Responsibilities of the State: Privatization and Social Services

Elizabeth Dougherty, PhD Candidate


What will be the face of privatization in a few years in Panama? And, indeed what will be the function of the state?

I ask this question in light of several visits to the Darien Region of Panama over the last year. When travelling to Embera (indigenous peoples also widely known as Chocoe) villages here in the Darien, as well as those situated within the Panama Canal watershed, I have always been struck by their lack of access to very basic to very basic social services normally available to other Panamanians. Services such as substantive education extended beyond grade six. Certainly the very poor clean water conditions accentuate the lack of basic healthcare within several hours by boat and walking. There are those in most every village whom are able to cure with the use of locally growing plants. Nonetheless, many illnesses run their full course, often with debilitating results.

A month or so ago, I visited the Embera Comarca in the Darien for the first time in just over six months. I traveled with two ìtecnicoesî from a local NGO, Proninos del Darien, who are assisting some Embera farmers with developing granjas familiares, family farms using sustainable organic agricultural techniques. Up the wide Chucanaque River we motored in hallowed-out tree, a piragua. The river was lined with plots of teak mixed in with naturally occurring trees that make up the tropical forest, in some places thicker or thinner.

I arrived in the Embera village of Tortuga with the tecnicoes Jaime and Johnny and my assistant Edgardo. A young girl of three or four years of age sat next to her mother, both with their feet in the water. The mother was washing her clothes with detergent and Clorox. The young daughter was drinking river water from her hand at her mother¥s side. River water mixed with detergent, Clorox, motor oil, diesel and whatever else might be floating in the water. We saluted them both and mounted the hill leading to the village situated on the hill above us.

As we walked in between the palm-thatched, open-sided houses attempting to locate this village's Casique, we noticed that there was a large group of Embera adults and children gathered near the basketball court where another group tossed a deflated ball back and forth. As we neared the large group, I noticed that there were also several Afro-Darienese there, apparently working very hard on something. Finally I could see what it was.

At the center of the group was a new, shiny, blue and white Cable and Wireless telephone booth. These Afro-Darienese were apparently completing their installation of the telephone itself inside the booth. Connecting wires, listening into the receiver for a tone, a voice, a line that might reach even into the city of Panama. Beyond the booth I could see a large plate of solar panels and an enormous radio tower taller than any tree within the village itself. I wondered who would invest the comparatively for them high cost of 25 balboas to make the first call and who would answer in a surprised voice on the other end.

We continued on through the village and upon learning that the Casique was out in the mountains gathering yucca from his farm, we headed instead to the school, as the tecnicoes from ProniÒos needed to arrange a Christmas fiesta with the teachers there. The sign outside the school read ìEscuela So and soî Constuyido en 1987, $28,000î Dicho y Hecho, I thought, as the signs literring the Darien had suggested to me.

Inside the school, 2 of the 3 classrooms had actually been finished. The kinders room had only half of the cement floor poured, the other half remained dirt. The walls in this room were crumbling. There were no books, no pencils, nothing other than a single hand drawn poster depicting 5 animals that roam the African savanna. Perhaps these kinders already knew everything important about the thousands of species living in the forests around them and had moved on to zoologically familiarize themselves with the rest of the world.

As we made our way down the river at the end of the day, I kept wondering to myself, ìWhat then does ìthe State,î the Panamanian government, has in its multi-headed mind(s)? If 50% of Panamaís population is living in rural areas, is this government determined to improve rural conditions in clean water, health care and education? It appears not. If they continue to concentrate on the reduction of foreign debt by reducing the public sector and at the same time drawing foreign investors, in part by selling off what have been traditionally governmental social responsibilities for the care of its own population, what will they do? For what functions are these resident populations of Panama able to call on their own government?

Privatization appears to facilitate Panama in following its well-established political and economic place in the larger global context. Panamaís long-term history that extends into Panamanian pre-history tells a story of a region existing to provide an trading ground for goods and services from outside the region. There were pre-Colombian traders, European gold robbers, slave ships in transit to the islands and the New World, Spanish colonizers and finally North American builders of a canal and multiple military installations. And the Colon Free Zone, 2nd largest in the world only to Hong Kong, where international goods come to be sold and bought should be added to the list as well.

As the saying goes, nothing changes quickly, and the Panamanian government appears to be no exception to that dicho. The concentration of power, in combination with continued provision of extensive service support to outside multinational bankers and businesses, have both contributed to the continued concentration of extensive wealth and class differentiation.

With the faltering of the various Marxist and so-called Communist states (with the notable exceptions of Cuba now trying to shape-shift itself using a process of cold capitalism) the forces working with ideals and methods other than neo-liberal capitalism in the Western hemisphere are dwindling. The amazing disequilibrium in wealth distribution between the thin crust of the Panamanian elite formed over the simmering mixture of the rest of the population is well known to be the greatest discrepancy of wealth in Central America. The Marxist-influenced military rules of Torrijos actually briefly economically elevated the middle and lower classes by including them, at least some degree, in the national economic plan.

The present PRD government headed by Ernesto Balladares, appears almost fearful, or at best forgetful, of the civil population. Certainly the bulk of the attention continues to go to the development of industries (the Panama Canal, the on-shore and off-shore banking, Colon Free Zone and the new arrival, ecotourism) within urban areas where the other 50% of the population resides. But even within these city limits, the governmental attention is grounded in interests serving the most upper of the upper classes.

Students and other activists recently repeatedly protested the privatization of the water services. However last week, Hydro Quebec was able to borrow nearly $94,000,000 from the Panamanian banking system at a rate lower than that offered by other international banks in order to finance its 40 year concession (renewable for another 40 years.) With this, they lease 49% of the Bayano Dam, the major electric energy source for Panama. This dam has always run far below capacity. This, along with the national phone company, are just two examples of the inefficient manner in which the government tended to its public services. Within the contract for the privatization of water, national banks gain interest, the government continues to receive revenues on 51% of the project as well as promising to now provide better services to the public. Downsizing the public sector also represents considerable savings for the budget. One might ask, "Why then, isn't this better for Panama?"

To respond, one could likewise pose the question, doesnít the government lose that 49% that it could retain if only if were able to be more efficient? Likewise, doesnít the Panamanian government avoid its responsibility to finally address its debilitating, internal nature of fragmented interests of the wealthy classes? As a University of Panama professor asked me, Doesnít the majority of the Panamanian population therefore continue to be given voice without being given power?

An recent article by political scientist Steve Ropp stated, "The absense of a populist dimension in the (current) government's economic plan could be seen by the lack of an explicit safety net for the poor and the lack of any clear indication that savings derived from the downsizing of the public sector would be used to support social development."

I imagine that in the not-so-distant future governmental department meetings will be filled with Harvard MBA awarded government officials, each with their cellular in hand. They will meet only as business managers of their Private sector, all public services leased out to overbloated multinational corporations impossibly trying to cross the social, cultural, political and economic barriers with the Panamanian population they service, who have now begun to boil just below the crusty surface.

Perhaps it is time for Panamanians to find a way to group together and "phone home."