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HomeTopicsBusinessPanama’s diplomatic row with Venezuela indicative of growing presence on world stage

Panama’s diplomatic row with Venezuela indicative of growing presence on world stage

WASHINGTON, D.C. – One year after Nicolás Maduro’s election as president of Venezuela – in a voting process the opposition claims was rigged and illegal – the hand-picked successor to the late populist Hugo Chávez faces a country in chaos.

Riots and street clashes between chavistas and government opponents have killed at least 41 people over the last two months. Venezuela’s homicide rate is now among the world’s highest, inflation continues unchecked and shortages are so bad that even toilet paper is in desperately short supply.

After Panama requested an urgent meeting last month at the Organization of American States to discuss the deteriorating situation in Venezuela, Maduro ruptured diplomatic ties with the Central American nation, accusing “the lackey government of a right-wing president” of plotting with Washington to intervene in Venezuela.

Last week, Panama’s top diplomat said he had no regrets about his country’s March 5 call for action at the OAS, which was backed only by the United States and Canada.

Foreign Minister Francisco Álvarez de Soto, speaking April 9 at the Center for Strategic & International Studies, said Venezuela stood by Panama when his country was struggling against a dictatorship, and that “we cannot just look the other way” now.

“The Venezuelan government unilaterally broke diplomatic relations with us, declared persona non grata all our diplomats in Caracas and gave them 48 hours to leave. Those measures were unnecessary, disproportionate and unfriendly,” he complained.

“We did not respond in a similar fashion. We’ve been accused of getting involved in Venezuela’s internal affairs, but it’s Panama that had to confront comments by the Venezuelan president about the Panamanian electoral process. That is getting involved in the internal affairs of a sovereign state,” said Álvarez, who’s been Panama’s foreign minister since February.

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Shortly after Maduro kicked out Panama’s ambassador and two other diplomats, President Ricardo Martinelli said Venezuela would still have to pay back its $1 billion debt to Panamanian exporters – a call echoed last Wednesday by Álvarez.

“Panama will protect its national interests,” the foreign minister told CSIS. “These measures taken commercially, in our opinion, are inconsistent with Venezuela’s obligations under international trade agreements and must be corrected. It might take time, but Panama has a history of knowing how to wait.”

Álvarez added: “We do not accept in any way that we have been involved in Venezuela’s internal affairs. We are acting according to international law, and therefore our suggestion to call a foreign ministers’ meeting was not getting involved – much less an attempt to promote any sort of instability against the government of Venezuela, which we have never challenged.”

Larry Luxner/The Tico Times
Larry Luxner/The Tico Times

Earlier last week, Maduro joined in a televised dialogue with Henrique Capriles and 10 other leaders of the Venezuelan opposition, under the sponsorship of Brazil, Colombia, Ecuador and the Vatican. While such dialogue is encouraging, few Venezuela-watchers expect the country’s crisis to be resolved anytime soon.

“As long as the price of oil is around $100 a barrel, Venezuela has much more to play with than any other country,” said John Maisto, a former U.S. ambassador to both Venezuela and the Organization of American States. “It could have the worst-functioning economy in the history of Latin America, but they still have a lot of money to spend.”

Maisto, speaking at another event the same day Panama’s Álvarez addressed CSIS, said that imposing U.S. sanctions against top Venezuelan officials and refusing to give them visas makes no sense.

“My own view of dealing with Venezuela goes back to Theodore Roosevelt: Speak softly and carry lots of big sticks,” said Maisto, who also was U.S. ambassador to Nicaragua in the mid-1990s. “Just having the sticks makes people stop and think. The notion that outsiders including the United States can solve the Venezuelan problem is folly. The Venezuelans got themselves into this in 1998. It was a free and fair election, and 57 percent of them voted for Hugo Chávez.”

Álvarez vowed that “Panama will continue to be vocal at the OAS” in the hopes a dialogue will eventually resolve Venezuela’s political and economic crisis.

“We truly hope the initiative by Unasur delivers on its expectations. We are happy to hear that the Holy See is getting involved. There is no true dialogue yet – just a sort of aggressive vocabulary and a lack of tolerance to disagreement. All those elements have to be addressed,” he said, adding that, “Panama will not accept anyone saying the OAS is dead, or that it’s a second-rate organization and does not represent the Americas.”

Álvarez noted that Panama’s outspoken position with regard to Venezuela is indicative of increasing role in world affairs – on complex, controversial global issues ranging from Syria to North Korea to Ukraine. It helps that Panama’s gross domestic product grew by 10.7 percent in 2012 and by 5.6 percent last year. The IMF says economic growth will hit 6.9 percent in 2014 and may exceed 9 percent in 2015 and 2016.

“Panama is worried about the situation in eastern Ukraine,” he said. “Russia is a big trading partner of Panama and is taking a stand to confront the EU and the United States. If there’s any sort of economic or trade instability – particularly with the EU – that’s going to affect international maritime trade because of the Panama Canal.”

From day one, he said, Martinelli has made it clear that Panama’s diplomatic efforts must be influenced by the country’s economic agenda.

“We are a trading nation and we need to go outside our borders to grow. There is no way Panama could have grown the way it’s been doing if it weren’t for our belief in free trade,” he said, noting that a $5.5 billion expansion of the Panama Canal, which turns 100 this year, will be finished sometime in 2015.

“Of course you need to have a strong democratic system. We are in the middle of a process to elect our next president, the entire National Assembly and the mayors of cities on May 4. It’s a show of how much Panama has improved since the dark days of the Noriega regime. The country has gone through a tremendous transformation.”

Among other things, Álvarez said Panama managed to convince the European Union that Panama was worth including in its free-trade talks with Central America.

“We are the EU’s top trade and investment partner in the region, buying 52 to 53 percent of everything the region gets from the EU – not only for our own consumption but also for re-export. And yet, Panama was completely out of that agreement,” he said. “We have delivered on our promises. Panama is now leading the Central American integration process. As I keep telling our Central American colleagues: Do not lecture Panama on regional integration anymore.”

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