Privatization Without Representation: Panamanian Doctors’ Long Strike

Panamanian doctors, medical workers, and teachers ended a month-long strike on November 18 by signing a series of agreements with the Panamanian government about Bill 349, or the Public-Private Partnership (PPP) Bill, which appeared to permit the government to privatize healthcare and education. The agreement would send the bill back to a “first reading,” which means, according to The Council on Hemispheric Affairs’ interviews with journalist Eric Jackson of The Panama News, that the bill “dies unless brought up in a future legislative session.”

 The Panamanian Society of General Medicine contended that Bill 349 would have “allow[ed]… a relaxation in the duties and obligations of the state, and [would] open… the door for basic services at the mercy of capital and not for the great majority.” Perhaps even more troubling, however, was the structure outlined by the bill for decision-making regarding PPPs, which would have given the president and several of his cabinet members unprecedented authority. This and other ramifications of the bill stand in direct contrast with the laws and regulations about PPPs characteristically found elsewhere in the world that guarantee at least minimal limitations and attempts at transparency.

In Europe, for example, the role of PPPs is clearly circumscribed. In its 2004 Green Paper on the topic, the European Commission defined the partnerships as instances of “cooperation between public authorities and the business world that aim to guarantee the financing, construction, renovation, management or maintenance of infrastructure or the provision of a service.” The document further notes that European PPPs are characterized by “the relatively long duration of the relationship” and the key role played by the private partner in all phases of the project, from design to financing and management. However, according to interviews with journalist Eric Jackson of The Panama News and Panamanian international and human rights law expert Doctor Gilma Camargo, Bill 349, unlike existing laws defining the limits of European PPPs, was sufficiently vague and sweeping to allow for the privatization of existing assets and services, and not just the creation of new ones.

Panamanian President Ricardo Martinelli asserted on November 3 that the striking doctors were “confused,” as the government had no plans to privatize hospitals. Furthermore, Chapter 5, Article 19 of the bill, while not specifically mentioning healthcare or education, stated that government institutions protected by the Constitution as state obligations may not be privatized. According to Eric Jackson, however, “one of the central objections that people…have about Martinelli is that to him (and the judges he has appointed), the [C]onstitution means nothing. Thus, any assurances that the privatization law would be limited by constitutional provisions about healthcare and education give scant comfort to those now used to dealing with Martinelli.” Moreover, the bill’s Explanatory Statement mentioned hospitals and schools among the “wide range of social and economic investment projects” which PPPs can engender. Even if healthcare and education were off the table, the very structure of the bill could have been dangerous for the stability of Panamanian democracy.

Chapter 3, Articles 8 and 9 of Bill 349 provided for a “Governing Body of the PPP Program” consisting of the president, the minister of the presidency, the minister of economy and finances, and the general director of the National Bank of Panama. Under the Bill, these individuals would have made sweeping decisions concerning the PPPs. Doctor Camargo, who also serves as interim executive director of the Institute of Political and International Studies of Panama, asserts that civil society groups were “concerned about … the level of power that this would give to the government, because it would be…an executive decision, where the executive power, the president and his assistants would be able to decide…what public works or what public services might be privatized.” As journalist Eric Jackson has pointed out, giving any executive branch this amount of power is a poor idea. Given President Martinelli’s chronic grabs for power—such as his attempts to wiretap opponents and increase the legislative representatives of his party—vesting in him the authority to make longstanding decisions regarding PPPs would be particularly unwise.

The transparency of procedures for selecting private partners is integral to the success of a PPP, the establishment of which requires careful planning at its early stages in order to achieve the desired result of financing at the lowest possible price. A stable and predictable rule of law is a crucial ingredient for PPPs in order to avoid nepotism in the awarding of contracts and to see to it that fair competition exists between firms. The Panamanian case would have gone against both of these stipulations. The bill’s Governing Body would have allocated all of the decision-making to the executive branch, and given the dubious history of the Panamanian rule of law in general—and Martinelli’s presidency in particular—the country is unlikely to achieve transparency in its dealings with private corporations without radical changes to the Panamanian political modus operandi.

Fernando Castañeda, one of the strike leaders, told reporters that the mass march to the presidency in which civil society groups joined striking doctors and teachers was “symbolic, as the movement is civic, and there is no political motivation [author’s translation].” The doctors, teachers, and civil society groups, however, did not act solely against the process of privatization, which has a particularly poor record regarding its services to low-income citizens in many Latin American countries. They also took a firm stand against the growing power of Panama’s executive branch over the rest of the government and the people themselves. The Panamanian case appears to highlight two common problems in Latin America: the dangers of privatization in a corrupt, presidentialist government, and the unpopularity of privatizing services in almost any state in the region. As written, the law would have been a poor idea anywhere; in practice, it would have had the potential to wreak considerable havoc on Panama.