:00:08. > :00:15.For a tiny Central American nation, Panama packs quite an international
:00:16. > :00:18.punch - it has the Canal, a key asset to international shipping,
:00:19. > :00:22.and it has a financial sector which specialises in parking the cash of
:00:23. > :00:26.people who want to keep their wealth from prying eyes.
:00:27. > :00:29.During the notorious regime of Manuel Noriega, it also developed
:00:30. > :00:38.a reputation for dodgy governance - but that was a generation ago.
:00:39. > :00:41.My guest today is Vice President Isabel de Saint Malo de Alvarado.
:00:42. > :01:23.Isabel de Saint Malo de Alvarado, welcome to HARDtalk. Thank you for
:01:24. > :01:27.the opportunity. Would you agree that Panama has a reputational
:01:28. > :01:31.problem? If you ask most people what they think of when they think of
:01:32. > :01:47.your country, they would say financial services, the Canal, and
:01:48. > :01:52.Manuel segment. We are a success. We have a democracy. We have liberties.
:01:53. > :02:00.We have freedom. We respect the rule of law. We have a strong economy and
:02:01. > :02:04.diversifying economy. We are growing when the rest around us are having
:02:05. > :02:10.trouble. We have had steady growth for the last years, 8% average in
:02:11. > :02:16.the last 15 years, 6.5% last year. Even during the crisis, we have the
:02:17. > :02:23.Canal but we are much more than that. We have a strong sector, our
:02:24. > :02:28.ports system is rated by the World Bank is one of the top in Latin
:02:29. > :02:33.America. Our logistics sector just second to Chile, and by the World
:02:34. > :02:36.Bank. I will stop you there because you have given me a litany of
:02:37. > :02:40.economic facts did suggest you are doing well. And I asked about
:02:41. > :02:44.reputation. When it comes to reputation, I think about the last
:02:45. > :02:50.president before your boss, the current president. The last
:02:51. > :02:56.president left behind him a mountain of allegations, of sleaze and
:02:57. > :03:01.scandal. He is currently in the US and facing six different
:03:02. > :03:06.investigations back in Panama. We have had about 26 years already in
:03:07. > :03:11.democracy, definitely the last period was hectic and compensated.
:03:12. > :03:17.We have been in government about a year and spent about the first year
:03:18. > :03:23.really cleaning up the government and cleaning up the act. You don't
:03:24. > :03:27.seem to have cleaned it up at all. I can go through a litany of current
:03:28. > :03:32.allegations facing people at the top of the government machine, and the
:03:33. > :03:36.judiciary. The judiciary and executive are separate branches and
:03:37. > :03:42.we are respectable of separation of powers. In terms of the executive,
:03:43. > :03:49.we have had allegations, and most people have left the government. We
:03:50. > :03:55.have spent time making sure their projects, we have turned information
:03:56. > :04:04.into justice. That is just a set head. We have insured a proper and
:04:05. > :04:08.transparent system. We ensure we follow processes and rules, and that
:04:09. > :04:12.is very clear in all of our actions as a government. Let's talk about
:04:13. > :04:17.the former president. He is still in the United States. Are you sitting
:04:18. > :04:23.his extradition right now? The Supreme Court approved to ask his
:04:24. > :04:27.extradition and the Supreme Court is preparing the documents. They will
:04:28. > :04:30.need to hand them to the Ministry of foreign affairs. We have not
:04:31. > :04:35.received from the Supreme Court the request yet. They have told us they
:04:36. > :04:40.are working on that. You know one of the key allegations against the
:04:41. > :04:44.former president is his meddling and interference and unconstitutional
:04:45. > :04:48.actions with regards to the Supreme Court, and in particular, the
:04:49. > :04:53.appointment of the President of the Supreme Court. A man who under your
:04:54. > :04:59.watch, your administration, is still in post. Why is he still there? I
:05:00. > :05:06.have the same question. They elected him. The Supreme Court members,
:05:07. > :05:09.which again, we are respectful of separation of power, and the Justice
:05:10. > :05:15.is separate from the executive. Yes, you were selected again to be
:05:16. > :05:18.president. There are many different civil society groups in your country
:05:19. > :05:23.who say this is untenable as the public have lost faith in the
:05:24. > :05:29.judiciary and the highest court in the land, would you agree? I believe
:05:30. > :05:35.we have a lot of work to do in terms of our judicial system from the side
:05:36. > :05:39.of the executive. We need to support the strengthening of the judicial
:05:40. > :05:45.system, and yes, I would agree... The opposition say the government
:05:46. > :05:50.needs to convene a national constituent assembly. That is the
:05:51. > :05:56.constitutional reform even the way the executive has interfered in the
:05:57. > :06:00.judicial branch, the only way to sort it out is to redefine the
:06:01. > :06:04.powers within the constitution. Is your government ready to do that?
:06:05. > :06:11.That is one of our commitments. Was or is? Was, before we were elected.
:06:12. > :06:19.Still is. We are considering what is the best way to approach that. When
:06:20. > :06:22.we took office, they said it would be dealt with during a second year
:06:23. > :06:32.of government, and that is where we are heading. The Chamber of Commerce
:06:33. > :06:35.in Panama said the other day we are an institutional crisis of epic
:06:36. > :06:39.proportions. You are telling me a year and a half after getting into
:06:40. > :06:42.office you are still vaguely talking about constitutional reform having
:06:43. > :06:46.promised it in an election campaign. That is not seem a sense of urgency
:06:47. > :06:52.even this crisis. The way of addressing government reform,
:06:53. > :06:57.constitutional reform, it is something that needs to be addressed
:06:58. > :07:04.but that is not the only way. Take a look at what Panama has done in
:07:05. > :07:07.terms of our processes, in terms of organising the state, in terms of
:07:08. > :07:13.abiding by the rule of law, in terms of providing and giving freedom to
:07:14. > :07:16.civil society. We believe in the strength of civil society today in
:07:17. > :07:21.Panama. You can speak freely. It did not happen before. Today in Panama
:07:22. > :07:24.if you are a member of the civil society you can publicly express
:07:25. > :07:29.your position and contribute. I government has an approach to
:07:30. > :07:39.decision-making that takes into consideration participation in civil
:07:40. > :07:43.society. The private sector participation as well. We do need to
:07:44. > :07:47.continue to work on strengthening our institutions, and what we have
:07:48. > :07:51.done in a year and a half speaks for itself. Are there still crooked
:07:52. > :07:55.politicians in Panama? The police found a kilo of cocaine in a vehicle
:07:56. > :08:00.belonging to an aide of a legislator the other day. How money crooked
:08:01. > :08:06.politicians are there? Can you tell me how many there are in the UK? You
:08:07. > :08:12.could ask me and I would say I think our politics is relatively clean.
:08:13. > :08:17.Well, good for you. I think we still have a lot of work to do. I think we
:08:18. > :08:21.are a country in the process of growth. We have come a long way, and
:08:22. > :08:24.I'm sure we will continue to strengthen our democracy and
:08:25. > :08:28.strengthen transparency and to ensure that practices where
:08:29. > :08:34.corruption exist are no longer tolerable. So you are a big believer
:08:35. > :08:39.in transparency? I am a full believer in transparency. In that
:08:40. > :08:43.case, I imagine you are actively considering the appeal of the OECD
:08:44. > :08:47.for you to apply the same rules that banks across the world are now
:08:48. > :08:53.adhering to, which is to be completely transparent in their
:08:54. > :09:00.financial operations. And to provide automatically that information to
:09:01. > :09:05.outsiders. We are completely in agreement with the OECD's proposal
:09:06. > :09:12.for automatic dissemination of information. In the address to the
:09:13. > :09:18.UN, we committed to automatic strange. We have taken important
:09:19. > :09:23.steps -- exchange. You have mentioned a couple of times the
:09:24. > :09:31.Manuel Noriega days, the financial system was very different. You are
:09:32. > :09:41.patently not doing what OECD wants. Switzerland's commitment, a historic
:09:42. > :09:46.land of banking secrecy, the media and many other financial centres
:09:47. > :09:50.have signed up. It is important for Panama to do the same and understand
:09:51. > :09:55.it is still pretty far from what these other jurisdictions have done.
:09:56. > :09:59.They are two separate things. Committed to automatic exchange of
:10:00. > :10:03.information and the commitment to the common reporting standards are
:10:04. > :10:09.different. I'm talking about your commitment. These common reporting
:10:10. > :10:15.standards. There are many explained. They are two separate things. We
:10:16. > :10:20.have stated last year the General Assembly committed to automatic
:10:21. > :10:26.dissemination. We have almost 30 agreements with different countries
:10:27. > :10:32.for exchange of information. But the OECD says, the OECD said we wanted
:10:33. > :10:35.down to the common reporting standards and Panama are saying no,
:10:36. > :10:41.we don't think that is in Panama's West interests. You just told me you
:10:42. > :10:47.were committed to transparency. I see a contradiction. There is no
:10:48. > :10:53.contradiction. We fully agree with the objective, but not the method.
:10:54. > :10:58.When you start laying conditions as I believe you have done with the
:10:59. > :11:03.OECD, we would do it if you do this this and this, they looked at your
:11:04. > :11:07.conditions and said your conditions are, and don't want to be rude,
:11:08. > :11:12.putting up a middle finger to the OECD. You have no real intention of
:11:13. > :11:16.changing the secrecy of your financial sector. The OECD is
:11:17. > :11:21.completely mistaken. There is a vision of the OECD currently in
:11:22. > :11:25.Panama. They need to see for themselves what it is we are doing
:11:26. > :11:33.in Panama. Actions speak stronger than commitment. But Panama in terms
:11:34. > :11:38.of its financial sector, would pass an additional law on NT money
:11:39. > :11:42.laundering, making sure that money for crime and terrorism does not go
:11:43. > :11:47.through out financial system -- NT. We are completely committed to
:11:48. > :11:50.automatic exchange of information and more than half of the members
:11:51. > :11:54.have signed. We are talking practical cases now. We sell
:11:55. > :11:59.prosecutors say there is evidence that one of Panama's largest legal
:12:00. > :12:04.companies wanted money for some of those indicated in a vast bribery
:12:05. > :12:08.scandal centred on Petrobras, the huge Brazilian Corporation. How come
:12:09. > :12:13.this kind of allegation is still coming out? I have seen information
:12:14. > :12:18.on the allegation and I think that needs to be cleared up and straight
:12:19. > :12:21.in. So for all of the strong commitment and fine words, you are
:12:22. > :12:24.admitting that you know there are still huge problems in Panama and
:12:25. > :12:28.inside your financial services sector? We are working hard and have
:12:29. > :12:34.come a long way. Our financial sector abides at the highest
:12:35. > :12:37.standard internationally and commits to the information that needs to be
:12:38. > :12:43.provided. We have a world-class financial sector. Just go there for
:12:44. > :12:49.yourself. Check. There is no way our financial centre can be being
:12:50. > :12:54.appointed as not complying. -- finger pointed. But you won't sign
:12:55. > :13:02.up to the rules Switzerland have signed up to. The reporting
:13:03. > :13:06.standards. Because it is one thing for some regions of the world. We
:13:07. > :13:10.are completely committed to schedule information the tax purposes and
:13:11. > :13:15.need to ensure information we provide on our clients is first of
:13:16. > :13:18.all not wrongly used, and that happens in some countries, perhaps
:13:19. > :13:24.not in this continent but in other continents. And second, yes, we are
:13:25. > :13:27.concerned about the cost to our financial institutions for the
:13:28. > :13:32.reporting system. We need to take that into consideration. Let us talk
:13:33. > :13:38.about perhaps the other keep your lot of Panama's economy, and that is
:13:39. > :13:42.the Canal. You have inherited a massive project to expand the
:13:43. > :13:47.capacity of the Canal, and I believe it is very late. It was due to be
:13:48. > :13:51.finished last year, and now it may be finished in the summer or autumn
:13:52. > :13:55.of this year if you are lucky. They have also been cost overruns to the
:13:56. > :13:59.tune of billions of dollars, and at one point, it turned out the
:14:00. > :14:06.concrete that had been made light sufficient steel enforcement. All I
:14:07. > :14:06.read about this expansion suggests that your public infrastructure,
:14:07. > :14:21.your ability to deliver is limited. I want to have you in Panama to see
:14:22. > :14:30.for yourself. We are proud of what we have done. At the cost from the
:14:31. > :14:35.beginning of last century when the original was built we are building
:14:36. > :14:45.another. This is a major service to trade internationally. The project
:14:46. > :14:50.is now about 96-97% completed. There are some things being done. It will
:14:51. > :14:56.be elaborated by the beginning of next year... Let me talk about the
:14:57. > :15:05.incompetence of the process,, building and delivering. The chief
:15:06. > :15:09.of the organisations said, in 2015 when it should have been delivered,
:15:10. > :15:16.the designer has not delivered the estimated quality. We are losing $1
:15:17. > :15:22.million a day that it is late. All in all, we have lost 450 million US
:15:23. > :15:26.dollars by the time this structure is open. It is unfortunate that the
:15:27. > :15:35.company is doing the work, international companies, have been
:15:36. > :15:41.delayed. -- companies. But it has been taken care of and we are in the
:15:42. > :15:44.final stages. For a major infrastructure like the Panama
:15:45. > :15:52.Canal, a few months isn't anything. It is more like 1.5 years. Not at
:15:53. > :15:58.all. 2014 was the first Judaic and you are beyond that. But let's talk
:15:59. > :16:06.about timing. -- due date. You talk about triple the capacity the
:16:07. > :16:14.original... Yeah. Unfortunately, the timing is terrible. The Orwell Prize
:16:15. > :16:17.has plummeted. -- oil price. It is so much cheaper to use the long
:16:18. > :16:21.route around the bottom of South Africa than to use the canal. Look
:16:22. > :16:29.at the end of this year and we will see how it goes. Have you looked at
:16:30. > :16:36.the figures recently? We haven't. I have been. Reports released this
:16:37. > :16:40.month found that since October last year, 115 vessels transporting from
:16:41. > :16:47.Asia to the east coast of America sailed around South Africa rather
:16:48. > :16:50.than the Panama Canal. We are fortunate to be in our geographic
:16:51. > :16:55.position and to be at the service of the world in this regard for over
:16:56. > :17:00.100 years. We are proud to offer this expanded canal. Yeah...
:17:01. > :17:06.(LAUGHING). The world will consider whether it is worth it. I tell you
:17:07. > :17:11.what it will also consider, the chief of the canal authority
:17:12. > :17:16.declaring before this thing had even opened, the new expanded canal, he
:17:17. > :17:22.said that he may have to improve and expand its more, $17 billion
:17:23. > :17:28.projects, to allow it to take the world's very biggest ships. Why
:17:29. > :17:34.didn't you do it all in one go? The analysis for this expansion was done
:17:35. > :17:40.more than 20 years ago, about 50 years ago. We are already very
:17:41. > :17:46.competitive. To remain active and take the steps we need we are
:17:47. > :17:51.already analysing a third expansion. That might happen, but
:17:52. > :17:56.not yet. You are telling me that the timelag has been so bad it is
:17:57. > :18:03.already not enough. No, you are saying that.
:18:04. > :18:07.(LAUGHING). Now it needs to be even bigger... Already, when the ex-
:18:08. > :18:12.tension started, there were vessels of different sizes. -- expansion.
:18:13. > :18:18.There are many larger than we have today which will be of service to
:18:19. > :18:25.the world. Will we need to consider them in a few years? Perhaps. We
:18:26. > :18:30.don't know. Analysis is being done. A final thought for you. I think
:18:31. > :18:36.there was a Summit of the Americas in Panama last year. You said, when
:18:37. > :18:44.talking about the growth of the Latin economy, the quality.
:18:45. > :18:49.Therefore,, it is interesting that it appears to be one of the most
:18:50. > :19:00.unequal societies in Latin America, Panama. Why is that? We are country
:19:01. > :19:04.that is growing. We still have to address the situation. If you look
:19:05. > :19:11.at the poverty figures they have been dramatically dropping for the
:19:12. > :19:16.last 15-10- five years. A quarter of your population apparently is
:19:17. > :19:30.delivered in poverty. -- still lives in. You talk about -7% growth
:19:31. > :19:34.rates. -- 6-7. Fine. But you still have a quarter of your population
:19:35. > :19:38.living in poverty. We do. And our government will address that. We
:19:39. > :19:45.came into office with a commitment to prioritise that issue. We have an
:19:46. > :19:51.investment programme for a five-year term of millions of dollars. The
:19:52. > :19:57.poor of that is addressing water sanitation, a major issue of quality
:19:58. > :20:01.for people. -- the quality. Education. Giving people the
:20:02. > :20:06.opportunity to be part of this growth. That is definitely
:20:07. > :20:14.unfortunate. That is still a challenge for Panama. We have come a
:20:15. > :20:19.long way. Ultimately, you are a small nation and depend upon trade
:20:20. > :20:23.and the help of neighbours and major economic players like China.
:20:24. > :20:33.Venezuelan and Columbia as well, and Columbia is not doing that well. --
:20:34. > :20:38.Venezuela. It seems that your growth rates are slowing. According to the
:20:39. > :20:46.IMF, Columbia will be tonight economy in the world, quite a lot
:20:47. > :20:52.for such a small economy. -- the ninth. In terms of key factors,
:20:53. > :20:56.foreign direct investment, and so on, Panama is a very diverse
:20:57. > :21:02.economy. That has allowed us to continue to grow. We have some
:21:03. > :21:11.resilient and institutions that has allowed us to continue in that
:21:12. > :21:17.direction. -- resilience. If you look at the forecast, that is what
:21:18. > :21:23.the forecast says. I will end with one more thought on the reputation
:21:24. > :21:29.issue. Manuel Noriega is in a Panamanian jail. Will he spent the
:21:30. > :21:34.rest of his life there? About a year ago... Could your government
:21:35. > :21:41.releasing ever? There is a lot of debate about that. The country is
:21:42. > :21:47.divided on the issue still. It was a hard period for Panama. I cannot
:21:48. > :21:50.tell you what will happen. He may be in a jail for the rest of his life
:21:51. > :21:58.in your country and you have suggested to me there may be moves
:21:59. > :22:03.to bring the last president into a Panamanian court, and who knows,
:22:04. > :22:09.possibly a prison as well. But if they are both languishing in prison
:22:10. > :22:15.while you say your country now is a modern, clean... Those are concrete
:22:16. > :22:25.examples we are cleaning up our act. We are saying, "no more." We
:22:26. > :22:38.will not accept those conducts. It is not what we want to be. It is not
:22:39. > :22:47.true -- truly what we are. What about the Zika virus? Panama has not
:22:48. > :22:55.been exempt. How can you ensure you protect your population? In the case
:22:56. > :23:00.of anima, because we are... We have forests and have been forever
:23:01. > :23:07.fighting these types of diseases and we have experience with it, the
:23:08. > :23:13.Cabinet agreed upon a degree last year, not because the situation was
:23:14. > :23:19.out of hand, but because we want to be repaired, we are going to take
:23:20. > :23:26.strict measures to control the spread of the mosquito. -- decree.
:23:27. > :23:31.-- prepared. It is a fundamental public health challenge. Is your
:23:32. > :23:38.government really capable of meeting that kind of public sector
:23:39. > :23:41.challenge? Completely. The Ministry of Health... As I said, we are
:23:42. > :23:46.cooperating with other countries on this issue. We have strong
:23:47. > :23:51.experience with this type of situation, so, yeah, we are very
:23:52. > :24:01.well prepared and have taken measures and are working hard. Madam
:24:02. > :24:07.vice president, thank you very much for coming on HARDtalk. Thank you so
:24:08. > :24:22.much for the opportunity. Thank you. Temperatures as low as -8
:24:23. > :24:27.in Scotland. Into Monday it will be a cold
:24:28. > :24:31.and frosty start.