Panama's Social Security reform and the risk of social unrest

Seeking to balance the operating deficit of the pension subsystem of the Caja de Seguro Social (CSS), which projects a negative balance of $1.2 billion at the close of the fiscal year, by raising the retirement age of workers instead of collecting overdue employer contributions will reignite protests from teachers' unions and construction workers.

Credit rating agencies are pressing for parametric reforms that would reduce the pension benefits of future retirees, while large commercial corporations evade payment of employer contributions without facing exemplary sanctions.

Putting Panama's social security system back on sound footing requires a public audit of the collection of evaded employer contributions, the elimination of privileges for private administrators, and a direct fiscal levy on the profits of the banking and logistics sectors.