In July and August 2022, Panamanians protested the rise in the cost of living in Panama, including food and gas costs. What started as teachers unionizing to oppose the cost increases, quickly turned into the largest protest since dictator, Manuel Antonio Noriega, was removed from power in 1989. Various Indigenous groups, unions and industry associations joined the teachers in this historic Panama protesting against living costs.

About What Has Been Happening in Panama

Due to the Russian-Ukrainian war, COVID-19 and the high inflation rates in Panama, the cost of living has been increasing significantly over the past few years spawning the Panamanian protest against living costs, specifically the rise in transportation, food and gasoline costs. In December 2021, the inflation rates were only 2.6%, but by May 2022, the inflation rates were 5.2%, a 100% increase.

Inflation has led to a jump in the cost of basic necessities such as food and gas. Transport prices have risen 16.1% since the start of the year.

Gas prices have been reaching an all-time high time in Panama. Since the start of the year, the prices have risen by approximately 50%, reaching a high in June. The average cost of a single food basket also significantly rose this year. Since last year, the price of a food basket has increased by approximately $18.

In 2019, an estimated 500,000 Panamanians were living under $5.50 per day, and more severely, 52,000 Panamanians were living under $1.92 per day. In 2020, an estimated 575,000 were living in poverty. Poverty is widespread in Panama but it hits the rural areas the most, affecting the Indigenous populations. According to the World Bank, in 2020, inequality in Panama was a high 49.2 on the Gini index, an index that measures the severity of class inequality. The high poverty rates among the indigenous people and lower class have been a factor in the establishment of Panama protesting against living costs.

The Impact of the Protests

Since the protests started there has been an estimated $500 million in economic losses. Food producers by themselves have lost approximately $131 million at the time of the protests.

Because of the duration and magnitude of Panama’s protests against living costs, negotiations between the protesters and the government have occurred, some resulting in a win. The government agreed in July to lower the price of gas to $3.95, a 24% decrease since the end of June.

However, the demonstrations continued and the government froze the cost of fuel at $3.25 in August. The government has also agreed to regulate the prices of 72 food items, a 30% saving on the price of a basket of food, which would in turn be more than $80 in savings.

The government has been dialoguing with the protesters and has made significant decreases in fuel and food prices. While some protests have turned violent involving the police, the government and the protesters are making their mark in history.

– Janae O’Connell
Photo: Flickr