What lies ahead for Panama amid ongoing unrest?

Intelligence Update

Tensions have escalated in the indigenous community of Arimae, Darién province, eastern Panama, after officers from the national Border Service (SENAFRONT) clashed with locals from the Emberá Wounaan during a protest on 05 June 2025. For nearly two months, demonstrators, including teachers, workers from (construction and banana industries), students, and healthcare workers, have barricaded and erected roadblocks along a major road that connects Panama to other Latin American countries. The protest is against the new Social Security Fund law (Law 462) and a security agreement involving U.S. personnel and contractors. Unions also embarked on an indefinite strike action since April 2025.

In response to the recent protest, police used tear gas and rubber bullets to disperse the crowd who in return threw Molotov cocktails and stones. Local news reports indicate casualties on both sides, although official figures are unavailable. Videos circulating on social media show residents and protesters running amid sounds of what appear to gunshots, with a building on fire. SENAFRONT reported that three of its officers were hospitalised, one of whom suffered severe injuries, including a hand reportedly severed by a machete. Images shared online also depicted a protester with pellet wounds and another with a facial injury.

Why the protests?

In March 2025, the National Assembly approved reforms to the Social Security Fund Law. It requires employers to pay more into the social security system. Despite these changes, the retirement age remains unchanged, which is still set at 57 for women and 62 for men. Additionally, some informal workers will also have to start making contributions. A recent poll indicated that over 80% of Panamanians oppose the reform. When José Raúl Mulino assumed office back in 2024, he faced many challenges, including opposition to his planned reforms. Reportedly, previous governments had ignored warnings and did not fix the country's crippling social security system. This has made Mulino’s job as leader even harder as he tries to implement some changes. He has vowed not to withdraw the law and promised to stop protesters from blocking the roads.

These months long protests are not limited to Darién province. Communities in the province of Bocas del Toro are also demonstrating against the law. They have kept several roads blocked despite repeated pleas from the government. Another issue fueling the protest is the security agreement with the U.S. concerning the Panama Canal, which allows U.S. troops access to air and naval facilities. Protesters see it as a “violation of national sovereignty”. President Trump’s controversial remarks about taking over the canal has made the situation worse.

What are the implications of the unrest?

One of the major points to highlight is the economic impact of these protests. The government has warned that ongoing demonstrations threaten the local economy. For instance, Chiquita Brands, a major U.S. banana company, has closed one of its plantations in Bocas del Toro indefinitely after reportedly losing around US$10 million in exports. The company had previously fired approximately 5,000 workers who participated in the strike.

Authorities have expressed concerns that the situation could escalate the health crisis in some parts of the country. Health Minister Fernando Boyd Galindo has raised alarms about the risk of disease outbreaks like dengue, malaria, and yellow fever. On 27 May 2025, the government declared a state of health emergency; however, the closure of several roads is disrupting medical care and making it difficult to have access to essential medicines and supplies.

Some schools have been forced to shut down temporarily due to the ongoing protests. Demonstrators have blocked access to the University of Panama (UP), leading the school management to suspend classes. This occurred amid an ongoing teachers' strike that began in April 2025 in protest over the reform.

These roadblocks can also affect border crossings. People trying to cross into Colombia through Darién or Costa Rica through Bocas del Toro are at risk of being impacted, especially if protests are active in those border areas.

The ability of the social movement coalition, Alianza Pueblo Unido por la Vida (People United for Life Alliance), to look beyond individual sectoral struggles and form alliances to challenge what they perceive as unfavourable government policies may have significant implications for the future of social activism in the country.

What to expect in the future:

• The major issues driving the protests remain unresolved, and attempts to suppress demonstrations may lead to further unrest and more disruptive actions. The reported casualties indicate that the situation has escalated to a more severe level.

• On 09 June 2025, the Alianza Pueblo Unido por la Vida has called for global action outside all Panamanian diplomatic missions worldwide. The movement aims to raise international awareness and support for their cause. Cities with large Panamanian communities are likely to see demonstrations.

• Protests are increasing the chances of changes to the pension reform. Given the strong opposition and the negative implications of the law, the government may be compelled to reconsider its position to prevent further demonstrations.

• The impact on cross-border trade is likely to become more evident as the demonstrations continue.