00:00In Panama, soaring debt, a record budget and warnings from international rating agencies
00:04are creating a perfect economic storm that is hitting Panamanians directly in the pocketbook.
00:11Our colleague Rekha Chandiramani tells us more.
00:15The country's high level of debt has been setting off alarms for years,
00:20but with one aggravating factor, the trend has reversed.
00:23It is no longer debt for public works, but to pay current expenses.
00:27Next year, the Panamanian government will allocate a record $3.661 billion
00:32just to pay off a debt that has grown by 152% in the last five years.
00:44An unprecedented increase in public debt has tripled the debt service, that is what we pay in interest,
00:50substantially reducing the resources available to the three branches of government and autonomous
00:55institutions, including the executive, legislative, and judicial branches.
01:07And that financial strangulation of the state means less money for essential services.
01:14It is resources that vanish from healthcare, classrooms, and public infrastructure.
01:17The 2026 budget is the highest in history, at $34.901 billion, a figure equivalent to
01:24six canal expansions, but at the same time it proposes the most severe cuts to social spending
01:28in years.
01:29In other words, the money, or chen chen, as the president calls it, is there, but not for
01:34panamanians.
01:35But why does a growing economy not generate the resources to avoid this suffocation?
01:40Pero por qué una economía que crece no genera los recursos para evitar esta asfixia?
01:45Lo que pasa es que el crecimiento de la economía se da.
01:47The thing is that economic growth is fundamentally driven by the logistics sector, that is, the
01:52sector linked to the international market.
01:54This is not reflected in the domestic sector for several reasons.
01:58Firstly, because wages are artificially low.
02:00As they are artificially low, there is no demand.
02:04The serious problem in this country is demand, in other words, there is low demand.
02:12This economic model, with low domestic demand and dependent on a single sector, is extremely
02:19vulnerable, a condition aggravated by a historical dependency, the monopoly of the dollar since
02:251904.
02:26Therefore, this makes the country hostage to external financing and the attraction of currency
02:30through investments, which in today's turbulent geopolitical context seems to impose more and
02:35more constraints than benefits.
02:37The Monroe Doctrine, throughout its history of more than 200 years, has simply not disappeared.
02:47It is the foundation, the pillar of us foreign policy, simply modified by certain names, and
02:52also from the perspective of each ruler, why?
02:56Because when we look at the 19th century, we went from the big stick to dollar diplomacy.
03:04But it has not changed because dollar diplomacy, dollars instead of bullets, what it does is
03:09take greater advantage of the resources or raw materials of these underdeveloped countries,
03:14on the condition of applying trade measures to them, that is, I buy the raw material from
03:18you, but you buy the manufactured product from me.
03:20O sea, yo te compro la materia prima, pero tú me compras el producto manufacturado.
03:27Having an economy that depends exclusively on foreign debt to function in something as basic
03:31as paying the state payroll, is extremely worrying, and at, this moment, when we are in
03:37a state of high tension with the United States.
03:41El impacto en la ciudadanía se vería en el encarecimiento.
03:44The impact on citizens would be seen in the increase in the cost of credit.
03:47An increase in interest rates would leave thousands of families and businesses outside
03:51the financial system.
03:52And almost half of the Panamanian population, two million people, have debts that, in this
03:57scenario, could become partially or totally unpayable, according to data from the Panamanian
04:01Credit Association, the Asociación Panameña de Crédito, Reca Chandiramani, Telesur, Ciudad
04:07de Panamá.
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