When denial meets with reality

Denial is one of the biggest problems facing those with addictions, whether it be problems with alcohol, smoking, drugs, gambling, even Facebook (yes that share -your -secrets network has become a problem for many).

In Panama, as the world approached the edge of an economic precipice, there was for months, a big boost in the sale of rose tinted glasses, as self interested forecasters and deniers rushed to assure the populace that all was well in the land of milk and honey, and that although the country’s growth rate will be down this year, Panama will be a shining example compared to the industrialized world, and certainly better than our Latin American neighbors.

Alas that kind of comparison doesn’t hold water. If you are down to half a loaf of bread a week, it doesn’t help if your neighbor has only a quarter of a loaf.

You will still be hungry.

THE BLAME GAME. The government, in its dying days, has put some contingency plans in place, and must be keeping its fingers crossed that the IMF will get more funds following the meetings of the Group of 20 who, as they dine on such niceties as organic smoked salmon, are playing the blame game to the hilt and musing over aid to the Third World.

Here at home, focused on the mud slinging election campaign, the public has not yet totted up the warning signs that have been coming from different directions. Early in the year the figures began to emerge of falling constructions starts in the last quarter of 2008.

BURST BUBBLE. There was a tacit admission by a few realtors that the bubble had burst, and that all the speculators who had bought into the condominium boom, and pushed the prices out of reach of the Panamanian working class, were going to lose their shirts or, wait for a long time for a return on investment.

Of course when it’s laundered money a year here and there won’t matter. There’s lots more in the pipeline, heading to supply the voracious US drug market. Yes State Secretary Hillary Clinton has acknowledged publicly that without a demand there would be no supply. Economics 101.

Then came the local auto sales industry, with early predictions from the top, that all would be well this year. But figures show precipitous drops, and the effects of fewer cars, while good for traffic spread through the economy to repair centers, gas stations, insurance agencies.

TOURISM. But we can rely on tourism to fill the holes right? Not so. While plans have been announced for a national competition to name the 10 best must-visit locations, and moves have been made to promote micro lending to create tourist oriented small businesses, the news emerges that hotel and tourist bookings are falling, because Panama is being out priced by other destinations.

In the good times Panama city hotel prices rose to outrageous heights in a country where labor is outrageously low. Compare with a report from columnist Phil Edmonston, staying in an internationally renowned “genuine” five star hotel in Toronto Canada, where hotel employees are unionized, well paid, and get double pay and time off when they work on Sundays or public holidays. The room rate has dropped from hundreds to $80.

EXPORTS. Our agricultural exports are falling fast, not helped by the boondoggle scandal of the forms not sent in time to the European Union, so that Panamanian products cost more. That led to government subsidies with taxpayer money for the growers, money that will be sorely needed to stimulate the economy and carry us through the hard times.

And then there’s the Cinta Costera, which with all its faults and procrastinations, will likely overall improve the city’s appeal. It was scheduled to be completed in May. The date has been moved to July, and may be further extended. That’s a boon for the thousands of workers employed there. When it’s finished, where will they go?

The incoming president will take office just as the rainy season starts. With the present economic clouds massing, his term will be in double jeopardy.

If Ricardo Martinelli, the right wing aspirant takes over, look for big street demonstrations, with gleeful PRD support, later in the year, as the recession takes hold.

All that said, Panama will survive and grow, and maybe, just maybe, move to harmonizing income levels.