Panama to pick new president after term boosted ties with China

Latin America

Panama to pick new president after term boosted ties with China

Voters in Panama are due to pick the next President on Sunday.

What might that mean for relations with China?

CGTN’s Roee Ruttenberg had more from Panama City.

In December 2018, President Xi Jinping made history when he became the first Chinese leader to visit Panama. The Central American nation had just established diplomatic relations with Beijing one year earlier. Panama’s President Juan Carlos Varela had twice traveled to China in the lead up to Xi’s visit.

President Varela was the right guy,” said Eddie Tapiero, a Panamanian economist. “[He was] the right person at the right time. Panama had just developed a logistic strategy which looked at the incorporation of the country into the global value chain, and we were looking for new ways of developing, and China was rising. And he came at a good moment.”

Tapiero now advises the Varela government on its free trade negotiations with Beijing. “When we talk about China, there’s always uncertainty and fear, because of the size and the lack of knowledge about the culture,” Tapiero said. “I think those visits helped to bring up the debate, and then to analyze the opportunity.”

Panama, with its Canal, depends on trade. The country’s economy runs on facilitating that trade. And not having official commercial relations with the world’s largest trader, China, was seen by many as an obstacle to growth.

Beijing was already investing in Panamanian infrastructure projects before diplomatic relations were established. Official relations solidified those investments and triggered more investments across the country.

Tapiero says that, with China, Panama “will be able to really move up, from just facilitating, to possibly manufacturing, distributing, things that we wouldn’t be able to do unless we got to another level.”

But with presidential elections this weekend, and Varela’s term ending this summer, what will become of his China legacy? The leading candidates have given no indication they’d turn back.

“All of them think that China is an important factor of the equation, in the future, for Panama,” Tapiero said. “The demand from China would allow us to grow without the need of heavy public finance.”

But he said the degree to which the candidates understand China, like Varela does, varies. And that may be the wild card.