Tight finish seen in Panama presidential election

Sun May 4, 2014 1:00am EDT

By Christine Murray and Elida Moreno
    PANAMA CITY, May 4 (Reuters) - Panama's presidential
election on Sunday is expected to be the closest in decades, as
the opposition battles to deny outgoing President Ricardo
Martinelli the chance to maintain an indirect hold over the
booming Central American economy.
    Recent polls show the three top candidates within a few
points of one another in a race pitting the current
administration, which oversaw a multi-billion dollar public
works drive, against challengers from both the left and right.
    The winner will inherit 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.
    Still, the campaign has focused more on personalities than
government policy, which is not expected to change dramatically
regardless of who emerges as the winner.
    A banking and trading hub, Panama is best known for the
canal that links the Atlantic and Pacific Oceans. Accounting
directly for 8 percent of gross domestic product, it has helped
fuel the fastest growth in Latin America in the last few years.
    Maintaining that performance will be a big challenge for the
next president, who the 62-year-old Martinelli openly insists
will be the former businessman and housing minister Jose Domingo
Arias of the ruling Democratic Change (CD) party.
    Seen by opponents as a proxy for Martinelli, whom the
constitution bars from running again in 2014, Arias' running
mate is the president's wife, Marta Linares de Martinelli.
    She has no formal political experience, but Arias has
dismissed suggestions she is not up to the job.
    "You can choose between the representatives of old politics,
who always governed for their own privilege, or for those from
new politics who can take the country even further," Arias said
at a packed closing ceremony on Thursday.   
    An Arias win would make his party the first to gain
re-election since a U.S. invasion in 1989 to oust military
strongman Manuel Noriega, who has been behind bars ever since.
    Running neck-and-neck with Arias is moderate leftist
challenger Juan Carlos Navarro of the Democratic Revolutionary
Party (PRD), a former mayor of Panama City.
    Navarro is vowing to improve government transparency after
Martinelli had to fend off allegations that the infrastructure
contracts he handed out were tainted by corruption.
    Just behind in third is the Panamenista Party's Juan Carlos
Varela, the center-right vice-president. He helped Martinelli to
win the presidency in 2009, but the two later fell out.
    Martinelli, a supermarket tycoon who founded the CD 16 years
ago and had popularity rates of around 65 percent at the end of
2013, recently inaugurated the first metro in Central America in
Panama City. Rides are free until after the vote.
    "He's been extremely able at doing things that people
believe are the things that a government should be doing," said
Felipe Chapman, chairman of Panama's stock exchange.
    Panama's growth spurt has lifted living standards, and at up
to $624 a month, the minimum wage in Panama is among the highest
in Latin America. But it has not been enough to offset the bite
of inflation, which is keenly felt by much of the 3.7 million
population, around one in four of whom live in poverty.
    The discontent has led to a nationwide construction strike
over pay since April 25. That has halted thousands of projects,
including work on the canal expansion, much to the annoyance of
Martinelli, who is president until July 1. 
    Inside El Chorrillo, a Panama City district built at the
turn of the century to house canal laborers, voters said it was
obvious Martinelli would not be far away if the CD won.
    "They can't hide that the (first lady) wants to hold onto
power," said Cecilia Smith, a 65-year-old supporting Navarro. "I
grew up in this country and I've seen that people who have had
power have money, and those who haven't are worth nothing."

 (Editing by Simon Gardner and Dave Graham; Editing by Nick
Zieminski)
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