Varela time in Panama

The new President of Panama, Juan Carlos Varela takes office in a country, which has reason to be optimistic.

Panama expects to join the Pacific Alliance, whose benefits include free trade, a common stock market and visa-free travel among member countries.

The alliance currently consists of Chile, Peru, Colombia and Mexico.

The expanded Panama Canal is scheduled to open next year, with expectations of increased revenue.

The existing canal in 2012 earned a profit of close to 50% on revenues of $2,5 billion.

Panama has for much of the past decade been a leader in economic growth in Latin America.

Still, the way forward may not be easy.

In order to pursue a social agenda, which Varela promised during the election campaign, he will need to make alliances in Congress, where his Panameñista Party has only 11 of 71 seats.

Even if the Panameñistas can work with the Revolutionary Democrats, their combined total of 32 votes would fall short of a majority.

The Democratic Change Party of outgoing President Ricardo Martinelli alone has 29 seats.

Varela also faces the challenge of having to clean the image of a state, oftern identified as corrupt and inefficient.

In his first act as president, Varela ordered a review of allegedly speculative trading, in order to slow the rise in the price of staple foods.

Beyond the glittering skyscrapers of Panama City, a quarter of the country’s population lives in poverty.

Varela has promised to Invest in public education and housing programs, as well increasing the minimum wage.