By Sean Mattson
PANAMA CITY (Reuters) - A supermarket tycoon with a multimillion-dollar fortune is the favourite to win Panama's presidential election on Sunday as voters look for assurances their economy can weather the global economic crisis.
Pro-business conservative Ricardo Martinelli, 57, has a double-digit lead in opinion polls over ruling party leftist Balbina Herrera, who has an anti-U.S. past and old ties to a former military strongman that rankles with some voters.
President Martin Torrijos' Revolutionary Democratic Party, or PRD, has strong support among lower-income voters but its popularity has sagged as prices of staples like milk and bread have soared in recent months and crime has spiked.
"We're tired of promises," said teacher Jose Cedeno, 52, who spends a chunk of his $900-a-month (603-pounds-a-month) salary on increasingly expensive food. "Prices haven't stabilised."
Fuelled by luxury apartment construction, U.S.-Asia trade through the country's famous canal and a robust banking sector, Panama's dollar economy has led Latin America with near or above double-digit growth for the last two years.
Analysts expect growth to fall to 3 percent or less this year as credit dries up, canal traffic drops and activity in Panama's Caribbean free-trade zone slows, another concern for voters fed up with high inflation and widespread crime.
Martinelli had a 14-point lead over Herrera in an April 23 poll and just needs to get more votes than his rival to win even if he falls short of 50 percent. A Martinelli victory would contrast with a shift to the left in much of Latin America in recent elections.
A U.S.-educated and self-made businessman who owns Panama's largest supermarket chain and is a former minister of Panama Canal affairs, Martinelli has promised massive infrastructure spending to create jobs if he wins.
Martinelli said on Friday he wanted to impose a flat tax of between 10 or 20 percent, raising tax rates on the banking and insurance sectors but lowering them for small-business owners.
His self-financed campaign budget dwarfed Herrera's and images of the white-haired magnate helping at a banana plantation and tossing bags of garbage into a truck on an urban collection route highlighted his attempt to win support from poorer voters usually faithful to the PRD. A charity he runs that funds education also helped.
"He has a lot, he's not going to steal. He's rich, but he's one of the rich who gives to the poor," said Ercilia Ramos, a poor 60-year-old cattle farmer.
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The PRD's Herrera clashed with Washington when she led protests against former U.S. President George H.W. Bush when he visited Panama after a 1989 U.S. invasion ousted military dictator Gen. Manuel Noriega.
Herrera, 54, has had trouble distancing herself from old links to Noriega, who is in a Florida prison serving a sentence for drug trafficking and money laundering. He has said he hid in Herrera's home from U.S. soldiers during the 1989 invasion.
She says now she would maintain close U.S. relations and her campaign proposals are similar to Martinelli's.
Both candidates say they will tackle crime and inflation while helping the poor with education and infrastructure, although neither is expected to run up a big budget deficit.
Foreign investors say they doubt either would upset Panama's economy or investment climate.
"Panama is a very good place to do business. It is a very easy place to come and go, governments usually don't interfere," said Roger Khafif, the developer of the $450 million Trump Ocean Club in Panama City. "We don't really think ... whoever wins will be a detriment to our business."
An agricultural engineer turned politician with stints as a mayor, a lawmaker and as housing minister, Herrera was one of six siblings raised in a rough Panama City neighbourhood by a single mother who cleaned houses for a living.
Her past appeals to voters like Maria Zuniga, who gives pedicures on the street and sees Herrera as hard on crime. "Things will surely change because she's a tough woman."
A third candidate, former President Guillermo Endara, 72, trails far behind in polls with about 5 percent support. Panamanians will also elect a new legislature on Sunday.
(Additional reporting by Mica Rosenberg; Editing by Catherine Bremer and Peter Cooney)
