|return to MA Project|
STRATEGY FOR THE ADOPTION
This paper was researched and written to fulfill the M.A. project requirement for the Monterey Institute of International Studies’ Master of Arts in Commercial Diplomacy. For more information about the Commercial Diplomacy program and the M.A. project requirement, please visit www.commercialdiplomacy.org.
As a consultant retained by Transparency International (TI, Panama Chapter), I have designed a strategy to build consensus for the adoption of an anti-corruption code in Panama. By adopting strong anti-corruption measures, Panama can help ensure a stable and transparent business environment that will help attract investment and enable long-term sustainable economic growth in the 21st century.
Corruption is a major impediment to economic
development in Panama. Failure to address this issue will threaten
the Canal’s economic viability, reduce Panama’s ability to replace
income lost from the United States’ withdrawal from Panama (five percent
or more of the GDP), and risk further weakening an already sluggish
The United States has identified corruption as
a major deterrent to trade and investment in Panama. Indeed, under
the U.S. Foreign Corrupt Practices Act,
U.S. companies face severe penalties if caught making bribes in foreign
countries; they are unlikely to invest in Panama if they think it
will require engaging in bribery. The recent entry into force of the
OECD Anti-Bribery Agreement further emphasizes the priority the international
community has placed on corruption reform.
It is crucial that Panama implement and enforce
legal reforms that make corruption a high risk, low return activity
and permit full recourse for companies that encounter corruption.
This will involve creating strong enforcement and watchdog agencies
that can curb bribery and corruption and assure adherence to international
conventions that criminalize such practices.
As Panama moves toward gaining greater control
of its own economic destiny, corruption stands as a major obstacle
to attracting the level of investment necessary for privatizing state-owned
enterprises and developing the Canal areas. Failure to address the
corruption issue will threaten the Canal’s economic viability, reduce
Panama’s ability to replace income lost from the United States’ withdrawal
from Panama (five percent or more of the GDP), and risk further weakening
an already sluggish economy.
needs to establish a stable business climate that encourages investment,
improves consumer confidence, and provides for long-term sustainable
growth. To achieve these goals, Panama must create a transparent and
sound business environment for both foreign and domestic corporations.
In light of Panama’s reputation of pervasive
corruption, it is crucial that legal reforms be implemented and enforced
to make corruption a high risk, low return activity. This involves
implementing policies that curb bribery and corruption, adopting international
conventions that call for the criminalization of such practices, and
creating strong enforcement and watchdog agencies.
Businesses must feel confident that they will
be able to function within a fully transparent legal and regulatory
framework if they are to invest in Panama. Without such a framework,
business costs and overall investment risk are simply too high.
In order to improve Panama’s international image as a good place to invest and convert Panama into a thriving economy, Panama's legal and regulatory framework must be brought into line with international standards. However, such reform will not be easy:
Overall Anti-Corruption Strategy for Transparency International (Panama)
The following strategy is designed to build support
for reforms through comprehensive domestic and international strategies.
The strategy is to be carried out by Transparency International (Panama)
in the in the context of the May 1999 presidential elections and to
be implemented in the pre- and post-election stages.
order to create momentum for the adoption of strong anti-corruption
measures in Latin America, the international strategy calls for the
formation of coalitions within regional groups. Coalition members
should include members from the international business community,
NGOs, civil society organizations (CSOs), and other TI national chapters
in Latin America. Specific sub-strategies follow:
Coalition Building Strategy
build consensus internationally, TI can initiate efforts to create
a Global Coalition on Latin
America, similar to the corruption fighting campaign former World
Bank president Robert McNamara leads in Africa. Members could include
TI national chapters in Latin America, the International Chamber of
Commerce, CSOs, NGOs, and international industry and trade associations.
International Organization Strategy
help focus the government’s attention on corruption, coalition members
can initiate a dialogue with donor agencies and international organizations
such as the World Bank and the InterAmerican Development Bank (IDB).
International institutions should be encouraged to make corruption
a top priority when providing assistance to member countries.
strategy is designed to communicate to domestic and international
audiences Panama’s efforts to develop its economy and consolidate
its democracy through good governance. This strategy will help improve
Panama’s business climate, attract investment, and reverse the harmful
legacy of Noriega’s dictatorship.
Post-Election Strategy for the Government of Panama:
a Watchdog and Enforcement Agency. A fully empowered, independent investigative, monitoring and enforcement
body should be created to ensure effective compliance with anti-corruption
measures. This body can work together with Transparency International
to secure its independence from the Panamanian government and be charged
with establishing a mechanism to measure corrupt practices in the
government (phone calls, e-mails, surveys and polls of the different
branches of government). It also can introduce diagnostic surveys
(public service delivery surveys, enterprise surveys, and public official
survey) with World Bank support.
a National Advisory Committee. This
committee should represent all sectors of society. Its task should
be to guide the reform process, as well as to advise on measures that
foster public support for reforms. The Committee can also help identify
practices and procedures that are conducive to corruption.
Reforms in the Judiciary.
The judicial system can play an important role in limiting corruption
at all levels of government by monitoring both civil servants and
politicians and by holding them accountable in the event of wrong
the Ombudsman. The
Panamanian Ombudsman needs full authority to operate, including a
mandate to investigate the judiciary.
Administrative and Civil Service Reforms. Preventive measures to deter corruption need to be established. These
measures include standards of conduct for public officials, mechanisms
to enforce these standards, and strengthened government procedures
in the areas of hiring, government procurement and tax collection.
Transparency principles must be incorporated into the procedural standards
for every privatization and government transaction. This involves
the creation of a single agency to monitor best practices in privatization.
Regulatory Reforms. Panama’s
regulatory system also needs to be more transparent. Transparency
can help ensure that laws and regulations meet the social and economic
objectives they are designed to achieve without burdening economic
activity more than necessary.
government should also initiate a national media campaign to inform
the public sector and general public of the need for support, participation
and feedback in denouncing corrupt practices.
Trade Fora Strategy
can show the world that it is serious about corruption reform by participating
in cutting edge discussions on the issue. It should become a full
participant in the FTAA working group on investment and take an active
role in WTO discussions on government procurement. Panama also should
accede to the OECD Anti-Bribery Agreement and negotiate an understanding
with the United States in order to address its concerns about the
lack of transparency in Panama’s government procurement regime.
International Organization Strategy
should both request IDB/World Bank technical assistance for implementing
anti-corruption reforms and create the necessary regulation for implementation
of the OAS anti-corruption principles. These actions would provide
a solid beginning for the acceptance and passage of a more comprehensive
international media campaign should be initiated to improve Panama's
image among investors, international organizations and governments.
This campaign should communicate Panama’s commitment to offer a transparent
investment climate similar to that of Singapore. The international
media strategy will help clear away the mist of corruption associated
with Panamanian business practices and bolster Panama’s efforts to
integrate into the global economy.
In pursuing these strategies TI should be prepared to counter:
general lack of commitment to the implementation of necessary reforms.
An anti-corruption code needs full support and commitment of the executive
branch to be passed, implemented and enforced.
lack of legislative support for passing necessary reforms.
that reform is not possible because resources are inadequate to create
watchdog agencies and auditing mechanisms.
newly elected president’s rejection of pre-election commitments on
corruption power once his/her party is in power.
The government should be prepared to respond to and overcome:
absence of commitment by high level officials. Without such a commitment,
the government will lack the moral authority to enforce laws and punish
lack of confidence among enforcement officials that their actions
against powerful people will be supported by top leaders.
ambitious promises that might lead to unrealistic expectations and
a loss of public confidence.
that are piece-meal and uncoordinated.
Reforms will not be successful if no one is committed to seeing
that they are implemented. Likewise, reforms that rely too much upon
the law or enforcement may lead to repression, abuses of enforcement
power and the emergence of further corruption.
that "overlook" those in leadership roles and focus only
on the “small fry." If the law is applied unfairly, it soon ceases
to have any legitimacy or deterrent effect.
failure to attract and retain the most capable officials from civil
society and the private sector.
to the 8th International Anti-Corruption Conference held
in Lima, Peru in 1997, Panama has one of the highest levels of corruption
in Latin America. Government
regulation and intervention in the economy have tended to reduce transparency,
hinder competition and hamper the efficient allocation of investment.
Bid procedures for certain privatizations and government-financed
projects have been questioned with respect to transparency, and there
have been seemingly unjustified re-submissions of bids.
Panama’s judicial system continues to be too susceptible to
political influence and apparent corruption.
bidders have complained about the Panamanian government procurement
regime because, as currently implemented, it falls short of best practices
and, in some cases, may not even follow the few relevant laws and
procedures already in place.
In 1996, for example, bidders in the privatization of two important
Canal terminals denounced the bid process for its lack of transparency.
These cases and several other instances of questionable practices
have soured some large international firms on doing business in Panama.
the government is actively looking for investment in the fields of
tourism, maritime services, and in-bond assembly and manufacturing
in the Canal areas. The government’s passage of important economic
reforms has not improved the international perception of Panama as
corrupt and lacking adherence to the rule of law.
the same time, the international community is making a concerted effort
to treat corruption as a global problem and bring it under control.
International lending organizations have increased their efforts to
curb corruption by leveraging their lending power for change. In 1994,
for example, aid to Tanzania and Kenya was suspended because of corrupt
practices in those countries. The OECD Anti-Bribery Agreement, which
entered into force in February 1999, is developed countries’ attempts
to attack the supply side of corruption by criminalizing bribery of
In Latin America, anti-corruption initiatives have been made a top priority via the Organization of American State’s (OAS’s) Convention Against Corruption, which requires governments to criminalize bribery, transnational bribery, and illicit enrichment. Panama ratified this Convention in 1997, but it has not yet enacted legislation necessary for its implementation.
Attempts to Curb Corruption in Panama
299 of the Constitution is one of Panama’s few legal provisions against
corruption. It obligates every high government official to present
an affidavit of his/her estate upon taking office. However, Article
299 has had almost no effect because regulations have not been established
to govern the content of the affidavit, its public nature, and the
penalties for non-fulfillment of this obligation.
September 1997, a bill was introduced in the Assembly that would have
put some regulatory teeth into Article 299, requiring the president,
vice-presidents, Supreme Court judges, ministers, vice-ministers and
the different directors of government autonomous entities to make
affidavits of their financial estate upon taking office. The bill,
however, was not even addressed by the Government Commission or introduced
for debate in the legislative period.
1997, Panama’s Attorney General introduced a bill to curb corruption
with the participation of TI and the United Nations Development Program.
The bill addressed some of the above-mentioned issues by proposing
reforms to the judicial and penal codes, criminalizing bribery, and
making provisions for combating different forms of corruption. In
the end, however, TI and other civil organizations opposed some sections
of its content due to its lack of strong language and failure to make
public officials accountable. The General Assembly did not even discuss
the legislation arguing that there were more important bills awaiting
a number of occasions, Transparency International (Panama) has denounced
the investment climate in Panama; investors often feel forced to offer
bribes to officials during government procurement processes because
they know other investors engage in such activities. Since 1997, TI
has tried to get the government to implement the Pacts of Integrity,
which include signed commitments by participants in government procurement
to respect the laws prohibiting payment of bribes to government officials.
This principle was successfully applied during the privatization of
the national telephone company. In general, however, government officials
have done little to denounce corrupt behavior.
Legal Framework for Government Procurement
Constitution gives the executive and legislative branches of government
the fundamental power and authority to award administrative contracts
and lease or sell state property. It also acknowledges the use of
concessions by the government and requires such awards to be based
on considerations of social well-being and the public interest.
abound that bribes have played a large role in these Cabinet awards,
which is not surprising given how the government procurement regime’s
multiple layers allow for inconsistency and lack of transparency.
The Constitution, Law 5 of 1988, Law 56 of 1995, and individual sectoral
laws all provide their own rules and regulations for privatizations.
The recently modified public contracts law (Law 56) introduced transparency
principles in bidding processes, but no agency oversees best practices
in government procurement.
Efforts to Curb Corruption
1996, the WTO launched a new attempt to develop an agreement to ensure
transparency in government procurement. The working group on transparency
in government procurement is currently discussing how to structure
a multilateral agreement, which could become part of the Millennium
negotiating round. The WTO secretariat is currently considering a
Japanese proposal for a procurement agreement. At present, WTO members
agree that such an agreement would require:
· publication of national legislation and procurement procedures,
· information on procurement opportunities,
· transparency of decisions on qualified bidders, and
transparency of decisions on contract awards.
voluntary WTO Government Procurement Agreement (GPA) is one of the
models being examined by the working group. Its 26 signatories are
predominantly industrialized countries.
Inter-American Convention Against Corruption
OAS Convention Against Corruption was signed by most Latin American
governments in 1996. However, its signatories have not enacted legislation
and regulations to implement it. The Convention requires governments
to cooperate in investigating and prosecuting corrupt acts, including
facilitating extradition and providing assistance in recovering illicitly
acquired property or wealth. It also requires governments to criminalize
bribery, transnational bribery, and illicit enrichment, and it discourages
the use of bank secrecy laws as the basis for withholding cooperation
from investigations of corruption.
March, the OAS and the InterAmerican Development Bank signed an agreement
to promote the prompt ratification and implementation of the OAS Convention
Against Corruption. The two organizations are co-financing the project
with contributions of $105,000 each. The program will include a series
of workshops in several countries to raise awareness of the importance
of ratifying and implementing the Convention.
OECD Agreement represents a major step in the fight against corruption
because it requires countries to help each other prosecute cases.
The Agreement is based on the idea that, since each country has an
interest in preventing others from gaining an advantage through bribery,
each will want to monitor others' adherence to the new convention.
Because OECD countries are promising to punish cheaters, the hope
is that more companies will choose honesty.
of January 1999, 11 countries—including five of the 10 largest—had
ratified the Agreement: the United States, Germany, the United Kingdom,
Canada, Norway, Japan, Finland, Hungary, Korea, Bulgaria, and Iceland.
They represent almost 60 percent of OECD exports.
Agreement went into force in these 11 countries on February 15, 1999. Other big exporters such as France, Belgium, the Netherlands,
and Italy, which represent almost one-quarter of all OECD exports,
have not signed.
corruption is worst in developing regions, many bribes come from companies
headquartered in highly developed countries. Accordingly, the OECD
Convention on Combating Bribery of Foreign Officials in International
Business Transactions attacks “the supply side of corruption.” It
asks the world's major industrialized democracies to enact laws that
end tax deductibility of foreign bribes and prohibit local companies
from paying bribes to foreign governments.
Agreement calls for the application of effective measures to deter,
prevent and combat corruption and bribery of foreign public officials
in connection with international business transactions and, in particular,
the prompt criminalization of such practices.
The OECD Agreement prohibits bribery of foreign legislative,
administrative, and judicial officials, whether appointed or elected.
Bribery is prohibited not only in procuring orders but also in all
regulatory affairs concerning, for example, environmental permits,
taxation, and customs and judicial proceedings.
The Agreement requires strong penalties, including extradition.
It also requires mutual legal assistance and the establishment of
accounting and auditing rules to prevent off-the-books accounts. The
Agreement, however, does not prohibit improper payments to political
parties, party officials, and candidates. In 1999, the OECD Anti-Bribery
Working Group is reexamining this issue for further action.
U.S. Foreign Corrupt Practices Act
United States made bribery of foreign officials a crime in 1977, when
it adopted the Foreign Corrupt Practices Act (FCPA). To help in enforcing
the FCPA, businesses are required to keep accurate books and records
of their transactions.
December 1996, the UN General Assembly adopted a Declaration against
Corruption and Bribery in International Commercial Transactions, as
recommended by the UN Economic and Social Council. Although not legally
binding, the declaration’s wording on criminalizing foreign bribery
and ending bribery’s tax deductibility signifies broad political agreement
in the international community on this matter.
May 21, 1997, the European Commission (EC) adopted a Communication
to the Council and the European Parliament on a policy against corruption.
The Communication sets out the EC’s comprehensive policy on corruption
inside the EU, as well as in its relations with non-member countries.
The Communication deals with a wide range of actions, including the
ratification of conventions that criminalize corrupt acts of EC and
member country officials, eliminate the tax deductibility of bribes,
and reform public procurement, accounting, and auditing systems. The
Communication proposes to establish a “coherent anti-corruption strategy
in the area of its cooperation with third countries which benefit
from EC assistance.”
1996, World Bank (WB) president James Wolfensohn made combating corruption
a top priority. In 1997, the Bank adopted a comprehensive program
that included assistance for corruption reform and strong controls
to prevent bribery in connection with WB financed projects. The Bank’s
efforts to fight international corruption focus on economic and policy
reform and institution strengthening.
In June 1998, the Bank created the Anti-Corruption Knowledge Center to help task managers and interested Bank staff understand corruption and to devise strategies that help client governments reduce corrupt practices. These goals are consistent with the Bank's strategy to mainstream anti-corruption work in country operations. The Bank's work focuses on the following:
· Preventing corruption in Bank projects.
· Helping countries reduce corruption upon governments' requests.
Mainstreaming anti-corruption efforts by integrating
the topic in country assistance strategies, economic sector work,
and other Bank operations.
Bank's international efforts to reduce corruption focus on:
Cooperating with other multilateral development banks
and with bilateral donor agencies; informing them of how it plans
to help member countries in this area; and undertaking joint or coordinated
activities as appropriate.
· Contributing to the work of regional organizations engaged in the fight against corruption (including the OECD, the Council of Europe, and the OAS) and participating in technical assistance and other activities as appropriate.
Consulting with the business community to better understand
its perspectives on corruption.
· Consulting with NGOs to gain their insights and exchange views on the Bank’s approach.
· Supporting domestic programs aimed at controlling transnational bribery and money laundering.
Explaining how international efforts complement domestic
action. The WB supports domestic efforts to control transnational
bribery and money laundering.
March 1996, the International Chamber of Commerce (ICC) issued revised
rules of conduct to combat extortion and bribery in international
business transactions. The rules prohibit extortion and bribery for
any purpose. The rules are not binding on ICC members but corporations
may voluntarily endorse them. To promote the new rules, the ICC has
set up a standing committee of business executives, lawyers, and academics.
ICC national committees mobilize support for the rules in their countries.
around the world are participating in the efforts of local governments
and other entities to curb corruption. Among the international NGOs,
Berlin-based Transparency International (TI) works to curb corruption
through international and national coalitions that 1) encourage governments
to establish and implement effective laws, policies and anti-corruption
programs, and 2) build public support for anti-corruption programs
and public transparency and accountability in international business
transactions and public procurement. TI has established chapters in
more than 70 countries.
economic future depends upon its ability to attract investment. It
will need large investment infusions to both develop the Canal areas
and offset income lost from the United States’ withdrawal from Panama
(approximately US$385 million annually or five percent of the GDP).
To date, however, Noriega’s legacy of corruption,
along with Panama’s failure to develop clear anti-corruption laws
and enforcement mechanisms, has undermined investor confidence. By
refusing to tackle corruption, the government has created an environment
that encourages corrupt practices in both the public and private sectors.
Panama’s corrupt reputation in the international community could well
limit its future ability to achieve long-term sustainable development.
can address the above-mentioned issues by adopting an anti-corruption
code. This will require the implementation of domestic policies that
severely punish bribery and corruption and the creation of enforcement
and watchdog agencies. Panama should sign and come into compliance
with international conventions that criminalize bribery. Immediate
actions involving the establishment and enforcement of transparent
standards in areas such as government procurement and bidding would
be a good first step toward establishing Panama’s commitment to adequately
address this issue.
needs large inflows of foreign investment to stimulate its sluggish
economy and make up for the United States’ withdrawal from the country.
Its current growth rates are too weak to support job production or
reduce its high, 14 percent unemployment rate. In the last four years,
Panama’s GDP averaged two percent growth, far below what is needed
to sustain development and increase employment.
an estimated value of US $5 billion, the former Canal Zone will be
critical in shaping the growth of the economy in the next 10 years.
The complex shipping and cargo-processing activities related to the
Canal are the crown jewel of the government’s economic plans to attract
The transfer of the Canal to Panamanian control
at the end of 1999 offers an opportunity for Panama to mold its political
and economic future to become a model of sustainable development in
Latin America. This transition presents a unique opportunity to fully
develop the Canal areas into commercial enterprises that create jobs,
raise national income and foster economic growth.
major uncertainties cloud the realization of this goal. Serving as
instruments of corruption during Noriega’s rule, the government’s
executive, legislative, and judicial branches still act as deterrents
to investment attraction. Costly public relations’ campaigns in The
Financial Times and
other well-known newspapers have helped Panama’s international image.
However, the investment climate continues to be undermined by the
lack of transparency in government transactions and public bids.
Panama is to become integrated into the global economy, with higher
living standards driven by sustainable private sector growth, it needs
to establish a transparent business environment recognized as such
by the world's most important trading and investment partners. Only
large inflows of investment will reverse Panama’s declining economy.
Vision for Panama’s economic development
economic success in the new millennium will depend on its ability
to exploit its real and comparative advantages: its strategic position,
the Canal, and the Canal area assets.
current situation is similar to that of Singapore’s in 1964. Both
countries are strategically located in their respective regions, and
both have similar population sizes—Singapore has 3.4 million people,
and Panama has almost 3 million. When the British withdrew from its
Singapore military bases, Singapore lost US$ 70 million in annual
income—a figure not too different, adjusting for inflation, to what
Panama will lose from the United States departure today.
like Panama, Singapore gained port infrastructure as well as airports,
housing and roads. And with these assets in hand, it made a crucial
decision to pursue outward development. It began training its workers
and promoting savings, investment, social development and exports.
Its goal was foreign investment in a free market context, and it succeeded.
Singapore remains the best example of sustainable development in the
last 30 years. It has achieved an annual per capita income of US$
13,000, almost 4 times that of Panama's. Today, Singapore exports
approximately US$ 40 billion, almost seven times more than Panama's
December 1999, the United States will have gradually transferred to
Panamanian control 94,000 hectares along the Canal, including 7,000
buildings and installations such as airports, hospitals, schools,
and ports. By following a development approach similar to Singapore’s,
Panama could rapidly become a model of Latin American development.
But this requires recognizing the linkage between good governance
and sustainable growth and following a well-defined economic strategy
that focuses on services exports and increasing inward foreign direct
has a relatively small domestic market. With only 2.8 million people,
it is the equivalent of only 15 percent of Mexico City's market or
a small portion of Buenos Aires' or Sao Paulo's markets. If Panama
is to achieve sustainable economic growth, it needs to become a net
exporter. By increasing and diversifying its exports, Panama can substitute
and surpass the loss of income resulting from U.S. withdrawal from
the Canal areas. Panama
has successfully exported services through the Colon Free Zone (the
largest in the Western Hemisphere), as well as the Canal and the Banking
Center (the largest in Latin America). It is also evident that Panama
can increase exports of goods and services by fully developing the
Through the development
of the Canal areas Panama can increase its exports to US$ one billion
annually and generate approximately 150,000 jobs. But to realize this
potential, Panama requires large amounts of investment, and in order
to attract investment, Panama needs to eliminate or reduce corruption.
Substantive and procedural policy changes must be implemented to make
corruption a high-risk, low return activity. The adoption of transparent
and strong anti-corruption measures would signal that Panama is serious
about attracting investment to reach its development potential.
The adoption of an anti-corruption code will
only be a first step toward curbing corruption in Panama. The adoption
of the regulatory framework set forth in the OAS Inter-American Convention
Against Corruption can create momentum for the passage and implementation
of a more complete anti-corruption code. To further improve Panama’s
anti-corruption measures and signal that Panama is serious about combating
corruption, it can adopt provisions from the OECD Anti-Bribery Agreement
and Transparency International’s standards—both of which reflect developed-world
standards recognized by the largest sources of investment.
OAS Inter-American Convention Against Corruption
year, Panama ratified the OAS Inter-American Convention Against Corruption,
but it has not yet adopted regulatory measures to enforce it. The
OAS Convention could be used as a model for addressing the following
issues in Panama.
enrichment. Under the OAS Convention, it is an offense for a public
official to inexplicably gain significant increases in personal assets
relative to lawful earnings. Panama needs to implement legislation
to this effect.
Government procurement policies. Multiple and
sometimes contradictory laws (the Constitution, Law 56, and individual
laws for specific sectors) govern the Panamanian government procurement
regime; no agency monitors best practices in government procurement;
and multiple agencies handle major privatizations. Only the recently
modified public contracts law (Law 56) introduced transparency principles
in bidding processes. To streamline and strengthen its government
procurement regime Panama should:
· Make the transparency principles of Law 56 the procedural standard for every privatization and government transaction.
Expand the purview of ProPrivat to be the only agency
in charge of overseeing privatizations and commercial transactions,
including those in the Canal areas.
Adopt and apply the Transparency International Pacts
of Integrity, which involve a signed commitment by participants in
government procurement to respect the laws prohibiting payment of
bribes to government officials.
service personnel reforms.
To improve the quality of the civil service, Administrative Career
legislation will need to be updated to ensure objective criteria are
used in recruiting staff and reviewing personnel performance. Panama
cannot afford to have an inefficient civil service in the 21st
century. Government downsizing will meet with resistance if it is
tied to the introduction of an anti-corruption code. However, public
sector salaries are inadequate because, in part, the government is
too large, and the inadequacy of public sector salaries encourages
"petty corruption." By downsizing, remuneration can improve
and efficiency should increase, resulting in increased business activities
and investment. This in turn should open new job opportunities. Singapore
has been successful in this endeavor. Gradual pay raises, fair salary
structures, and strict penalties for corrupt acts by civil servants
all help ensure quality public services. To address corruption at
the highest levels, where officials are already well paid, stricter
penalties, monitoring and surveillance systems must be put in place.
The OAS Convention can serve as a model for these systems. The Convention
establishes the need for ethical codes concerning the prevention of
conflicts of interest, oversight of state resource and asset allocation,
and reporting systems for identifying corrupt acts when they occur.
and auditing reforms. Reforms in these areas will improve transparency
in public spending.
requirements. The Panamanian
Constitution requires public servants in managerial or top positions
(ranging from the president to directors of public entities) to make
disclosure statements. Nonetheless,
this has not served as an effective deterrent to corruption because
the pertinent regulation has not been adopted in the legislature,
and disclosures are kept in the Controller's Office where they are
not subject to evaluation. Appropriate regulation needs to be enacted.
The issue of making affidavits public is very controversial and needs
to be subject to public debate. (Legislative opposition to the disclosure
requirement was due to legislators’ reluctance to make disclosures
public.) Annual disclosure of the financial affairs of key players
and reviews of disclosure statements by independent enforcement institutions
can go a long way toward discouraging corrupt practices.
of an independent commission against corruption. Corruption monitoring
cannot be left only to public prosecutors and other law enforcement
bodies. Panama needs to create a new agency or regulatory body to
monitor compliance with the anti-corruption code and to offer legal
assistance relating to investigations and proceedings within the scope
of best practices. To avoid political manipulation, Transparency International
(Panama Chapter) can be involved in this monitoring and surveillance
task. In cases where complaints are found to be valid, reviewing authorities
may have powers to grant relief to complainants.
OECD Anti-Bribery and Anti-Corruption Agreement
OECD Agreement helps assure transparency in bidding processes by attacking
the supply side of bribery and corruption in international business
transactions, including trade and investment.
Eliminating tax deductibility of bribes to
foreign public officials. Signatories to the OECD Agreement are
required to make bribes of foreign public officials, as well as the
proceeds thereof, subject either to seizure and confiscation or to
sanctions of comparable effect. Companies are required to issue financial
statements disclosing their material contingent liabilities.
Although Panamanian laws do not allow tax deductions for bribes,
companies are not required to issue financial statement disclosures.
By adopting this OECD provision, Panama will send a signal to domestic
and foreign companies that it is building a system based on integrity
Criminalizing transnational bribery and corruption.
Panama’s penal code should prohibit transnational bribery and provide
for the punishment of such practices. To establish the Panamanian
government’s serious intent to improve credibility and transparency
in business transactions, this issue needs to be attacked on all fronts.
It is not enough to simply criminalize the act of making a bribe.
Strict legislation should also criminalize the demand side—public
officials’ misuse of power for private gain. Current Panamanian laws
criminalize bribery and corruption but the penal code needs to be
revised and updated to tackle new forms of corruption that are not
covered by the law. Penalties might need to be increased to deter
corrupt practices. Additionally, Panama has no mechanisms in place
to make holders of public office accountable for their decisions and
actions. There needs to be a system of checks and balances within
the legal framework.
Prohibiting improper payments to political
parties. Panama prohibits improper payments to political candidates
but has no mechanism for monitoring compliance with this prohibition,
and political parties have been accused of receiving bribes in exchange
for contract concessions. No international agreement or convention
addresses contributions to political parties, but the OECD is studying
Issues that Panama Should Consider
Right to petition. Access to information is a critical aspect of anti-corruption programs.
Recently approved legislation establishes the right to petition and
the right to public information. However, public officials do not
comply with this legal provision.
Ethics. The ethical environment must be
owned, policed, adapted and updated across the public sector. If the
ethical environment has potential weak points, new means of accountability
must be introduced or existing means upgraded and reinforced.
Application of the Code. Aside from writing and enacting an anti-corruption code, the government needs to determine whether the code should be retroactive. In the past, there have been accusations that governments have mishandled important contracts and privatization projects. The companies involved are already established under legal terms and employ hundreds of Panamanians. In light of the controversial nature of retroactive application, an anti-corruption code should not be retroactive. Hong Kong, deemed as one of the world’s most corruption-free societies, successfully followed this approach.
The adoption of anti-corruption and anti-bribery
regulations is a politically sensitive issue for most countries. In
many cases, politicians see anti-corruption reforms as political suicide.
Government officials are likely to resist implementation
of anti-corruption codes that require higher levels of government
accountability and transparency, and accordingly, political interference
aimed at watering down proposed anti-corruption legislation should
be expected. While the political elite may agree to cosmetic reforms
to satisfy TI and international lending organizations, actual enforcement
will be weak without civil society’s active participation.
Due to the limited scope of international lending institutions’ work on governance and participation, it might be difficult to obtain immediate support from them for stronger anti-corruption measures. However, international institutions are paying more and more attention to the negative effects of corruption in development. Efforts to address corruption in the OECD, and soon in the WTO, will keep a spotlight on the negative impacts of corruption in international trade and economic development.
issues that need to be addressed in bringing Panama's legal and regulatory
framework into line with international standards include:
lack of support for institutional changes from the executive, legislative,
and judicial branches of government.
unjustifiable benefits and prerogatives that legislators and other
high-level government officials now enjoy.
widespread tolerance of a privileged class that has access to power
and can buy judges.
· A non-transparent judicial system that is seen as the most corrupt branch of the Panamanian government.
Apathy within the general public toward active participation
in the democratic process.
These obstacles will make an anti-corruption
campaign both difficult and lengthy. Especially difficult to overcome
will be strong opposition from within the government. Opposition to
reforms will likely come from the following areas:
Legislators. Members of the Legislative Assembly enjoy unjustifiable privileges and prerogatives that would disappear with a more stringent anti-corruption code. Past attempts to pass anti-corruption reforms encountered legislators' opposition, and reform bills were not even debated. Legislators generally do not consider corruption an important issue (partially because they do not understand its impact on the economy), and they will oppose reforms that will limit their earning potential. Another issue to consider is the partisan nature of the legislature, particularly with respect to bill sponsorship. If introduced by the majority party, anti-corruption measures might get majority support. If introduced by the minority, however, passage is unlikely. As Panama consolidates its democracy, legislators will come under increased scrutiny during election campaigns. Accordingly, anti-corruption reforms should be addressed in the context of these campaigns.
The Executive. Successful anti-corruption reforms will require strong support and leadership from the president. The stakes are so high that powerful high-level officials may try to obstruct reforms and even use violence in order to avoid passage. In the past, Panamanian government officials have given little support to stronger anti-corruption measures and have failed to denounce corrupt behavior. Indeed, after initiating a UNDP-financed corruption control program, the Office of the General Controller decided to transfer it to Transparency International because of its own lack of success in obtaining results.
The Judiciary. Under the current administration, the judiciary has been highly criticized; it is perceived as the least transparent branch of government. Its weak and uneven application of the rule of law reflects a fundamental problem. In the last three years, 15 judges have been fired, and some have resigned alluding to pressure for specific rulings. Because of the judiciary’s critical role in the implementation of an anti-corruption code, it will need to undergo important reforms. Judicial reform involves strengthening objective criteria for selecting and retaining judges and other personnel.
party leaders. Three presidential candidates have included TI’s
proposals in their government plans, but once in power, each has caved
on anti-corruption; the political costs involved are extremely high
and other pressing issues such as poverty, unemployment, health, and
education are easy to put at the top of the agenda. Political party
agendas reflect the lack of knowledge and awareness of the real impact
of corruption in economic development. Additionally, political leaders
concerned with election might view reforms as an obstacle to their
ability to receive campaign financing and public sector support. Because
politicians tend not to fulfill their promises, civil society’s scrutiny
will play an important role in ensuring compliance.
Sector Opposition. Locked in a prisoner’s dilemma in which the
dominant strategy is bribery, international and local business people
have been reluctant to support reforms. Businesses that have close
ties with high-level corrupt officials and have been involved in prior
misconduct might lose out, at least in the short run, by such reforms.
Recently, however, Panama’s lack of transparency has been identified
as a barrier to private sector development and to increased local
and international investment. Further, corruption scandals involving
U.S. firms and Panamanian government officials have been exposed in
the media—exposure that has negatively impacted the image of those
businesses. The entry into force of the OECD Anti-Bribery Agreement,
which criminalizes bribery of foreign officials, will help build private
sector support for anti-corruption reforms.
Consensus for the Adoption
In order to succeed, an anti-corruption reform
strategy must have the support of all segments of society: governmental,
legislative, business and public. Despite the political elite’s vested
interest in maintaining the status quo, building such support is plausible.
Just as national leaders, despite their self-interest in maintaining
the status quo, undertook free-market reforms, privatizations, and
related policies, these leaders also can be persuaded to support enactment
and enforcement of an anti-corruption code.
Broadcasting two messages
will be key to the consensus building strategy:
· In the coming years, governments will be increasingly pressured to take action against corruption. Just as global forces pushed for economic reforms, privatization and openness, they are now pushing for better governance and greater transparency in commercial transactions.
Reforms are necessary if Panama is to successfully attract
FDI and international portfolio investment. Competition for foreign
investment is keen, and foreign investors value stability, predictability,
transparency, and honesty in government decisions. For Panama to become
a model of sustainable development in Latin America, it must reduce
The May 1999 elections offer a window of opportunity
to introduce reforms, especially if the elections result in a change
in regime or individual leadership. Polls indicate that a majority
of Panamanians are discontent with the government’s performance and
will support a reform effort
The objective of this
strategy is to overcome domestic opposition to reform and build support
for the adoption and enforcement of anti-corruption reforms in both
pre- and post-election stages.
Consensus Building Strategy. In order to create national support for the adoption
and enforcement of anti-corruption reform, all sectors of society
should be pulled into the campaign as early as possible. TI can pursue
the following two-tier strategy:
Building Strategy. To
build support for anti-corruption reforms and ensure that all sectors
of society make such reform a common national goal, the Panama
Anti-Corruption Coalition (PACC) should be formed. The PACC should
include representatives from academia, the private sector (including
domestic and international businesses and trade associations), civil
society, NGOs, political parties, the judiciary, legislators, unions,
government workers, and local government agencies in charge of investment
attraction in Panama. Special attention should be placed on efforts
to increase awareness of the damaging economic and political effects
of corruption. Specific PACC objectives include:
· Enhancing public awareness. Awareness-raising workshops can bring this issue to the attention of civil society, public officials, legislators, and politicians. A sustained participatory process, extending far beyond the initial awareness-raising and mobilization stages, will prove crucial during reform implementation.
society constituencies. These constituencies can help build initial
support for anti-corruption efforts by organizing letter writing and
phone campaigns targeted at legislators.
Open public debate on corruption issues can help all sectors of
society understand the different reforms and help define implementation
priorities. The debate can encourage participation of civic organizations,
political parties, chambers of commerce, industry organizations, professional
associations, and other interest groups.
and the public sector in diagnosing corrupt systems. Public servants
and private citizens are valuable sources of information, especially
in identifying occurrences of corruption. Client surveys, citizen
oversight bodies for public agencies, professional organizations,
telephone hot-lines, call-in radio shows, and educational programs
can all help in shedding light on corrupt practices.
Media Strategy. A
comprehensive media campaign will help raise awareness of the corruption
issue, neutralize opposition forces, and convince legislators, political
candidates, government workers, and the private sector of the need
for a world-class, transparent business and legal environment in Panama.
By conducting and using media sources to disseminate polls on how
Panamanians view bribery and corruption, PACC can make corruption
an election issue and help build voter support for the party that
shows more interest in and commitment to adopting anti-corruption
policies. As a result of the country’s democratic reforms, new leaders
who are dedicated to fighting corruption and improving public administration
are already gaining power as never before.
Executive Strategy. The president needs to send a clear message to members
of the cabinet, and legislative and judicial branches of government,
as well as civil servants, that anti-corruption reform is a top priority
and that strong measures will be taken to ensure enforcement. This
strategy calls for lobbying the newly elected president and identifying
reform-minded decision-makers within the cabinet whose constituencies
would support corruption reform to further the country’s broader interests.
The election of a new government offers an opportunity to identify
key political supporters. However these supporters must have the full
political support of the president. The executive should help:
· Create confidence that it is possible to make systemic anti-corruption improvements without committing political suicide. Offering educational consultations and technical assistance to leaders may help them learn from other countries’ anti-corruption efforts and pave the way for them to adopt a systematic approach to the problem.
Address public sector opposition. Civil servants need
to know that their rights will be protected and that downsizing will
ensure higher salaries and more efficiency. Corruption reforms will
help attract investment and, in turn, create new job opportunities
as a result of this investment.
Judiciary Strategy. This strategy aims at identifying reform-minded judges who will support
change and fully implement anti-corruption measures. Coalition members
should undertake a lobbying effort as well as write opinion articles
and letters to media editors emphasizing the need for judicial support
for implementation and enforcement of an integrity system. The media
will be especially important to obtaining support from the judiciary.
Coalition members should lobby lawmakers directly as well as work
with grassroots and interest groups to send letters to, call and lobby
legislators. Lobbying activities should be focused on those who have
not shown support for reforms. (See
4. Media Strategy. The media strategy aims at increasing awareness of corruption issues within the private sector, the government, the political class, and citizenry. The media should be used as a sounding board for the reforms (See Media Strategy.)
assure broad-based support for the anti-corruption initiative, TI
should organize the Panama Anti-Corruption Coalition
(PACC). This coalition, which should represent all segments
of society, needs to be established early on in the consensus building
process. PACC can take on the county’s “National Dialogue” anti-corruption
initiative, which involves TI, the General Comptroller's Office, the
General Attorney's Office, and UNDP.
PACC's purpose would be to create broad support
for and commitment to making anti-corruption reform a common national
goal. Potential member organizations and government institutions include:
Chamber of Commerce (Panama-Chapter)
Chamber of Commerce, Association of Colon Free Zone Users, National
of the Judiciary
of the Legislative
of the Cabinet
society organizations (Fundación para el Desarrollo de la Libertad
Ciudadana, Assembly of Civil Society)
sector workers (civil service)
Club, Kiwanis Club and De Leones Club
ProPanama, ProPrivat (government agencies in charge of investment
Support from the following groups will be particularly
Society Organizations (CSOs). CSOs raise citizens’ awareness of their new responsibilities
in consolidating the democratic process and ensuring sustainable development
in the 21st century.
institutions and religious leaders. Religious groups and leaders have a large and broad following. They are
in an ideal position to preach and counsel on the evils and immorality
of corruption. They should be encouraged to promote good morals, integrity,
accountability and transparency in people’s professional lives.
administrators and teachers.
help educate the younger generation about good morals, behaviors characteristic
of good citizens, roles and duties of citizens, and the dangers of
corruption. Reform efforts will be in vain unless the culture of corruption
is reversed. Governments, schools and religious institutions should
launch educational initiatives designed to raise young citizens’ awareness
of the incalculable harm done by corruption and the personal risks
one runs by engaging in corrupt practices.
private sector. The
private sector can achieve broad support from workers, politicians
and government officials concerned with the health of the economy.
of the judicial and legislative branches of government and cabinet. Reform-minded
members of the government can be instrumental in building consensus
within the government.
Early in the campaign process, efforts should
be made to strengthen alliances and build coalitions. Special attention
should be placed on efforts that increase awareness of the effort
to fight corruption in the coming years. Grassroots interest groups
should visit and send letters to presidential and legislative candidates
in order to gain their support for anti-corruption measures. PACC
should immediately take the following actions:
letters to and meet with presidential and key legislative candidates
to press them to address corruption in their platforms.
on persuading presidential and legislative candidates to sign a pledge
of support to anti-corruption measures. Such a pledge will help after
the election in holding victors accountable for their campaign commitments.
public debates that can help make the anti-corruption code a central
issue of the campaign. Debates can force candidates to articulate
their positions on corruption reform.
should not identify or support any specific candidate because this
could jeopardize the legitimacy of the anti-corruption code and its
After elections are concluded, PACC should also:
elected officials’ compliance with the anti-corruption pledges they
signed during the election campaign.
legislators to ensure support for passage of reforms.
the president’s staff to secure support, commitment and leadership
for the adoption of the Pacts of Integrity.
integrity seminars for the president, cabinet members, and legislators
to promote the issue of corruption as a government priority.
similar seminars for local council leaders, accounting officers, and
election monitoring officials.
pressure on elected officials to avoid giving political appointments
to persons known to engage in bribery.
the government in establishing and implementing effective laws, policies,
and anti-corruption programs.
and enhance public support for and understanding of anti-corruption
for legislation that empowers citizens to bring suits against public
officials who take bribes.
public sensitivity to the need for public scrutiny of elected officials
and political appointees.
all parties in business and related areas of national interest to
follow the highest levels of integrity and to adhere to certain standards
coalition effort provides an opportunity for PACC to evolve into a
formal and more active entity, a
Citizens' Anti-Corruption Organization. The decision whether or
not to create such an organization should be made by coalition members.
in PACC should be subject to payment of a fee. However, low-budget
NGOs and public interest groups should be allowed to support the coalition
effort with in-kind contributions of personnel support or other non-monetary
resources. PACC’s board of directors should be comprised of citizens
of impeccable integrity and strong public or private sector service
should focus more on prevention and information supply rather than
on the actual enforcement of anti-corruption laws.
Panama will need
to enact new legislation in order to make corruption a high risk,
low return activity. It will need to enact laws against corruption,
as well as enforcement codes, and it will need to reform parliamentary
practices and procedures to establish a framework of legislative accountability
and transparency. The reform process centers on guaranteeing and promoting
the openness of the legislative process and empowering select committees
to hold the president and cabinet accountable.
interest group participation in the legislative process is not common
practice in Panama, grassroots organizations should be included in
the legislative strategy. Their inclusion will put legislators on
notice that citizens at the grassroots level are concerned about this
issue, as well as help ensure citizen participation in the Coalition’s
letters explaining the importance of reform legislation to legislators
legislative candidates in debates to push them toward taking a public
stance on corruption.
legislative candidates to sign an anti-corruption pledge, thereby
committing them to the passage of necessary anti-corruption reforms.
Lobby the Legislature
the goal of ensuring support for reforms before they are debated,
PACC should implement a comprehensive lobbying strategy during the
first month after inauguration. Past failure in the passage of anti-corruption
reforms can be attributed to legislators’ lack of knowledge of the
importance of reforms—knowledge that could have been built through
lobbying activities. The goal should be to make it impossible for
legislators to use, as they have in the past, the argument that anti-corruption
reform is not as important as other issues.
on election momentum by scheduling meetings with newly elected officials
soon after inauguration.
In these meetings, PACC representatives can remind officials of their
campaign commitments to corruption reform, introduce them to the anti-corruption
bill, and urge officials to make its passage a priority issue on their
agendas. Efforts should be focused on reform backers who can rally
voter support and pull votes from opponents. Also, gaining support
from the head of the Government Commission will be crucial. PACC representatives
should ensure he understands his personal and professional interest
in passing reform measures and seek his input on issues that might
affect his support for reforms.
a “Dear Colleague” letter campaign, through which legislators supportive of reforms can solicit support
of fellow legislators.
meetings with legislators.
Coalition members who have similar interests to or established relationships
with specific legislators should be assigned to visit those legislators.
At each of these meetings, PACC representatives should leave a written
description of the necessary reforms. These meetings should communicate
the message that curbing corruption and establishing transparent business
and government systems is important to ensuring investment attraction
and developing Panama's growth potential, particularly in light of
the unique opportunities presented by the Canal and Canal areas turnover.
Tracking PACC Progress
should maintain a legislative scorecard to track which legislators
have pledged their support to reforms. The scorecard will help focus
lobbying efforts on legislators who have not yet shown support, and
help in easily identifying allies within the legislature.
members can arrange meetings at the district (circuitos) level to
talk about the importance of reform legislation. These meetings will
give legislators a forum in which to openly state their views and
listen to their constituents' opinions.
The meeting should be orchestrated to guide legislators’ toward
reform votes. PACC should make the results of these meetings public
(See media strategy).
Schedule a Legislative Day
informational day with legislators would help keep the reform agenda
in legislators’ minds. Additionally, at the end of the day, a press
conference should be conducted with legislators, PACC members and
high-level representatives from the judicial and executive branches
of government (including, if possible, the president). A distinctive
high profile emblem (a white ribbon) should be distributed to all
the legislators to remind them of the need for integrity in all government
and business transactions and the importance of their votes.
Establish permanent, periodic training sessions for Legislative Assembly
Media coverage will keep the public aware of
the reform campaign effort and the crucial role every Panamanian plays
both in building consensus and support for reforms and in enforcing
La Prensa, the most influential newspaper in Panama, should be targeted as a primary
medium for reaching the public. Because it is independent, La
Prensa has played an important role in enabling the passage of
laws and in exposing government officials’ corrupt practices. It also
has the highest circulation rates and is the elite’s medium of communication.
La Prensa was founded by
the current president of Transparency International (Panama Chapter)
and president of the Foundation for the Development of Citizenry,
Roberto Eisenmann. Because La
Prensa’s close ties with the Foundation for the Development of
the Citizenry and Transparency International, free news coverage and
a paid advertising campaign should begin with this newspaper.
Pre-Election Media Campaign
The objective of the pre-election media campaign
is to create awareness of the corruption problem and build consensus
for the adoption of anti-corruption measures. The media strategy should
corruption the topic of the year. This can be achieved through media
coverage, op-ed pieces, editorials and paid advertisements.
awareness of the need for reform and its importance for Panama's future
economic growth. This is an important part of the media strategy since
the majority of the population recognizes that corruption is a pervasive
problem in the government but does not identify it as a pressing issue
that affects their personal lives. This is due primarily to the fact
that the population also faces other immediate and pressing problems
such as poverty, unemployment, and inadequate housing, health care
and education systems. For those Panamanians who do not deal directly
with the government on an everyday basis, they recognize the existence
of corruption, but feel it has no direct impact in their lives.
freedom of the press in order to guarantee journalists’ independence
when covering stories about government corruption. This involves the
elimination of gag order legislation.
methods of increasing corruption awareness include:
Broadcasting awareness messages on TV, radio, billboards, and the Internet,
as well as in the print media. These messages can identify the problems associated
with corruption and describe why corruption is something every Panamanian
must recognize and resist. Panamanians need to understand that corruption
affects everyone and that reform is possible, but only if citizens
demand it and participate in wiping it out. Private citizens can participate
in the reform process by:
efficient services from the government officials including legislators,
judges, ministers and public servants.
government officials through mobilization, demonstrations.
active civil society.
the elimination of gag order legislation.
Broadcasting civic messages on TV, radio, and billboards, as well as in
the print media. This campaign should emphasize the need for every Panamanian to actively
defend and practice civic values for the benefit of future generations
and the development of the country.
Initiate a popular cultural campaign. The most popular and famous artists should
be encouraged to write songs about the importance of changing the
corruption mentality. Advertising companies could create innovative
ads about the importance of civic values. Songs and advertising campaigns
reach the most apathetic segments of the population, especially the
younger generation. Advertising campaigns can be financed by PACC
as well as other sources such as international organizations, civic
clubs, NGOs, private individuals, and private sector organizations
(See Budget Exhibit).
The Message (draft)
turnover of the Canal and the Canal areas provides a unique opportunity
for Panama—an opportunity that could springboard Panama into a period
of unprecedented growth and development. But this development won’t
take off without foreign investment, and foreign investors won’t come
to Panama if they expect to be confronted by corruption when they
arrive. Panama needs to implement and enforce an anti-corruption code
that ensures investment attraction and gives the country a chance
to develop its full growth potential. Failure to take action against
corruption will not only perpetuate Panama’s problems but also could
drag Panama even closer to the backwaters of developing nations. Just
like the Communist countries in the 80s, we can delude ourselves that
conditions will improve even if we don’t make the tough choices necessary
to rid Panama of the damaging effects of corruption. Alternatively,
we can take action to curb corruption and move toward sustainable
reform of corrupt practices will require the support and commitment
of the general population, as well as full participation of the public
and private sectors. Without widespread support, anti-corruption efforts
would be in vain. The solution lies in changing the general population’s
apathy and tolerance of corruption. And this will require active participation
in the democratic process and scrutiny of all government actions by
civil society, the media, watchdog agencies and the legal system.
Civil society must insist upon a system of sound governance that holds
to Singapore in the 1960s, we can gather momentum from the great opportunities
associated with the reversion of the Canal areas. Singapore, which
inherited valuable assets from the British, made the decision to attract
foreign investment and pursue outward development. The country’s leaders
ensured a stable political environment by strengthening the civil
service and holding it accountable for wrongdoing. The rest is history.
Singapore is one of the most corruption free countries in the world,
as well as one of the best examples of sustainable development in
the last 30 years. Citizens, the choice is yours!
Joint TI-government press conference. Transparency
International and the government should hold a joint press conference
as part of the kick-off of the awareness and prevention campaign.
This will shine a spotlight on the campaign right from its start and
take advantage of the momentum established with the installation of
the newly elected government. The press conference should convey the
commitment of the government to fight corruption, inviting the general
population, as well as the private and public sectors to participation
in this national goal. The underlying message should be to assure
Panama’s long-term growth and sustainable development by guaranteeing
that economic reforms and opportunities created as part of the Canal
reversion will not be undermined by corruption.
Gaining support from media editors. Editors and publishers/producers of every
form of mass media need to be encouraged not only to participate in
the coalition but to sign a pledge to fight corruption in their media.
Gaining support from journalists. PACC can help focus journalists’ attention on corruption
issues by training them on how to expose corruption cases.
Educational/awareness raising campaign.
PACC should produce educational articles, as well as educational videos,
exhibitions, bulletins, and flyers. These educational materials should
be geared toward public workers, the general public and students (kindergarten,
primary, secondary and university levels). This non-traditional media
campaign should focus on how to prevent corruption, as well as on
practicing good values at work and in the family. This campaign should
help form a different attitude regarding corruption.
a public relations team that will write press releases for news stories
and op-ed pieces and provide information for news stories. Press releases
for the local media need to be issued in order to keep everybody abreast
of the progress of anti-corruption reforms.
and publicize public debates on the adoption of an anti-corruption
code to help the public, academics, businesses and politicians recognize
the importance of corruption reform.
newspaper, television, and radio editors to get free news and editorial
coverage of the benefits of curbing corruption.
permanent space in newspapers for a weekly publication of:
Updates on legislative reforms.
Information about the most corrupt sectors of government (number
of cases, prosecutions, etc).
Information regarding citizens satisfaction or dissatisfaction
with government services.
Information about future activities (press conferences, training,
Opinion pieces from think tanks.
Press releases on each legislator’s stance on the corruption
issue as well as other members of the political elite.
Results of public surveys on corruption.
Opinion polls on the population's perception of corruption
and business perceptions of the investment climate.
By making corruption in Latin America a priority issue, international organizations can provide Panamanian leaders with political cover for tackling anti-corruption reforms. International pressure for reforms all over Latin America allows individual leaders to admit to a common problem that is not specific to their own political party, government or business sector and leaves room for leaders to move forward with a united front. International support can come from international groups, including the international business community, civic groups, CSOs and TI chapters. The following actions will help consolidate international pressure for Panama’s leaders to adopt anti-corruption reforms:
Establish a Global Coalition on Latin America.
To build international support and momentum for reforms, the Panama
Anti-Corruption Coalition can take a leading role in initiating a
Global Coalition On Latin America
(GCOLA) to help fight corruption, similar to the African Coalition,
headed by former World Bank president Robert McNamara. A global coalition
to fight corruption in Latin America will help build momentum to pass
reforms in Panama and other countries of the region. PACC members
can establish communication with McNamara, and Panama’s newly elected
government should be encouraged to make a formal request for assistance
to McNamara. McNamara's role in Africa has been important in raising
awareness among international investors of the need for change. A
similar approach in Latin America will help raise awareness among
the Latin American politicians, legislators, businessmen and citizens
about the need for anti-corruption measures. GCOLA
should be comprised of the Latin American TI chapters, the International
Chamber of Commerce, major trade associations, civil society organizations,
and NGOs of the region. GCOLA should take the following actions:
· Introduce and incorporate transparency principles in government procurement in all regional trade fora such as the FTAA, Mercosur and Pacto Andino.
· Push for the adoption of the OECD anti-bribery principles in all trade agreements.
Push governments to adopt comprehensive anti-corruption
legislation with emphasis on stronger enforcement and penalties. It
should be emphasized that watchdog agencies require full authority
and independence to operate effectively.
dialogues with international organizations. These dialogues should
revolve around how international organizations and donor groups can
help focus the Panamanian government’s attention on corruption reforms.
International institutions can make anti-corruption reform a top priority
when providing assistance to member countries. The InterAmerican Development
Bank (IDB) and the World Bank can bring the issues to governments’
attention through their Country Assistance Strategy and by requiring
fiduciary responsibility on projects they sponsor. These two important
financial institutions can play a critical role by:
good governance and anti-corrupt practices their primary goals for the new
millennium. This would send a signal to the political elite that
prompt adoption of reform measures is expected.
supervision of procurement and instituting more rigorous reviews of
The IDB and WB have announced their willingness to review contract
award processes when other bidders raise complaints about a lack of
transparency. They are already contemplating denying companies that
have engaged in corrupt practices the possibility of participation
in Bank-financed contracts, either indefinitely or for a stated period
of time. Because the Panamanian government will require loans and
technical assistance in modernizing the infrastructure of the Canal
areas, these two institutions can use this stipulation to require
transparency in the management of commercial transactions taking place
in the Canal areas.
technical assistance for judicial and civil service reform, as well
as local capacity building.
World Bank and IDB commitments to assist in the development of technical
capabilities and institution building can help build support for reforms.
· Begin an international media campaign. International media coverage of the historic opportunities opening up to Panama can create awareness of the need for change. PACC members can pursue free news coverage, taking advantage of international media coverage of the elections and the Canal turnover. PACC should:
- Hold a PACC-government press conference to promote their joint anti-corruption effort.
- Use international wire services to post the progress of reforms and investment opportunities in Panama.
- Use GCOLA as a means to attract free media coverage. Among other activities, GCOLA can organize a press conference to announce the beginning of this regional effort to fight corruption.
- Initiate a paid media campaign to publicize Panama’s anti-corruption reforms. PACC members, especially the private sector, should publicize the changes in an effort to improve the country’s international image and attract foreign investor interest in Panama.
 Transparency International,
a non-profit NGO headquartered in Germany, is the leading worldwide
advocate for corruption reform.
 Transparencia Internacional. La Hora de la Transparencia en América Latina: El Manual de Anti-Corrupción de la Función Pública, Ediciones Granica, 1998, p. 125.