Opposition leader Juan Carlos Varela has won the presidential election in Panama with almost 40% of the votes.
Vice President Juan Carlos Varela pulled off a surprise victory in Panama's presidential election Sunday May 4th, thwarting an attempt by former ally President Ricardo Martinelli to extend his grip on power by electing a hand-picked successor.
With only 60% of the votes counted, Varela led with 39 percent of the votes, compared to 32 percent for Martinelli's choice, political newcomer Jose Domingo Arias. Juan Carlos Navarro, a former mayor of the capital, was running third in the seven-candidate field with more than 83 percent of the ballots counted.
Varela, who takes office July 1, dedicated his victory to Panama's democracy. Waving the nation's flag at a rally to celebrate his victory, he vowed to put aside the partisan bickering of the past five years and put an end to corruption that worsened under Martinelli.
The ruling party has still never won re-election to Panama's presidency since the United States' 1989 overthrow of military strongman Manuel Noriega.
"Whoever wants to do business should grab their things and go to the private sector," he told a cheering crowd in a clear swipe at the outgoing president.
A free-market conservative, the 50-year-old Varela also has strong social credentials. Before separating from Martinelli in 2011, he was the architect of the government's popular "100 for 70" program that provides a $100 monthly stipend to Panamanians over age 70 without a pension or retirement benefits.
Although Martinelli wasn't on the ballot, the billionaire supermarket magnate's presence loomed large during the campaign. Many worried he would be the power behind the throne if voters chose Arias, a soft-spoken former housing minister, and even seek to change the constitution to eliminate a two-term cooling off period before becoming eligible again to seek the presidency.
As the race narrowed in recent weeks, Martinelli crisscrossed the isthmus inaugurating hospitals, stadiums and Central America's first subway while warning the 4 million Panamanians that record-low unemployment and economic growth that averaged more than 8 percent since he took office in 2009 could be jeopardized if his opponents won.
A stunned Martinelli reluctantly recognized the results. Hounded by cameras while arriving at Arias' campaign headquarters Sunday night, he offered up a snappish "May God help us" and said he would shelve plans for a quiet retirement and devote himself to opposing Varela's rule.
"I'm going to hit them hard because I know what they're like," he said, alternately blaming media bias and faulty polling for the loss. Voter turnout was a high 75 percent.
The outgoing president will have a strong platform from which to battle Varela: Candidates from his Democratic Center party were the biggest winners in congressional voting Sunday, taking an estimated 29 of 71 seats in the legislative assembly. Varela's alliance won just 12 seats, meaning he will almost have to negotiate with Navarro's center-left Democratic Revolutionary Party, which elected 22 representatives. Varela left the 2009 presidential race to throw his conservative Panamenista party's support behind Martinelli in exchange for the vice presidency.
After his swearing-in on 1 July, Mr Varela will therefore have to form alliances with the opposition to push his planned reforms through the legislature.
He faces the challenge of maintaining buoyant growth while dealing with economic inequality, with a quarter of the population living in poverty.
Mr Varela will also have oversight of a major expansion of the Panama Canal, which accounts for 8% of gross domestic product in the country.
But the political marriage didn't last, and Martinelli dismissed him from an additional role as foreign minister in 2011 for refusing to back a plan for a referendum to allow president's to serve consecutive terms.
Varela said he would continue Martinelli's drive to improve Panama's infrastructure, the linchpin of the president's 60 percent approval rating.
But he vowed to boost transparency, reflecting the perception that much of $15 billion spent on upgrades was lost to corruption and poor planning.
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