Two decades of corruption in Panama: $5 billion+ public funds lost

An exhaustive analysis of 90 emblematic corruption cases in Panama reveals the devastating economic and institutional impact on the country. Between cost overruns, irregular concessions, and fund diversions, it is estimated that over $5.1 billion has been lost from the public treasury over the last two decades.

The Cost of Corruption

The investigation highlights two emblematic cases. The first is the Odebrecht scandal, in which cost overruns in public works projects between 2006 and 2019 exceeded $2 billion, making it the largest corruption case in recent history. The second concerns the Panama Ports Company (PPC) concession, which caused losses of over $1.2 billion due to unfavorable contractual modifications for the State.

The remaining 88 cases include fund diversions in social programs, poorly constructed roads, inflated purchases, and acts of clientelism, totaling an additional $1.5 billion in losses.

Socioeconomic Effects

The $5.1 billion lost represents nearly 6% of Panama’s gross domestic product (GDP) in 2024. This amount surpasses the combined annual budgets for education and health, as well as the contributions from the Panama Canal to the national treasury. The lack of public investment also left indigenous communities, such as the Ngäbe Buglé region, in extreme exclusion, leading to multiple preventable tragedies.

Institutional Challenges

The situation is worsened by impunity. Of the 90 analyzed cases, only a dozen resulted in firm convictions, while most advanced slowly or stalled in an obstructed judicial system. Experts suggest that weak institutions, lack of resources, and an absence of political will have perpetuated the lack of accountability for those responsible.

What Might Have Been Accomplished?

With the $5 billion lost, critical infrastructure such as bridges, roads, and school transportation could have been built to prevent human tragedies and reduce social exclusion in marginalized communities.

Corruption in Panama has not only eroded public trust in institutions but also compromised the ethical fabric of public administration. The solution requires structural reforms to enhance transparency, punish corruption, and restore integrity to public office.

Source provided by: La Estrella de Panamá https://www.laestrella.com.pa/panama/nacional/panama-dos-decadas-de-corrupcion-y-mas-de-5-mil-millones-en-fondos-publicos-perdidos-FM18633767