Newspaper article The Christian Science Monitor

Panama's Strike Squelched, but Resentment Lingers

Newspaper article The Christian Science Monitor

Panama's Strike Squelched, but Resentment Lingers

Article excerpt

THE attempt of President Ernesto Perez Balladares to open one of the most protected economies in Central America to international competition seems to have succeeded. But the political cost may be great.

While the Legislative Assembly debated legislation "modernizing" the Labor Code in past weeks, several of the country's largest unions took to the streets. The result: three days of rioting last week that left four dead, scores injured, and hundreds arrested.

Although described by commentators as the worst civil unrest since protests in the late 1980s against then-dictator Gen. Manuel Antonio Noriega, the protests and strike failed to halt the reforms to the code, which the Assembly passed in a narrow 37 to 32 vote on Aug. 12.

The code, drawn up in 1971 under the left-leaning populist dictatorship of Gen. Omar Torrijos, gave workers more rights and benefits than in any other country in Central America.

Changes to the code have been debated in Panama for years, but it took the center-right administration of President Perez Balladares, a stalwart of former dictator Manuel Noriega's ex-political party, to cement them.

The new law allows companies to cut salaries in times of national or international crisis. It also reduces pensions and sharply limits the amount that companies must pay striking workers.

Businesses will no longer have to put aside some of their workers' paychecks for social security and pension plans.

Perez Balladares cited "foreign investment" and the "future of Panama" as key reasons for changes in the Labor Code. Panama hopes to join the World Trade Organization this year as well as the North AmericanFree Trade Agreement.

"I don't think these reforms will benefit the economy," says Miguel Antonio Bernal, a law professor at the University of Panama.

"They {the Democratic Revolutionary Party, or PRD} tried the same thing nine years ago. …

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