Panama groups reject deal with govt, resume blockades

Fresh demonstrations have begun in Panama as pressure groups turned their backs on a deal signed with the government to end their protest in exchange for a fuel price cut.

After union leaders consulted grassroots supporters on the deal announced on Sunday, it was decided to continue the protest, said Luis Sanchez, a leader of the Anadepo civic grouping on Monday.

"We had warned the executive that we still have to consult the rank and file," he told the TVN-2 channel.

The agreement, he added, "was signed under pressure" and members have opted to continue the mobilisation that had seen trucks and banner-waving demonstrators paralyse the strategic Pan-American Highway.

"In the meantime, there is no agreement," said Sanchez as he tore up a sheet of paper.

'No food, no buses'

On Sunday, the government and some protest leaders announced a deal to end more than two weeks of demonstrations over high fuel prices and rising living costs in the country of 4.4 million people.

The outpouring has cost the economy millions of dollars in losses and has led to shortages of fuel and food in some parts of the country, according to the private sector.

"We are in a bad way; no food, no buses. I wanted to buy rice and... what little can be found is very expensive. The vegetables are damaged," said Angelica Ruiz, a resident of Pacora east of Panama City who also had trouble getting to her place of work.

The government agreed on Sunday to cut the price of petrol to $3.25 per gallon and pursue talks on lowering food and medicine costs that were key among protesters' concerns.

Last week, it had already reduced the petrol price to $3.95 from $5.20 per gallon in June, but this was not enough to appease the demonstrators.

After Sunday's announcement, several unions said the so-called agreement was inadequate and had left out many groups.

"We will stay on in the street," said protester Juan Morales, a farmer from Capira, west of Panama City.

"We will not weaken. We need strong and positive answers," he told the AFP news agency.

Economic struggles

The biggest protest on Monday was in the capital, with members of the Suntracs construction union closing access to roads with burning tire barricades, causing massive traffic backups.

There were also new blockades of the Pan-American Highway that connects Panama with the rest of Central America and is the main transport route for goods through the country.

The protests come amid difficult economic times for a country with inflation of 4.2 percent recorded in May, along with an unemployment rate of about 10 percent and fuel price hikes of nearly 50 percent since January.

Despite its dollarised economy and high growth figures, the country has a high rate of social inequality.