The Foreign Service Journal, January-February 2020

42 JANUARY-FEBRUARY 2020 | THE FOREIGN SERVICE JOURNAL Today, Panama has Latin America’s highest per capita income, and economic growth has averaged 6 percent over the last 15 years. The country’s banking system remains strong and was hardly affected by the 2008 worldwide economic meltdown. The canal had a net profit of $1.8 billion last year, which allows the government to provide generous subsidies to the poor for housing, transportation, education, electricity and health care. The country’s life expectancy is 79 years, the same as the United States. Panama’s Concerns The real concerns in the bilateral relationship during the last decade have revolved around the issues of drug trafficking, money laundering, tax evasion, corruption, security, illegal immigration, the growing Chinese influence in the country and the lack of a transparent judicial system, as well as Panama’s positions in the Organization of American States and the United Nations regarding Cuba, Venezuela and Israel-Palestine— all important and sensitive issues. In my experience as Panama’s ambassador to the United States and in subsequent interactions I’ve had with U.S. diplo- mats, I’ve found that it’s important to discuss matters as openly and respectfully as possible, without relying too much on diplo- matic jargon that can sometimes cloud the issues that need to be resolved. As long as both sides are open and transparent, a solution can usually be found. Sometimes this can be difficult, however, because the eco- nomic and military might of the United States tends to create a certain arrogance that prevents U.S. diplomats from under- standing and accepting the other parties’ concerns and view- points. This, in turn, precludes the United States from being more flexible during negotiations, which can be detrimental to American interests in the long term because it engenders resentments that can prove difficult to overcome. Panama has traditionally had a very close working relation- ship with the United States on matters of security and drug trafficking, especially in Darien province next to the Colombian border, which is the area of major concern. Panama has as great a vested interest in this issue as Washington has, so col- laboration has been good and the results relatively positive. The same applies to the issues of money laundering and tax evasion, where Panama has done a fairly good job. There is, however, growing frustration in the U.S. Treasury’s Finan- cial Crimes Enforcement Network, at the Organization for Economic Cooperation and Development, and in the intergov- ernmental Financial Action Task Force with a small group of attorneys in Panama who have successfully managed to prevent the implementation of measures that would result in a more effective system. The government of Laurentino Cortizo Cohen, who was sworn in as president in July 2019, has promised to implement new measures guaranteeing full transparency by the end of this year, which is a step widely applauded and supported by the United States and by those in Panama who want to improve the country’s image. At the moment, the following three issues are the main points of contention between the two countries. Lack of an Effective Judicial System in Panama The acquittal of former President Ricardo Martinelli after he was extradited fromMiami to Panama on eavesdropping and misappropriation charges crystallized frustration in the United States about the lack of a transparent judicial system in Panama. The Martinelli judgment was highly controversial because there was overwhelming evidence for conviction. The judgment, which has been appealed, reflects a weak judicial system. The United States is demanding that the problem be solved, and this concern is shared and supported by civil society in Panama. The lack of a transparent judicial system is a barrier for many U.S. companies; they decline to participate in bidding for public procurement for government projects, since they perceive the process to be rigged, and there is no effective judicial remedy. Given U.S. Secretary of State Mike Pompeo’s emphasis on using diplomacy to promote the interest of U.S. companies around the world, this issue has created real tension. The weak judicial system has also allowed many drug traf- fickers and money launderers to walk away free after they’ve The economic and military might of the United States tends to create a certain arrogance that prevents U.S. diplomats from understanding and accepting the other parties’ concerns and viewpoints.