A complex relationship of local politics, income distribution and global commerce
For over a week now, the Ngäbe (largest indigenous group of Panama) have been protesting. Choosing strategic points on the Pan-American highway, the main highway that goes from Panama to Alaska, they have set up road blocks and are out protesting day and night. The Pan-American is the only way to transport supplies, people or commodities by road from Panama City to the western provinces of Chiriquí, Bocas del Toro and the Comarca Ngäbe Bugle. Here, there are places that are running out of gas and other supplies while Panama City is not getting produce (over 80% of the vegetables consumed in Panama is produced in the highlands of Chiriquí). In the past few days, farmers have collectively lost $2.3 million. Flights across the country are in high demand and over 400 people have been stranded at the bus terminals. In the provincial capitol of neighboring Bocas del Toro the banana workers are protesting as well, showing solidarity with the same movement. The issue: mining.
Violence has escalated drastically as federal police confronted the protesters with tear gas and rubber bullets. While initially making some progress in opening sections of the road, protesters rallied and continued to fight against police, throwing rocks, lighting tires on fire and strengthening road blocks. The indigenous protesters have also burned two police stations, one in San Felix and another closer to David. At the moment, there has been one confirmed death and several wounded.
This is not the first time since I have been in Panama that such protests that have occurred (see my blog post from 2010). In fact, they are relatively frequent and caused mostly by changes in domestic legislature concerning Panama’s energy policies. Specifically, Mining and Hydroelectricity.
Through exploratory analysis, large quantities of minerals, such as copper and gold, have been found beneath the surface in various places throughout Panama. Such deposits are high in high demand, extremely valuable and can be sold at high prices. One such deposit has been found in the sparsely populated Comarca Ngäbe Bugle which is an Indian reserve and home to the Ngäbe. Over the past few years, large foreign companies including those from Canada and South Korea have been competing for the rights to begin mineral extraction of these valuable ores. In 2010, the Panamanian government changed the countries mineral rights to allow foreign governments to invest in mines.
The current President and his administration are known for being very pro-business. To their credit, they have seen substantial economic growth: From 2005 to 2010 (current president Ricardo Martinilli began his 5-year term in 2008) its economy expanded by more than 8% a year, the fastest rate in the Americas. The IMF expects it to grow by over 6% a year during the next five years. Panama will soon overtake Costa Rica and Venezuela in GDP per head. Accounting for purchasing power, it is one of the five richest countries in mainland Latin America. The Canal obviously contributes a lot to this strong economic data, but other sectors such as insurance, finance and legal industries, regional bases for large multinationals and also shipping add significantly to GDP.
“Panama’s import tariffs are among the lowest in Latin America, and the country has received foreign direct investment worth nearly 9% of GDP, the largest share on the continent. A $5.3 billion expansion of the canal for bigger ships is due to be completed in 2014. Separately, the government has begun a five-year, $13.6 billion investment plan, focusing on schools, hospitals, sewerage, roads and a metro for the congested capital. Pensions for the poor and a universal scholarship will help to reduce inequality, which is among the worst in the Americas. In indigenous areas, 85% of people cannot afford enough calories for an adequate diet—even as the champagne flows in the capital’s casinos.” [1]
So here is the catch. While the Martinelli administration has promoted the economic growth of Panama City, very little of that wealth actually trickles down into the provinces and almost none into the areas where the indigenous Ngäbe live.
Back to mining. In 2010 the extremely controversial “Sausage Law” (pork barrel legislation) which was hastily passed over a weekend session with little attendance, the protesting began. Included in this legislation was a revision to the country’s mineral code giving favorable benefits and incentives to the large foreign companies interested in mining operations.Then, in 2011, Martinelli continued pushing legislation promoting mining by allowing foreign governments to invest in mining. This led to more protesting and increased hostilities between indigenous groups and the government.
Since then, the Ngäbe have been justifiably upset and are blocking the critical transportation paths to amplify their voices and spread their message. With very little impact in the national legislature, the Ngäbe do not want the mining operations in their province. They understand that the mining of wealth under their land has severe environmental consequences and little hope in profiting themselves.
Here is an example of the environmental effects of mineral extraction. Metals constitute only a small fraction of a metal-bearing ore, which in turn constitutes only a small fraction of the dirt that has to be dug up to extract the ore. Hence the ratio of waste dirt to metal is typically 400 for a copper mine, and 5,000,000 for a gold mine. That’s a huge amount of dirt for mining companies to clean up.[2] For a culture whose lives are still intimately tied to the land, the consequences of environmental damage would be devastating.
Why does this matter to us? In the words of Jared Diamond (Collapse)
On the average, each citizen of the U.S., western Europe, and Japan consumes 32 times more resources such as fossil fuels, and puts out 32 times more wastes, than do inhabitants of the Third World. These people in the Third World aspire to First World living standards. They develop that aspiration through watching television, seeing advertisements for First World consumer products sold in their countries, and observing First World visitors to their countries.
The problems of all these environmentally devastated, overpopulated, distant countries become our own problems because of globalization. We are accustomed to thinking of globalization in terms of us rich advanced First Worlders sending our good things, such as the Internet and Coca-Cola, to those poor backward Third Worlders. But globalization means nothing more than improved worldwide communications, which can convey many things in either direction; globalization is not restricted to good things carried only from the First to the Third World.
That’s why political instability anywhere in the world now affects us, our trade routes, and our overseas markets and suppliers.
All modern societies depend on extracting natural resources, both non-renewable resources (like oil and metals) and renewable ones (like wood and fish). We get most of our energy from oil, gas, and coal. Virtually all of our tools, containers, machines, vehicles, and buildings are made of metal, wood, or petrochemical-derived plastics and other synthetics. We write and print on wood-derived paper. Our principal wild sources of food are fish and other seafoods. The economies of dozens of countries depend heavily on extractive industries and our societies are committed to extracting those resources: the only questions involve where, in what amounts, and by what means we choose to do so.
Here are two excellent articles on the economic disparities of Panama:
A very well thought out post. Thanks for succinctly explaining some political history leading up to this. I have learned.
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