CUNNINGHAM: Well, good morning. I’m Nelson
Cunningham. I’m the president of McLarty Associates. And I’ll be presiding here at this morning’s
session. Unlike most Council sessions, this one is on the record. You’ll see the cameras
here. There’s some reporters in the room. We do ask you to silence-to turn off your
mobile phones, because it interferes with the sound system. We’ll be-I’ll introduce
the vice president, we’ll spend-she and I-she’ll make some remarks, she and I will spend until
about 9:00 in a dialogue, and then we’ll open it to the audience, as it typical here at
the Council. For me, it’s a privilege, of course, to preside
at any CFR event, but this one is a special one for me, because my family lived in Panama
for six years when I was a boy, my father was a businessman in Panama City. He founded
the American Chamber there almost 40 years ago. And for us, Panama has a very special
place in my family’s life. And I’m fortunate today, and for the last 20 years, to be involved
in U.S.-Latin American relations. And Panama, of course, has played such an important role
at key moments there. So it’s a pleasure for me to be able to be here to introduce the
vice president. Vice President Saint Malo has a very international
background. She, of course, was raised in Panama, studied in the United States for both
college and for her business degree, and then spent 15 years in Panama working for the U.N.
Development Program as the country manager there. In that role, she spent a great deal
of time both in Panama, and then dealing around the world with multilateral issues. And I
understand that she got to know the current president, President Varela, during that time,
working with him on various dialogues dealing with the canal and other issues. And so someone
who came out of the multilateral world, out of the business world, found herself pulled
into the political world. So you bring-you bring a great deal of experience and breadth
to this position. As is common in Panama-although you are of
course the constitutional vice president-but as is common in Panama, the president also
asked you to take a second role as foreign minister. And you now carry out that role.
So you’re here today in two capacities. It’s a real pleasure to be able to introduce to
all of you Vice President Isabel de Saint Malo. (Applause.)
SAINT MALO: Thank you very much, Nelson, for those kind words. I was walking in and he
greeted me in Spanish. And I said, wow, where is that Spanish from? (Laughs.) And he said:
I’ve lived in Panama. So it’s a pleasure to be sharing this podium with you.
Good morning, everybody. It’s really an honor to be here today. I’ve been actually an admirer
of the Council’s work for a long time, first as a student of international affairs, then
when I began my career actually here in Washington, D.C. with the Center for Democracy, and later
on as a practitioner of development and of democracy, and now of diplomacy. You definitely
make great contributions to policymaking in terms of foreign policy. And that’s-I think
that’s very important. So it’s an honor to be here today.
I’ve been told that the objective is to have a conversation. So I’ll try to be brief in
these remarks so that we move onto the interesting part of the morning, which is the conversation
with you. I’ll try to make some remarks to let you know a little bit more about my country
where we are right now. And I’d like to begin by referring to Panama as a global place.
And I like to say, Panama has been globalized before globalization was in fashion. And that’s
actually true. Ever since we were-we were born as a republic, we’ve been-we’ve been
a crossroads of people, of trade. And with the Porto Bello (sp) affairs, and then through
the gold rush, and then, of course, the Panama Canal. And that has really made us who we
are as a country, a country really open to the world.
And this has been kind of like the basis of one of the principles of our foreign policy
and our domestic policy in terms of our ability of bringing people together. Latin America
enjoys today democracy, pretty much. And not too long ago I’m sure around these tables
discussion of the dictatorships that were taking place in the region were happening
every day. The guerilla warfare, we don’t have that now. Fortunately, Panama has been
part of that democratization of the region. We are proud to have been-recuperated our
democracy. And for the past 25 years, we’ve had already five democratically elected governments.
And we enjoy democracy. Panama, our country, our people, we value democracy. We value freedom
of expression. We value a market economy, providing opportunities to all of those that
wish to seize those opportunities. In terms of our economy, we have a very diversified
economy. According to the IMF, we are ranked third as the most economically prosperous
country in Latin America. In terms of the World Economic Forum we rank second in terms
of competitiveness. In the past 10 years, we’ve enjoyed a growth of 7.6 percent, making
it one of the fastest-growing economies in Latin America. Even during the difficult years,
recently, Panama managed to continue to grow. We grew over 6 percent last year. Our projects
for this year are also over 6 percent. And of course, the Panama Canal, which we are
very proud to be inaugurating this year the enlarged Panama Canal, makes and important
part of our economy. However, our economy is very diversified and
we do not depend on any particular sector of the economy. Our canal is complemented
by a worldwide platform of logistics and services. One of the best ports and airports in the
region are in Panama. And with the expanded canal, which we are proud to be inaugurating
June 26th, capacity will triple in terms of volumetric capacity to transit through the
canal. And I was actually yesterday at the-at the Energy Summit chaired by Vice President
Biden. And we were discussing what this canal will offer in terms of the possibility of
transit to LNG vessels from the United States Gulf Coast to Asia. So all of this, and given
the difficulties of energy in the region and the efforts for integration, there are great
opportunities and also possibilities for Panama to once again put our country to the service
of the world, to the service of trade, and of development in the region.
Amidst this growth in economic terms, amidst our democracy, which we are proud to have
recuperated, you would ask where are our challenges? And we do have important challenges in terms
of development, particularly. Our challenges remain in terms of overcoming poverty, in
terms of improving social indicators. And that is actually the core of our government
plan. Our five-year government plan is concentrated in providing these opportunities to almost
4 million Panamanians. We have development budget of over $17 million, devoted primarily
to education, to health. We’ve come a long way in terms of our poverty indicators-a long
way. But we still have important steps to take.
And that is our concentration of our-of our government. A country that grows, a country
that has the economic indicators that we have, a country that serves the world has all of
the necessary capabilities to make this available to all Panamanians. And that is what we’re
working at. That is our concentration. And these investments in social and infrastructure
projects will definitely help us deepen our social welfare, increase stability, expand
human capital, and further develop our infrastructure. In terms of our foreign policy, we base our
foreign policy on two pillars. The first pillar being a country that promotes dialogue, that
promotes understanding. This has been part of our foreign policy for many years. It’s
kind of who we are as a country, as a result of having been the crossroads of the Americas
and of the world for a long time. An example of this vision was the Summit of the Americas,
which we were proud to host last year, and which allowed for the participation of all
countries from the Americas for the first time ever in the Summit of the Americas. I
was that the-our effort was part of that vision of Panama as a country that promotes dialogue,
that promotes understanding. Our second pillar in terms of foreign policy
is to have an active participation in the global development agenda. And we have been
very, very active in this government in terms of, for example, of human rights, which led
to have a seat for the first time. We were able to have a Panamanian elected to the Inter-American
Commission of Human Rights for the first time ever. We were elected at the United Nations
Commission on Human Rights, also for the first time.
And our participation in the Sustainable Development Goals, which were agreed upon by many countries
last year at the United Nations General Assembly, it’s not only a commitment in terms of the
global development agenda, but it’s at the core of our national government plan. We have
actually decided by decree that the SDGs will guide Panama’s investments and Panama’s social
efforts. So in this regard, there is a complete alignment with the global development agenda
and our domestic policy. Our participation in the Paris agreement.
Panama even led an effort in terms of the countries that have forest, and the efforts
that the world needs to make in order to ensure that those countries that have forest can
keep them, and the contribution that this makes to climate change. All of this is, again,
a result of this importance that we give to the global development agenda, understanding
that that is where the world needs to concentrate its attention.
We need, as a world, to overcome the issues of today, the issues of people migrating from
countries where there is war and where there is lack of opportunities, to developed countries.
The issues of human rights, which still today are violated in many parts of the world. The
issues of incorporating those excluded from development into development. We see these
not as an issue that is apart from our core domestic policy. And we see Panama as a country
that can play a role in order to continue to push those efforts.
Now, we are today in the mind frame of many people not for everything that I’ve shared
with you. We are at the top of mind of many people because of some publications that came
out about a month ago, already. It seems like a year ago-(laughter)-so much has happened
ever since-ever since that came out. Let me tell you something about the wrongfully called
Panama Papers. And I’m sure they were named Panama Papers because Panama is a great name.
(Laughter.) Panama is a great name. And this journalist needed to have a great name for
their publications. And, you know, that’s our problem for having a great name.
But the fact of the matter is that, yes, the publications referred to business conducted
by a law firm in Panama. But furthermore, the publications refer to dealings of banks
in 21 jurisdictions, none of them in Panama. Not one of the banks that have been mentioned
in those publications is based in Panama. The publications referred to offshores. Twenty
percent of those, registered in Panama. Eighty percent of those, registered elsewhere-British
colonies, United States, everywhere. The publications really underline that there is a global problem
in terms of the financial system, something that the world has recognized for a long time
and this publication just make it clear that we still have a long way to go. We still have
a long way to go as a world. It’s been hard on Panama that the publications
are named Panama Papers. It’s been very hard, particularly for our government. I must admit
that Panama, as a country, we came a little late to the efforts of transparency for the
financial sector. When President Varela was vice president and minister of foreign affairs,
during the last government, Panama had not signed one treaty for double taxation. And
under his leadership, we established a national commission, we initiated our signing of and
negotiating of double taxation agreements. And we signed about 25 at that period of time.
And then the alliance broke. And then he left the government. And then the previous government
didn’t do much in terms of this global effort. And when we took office two years ago, Panama
was on the gray list of the FATF because we had failed to comply with some of the global
efforts. And we initiated a strategy which moved so fast, even recognized so by the FATF.
I heard them at a meeting in Panama say that they had never seen a country move so fast
in terms of the decisions that need to be made and the processes that need to be put
in place in terms of transparency. And we were able to be removed last year from FATF’s
gray list as a result of Panama implementing anti-money laundering legislation, prevention
of money from terrorism into our financial services. We installed the governance institutions
that we needed to install. And we got our act together. And we were able
to be removed from the gray list. And we were able to move to the phase two of the peer
review of the OECD. So all of these efforts that our government has been doing, and that
have been recognized globally because FATF’s decision to remove us from the list is a recognition
of our efforts and the OECD’s transition to phase two of the peer review is a recognition
of our country’s efforts, it’s hit hard by some publications that have our name, because
our name is pretty nice. (Laughter.) So we have been in an effort to, again, share
with the world what it is that we’re doing. And, yes, there are problems with the financial
system around the world, problems of which Panama must be a part of its solution, but
the rest of the world as well. And we will continue to work in that direction. We are
committed, not because of the Panama Papers. We were committed the day we took office.
And the actions we’ve taken speak for themselves. But I wanted to take this opportunity to let
you know our vision on these publications and what it is that our vision is in terms
of transparency in the financial sector, transparency in general.
Transparency has been at the core of our government plan. Procurement in the past years in Panama
has been known. And actually, the justice system can say a few things in that regard.
Procurement in Panama was really permeated by corrupt practices. We have really, really
cleaned Panama’s act in that regard. And you can ask foreign companies now what it is to
invest in our government investment plan. And we know what it was to invest previously.
So our commitment to transparency in the financial services, in our procurement processes, we
are committed to changing politics in Panama to really be what politics needs to be-a service
to the people. Politics-not to have a personal agenda, not to enrich yourself, politics to
be a tool to serve the people and to serve the country.
So our commitment is strong. Our commitment, once again, I would like to reiterate, is
not the result of responding to some publications. Our commitment has been clear ever since we
took office. The measures taken speak for themselves. And as I began sharing with you,
Panama is a lot more than that. Panama is a country that enjoys democracy, that enjoys
freedom of expression, that enjoys economic growth that is fighting to ensure that this
economic growth transform into the improvement of life of all Panamanians. And we’ve seen
some important progress in that regard in terms of education, in terms of health, in
terms of water, and sanitation. And our success story is there. I invite you
all to come see for yourself. And more than that, we are truly committed to continue to
make Panama a country that shares this prosperity with the rest of the region, and that ensures
that this prosperity permeates not only Panama, but our neighbors that have difficulties a
lot harder than we have. And we are working hard in terms of our foreign policy to play
that role and make sure that the global development agenda, which guides multilateralism and foreign
policy in many ways, really reaches the people of Central America, of Latin America. And
that’s what we’re committed to do. Thank you very much for your attention. (Applause.)
CUNNINGHAM: Madam Vice President, you touched on one of the issues that I know has been
on the forefront of the minds of those here, which is the transparency issues in Panama.
Your boss, your president, President Varela, as you mentioned, was vice president in the
prior administration, was foreign minister, and had a very notorious split with President
Martinelli because Vice President Varela no longer had confidence in the way President
Martinelli was governing the country when it came to transparency and corruption issues.
And he was, of course, relieved of his duties as foreign minister, but he could not be relieved
of his duties as vice president. So he had an empty desk for a number of years, which
prepared him well to take on the role of running-again, running for president, and now serving as
president. President Martinelli, meanwhile, former President Martinelli is living in Miami.
SAINT MALO: What can I tell you? CUNNINGHAM: Your government has-your Supreme
Court has issued some charges against him. I know you have an extradition request pending.
There may be further charges-if one reads the newspapers-there may be further charges
coming. What can you tell us about the status of President Martinelli here in the U.S. and
your efforts to bring him to justice in Panama? SAINT MALO: Interesting question. As you have
mentioned, our Supreme Court has a few cases pending on Mr. Martinelli, former President
Martinelli. One of those-which is for the issue of rigging telephone conversations-one
of those has been approved by the board of the Supreme Court to, under that-under those
charges request the extradition to the United States. Now, in terms of Panamanian legal
framework, the Supreme Court needs to prepare the extradition request and submit it to the
Ministry of Foreign Affairs. And then the Ministry of Foreign Affairs will be responsible
for transferring that request to the United States. We have not yet received from the
Supreme Court that request for extradition. Now, we’ve of course evaluated and studied
the issue. And it’s a complicated situation. We understand in terms of-first of all, our
extradition treaty with the United States dates as far as the beginning of the 1900s.
So the crime by which the Supreme Court is authorized to request the extradition is not
part of the treaty because, of course, at that time, there were no telephones, so even
less there was a crime to listen to conversations. Of course, this can all-and we’ve had discussions
with the United States authorities-of course, this can be supported. But that’s an issue
that we need to deal with. The second issue is that according to the
treaty, if we request Mr. Martinelli’s extradition based on that case, we cannot judge him in
Panama for any other case. And he-the cases-I believe it’s almost 10 cases that are in the
Supreme Court regarding Mr. Martinelli right now. And most of them are a lot more serious
than listening into conversations, which is serious enough. The charges are basically
referring to corruption, and his participation on corruption practices, on our procurement
processes, and even linked to processes that are now at the judicial system in the United
States. So another issue that I understand our Supreme
Court has is, how are we going to request his extradition and make sure, in the dealings
with the United States, that we are not just protecting him from future processes? So those
issues are critical issues there, and as of-as we have been told by our Supreme Court, and
actually we’ve discussed, as mentioned, with U.S. authorities, the importance of making
a very strong case so that the case doesn’t fall through the cracks in the United States
system. And we do know that Mr. Martinelli has the resources to hire knowledgeable lawyers,
and we understand he has hired a large number of knowledgeable lawyers. That’s an issue
for Panama. We need to make sure that we can process him properly for all of these issues.
Now, that’s one thing, the request for extradition. And I do hope that we will request his extradition
soon enough. It’s not in our hands, but we will definitely go on with the process once
we receive a request. That is one thing. But the second thing is what’s happening in
the United States with the fact that former President Martinelli is living in the United
States. Now, I understand that your authorities cannot mention, for example, if he has requested
asylum. He might have. Some of you might be lawyers and would probably know better than
I what happens in terms of an extradition request if he’s in an asylum request process.
And I understand asylum request processes can take as long as three years for a decision.
And I understand that once this is-this process is going on, this person cannot be touched.
So, when and if Panama requests the extradition, I don’t know what’s going to happen with the
United States system. But what is-what is harder, I think, is not
this judicial situation that I do hope for Panama’s sake goes through. But the thing
is that this person is living in the United States really just dedicated to Panamanian
politics through social media. So I don’t know, that is something that I’d like to pose
the question to you. (Laughter.) You know, it just blows my mind. It blows my mind. And
I think-I think the world has a long way to go to ensure that we stop protecting those
that should be brought to justice. CUNNINGHAM: I want to commend you, in your-in
your remarks and just now, for the candor in which you’ve addressed some of the most
complicated issues facing Panama today-the Panama Papers, the issues with former President
Martinelli, the issues of development. You mentioned also-but I think you swallowed some
of the good news, which is of course the opening of the-of the new locks in the Panama Canal.
Forty years ago here in the United States, Panama was one of the hottest political topics
over President Carter’s-over, actually, President Ford and then President Carter’s negotiation
of a treaty to return the Canal Zone to Panama and to eventually turn over the management
of the Panama Canal to the Panamanians. Those who may not have focused on Panama since then
might not know that Panama successfully took over the management of the canal and have
had really an unimpeachable, for the last 20 years-almost 20 years, management of the
canal, belying all of the fears and concerns that had been raised at the time. You’ve also
gone ahead and then moved ahead with a major expansion of the canal to permit much larger
vessels to go through. Tell us how-and that will open in June, as you mentioned. Tell
us how you expect that to impact Panama’s economy, as well as further the global shipping
lanes that go through Panama? SAINT MALO: Thank you for that question, because
we are very proud in Panama to be inaugurating our expanded canal June 26th. And let me share
with you what I think we’re most proud of. And you’ve mentioned that we’ve successfully
assumed the administration of the canal, and that it’s recognized internationally by the
trade world and by other countries the transition from U.S. management to Panamanian management
was imperceptible to the world. That was-we’ve done it. We’ve done it well.
But more than that, over a hundred years ago, when we began the original canal, we had to
turn to the French and that we had to turn to the United States, but this expansion was
done by Panama. And if we look at the investment, which is over 5,000 million dollars, in terms
of dollars in that time we’re building a second canal. This is a major infrastructure project,
and we are very proud to be inaugurating the canal, and being a Panamanian-a Panamanian
project funded by Panama, led by Panama, contracted by Panama. And this just shows what Panama
is capable of. And this will represent a major transition
to world trade. I mentioned the LNG vessels, for example, that will be able to transit
through an enlarged canal. The administrator of the canal was just saying a few days ago
that ever since the inauguration was announced, they have just been receiving the bookings,
and it’s booked for its initiation. The world-the maritime sector has been expecting the expansion
of the canal and were just there ready to jump as soon as it was finalized, and that’s
great news. An enlarged canal will represent important
additional revenues for Panama. One of the most important things from the transfer-for
the transfer of the canal to Panamanian management is that, under U.S. administration, the canal
was managed-in terms of its budget, it was managed-money that came in, money that was-that
came out. There were no revenues for Panama, nor the United States. That was definitely
changed when Panama assumed administration, and the canal is today an important source
of income for our national budget. And an expanded canal will increase that dramatically.
And we are-we are waiting for those resources in order to divert them to what I have mentioned
is our most important challenge, which is development.
As mentioned earlier, our challenges in terms of water and sanitation are amazing. You go
to Panama City-I don’t know if you’ve been recently; if you haven’t been recently, you
should go-you go to Panama City, and Panama City looks like New York City. But in a country
where we have a city that is booming, we have sectors of our country that are excluded.
And we’re working hard at ensuring that our human development indicators just jump, and
the resources that we will receive from an expanded canal will definitely be diverted
into that-into that direction. CUNNINGHAM: I’m going to turn now to the audience.
Those of you who have questions, I’ll ask you first to tell us who you are, what institution
you’re with, and then to keep your questions brief, fierce, and decisive.
Well, the press has an interest in asking questions, so let me turn to the table here.
The woman in the-in the red jacket, please. Q: Hi. Welcome, Madam Secretary. My name is
Nadia Chow, Washington correspondent for Liberty Times.
I have two question(s). The first one is, for the inauguration, Panama already extended
an invitation to Taiwanese President-elect Tsai Ing-wen and both Chinese President Xi
Jinping. I wonder, are you expecting both of them to attend? Because Madam Tsai already
expressed his (sic) interest to, you know, participate.
The second question, the Panama Paper(s). More detail were coming on Monday, next Monday,
and you said that Panama has been hit hard by this paper. Can you elaborate, you know,
if more detail is coming, what the impact will be on Panama’s economy? Thank you.
SAINT MALO: Thank you very much. On the first question, yes, we have extended
invitations to both the president of China Taiwan and the president of People’s Republic
of China. Panama has diplomatic relations with Taiwan and Panama has commercial relations
with China. We have an office in China. We have an office in Hong Kong. And we have an
office in Taiwan. And we have invited to the inauguration of the Panama Canal the commercial
sector of the world, and we have invited heads of state.
Now, what has defined which heads of state we have invited? We invited about 40 heads
of state. The decision has been based primarily on those countries that are the primary users
of the Panama Canal, and China is one of the primary users of the Panama Canal. So we would
love to have them both, definitely. This is-this is an event where Panama places ourselves
once again to the service of world trade and world commerce, and we hope to share this
celebration with the rest of the countries that participate of this-of this service that
Panama provides. Regarding the second question, yes, we’ve
heard that there is a second round of information coming. I said Panama has been hit hard because
it bears Panama’s name. But many countries have been hit hard because the information
that has come out here touches, as I mentioned, 21 jurisdictions in terms of banking, many
other jurisdictions in terms of the registration of offshores, and furthermore, people that
have a public life all over the world. What can come of those-of those publications?
I would imagine more information on people that have offshores or that have registered
businesses. And we’re just as expecting as the rest of the world of these new publications.
CUNNINGHAM: Good. Yes, here at the front table? Q: Good morning. Thank you for joining us.
Clara Brillembourg of the law firm Foley Hoag. I wanted to ask, given Panama’s historic role
as a leader in the region, and also given your close relationship with the United States,
how the opening of the relationship between the United States and Cuba has affected Panama.
SAINT MALO: The opening of the relationship with the United States and Cuba, it’s great
news to Latin America. It’s not only great news to Panama, but it’s great news to Latin
America. It was a-it was something that needed to happen at some point. We are very proud
to have been the venue where the president of the United States and the president of
Cuba met for the first time over 50 years. And it’s interesting that the last time they
had met before the Summit of the Americas, the last time a president of the United States
and a president of Cuba had met, was in 1956 in Panama.
So we take pride in being a country that brings people together, that brings countries together.
We have been open to the world forever. Due to our geography, geographic location, Panama
has been a crossroads of people, of culture, of trade. And that has made us open to the
world, and that has made us a country that takes pride in bringing people and countries
together. So that’s great news, and we do hope it will continue to move forward.
CUNNINGHAM: Let me ask a question that follows on the one about the expansion of the Panama
Canal, because this-the opening of the canal and the new locks actually touches on another
topic of global concern, because there may not be enough water to fully power the locks
going forward, as I understand, at least for the moment, because of El Nino.
It’s-not everyone may know that one of the miracles of the Panama Canal is that it’s
fed entirely by the waters of the rain forest in the interior of Panama. There are no pumps.
It’s not recirculated. The water starts in the interior of Panama and then flows through
the locks into the sea. Because of El Nino, you’ve had a drought. Some have linked El
Nino, and this particularly severe El Nino, to climate change.
What is Panama doing to both address the immediate issue of the water that it needs for the locks
and the broader question of climate change? SAINT MALO: Well, I’ll begin with the second
question first, the broader question of climate change. As mentioned, we were very active
in the negotiations towards the Paris agreement. We think that’s great news to the world that
the world has finally reached an agreement in terms of climate change. The implementation
will definitely be difficult. There is a question here of the cost of taking
measures and who bears the cost. When I mentioned the efforts of Panama, which led-Panama led
a coalition of 52 countries towards the negotiations of the Paris agreement, 52 countries that
have forest. And the proposal of these 52 countries was basically what do we do to conserve
this forest, and who foots the bill? Because at the end there is a cost to development
when you commit to conserving your forests. And forests are basically in the underdeveloped
world. So countries like the United States will have an important role to play in this
effort towards climate change. Locally, we are doing a lot of things. We
have a strong leader of the efforts right now in Panama, which is our minister of environment.
She’s been an advocate of environment for a long time. She’s been trained in environment,
and she’s working in this regard. We have a project of reforesting Panama, which
is going very well. And we’re just really turning around how we manage environmental
processes in Panama, and we’ve really raised the commitment of our government in terms
of environment in general. Now, the water for the canal. The issue is
that the lakes that feed the canal are also the lake that feed the Panamanian population
for drinking water. So, yes, this is an important issue. The good news is that the new canal
does recirculate water. So the locks that were built at the beginning of the last century,
they were throwing that water into the sea. But the new locks work recirculating water.
So that’s the good news. We have-President Varela mentioned last year
at his speech at the National Assembly a project that we need to look into soon, which is a
project to build further water reserves in Panama. And the lakes that feed the canal
are manmade lakes, are lakes that were made for the canal, and they now provide the drinking
water to the city. There is a lot of water in Panama. We need
to work at preserving this water. And there is an area of Rio Indio where there are several
rivers come together. And we’re looking towards in the future just building a large new water
reservoir-reservoir. Now, the other good news is that in Panama
we had El Nino. But in Panama, when it starts raining, it starts raining. (Laughter.) And
last week it started raining, and then we had floods. (Laughs.) So fortunately enough,
the dry season has-it’s over. The lakes will-how do you say that? They will regain-
CUNNINGHAM: Replenish. SAINT MALO: Replenish-thank you-replenish
with water. But that’s an issue that Panama needs to look into for the future, the issue
of water for the canal and water for our population. We’re fine for the next-you know, for the
near future. But long term we’re already looking into additional projects that will ensure
the supply of water. CUNNINGHAM: Yes, the gentleman at the back
table. Q: Thank you. Madam Secretary, this is Alex.
I am the Washington correspondent of United Daily News of Taiwan.
I have a question with regard to diplomatic tie between Panama and Taiwan. We know Panama
and China have robust economic ties, which China have diplomatic tie with Taiwan. And
Panama has been expressed its willingness to establish diplomatic tie with China before.
And my question is, how would you describe the diplomatic relations between Taiwan and
Panama at present? And is so-called dual recognition a possible way to figure out the diplomatic
issue among Panama, Taiwan, and China? Thank you.
SAINT MALO: We have diplomatic relations with Taiwan. We have very good diplomatic relations.
We have, as I have mentioned, commercial relations with China. We understand the two Chinas have
an agreement, currently a truce, which we respect. And we are very respectful of the
way they handle their relations and their rapprochement. It’s been a long process for
them. Meanwhile, we are friends of Taiwan and have
diplomatic relations with Taiwan. And we have strong relations, commercial relations, with
China. And we do hope that both of them will continue to become stronger.
CUNNINGHAM: Yes, sir, over here. Q: Hello. Steve Rodriguez. I’m a venture capitalist,
but I spent some time in the region with the U.S. Mil Group in Colombia.
My question, Madam Vice President, is your country sits at the crossroads of a number
of important issues related to terrorism, epidemiology, and, of course, trade. I guess
my question is not so much getting a current update of where things are. I can read plenty
of papers that have been written here in D.C. on that. My question is, how do you view your
country’s role at the crossroads of so many of those issues going forward?
SAINT MALO: Those issues that are global issues are-we are having to face them, as well as
the rest of the world. And I take the opportunity of your question to refer to one particular
issue, which is difficult for us and which is a current affair, in the situation of migrants
going through the isthmus on their way to the United States.
For the past years, many years, there have been-there has been a flow of migrants through
the Central American isthmus to reach the United States. Now, the flow is made up of
Cubans, many of them wanting to reach the United States, given the policy that the United
States has of welcoming Cuban migrants. And there has also been a flow of people from
another continent. There is a flow of people from Africa, from Asia. These people enter
the continent, most of them, through Brazil or Ecuador. Brazil and Ecuador both have a
migrant policy that they’re open to the world and they don’t require visas for many nationalities.
And I think it’s a drama. I think it’s a human drama to have people that flee their countries
with their families. We have people going with their young children. We have pregnant
women. We have entire families. And, you know, the issue of refugees in Europe, it’s very
visible right now because they’re coming in large numbers. The issue of migrants going
through the Central American isthmus towards the United States, it’s a smaller number than
the refugees in Europe so it’s not as known. But it’s a human drama. It’s a human drama
that people have situations in their country in terms of wars, in terms of lack of economic
opportunities, that are so dramatic that they’re willing to risk everything to find a better
livelihood. And I really think the world needs to look
into what’s happening in these countries. The response is not closing the gates, because
at some point I don’t know if you can close the gates. I mean, look what’s happening in
Europe. But I think the response needs to be a coherent, integral response. Addressing
the issues of development and the issues of peace are countries that are far away from
us, but that have these issues. And the issue of migrants, right now we have
3,900 Cubans in Panama that cannot move to Costa Rica because Costa Rica closed the frontiers.
And Costa Rica closed the frontiers because Nicaragua closed the frontiers. And we cannot
close the frontiers with Colombia because we don’t have a frontier with Colombia. We
have a jungle on our frontier with Colombia. So what are we to do? Are we to move these
families with four-, three-, two-year children into the jungle, which we actually did with
a few of them a couple of weeks ago, and a four-year-old got lost? And then we sent our
police. After sending our police to stop them from coming in, we sent our police to look
for the kid, because what are you going to do, ignore this human drama? I mean, we cannot
be a world talking about a global agenda and talking about poverty and talking about human
rights at the tables of the U.N. and then looking to the other side when there are people
that are willing to risk everything because they have no future at their original countries.
I don’t see an easy response. Panama is going to have to do something at some point. We’re
going to have to-I don’t know-send Cubans back to Cuba, send them to Ecuador, which
issued the visas. They have Ecuadorian visas. They don’t have visas from Colombia. They
don’t have visas from Panama. We received about 400-a few months ago about 400, 390,
people from Congo. And we were, like, what? Three hundred and ninety in one month? We’ve
had people from Senegal, from Congo; you know, two, three. They come through Brazil and they
walk their way up to the United States. Can you believe this? So we were, like, this doesn’t
make sense, you know, 390. Well, we have some agreements with the United
States and some systems to identify some people through their-what do you call this, their-
CUNNINGHAM: Fingerprints. SAINT MALO: -fingerprints, thank you, because
they claim they don’t have papers. They “lose” their papers because they don’t want to be
sent back. And if countries don’t know where they’re from, you cannot send them back. They
were Haitians. They were Haitians claiming to be from Congo.
So this is a human drama that the world needs to start looking at. And I don’t think the
result is to close the gates. I think the result is to push development in those countries.
And I don’t think we can any longer pretend that this does not affect us, because we thrive
in development and economic prosperity because this is not so far away when these people
are every day coming into our own countries. CUNNINGHAM: Well, thank you for that very
articulate description of the issues involved. Our country is about to embark on a-on a debate
on this very issue, a presidential debate. And it’s one of those who believes that America
is much stronger when it welcomes those from around the world, I personally welcome your
articulate comment, although it was not intended to be a comment at all affecting our own political
debate here. Other questions? Yes, sir, in the back.
Q: Hi, my name is Tony Perez. I’m a- CUNNINGHAM: Wait for the microphone, sir.
Q: Yeah, thank you. My name is Tony Perez. I’m a professor at Catholic University. And
earlier in my career, I had the lack of fortune of working on international extradition matters,
so I was intrigued by your comment about the Martinelli situation.
The United States for the last 30, 40 years to my knowledge has been seeking to renegotiate
extradition treaties into the modern dual-criminality format. And I was wondering-if I understood
you correctly, Panama has not yet joined in that process, and I was wondering if you’re
changing your view about it, and whether or not you could utilize that change to extradite
Mr. Martinelli? And the follow-up question is: Are you really better off with Martinelli
in Panama or in Miami? (Laughter.) SAINT MALO: I don’t know if I want to answer
your second question. (Laughter.) We would welcome the renegotiation of a treaty.
I don’t think we have-we have a formal request. We have not initiated a request. Now, the
negotiation of those agreements, which need to be passed by our legislative bodies, are
not so quick. So I don’t know if we should be waiting for that to deal with this and
other cases. We certainly could move into that direction for the future.
And I take the Fifth Amendment on your second question. (Laughter, laughs.)
CUNNINGHAM: Yes, here at the back table. Wait for the microphone, sir. Thanks.
Q: So, thank you very much, Madam Vice President, for being here. And congratulations on the
new government’s commitment to transparency and to development issues.
So, my name’s Itai Grinberg. I’m at Georgetown Law. Important, I guess, also relevantly,
I was previously at the United States Office of International Tax Counsel, where I worked
on offshore tax evasion issues. In prior governments, Panama developed a reputation
as being perhaps the most recalcitrant of the major or significant financial intermediary
jurisdictions around the world with respect to offshore tax evasion issues. And in this
government, you’ve only recently joined the Common Reporting Standard, which is kind of
the new globally accepted standard for what countries will do to try to address offshore
tax evasion. I think you did that last week. Given this history, I think there’s sort of
this reputational question that Panama faces. And the question is, just tangibly, are there
things Panama is prepared to do besides kind of the bare minimum to get off the, OK, they’re
different than everyone else list that you’re prepared to share with this audience? So that
would include, for example, changes in rules about how lawyers and accountants do due diligence,
rules about beneficial ownership. There are a variety of things that Panama could do to
change the way it’s perceived. I’m curious if you have any thoughts about that.
SAINT MALO: Well, definitely. And actually, some of the things that you’ve mentioned we’ve
already done in this past 20 months in government. We have very strong know-your-client legislation
in Panama. Actually, I invite you to go to Panama and try to open a bank account. It’s
a lot harder than opening a bank account in the United States. We have know-your-client
legislation. We have due diligence legislation. The previous government approved a legislation
changing bearer shares and making it obligatory for lawyers to know the end owners of shares.
And they passed that legislation and they placed it in a hold for five years, until
2018 or something like that. We reinstalled that legislation, which was placed into effect
January 1st this year. So, today, important changes have been made to our legislation.
Now, there is a question that I don’t think is that well-known in terms of our commitment
and in terms of our actions. And I think it’s something that needs to be put into the table
and just figure out how we deal with it. And it’s part of our reality.
First of all, our taxing legislation, we do not tax Panamanians for income generated outside
of Panama. That is our system, which works well for us. Now, we respect other countries’
system(s). And we are committed to helping other countries follow the money of their
own citizens that try to hide their money in other jurisdictions. We are committed to
assisting those countries, and we will continue to do everything that we can to assist those
countries. However, the cost of implementing the Common
Reporting Standards is going to be very high on our financial system. And we’re going to
do it. But fear-I mean, nobody has put onto the table what it represents for a small country
to ensure that you commit to certain standards-because other countries need that information; you
don’t. There is a large cost in terms of operations for banks if they’re going to exchange information.
Our taxing authority can barely collect taxes in Panama. I mean, we have our own problems
of tax evasion that we’re working hard at conquering. Now, we don’t only need to concentrate
now on strengthening our taxing authorities in order for them to collect the taxes that
we need to improve the livelihoods of Panamanians, but now we need to make sure we strengthen
our tax authorities so that they can share information with the rest of the world, with
countries that are a lot more powerful and have a lot more resources than we do.
Now, we’re going to do it. We think it’s fair that we do it. But you need to know there
is a cost involved here. And that is something that I think needs to be brought into the
table at some point, because it’s like-it’s like developed countries-and I understand
the need for additional resources, and I understand the need to go after your own citizens that
find whatever way to evade taxes. And so international legislation has just been getting stronger
to move that fence, and in the process you’re setting up some standards to the rest of the
world that are standards-that bear a high cost to your own system at the-at the cost
of your people, at the cost of money you need for development. So I just wish-since you’re
in that area, you know, I just wish that that reality was also placed on the table.
Now, regarding are we willing to do something more than just committing to the bare minimum,
yes. I would love to see my country become a leader in terms of transparency. And this
is something that we’ve debated. Locally, we’ve installed an international committee
of experts as-last Friday, we installed it-as part of the measures that we’ve taken to respond
to the information that has come out through the Panama Papers and as a part of our commitment
to improve our system, committee to be co-chaired by Nobel Peace Prize Joseph Stiglitz. Now,
we all know where Professor Stiglitz’s views are in terms of transparency and in terms
of development. And we are committed to just waiting for the recommendations of that committee
and see what information they provide there that will help us be better.
And, yes, I would love to be at the forefront. But you’ve got to understand, just committing
to what we’ve committed, it’s not an easy thing. We are having to face questions of
whether we devote money to education or we devote money to the standards. It’s not an
easy-it’s not an easy position to be in. But, yes, we’re committing, and we are working
in that direction. CUNNINGHAM: Well, we’ve just crossed the 9:30
hour. And so, as I-as we bring matters to a close, let me note that in this country
we have a long tradition of vice presidents who use the job as a platform for other jobs.
(Laughter.) We have a more recent tradition of secretaries of state, foreign ministers,
even women secretaries of state using that as a position for further jobs. And I commend
that to Panama. (Laughter.) Thank you all. Thank you all for-thank you
for joining us here. Thank you all. Please join me in welcoming and thanking the vice
president. (Applause.) SAINT MALO: Thank you. Thank you very much.