September 8, 2008 / 2:36 AM / 10 years ago

Panama leftist with anti-US past to run for president

PANAMA CITY, Sept 7 (Reuters) - Panama’s ruling party on Sunday elected a leftist with an anti-U.S. past as its candidate for next year’s presidential election, which is likely to be fought over inflation and the big wealth gap.

Balbina Herrera, a former housing minister once linked to former military strongman Gen. Manuel Noriega, easily won the nomination of the Revolutionary Democratic Party, or PRD.

Following a vote by party members, she beat Panama City Mayor Juan Carlos Navarro.

Navarro conceded with more than 50 percent of the votes counted, giving Herrera 48.8 percent and Navarro 39.1 percent. Another candidate trailed in third place.

Under President Martin Torrijos, the son of a former Panamanian strongman, economic growth has been some of the fastest in Latin America, driven by construction, investment and growing U.S.-Asia trade through the Panama Canal.

The economy is seen growing up to 8 percent this year, versus 11.2 percent in 2007 due to the slowdown in the United States.

But inflation is rising and the wealth gap is huge.

According to the World Bank, 10 percent of the population owned 43 percent of the country’s wealth in a nation of just over 3 million people. Inflation was up 9.6 percent in the 12 months to July, largely due to increased oil and food prices.

“We have the responsibility ... to take this (economic) growth to ... the poor,” said Herrera, who wants to scrap income taxes for anyone earning less than $2,500 a month — the majority of the population.

Herrera, 53, has responded to attacks she is a firebrand populist by flying to New York earlier this year to meet Latin American investors and business leaders, as well as holding frequent meetings with business people in Panama.

While voting on Sunday, she promised to elect a young businessman as her vice-presidential running mate.

Leading opinion polls for the May, 2009 vote, her closest rival is likely to be Juan Carlos Varela of the Panamenista party, or supermarket tycoon Ricardo Martinelli.

Noriega has said he hid in Herrera’s house from U.S. soldiers who invaded Panama and overthrew him in 1989.

She also played a key role in heated anti-American street protests during a visit to Panama by former President George H.W. Bush shortly after the U.S. invasion.

But she denies once being an ally of Noriega, now in a Florida jail for drug trafficking.

Panama, considered a safe haven for bondholders in Latin America, has some $8.2 billion in debt securities held abroad.

Editing by Vicki Allen

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