Panama champions female empowerment as it seeks to transform its image

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Panama, famous for its canal and infamous as an offshore financial centre, now wants to earn a different reputation: as a beacon of female empowerment in Latin America.

Six of the 16 ministers in the Panamanian cabinet are women and the Central American country has set a quota of 30 per cent female participation for boards of state companies, an unusual step in the region’s male-dominated corporate world.

“We had historically family-run businesses with no women participating in them, at least at the high-level positions, and the same with the government,” said Erika Mouynes, a US-trained former corporate lawyer who is Panama’s foreign minister. “So we took . . . a more holistic approach: not just the government or not just private sector, everybody needs to comply.”

Panama’s President Laurentino Cortizo won the 2019 election as an anti-establishment outsider vowing to combat corruption, inequality and poverty. However, in his first two years in office, he has struggled with the departure of several ministers, a botched attempt at constitutional reform and the devastating impact of coronavirus.

The economy collapsed 18 per cent last year and the country has the highest Covid-19 mortality rate in Central America after an ineffective lockdown. The government has stepped up vaccinations in recent weeks and more than 4m inoculations have now been administered to the population of 4.3m.

Mouynes said Panama was one of the first countries to partner with the Equal Pay International Coalition and is a member of the steering committee of the UN-sponsored body. However, the government’s pursuit of greater female representation and more equal rewards stands in contrast to the inaction of some of its neighbours.

Mouynes still encounters rooms full of men at Latin American diplomatic meetings. “Out of 35, we’re only four foreign ministers that are women in the region,” she told the Financial Times in an interview. “So you can see that it is still quite a challenge, particularly in Latin America.”

Cortizo, she says, feels so strongly about the issue that he has chosen a female bodyguard.

“When you trust your life to a woman, to a policewoman, rather than a man, it says a lot about the trust that he has,” she pointed out.

President Laurentino Cortizo, pictured in 2019, has a female bodyguard © Arnulfo Franco/AP

Efforts to place women at the centre of Panama’s recovery from the coronavirus pandemic have seen 70 per cent of government microfinance loans of up to $5,000 allocated to female entrepreneurs, Mouynes said. The IMF expects the economy to grow 12 per cent this year.

Progress on reforming Panama’s reputation as a haven for illicit financial flows has been harder. Mouynes insists that the government is working hard to address deficiencies identified by bodies such as the Financial Action Task Force (FATF), the intergovernmental watchdog for financial crime and terrorist financing.

For example, more than half of Panama’s 762,709 registered corporations have been suspended after failing to comply fully with local standards in an effort to clean up the corporate registry, she said. Panama now shares tax information with 76 countries.

However the IMF earlier this year noted that Panama had missed the original deadlines set for exiting the FATF’s “grey list” of 22 countries requiring increased monitoring because of shortcomings in combating money laundering. The list includes Syria, South Sudan and Zimbabwe.

“The authorities need to expediently address the remaining deficiencies in Panama’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulatory framework,” the IMF said in a statement in May after a virtual visit.

The EU kept Panama on a blacklist of non-co-operative jurisdictions for tax purposes in February and Panama comes a high 15th on the Tax Justice Network’s Financial Secrecy Index of 133 jurisdictions, though below the UK and the US.

“Panama is still doing pretty badly,” said a researcher at the Tax Justice Network. “It has approved a new beneficial ownership law which would be an improvement but it doesn’t appear to cover trusts and there is no public access.”

Mouynes is reluctant to commit to a target date for Panama to exit the FATF grey list, saying the government wants to do a thorough job on compliance to minimise the risk of backsliding. “It would be easy to come out of the list but then be back in two years or three years so everything that we’re trying to do is to lay the groundwork for this to never happen again to Panama,” she said.

In the meantime, Panama is stuck with the bad publicity it received over the 2016 Panama Papers scandal. This erupted when Mossack Fonseca, a Panama law firm, had its client data hacked and leaked to a consortium of news media around the world. The trove of 11.5m files revealed a web of 214,000 offshore entities, including some used by government and public officials to illicitly conceal wealth and avoid taxes.

Countries have recouped more than $1.36bn in unpaid taxes, fines and penalties as a result of inquiries sparked by the Panama Papers, according to the International Consortium of Investigative Journalists, which co-ordinated the effort.

Mouynes insists Panama was blamed unfairly for a global problem. “We’re suffering this very terrible reputation from the . . . Panama Papers where the only thing that had relevance to Panama was that the law firm was located here,” she said.

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