Exclusive-Panama’s president-elect vows to help fix canal water problems, build major train line

By Thomson Reuters May 8, 2024 | 7:25 PM

By Valentine Hilaire and Elida Moreno

PANAMA CITY (Reuters) – Panama’s president-elect, Jose Raul Mulino, said on Wednesday he will urge lawmakers to approve a law enabling the Panama Canal to build large water reservoirs in the face of an unprecedented drought that has hit the capacity of the vital waterway.

In an interview at his office in Panama City, Mulino said he wants the law, which would grant the waterway permission to operate on land needed for the reservoirs, to be the first approved under his administration. The canal, he added, needs a solution to the lost revenue linked to adverse climate conditions.

Mulino also said he wanted to make a major new tourist train – similar to one built in Mexico- a flagship project of his administration.

“One of the first decisions I am going to announce is the creation of a national railway secretariat,” Mulino said, adding that studies show the line could help boost tourism.

Mulino, a 64-year-old former security minister, won Panama’s election on Sunday with 34% of the vote and said his government would be pro-investment and pro-business, adding that the Central American country would honor its debts, while he vowed to not forget the poor.

He won with the help of popular former President Ricardo Martinelli who was barred from running due to a money laundering conviction. Mulino, who served as security minister during Martinelli’s administration from 2009 to 2014, had been Martinelli’s vice presidential candidate and took his place.

Fitch ratings in March downgraded Panama’s debt to speculative grade, citing fiscal and governance pressures aggravated by the government-ordered closure of a giant copper mine run by First Quantum Minerals.

Mulino said he was confident Panama would keep its investment grade rating and that ratings agencies would be satisfied with his government’s economic plans for the country.

“I am sure that they (ratings agencies) will give their endorsement to what we are going to propose,” he said. “I’m really positive and optimistic.”

Mulino also said he has spoken with various world leaders following his win, including U.S. Secretary of State Antony Blinken and Brazilian President Luiz Inacio Lula da Silva.

After the talk with Blinken, Mulino expressed his commitment to create a team devoted to streamline the process for U.S. companies to invest in Panama, and also said he agreed with Lula to explore the possibility of Panama’s entering the South American Mercosur trade bloc.

(Reporting by Valentine Hilaire and Elida Moreno; editing by Stephen Eisenhammer and Leslie Adler)