The Wealth Disparity in Panama

A problem seen everywhere

Last year I went to visit my family in Colombia. This winter break, I went to visit my family in Panama. During my stay there, I started noticing some patterns. I have never been to Latin America before and culturally it was all very different and very new to me. I immediately noticed the nature which was so diverse and beautiful. The people were very nice, all welcoming and affectionate. I also noticed the laid back nature of individuals which is very different from my own culture. However, one aspect that really struck me when visiting these countries is the large economic gap between the rich and the poor.

When in Panama, I toured around Panama City. As a tourist, you see the tall, glistening skyscrapers, the surrounding lights which shine through the night. Modern buildings with unique architecture. However, the second you enter the small alleys, it’s as if one enters another world. The surrounding shifts into a ghetto-like town. Small buildings with broken roofs, houses falling apart. Litter and dirt everywhere. Nothing modern or shiny. No glistening towers. No properly paved streets. Only cracked balconies, with clothes hanging. No dryers. In Colombia, it is similar. The rich live in large houses with housekeepers and gardeners while the poor live in shattered homes or in farm areas taking care of cattle. What concerns me is the huge disparity between the wealth in Latin America. No matter where I went, I could see this disparity. Even in areas that tried to cover it up with touristic attractions. The ever-growing question of ‘why’ kept repeating in my head, so I decided to do some research. In 2008, Latin America and the Caribbean region had the highest combined income inequality in the world (Isabel et al, 2014). According to the World Bank, Colombia, and Panama are ranked in the top ten countries with the world’s worst income inequalities, number one being South Africa (Beaubien, 2018). Hence, this problem is not specific to Panama or Colombia but is a challenge many developing countries face. However, when speaking from my own experience, I can only talk about Panama and Colombia.

The vast wealth disparity in Panama is further increased by labor shortages. Many people lack qualifications for specialized jobs, which causes companies to hire foreign staff (Central American Data, 2008). The country relies heavily on foreign investments but lacks any of its own businesses. In fact, 80% of its economy is based on the services industry, such as the Panama Canal, banking commerce, and the Colon Free Trade Zone, which all are dependent on global trade (World Bank). Individuals who don’t have the qualifications end up creating their own small businesses or most usually doing simple labor work. This simple labor, although good as it provides jobs for the poor, emphasizes the difference between status, and in this way undermines the unification of the people. It makes status important. In this system, the poor ‘serve’ the rich. In stores, the poor load the groceries into bags and then unload them into the trunk of cars. A simple task one could do by themselves, and for this reason, struck me as odd. In gas stations, they are the ones to fill up your car with gas. They are the ones gardening for the rich, doing the housekeeping work of cooking, cleaning, and washing clothes. In this way, it is like India’s caste system. People are divided into rigid hierarchical groups based on status (BBC, 2019). Some are born into it. Either way, the richest are the ones who hold the most power to develop or hinder the country as they have the power to fund movements. In fact, one of the richest families in Panama: The Motta family, largely funded the Independence Movement (MOVIN) played a major role in electing the past president Juan Carlos Varela (Abonilla, 2016). If a family has the power to influence presidential elections, they have the power to promote or demote equality.

However, corruption inhibits equality. Despite Panama having the fastest growing economy in Latin America (World Bank, 2019), around 23% of the population lives below the poverty line (CIA, 2015). Corruption brings money to a few individuals but inhibits the equal growth of the country as a whole. Corruption such as narcotrafficking and the 2016 Panama paper scandal, which exposed many companies and politicians of money laundering and tax evasion, (BBC, 2016) are challenges that suppress the country’s socio-economic development.

Another aspect I noticed, which seems to inhibit wealth equality among individuals and the development of the country in general, is the lack of initiative. The mentality of individuals seems to be ‘help out only when it’s convenient.’ Safety or the development of a sustainable living seems to be disregarded. The reasons laws are followed, aren’t for one’s own safety, but because of the threat of a fine. From my own experience, I have seen cars at night driving without lights, not following any of the rules. Even my uncle once told me that I need to tie my seatbelt otherwise he could be fined. That again struck me as odd, as it would never occur to me not to tie myself, not because of a fine, but because of safety. The same mentality is used when it comes to reducing plastic. It’s only done when it’s convenient, but the second there are too many people and it takes too much effort to wash plates, people start using plastic ones. The poor have too many of their own worries to deal with and the rich do not care. So I wonder, who is going to push the country forward and develop its safety, and its environmental prospect? How are people going to get better qualifications for jobs with a lack of safety, lack of sustainable living? If there is no push from the people, how is the government going to care?

Bibliography

Abonilla. “Movin Refuses to Accept Its Roots and Goes on the Offensive.” Panamá América, 24 May 2016,www.panamaamerica.com.pa/tema-del-dia/movin-refuses-accept-its-roots-and-goes-offensive-1027520.

BBC. “Panama Papers Q&A: What Is the Scandal about?” BBC News, BBC, 6 Apr. 2016, www.bbc.com/news/world-35954224.

BBC. “What Is India’s Caste System?” BBC News, BBC, 19 June 2019, www.bbc.com/news/world-asia-india-35650616.

Beaubien, Jason. “The Country With The World’s Worst Inequality .” NPR, NPR, 2 Apr. 2018, www.npr.org/sections/goatsandsoda/2018/04/02/598864666/the-country-with-the-worlds-worst-inequality-is.

Central America Data. “Panama: Investments.” CentralAmericaData, 2008,www.centralamericadata.com/en/article/home/Panama_Investments_and_FTA_needs_qualified_labor.

CIA. “Population below Poverty Line.” Central Intelligence Agency, Central Intelligence Agency, www.cia.gov/library/publications/the-world-factbook/fields/221.html.

Isabel Ortiz; Matthew Cummins (April 2011). “Global Inequality: Beyond the Bottom Billion”

(PDF). UNICEF. p. 26.

World Bank. “Overview.” World Bank, 10 Oct. 2019, www.worldbank.org/en/country/panama/overview.