Panama president-elect builds business-friendly cabinet

Panama President-elect Jose Raul Mulino on Thursday pulled business leaders and an economist into his ranks, the first cabinet selections in what Mulino has promised will be an administration friendly to the private sector.

Mulino, whose government will begin the transition process next month, tapped business leader Felipe Chapman for the economy and finance minister post and economist Javier Martinez-Acha as foreign minister.

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"The campaign is over, from here on out it's our job to lead the country with the best people possible," Mulino said.

Chapman is the son of former Planning Minister Guillermo Chapman.

His appointment is "clearly a positive development, one that increases the likelihood of more sound fiscal management in upcoming years," wrote analysts from BancTrust & Co. in a note to clients.

Julio Molto, head of the national police under Martinelli, will also serve as trade minister. In his role, Molto will oversee the closure of the once-lucrative First QuantumFM.TO copper mine in the nation.

Martinelli is a close ally of Mulino's and had headed the presidential ticket before his run in this month's elections was disqualified and Mulino took his place.

The former president holed up in the Nicaraguan embassy in Panama City after his conviction in a money-laundering case known as "New Business" was upheld, though he still wielded outsized influence on the election, with Mulino visiting him after the vote.

Despite the legal troubles, Martinelli's 2009-2014 administration was an economic bonanza, with businesses and job creation booming.

Mulino has vowed to follow Martinelli's economic strategy, though "the new authorities will have to overcome the challenges that are being inherited from the (outgoing) administration," the BancTrust analysts wrote.

"Maintaining the country on the path of fiscal consolidation continues to be unlikely in the short term," they cautioned.

Mulino also named Jose Icaza, the former head of Panama's chamber of commerce, as minister for the Panama Canal. The trade route, one of the world's busiest, has been hit by a recent drought and daily crossings have been limited.

The president-elect said on Thursday he still had to name an interior minister and education minister.