Panama hit by violence in pension reform protests

PANAMA CITY - Panamanian police battled thousands of demonstrators around the national assembly on Wednesday in the third straight day of fierce protests against pension reforms.

Construction workers and teachers joined the protests and burned effigies of President Martin Torrijos, promising "sticks, stones and molotovs" if the reform proposals became law.

Protesters hurled bottles and rocks at police, who responded with tear gas and shotgun blasts.

Thousands fled choking as armoured police vehicles combed the area and made arrests. No serious injuries were reported.

The social security system's reserves are inadequate for its future pension commitments, and the government needs pension reform to rein in a hefty budget deficit.

Cleaning up public finances is key to Torrijos' ambitious plan to expand the country's interoceanic canal, whose locks are too small for a new generation of vast vessels.

Torrijos is the son of the popular former dictator General Omar Torrijos, who negotiated 1977 treaties that won back control of the canal from the United States in 1999.

Martin Torrijos won an easy victory in last year's presidential elections but many Panamanians are upset with the social security reforms, which would raise the retirement age and force workers to pay more in contributions.

The reforms are likely to pass into law quickly as Torrijos' ruling Democratic Revolutionary Party holds 46 of the 78 seats in the national assembly.

"He isn't consulting the people. There are over 200 articles to be debated. It's all happening too quickly," said Carlos Sanchez, a teacher, during the protests.

The reforms must pass two debates before they become law. The first debate began on Tuesday and is expected to conclude swiftly. Construction unions, teachers, and other unions have threatened a nationwide general strike when that happens.

Public schools in several provinces have been closed after students battled with police and looted shops and cars on Monday and Tuesday.

- REUTERS