Panama's Free Market Conservative

The new president of Panama wins in an upset. Former engineer Juan Carlos Varela has shocked naysayers with a victory for all those who trust in the power of the free markets. Business leaders in Panama have reason to look forward with optimism. Here, Al Jazeera America outlines a surprising victory.

Varela, who takes office July 1, dedicated his victory to Panama’s democracy. Waving the nation’s flag at a rally to celebrate his victory, he vowed to put aside the partisan bickering of the past five years and clean up government amid the widespread perception of corruption that worsened under Martinelli.

“Whoever wants to do business should grab their things and go to the private sector,” he told a cheering crowd in a clear swipe at the outgoing president.

Most pre-election polls had given a razor-thin lead to ruling party contender Jose Domingo Arias, Martinelli’s hand-picked candidate. According to official results, at the time he was declared the winner, Varela had 39 percent of the votes, compared to 32 percent for Arias. Former Panama City Mayor Juan Carlos Navarro was third in the seven-candidate field with 27 percent.

The president said Sunday before the polls closed that he was prepared to hand power to whoever is declared the winner, even if by a single vote, and called on all candidates to show “integrity to recognize whoever triumphs.”

Varela, a 50-year-old engineer, is the scion of one of Panama’s richest families, owner of the Varela Hermanos rum distillery. He left the 2009 presidential race to throw his conservative Panamenista party’s support behind Martinelli in exchange for the vice presidency. But Martinelli dismissed him as foreign minister in 2011 for refusing to back his plan for a referendum seeking consecutive re-election. Varela’s became the president’s fiercest critic, accusing him of taking kickbacks for a government radar system contract. Martinelli denied the charges.

A free-market conservative, the 50-year-old Varela studied engineering at the Georgia Institute of Technology and has strong social credentials. Before breaking with Martinelli in 2011, he was the architect of the government’s popular “100 for 70” program that provides a $100 monthly stipend to Panamanians over age 70 without a pension or retirement benefits.

Varela inherits oversight of a major expansion of the Panama Canal, which briefly stalled earlier this year after a row over costs between the canal and the building consortium. He faces the challenge of maintaining buoyant economic growth and ensuring the benefits trickle down in a land where a quarter of the population lives in poverty.