Panama votes with millionaire magnate as favourite
PANAMA CITY (Reuters) - Panama voted on Sunday in elections which could choose multimillionaire supermarket magnate Ricardo Martinelli as president, bucking a trend of left-wing leadership wins in Latin America in recent years.
Before the vote, opinion polls gave conservative Martinelli a double-digit lead over Balbina Herrera of the ruling centre-left Revolutionary Democratic Party, or PRD, whose government has struggled to rein in crime and high prices.
Concern about the flagging economy and high inflation has dominated campaigning.
"Before, with $20 you could buy a lot, now the prices are double," Edith, a 47-year-old maid, said after casting her vote for Martinelli's Democratic Change party in the run-down neighbourhood of Calidonia. "As a businessman he might be able to figure out how to improve prices."
Fuelled by U.S.-Asia trade through its transoceanic canal and robust banking activity, Panama's dollarised economy has led Latin America with growth of near or above 10 percent in recent years. But 2009 growth could slow to 3 percent or less as the global crisis hits credit and shipping.
The ruling PRD has a strong support base and President Martin Torrijos has been popular, but Herrera has an anti-U.S. past and old ties to a former military strongman that rankle some voters.
Herrera, wearing a traditional embroidered dress, attended mass and then voted at a local high school.
Martinelli, in sneakers, voted midday surrounded by journalists. Polls close at 4 p.m. (10 p.m. British time). He had a large lead in opinion polls before voting.
Both candidates have promised to take a tough line against crime -- a popular message in Panama, which is a transit point for South American cocaine trafficked to the United States.
Shots were fired at a polling station in the coastal town of Colon, rattling voters, but no injuries were reported and officials said the incident was gang-related.
GROWTH SEEN FALLING THIS YEAR
In a parallel parliamentary vote also held on Sunday, analysts said the PRD's well-established political base might give it a majority in the 71-seat Congress, creating an opposition that could complicate Martinelli's rule if he wins.
Demand for luxury apartments in the skyscrapers that dominate Panama City's skyline is dropping. Builders say some projects are on hold and half-built condos are up for sale.
Both candidates plan to use infrastructure projects to inject some life into the economy and push ahead with an ambitious $5.25 billion (3.52 billion pound) expansion of the canal.
But neither is expected to run up a big budget deficit, which could worry foreign investors drawn for years to the country's booming service and property sectors.
Martinelli, 57, a U.S.-educated and self-made businessman who owns the dominant Super 99 supermarket chain, wants to build ports, highways and a Panama City subway if he wins.
He also would impose a flat tax of between 10 percent and 20 percent to appeal to foreign investors keen for a clearer tax code, but the measure would raise taxes on Panama's thriving banking and insurance sectors.
Both candidates back a free trade accord with the United States, which has been held up in the U.S. Congress by concerns about Panamanian labour rights and tax evasion.
Herrera, 54, clashed with Washington when she led protests against former President George H.W. Bush when he visited after a 1989 U.S. invasion to oust Gen. Manuel Noriega, a dictator who was jailed in the United States on drugs charges.
Herrera, a former housing minister, has tried to play down her old links to Noriega, who has said he hid in her home from U.S. soldiers during the invasion. Her supporters say that is history.
(Additional reporting by Elida Moreno; Editing by Pascal Fletcher and Mohammad Zargham)