's (CD) Arias, whose running mate was Martinelli's wife and who was seen by opponents as a proxy for the outgoing president.

A banking and trading hub, Panama is best known for the canal that links the Atlantic and Pacific Oceans. Accounting directly for 8 percent of gross domestic product, it has helped fuel the fastest growth in Latin America in the last few years.

Varela, whose family runs Panama's biggest liquor company, faces the challenge of maintaining buoyant growth but ensuring the more of the benefits trickle down in a land where a quarter of the population lives in poverty.

At up to $624 a month, the minimum wage in Panama is among the highest in Latin America, but many of the country's poorest are feeling the bite of nagging inflation.

The discontent has led to a nationwide construction strike over pay since April 25. That has halted thousands of projects, including work on the canal expansion, much to the annoyance of Martinelli, who will hand over power on July 1.

Copyright Reuters 2014.