Panama politicians, politics, promises, electoral promises, needs, community, communities, identify, coach, coaching

Promises Panama needs

Last week I published a post regarding my “wish list” for Panamanian politicians – what I wanted them to demonstrate in their character – compassion, creativity & courage.

André Conte responded that while he enjoyed it, more than “what do you want” he wanted the question to address “what do we all need?”

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So, while I’m not entirely sure that I have managed to truly answer his question, here is my attempt at responding to the issues that I think our 2019 elected politicians need to seriously address.

Many of these issues will not fall upon the legislators to respond – but rather upon the President, Cabinet, individual Ministers and heads of Government Departments.

Some will require incredible courage, such as the head of the Caja de Seguro Social – a crisis which I have been hearing about the past 25 years. And yet, it’s still in crisis! The leadership required here is one of an appointee – not an elected official!

And yet, here’s hoping that they step forward with compassion – the ability to connect to all the interested parties; creativity – to be able to draw upon all the solutions from all interested parties to solve the crisis; and courage – to confront the many interests that arise and actually implement a solution after having heard all interests, identified the needs of the institution and the public, and work to a long-term solution for the institution once and for all.  I maintain my opinion that every single politician and director or Minister needs coaching & mentoring in order to truly be effective in their roles with adequate support!

What I’ve seen of politicians so far

Unfortunately, my opinion of politicians is not very favourable.

It’s my belief that they are driven by their need for “job security” – which means that they are looking solely for reelection (to the same post or a “better” one), rather than driven by the needs of their communities.

Typically, this means that they are always looking for a building or project with their name on it – it’s irrelevant whether the community really needed it or not. They want something that they can point to and say “look what I did for you”.  Most constituents will look at that and think “wow, they built something”, without actually asking whether that was the priority of the community.

Bureaucrats, similarly, are driven by promotion & job security. This means that they will not do anything risky – even if change is needed – because that could get you fired. Likewise, in a situation of cronyism, they are unlikely to oppose elected politicians, because that will get you fired.  This means that they will simply toe the line – even if the line isn’t going anywhere!

Community interests & needs

Unfortunately, this typically means that neither the elected politicians nor the bureaucrats are studying the interests of the communities that they serve. And moreover, it means that no one is thinking or evaluating the long-term needs of the community or society as a whole.

For some areas of Panama’s political plans, I am aware that there have been agreements reached between political parties & bureaucrats regarding long-term plans. But this is the exception, rather than the rule.  Unless politicians are willing to give up their aspirations for reelection – focusing instead on the long-term needs of society, instead of a building with their name on it or hams for Christmas – what will be done?

How will projects actually be completed if there is not complete “buy-in” from all interested parties? Solutions that are reached by the different interest groups – and not simply decided by politicians with a 5-year plan.  This is one of the primary reasons why I will harp on, over and over, about the need for compassion (connection), creativity (the ability to brainstorm with all interested parties solutions – outside the box), and courage (motivation to move forward and overcome obstacles that arise along the way) for the leaders in driving a solution forward!

Because – if for once – someone were able to get all of the interest parties to agree upon the solution, which takes longer than 5 years to implement – it wouldn’t matter that the government changes.  The interest groups themselves would keep the projects and solutions on track through the change of government. But I haven’t seen a government yet capable of pulling off a solution of this magnitude!

So, what do I think we need?

Where do I start?  Which of all of the needs of Panama is clamouring the most for attention?  If we solved one of the problems, would that solve all the rest?  I know that O’Neill in Alcoa found a keystone problem, which when he solved then solved by itself all the rest of the problems within the company, but I am really hesitant to take a guess which one of the areas of government might have the biggest impact on all the rest of the areas!

Presidency

For want of a better place to start, I will start at the top!  And I will admit – this being PanUtopia – the size of the issues to be addressed overwhelms me as to who the right person for this job might be.  Because, in utopia… this person would be capable of handling a Cabinet of Ministers and keeping each one of them, and their respective subordinates, focused on the goals at hand and putting each of the areas I will touch upon in order!

Qualities I want in a President:

  1. compassionate – able to connect with empathy and understanding with communities and their leaders; able to connect with each member of the Cabinet and empower them to effectively do their jobs, because it’s not the President’s job to fix each of the problems that I will identify below; diplomatic – able to command a room and speak from the heart, capturing the attention and connecting with the audience;
  2. creative – able to sit down at a table with 15 people + assistants, and brainstorm solutions – calling in all the talents & abilities of those present – to create solutions that no one person individually could possibly come up with; analytical & logical – able to look through the numbers and lists and come up with priorities and rationally decide the most efficient course of action; well-read & educated – to learn from the experiences and draw from the experience of others that are not even in the room through extrapolation;
  3. courageous – secure enough in their identity to speak their truth and present their ideas and solutions; motivated to see the solution through any obstacles, knowing from the very beginning that obstacles would arise and that they would need to create solutions for those, and being willing to do the hard work consistently to see it through to completion.  Motivated to push through the days when things appear to be going wrong, not simply waiting until “things feel right”.

Looking at that list… it’s kind of what I want in every Minister & Director of Government Agencies as well!  It’s not enough that it only be at the level of the President!

As you will see from the issues below – many of these issues are actually in the hands of bureaucrats – Ministers appointed by the President (not publicly elected officials) and heads of Departments.  While there will be necessary work with publicly elected officials (mayors, representatives and legislators), the majority of “decision making” and implementation will be effectively be within the executive branch of government!

How important is it, over the next 5 years, to legislate in theses matters (other than budget constraints) versus implementation of the decision-making?

Education

Unfortunately, earlier this year I wrote about the challenges facing Panama’s education system, and many of those challenges are still unattended.  Of the 1300+ schools without walls (just the roof held up on posts), there are more than 700 still outstanding. In a recent study of the 3rd grade education level, 1/3 can’t write, 50% can’t read and 60% don’t have requisite basic math skills expected!  That’s without even addressing the issues of modernisation of the system to meet the constantly changing global climate and advances in technology and work environments!

The biggest challenge, however, that I see — what is the vision that guides Panama’s education policies? How will the Minister of Education reach consensus with the educators and other interested parties (including even future employers and entrepreneurship opportunities) to establish the road map that will guide decision making in coming years?  What is the first and primary issue that should be dealt with in the education system that would work towards solving the myriad of issues that need to be faced: preparation of the teachers, infrastructure, participation in growth of the economy, technology?

This one area alone requires someone at its head that truly can get to the bottom of the issues within the Ministry and set a plan of action with the buy-in of the teachers & educators to achieve at least one phase of the plan by 2024!

Health

While I accept that the health issues are actually 2 separate issues, one being the Ministry of Health (and approval of imports of medication, as well as the State health network), there is the more pressing crisis of the CSS (Social Security).  This is a challenge from within as well as from the outside!  The competing interests are tearing it apart, as they have been doing for the past 30+ years!

There are issues regarding their finances & assets, issues with respect to the services (or failure) offered, the infighting and power struggles (national as well as regional and within hospitals), and the competing interests of the doctors, nurses, technicians, suppliers & patients.

This is definitely a scenario where I could see the identification of keystone habit (such as that described by O’Neill in his experience at Alcoa) would actually make a monumental difference to the whole organisation and could be the beginning of a solution!  However, O’Neill was lucky that he counted with the support of his Board – the ones responsible for bringing him on to solve the problem!  In the case of the CSS – this need for support from the Board would need to be addressed!

Housing

Panama currently faces the challenge of needing 200,000+ housing units – but the construction industry is faced with rising labour & material costs.  Construction permits dropped 50% in 2018, and while the country needs 15-16,000 additional homes each year, only some 14-15,000 a year were being built (before the drop in permits!).  Of the 100,000 homes promised by the current government during their term, some 45,000 have been built.

The head of housing will need to balance the interests & needs of the community (for housing) against those of the construction companies, infrastructure needs, and environmental concerns.

Infrastructure

Closely related to the need for housing are other infrastructure needs – even though in 2018-2019 some $2 billion of projects are underway.  This includes finishing line 2 of the Metro and starting line 3 to Arraijan & Chorrera.  But one of the questions being regularly asked is why Chorrera is merely a satellite of Panama City, rather than being designed and built as a separate center that provides employment and not merely sleeping quarters to workers for Panama City!

Two thousand km of roads were promised by the government and claimed to have been built, although it was later clarified that this was really only some 355 km that were completed.

The government also promised to eradicate latrines – but while 200,000 were promised, the results remain unknown.  Likewise, running water has not been installed to all communities in Panama, and many communities still find themselves off the electric grid and mobile phone coverage.

Energy

Closely related to the foregoing issues are the myriad of issues tied up in the energy sector.  I wrote about these issues a number of months ago.  The interest groups here are varied and with conflicting interests.  Needs include:

  • a long-term maintenance plan
  • transmission line #4
  • pricing
  • environmental policies and policing.

The sectors that are affected by energy include: construction, commerce, industry & consumers.

If Panama wants 75% renewable energy by 2050, it needs to change the legal framework and confront the investments recently made into gas-based energy projects, rather than green energy projects such as wind farms or solar power.  In 2016, 60% of the electricity produced in Panama was through hydroelectric plants (which while a renewable source, create significant environmental damage in large areas), 32% thermal, 7% wind and only 1% solar.  What is curious to note is that worldwide, countries with much less sunshine (take for example – Germany) have a much higher rate of solar power than our tropical nation!  Go figure!

Fiscal Policy

Panama’s current fiscal policy requires an overhaul – in order to:

  1. attract investment
  2. be fair on all the players in the market (including small & medium enterprises)
  3. tax monies should not be “lost” through poor management and corruption/theft
  4. in order to “balance the books” – decisions may need to be made to cut government overhead
  5. it may be necessary to down-size government offices, irrespective of how unpopular that may make government members!

Economy

Where to start?

Panama currently faces more unemployment, less investment, less loans being granted and less sales in commerce.  In 2018, the unemployment rate increased for the fifth consecutive year.

There is a serious lack of equality within the country, with many areas still in subsistence farming and well below the poverty line.  Only a few sectors are actually benefited by the current economic growth that is touted internationally.

Financing is barely available for the business sector, particularly small to medium enterprises.  Policies do not support or encourage growth, investment or expansion of companies.

Unemployment

Forty percent of the workforce is currently listed as “self-employed”, “on contract” or “part time” – with no stability.  The results in lower productivity and inability to participate in bank financing and other needs.

Special Zones

While the special zones were thriving, with global changes, they are failing to create a significant difference to the economy and generate employment. Policy changes and focus are necessary.

Tourism

While tourism generates about 10% of GDP and 130,000 jobs in the economy, hotels are currently suffering with a 46% occupancy rate. Once again, a concerted plan and creativity – from public and private sector together – is required to change the situation.

Agriculture

It would appear that the agricultural sector has been abandoned to subsistence farming – with not much technological or educational assistance to the sector.  Exceptions to this are the farms owned and operated by the major supermarkets, who basically produce exclusively for their own consumption.  But many areas of the country are abandoned, with little or no interest in exchanges of technology between countries and participation in projects for learning in the alienated communities that are relegated to subsistence.

Another concern, in the commercial enterprises of farming, is long-term sustainability and environmental accountability for farming methods – particularly long-term effects of runoff from the farms and damage to the surrounding environment.

Justice & Security

I can’t close without mentioning the concerns about the justice system and security issues in Panama.  There are many jokes and memes about “perception” – we “perceive” that there is a problem.  But let’s get real – there is a problem! Not a perception!

Security of citizens and tourists needs to be addressed not only in Panama City or Colon, but in the entire country. Gangs & drug trafficking need to be addressed, as do home invasions and robberies.

In the justice system, attention should be given to the Sistema Penal Accusatorio – which was introduced over the past few years.  It’s not that the system should be reverted to the previous system, which was full of its own flaws – but attention needs to be given to the concerns of the police force and prosecutors regarding their experience within the system. These concerns needs to be addressed across the board.

  • What needs to be fixed?
  • What simply needs to be tweaked?
  • How can members of the police force be educated and prepared better to work within the system?
  • Where are different parties frustrated by the process?

Change is never comfortable, but concerns should also be addressed.

Drawing this to a close

As I look at all of these needs, I recognise that Panama needs well-prepared teams within each area.  This is not an issue for “the President” to fix. I admit, I am sick of people saying “The President needs to come here and solve this problem”.  A country’s problems cannot depend solely on one person to solve them!

This is something that will require not just Ministers that are prepared to sit down at tables, but all interest groups that are well-versed in the myriad of issues and concerns of their specific industry and that are open to brain-storming solutions that take into account all of the interests in the matter, rather than simply being closed to “this is my position”.

Experienced negotiators and mediators – that are able to delve into the needs and interests of all parties will be required at each table – that can identify the need that lies below the stated position.  People that know how to ask questions and are willing to continue asking until truly connecting with the source of the interest, rather than accepting on face value a projected position at the negotiating table.

If any one of these problems is truly to be addressed and a solution found – all parties have to be prepared to see all sides of the issue and begin to accept that the solution may only truly be found by everyone working together to build a better country!

Communities themselves will need to start to believe that they possibly have a role to play in solving the problem, and actually in carrying the solution into effect.

This may require that everyone stops looking at their belly button and “what’s in it for me?” – and actually starts to look at

“how do we all participate in fixing these problems?”

Well, as always, this is PanUtopia!

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Renewable energy in Panama

Introduction:

Panama is blessed with an abundance of sunshine and rain, allowing it to entertain renewable energy sources as the sole source of it’s electric supply.  Nonetheless, it continues to depend on a couple of carbon-based plants for its electrical demands, and the local energy authorities are under fire for proposed taxes and charges on solar power producers.

In late May, the headlines regarding the ASEP decision were all along these lines:  “While the rest of the world looks to consume and produce clean energy, the Panamanian Government – through ASEP – is trying to PUNISH anyone who installs solar panels or other clean energy generators in their homes or businesses.”  

Mientras el mundo apunta al mayor consumo y producción de ENERGÍAS LIMPIAS, en Panamá el Gobierno Nacional —a través de la ASEP— busca CASTIGAR a las personas que instalen paneles solares u otros generadores de energías limpias en sus hogares o negocios. #COMPARTEpic.twitter.com/JR0sC2bzgd

— ClaraMENTE (@ClaraMENTE507) May 26, 2018

At the beginning of June, ASEP opened the dialogue, indicating that they did not intend to penalise those who had solar panels for personal consumption, but that they were looking to ensure that anyone that was connected to the electrical network and infrastructure was paying appropriately for the infrastructure, and not simply getting a free ride simply because they principally had solar panels or other self-generating systems.  There was also criticism because of the pricing suggested out the outset for those who were generating more than they needed and were feeding this excess into the general network.  This ignores, in part, that since February of 2017, Panama has had its first commercial solar power plant “Central Fotovoltaica Bugaba“.

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The National Energy Plan – 2015-2050

In April 2015, the Panamanian Government published the 2015-2050 National Energy Plan which sought to place a new focus on solar and wind sources, rather than the traditional sources of hydro and carbon generators.  By 2050 it is hoped that Panama will rely, 70% on renewable energy (primarily wind & solar).  The move away from hydroelectric power comes after serious confrontations with indigenous groups and communities over the devastation and changes to the ecosystem.

For example, if you have a quick look at the following video, you can appreciate the Tabasará river during a normal rainy season (before the hydroelectric plant was built).

The two videos that follow are during the construction of the power plant on the Tabasará river, where you can appreciate the devastation down-river to the entire ecosystem and the change that this has generated for all of the communities that depend on the river.  Obviously, the videos of the construction are during the dry season, rather than rainy season (so it is no longer a raging river in full flood), but as you will see in the second video, the communities downstream from the project were left with almost stagnant water.

The communities also denounced and complained that they were being displaced from their homes and communities. Obviously, this had economic repercussions for these communities, as they lose their farm lands.  Even those who previously used the river for rafting and outdoor adventures during the dry season have said that they have totally closed down the Tabasará option and have had to find other rivers for rafting and adventure.

In a similar manner, Nata & Aguadulce were left without a drinking water supply when the local hydroelectric plant shut off their access to water during the summer of 2016, because the 2015 rains were not enough to fill up all of the reserves.

Support for private solar panels

In 2016, the ASEP took steps to support and promote solar panels in homes and projects.  At this time, ASEP promised users that they could reduce their consumption by 50% or even up to 100% through the installation of solar panels on the roofs of their homes or businesses.  Nevertheless, there were requirements for this, which involved the local electric companies:

  1. approval by the competent authorities (fire brigade, city council)
  2. design of the system and technical details regarding output and capacity, and all of this with
  3. a letter to the electric distribution company, requesting the installation of a bi-directional metre.

The electric company was then to install the bi-directional metre, (not to be charged to the consumer) which would compensate the output and input, measuring the net usage of the client of electricity and that produced by their system.  In these cases, the homes were not installing batteries or storage units, as the excess of their production was pushed back into the system for usage by others in the network, and then they consumed electricity when their solar system was not producing.  These were not stand-alone or self-sufficient units.

Regulation of self-production

Later in 2016, the ASEP informed that it might consider a limit of 500kW for residential production of solar power and then (after consulting the public and users) notified that it would not be doing so, but rather it would be leaving that to each homeowner to decide what production and consumption they required.

Is it really worth it?

Costs in 2016-2017 were still prohibitive – for a home consuming 500kW hours/month, the cost of installation would be approximately $9,800.00, which meant that the investment would be paid off in about 7-8 years. In 2018 we see the costs for a home consuming 400kW hours/month having installation costs of $4-5,000, almost half of the cost for 2016!  However, as many of those living in Panama know, our electric bills are quite high, so as those costs of installation come down (which they have over the past 24 months), solar power becomes more attractive as a residential alternative.  This is especially the case with those companies that are providing a 25-year guarantee on their panels!

Throughout 2017, ASEP continued to promote solar power for residential use, touting the benefits of being able to hook into the distribution system and get paid for any over-production.  And so we now (Feb 2018) find Provivienda (one of Panama’s real estate developers) offering a subdivision in Arraijan in which all homes come with their solar panels installed and connected to the system. This subdivision is expected to be completely self-sufficient to the needs of each home.

The regulations provide that where the consumer is using no more than they are producing (and supplying into the network), then there is no charge to them. Where their solar plant provides more electricity than what they have consumed, then they can expect to receive a payment from the electric company for up to 25% of their consumption (but no more).  So, for example – you produce 500kW/hours, but you only consume 400 – you will get paid on that 20% extra that you produced.  You consume 500kw/hour and you only produced 400 – you will have to pay the electric company for the consumption!

Commercial projects:

Smaller companies have already begun to invest in solar power plants, for commercial purposes, such as “Central Fotovoltaica Bugaba“.  2017 say some 72.4MW come online and 2018 some 78.8MW are expected to receive their commercial licenses and approvals for production.  For 2019-2021, a further 200MW have provisional licenses to build and come online.  There are already mini solar plants in Azuero, Llano Sánchez and Chiriqui.  If with all of these projects, they generate the estimated 383MW (with an investment of $422M over this period 2017-2021), this would be more than the production of Fortuna (which produces 300MW and is the largest in Panama so far).  The issue for Panama is the rainy season, because this brings down production to almost 20-40%, with a higher production during the dry season.  Therefore, most of the solar farms are located in the “arco seco” – the “dry arch” – in the Azuero Peninsula.

Wind Farms

Anyone who has driven out to Penonome from Panama City has appreciated the wind farm on the left-hand side of the highway.  As of March 2018, construction of a second windfarm in Cocle is under way, this one in Taobré.  This wind farm will have 20 Vestas turbines and 2 substations, and is expected to be built in 22 months.

Changes in Public Bids

Roll forward to February 2018 – and the ASEP announces that all bids for energy projects “from now on” will be on an equal footing – with no special exceptions being given for clean energy.  That means that the gas / thermo plants (such as those in Colon) will be competing cheek-to-cheek with solar and wind farms.  It would seem that this gives the thermo/carbon/gas projects an upper-hand as they are less capital intensive.  But the ASEP assures that this is not the case, because they will have to quantify and provide a bond covering the possibilities of contamination. So, while a solar plant will have a low contamination factor, the gas or thermo plants will have to adjust theirs costs to include for accidents and liabilities.

And then…

Roll forward to May 27, 2018, and everyone is in an uproar because it seems that ASEP now wants to start TAXING residences and businesses that have installed solar panels (connected into the system and producing energy for the system). On May 27th, they indicate that they are considering an “additional charge” to anyone that has solar panels on their home or business.  However, they didn’t go into what this “additional charge” was, which caused a massive back-lash as I mentioned at the very beginning of this article.

Given the reaction from the public and from conservation groups, ASEP took a step back, defending itself with “you didn’t understand what I said”.  They never did quite clarify what it was that they had said!  On the 1st of June, this then rolled into “we are not going to make any decisions on this until we have reached a consensus with all of the parties involved”.

Eventually, what came out was the following explanation:  if you have solar panels and are self-sufficient but you are still connected to the network, the distributor must have available at any and all times enough electricity for your home/business.  So, let’s say you need 400kW hours/month – they must produce enough for that.  But, since you have your solar panels, you aren’t actually using it and are not paying for it.  They want to charge for having it available to you, but you not using it!

Putting a tax on the sun

The reaction from some of the players (particularly owners of companies installing solar panels) was that the government was looking to put a tax on the sun!  Others point out that this clearly is a dis-incentive towards clean energy and favors the production of cheap oil/gas-based thermo electricity, rather than making the long-term investment into solar panels and self-production.  If the government wants private persons and companies to make the capital investment into solar power, then they cannot consider putting an additional tax on it.

The ASEP justifies their proposal as being simply a charge on those who are producing energy and pumping it into the network (and getting paid by the electric company for this).  But that’s not what they said they were going to tax. I’m still waiting for the dust to settle (maybe after the world cup fever has subsided next week), to find out what ASEP has really decided or whether the “let’s reach a consensus” is underway.

Reaching Utopia

With a new Metro line being finished in 2019, more electricity will be needed to run that! More buildings = more air-conditioners running. In a country in which 35% of the electricity goes towards air-conditioning, maybe it’s time for Panama to look not only at how it produces electricity, but how it can reduce wastage or improve geothermal covering of buildings to harness the energy!

Maybe it’s time to explore alternative options like turbines that create electricity simply from moving traffic (of course, that would mean that Panama’s traffic would need to move!).
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There are few voices (and even less articles) discussing the alternatives for the central business district, hotels and banks to contribute to the solution to the needs over the coming years.

  • There are many options for windows on buildings to generate electricity through special coverings.
  • There are green buildings, which are growing more plants to battle CO2 emissions.
  • There are options for paint and finishing on buildings which will assist in making them cooler and not using as much electricity and air-conditioning.

But there is so much to learn and there are no tax incentives for businesses to make these capital expenditures on long-term returns.

If there are less than 250 residences in all of Panama (in 2018) with solar panels, can I really expect that people will be forward thinking about what we need to do in order to work towards a solution?