On October 9, 2026, a powerful earthquake struck Panama, shaking buildings and sending frightened people out into the streets. It was one of the strongest tremors Panama has felt in recent years. I have lived here for seven years, and Panama is home to my family and me, so it was hard to watch towns like Macaracas and Tonosí count their losses. One woman who was badly injured during the earthquake later died in hospital, and my thoughts are with her family.
As the aftershocks continued, my mind kept going back to Venezuela. Two earthquakes of about the same strength killed more than 6,500 people there in June 2026. Many families lost a parent or a child in seconds. I feel for all of them.
An earthquake is a natural disaster, but the number of people who die depends partly on the conditions in the society it strikes. People credit the market economy with growth and cheap goods, but rarely with the buildings that remain standing after an earthquake. It creates the wealth to pay for safer buildings and gives builders a reason to deliver them. It also encourages better regulation.
In this article, I will compare the two disasters and look at how a market economy and a socialist one shaped what happened, both before the ground moved and after.
A magnitude 7.7 earthquake struck southern Panama on October 9, 2026, leaving hundreds of families homeless, damaging schools, and forcing entire communities to face a long recovery and rebuilding process
The earthquake happened at 12:56 p.m. Its epicentre was the Azuero Peninsula in southern Panama. While the U.S. Geological Survey (USGS) measured the earthquake at magnitude 7.7, the University of Panama's Institute of Geosciences determined it to be 7.5.
The damage was serious in the worst-hit towns. In Penonomé, the San Juan Bautista Cathedral was damaged, and part of the Hotel Dos Continentes came down. Within hours, the Panama Canal was operating normally, and Tocumen Airport was back to taking flights. By October 14, more than 4,000 families had been affected, including 879 families who had lost their homes, with serious damage reported across several provinces. More than 600 schools were damaged, and about 3,700 people were sleeping in temporary shelters. At least 27 people were injured. Elena Barría, 68, from Macaracas, was badly hurt when her house collapsed, and she died in a hospital in Panama City five days later.
The disaster did not end on October 9; aftershocks have continued to rock the country for days. Thousands now face mounting repair costs, and the 879 families who lost their homes must start over from scratch. Schools need repairs before classes can resume, and many residents still rely on temporary shelter and emergency aid. While nothing can compensate for the loss suffered by Elena Barría’s family, for everyone else, the recovery will take months. The hardest-hit towns, like Macaracas and Tonosí, will need help for a long time.
Panama City’s modern skyline reflects decades of investment in stronger construction, building standards, and oversight, helping make its infrastructure more resilient to major earthquakes
A building’s chances of surviving an earthquake are largely decided years before the shaking starts. Deeper foundations, heavier reinforcement and a proper soil study all cost money. Panama has grown wealthier over the past two decades, giving families and companies the resources to build structures suited to the ground they stand on.
Money is spent wisely only when someone checks how it is used. A Panamanian developer usually builds with borrowed money, and the bank wants the structural plans before it lends. Insurers have an interest in assessing the risks, and buyers can demand the relevant documentation before committing their money. Each stands to lose money if the building fails, so each has a reason to check the work. A developer known for cutting corners will struggle to sell their next project.
In a market economy, the government has a smaller job, but it is an important one. Panama’s government writes and enforces the building code, then lets private builders get on with the work and take responsibility for it. Panama had arranged catastrophe-insurance coverage before the earthquake, and the government plans to use insurance proceeds and non-repayable donations to help fund recovery, limiting its need for additional borrowing. Venezuela’s government tried to do everything itself.
Rescue workers sit amid the rubble in Venezuela, where devastating earthquakes left thousands dead or homeless, raising serious questions about construction standards, building safety, and government oversight
Venezuela’s disaster began at 6:04 p.m. on June 24, when a magnitude 7.2 earthquake hit the north of the country. Less than a minute later, a second and stronger quake followed, a 7.5 centred just off the coast near La Guaira, north of Caracas.
The earthquakes were comparable in magnitude, although the intensity of shaking and the number of people exposed differed considerably. The U.S. Geological Survey measured Panama’s at 7.7, and it killed one person, while Venezuela’s twin shocks killed more than 6,500 people and left over 17,000 homeless. In the coastal town of Caraballeda, security cameras near a bowling alley captured eight apartment towers collapsing in less than a second. Behind those numbers are thousands of families grieving loved ones, as well as survivors who have lost their homes and everything they owned. The collapse of those towers raises a serious question: why were they approved for construction there in the first place?
Many of the towers that fell in Caraballeda were built by the state. In 2010, floods and mudslides displaced more than 100,000 Venezuelans, and Hugo Chávez's government rushed to rehouse them through its signature housing program. It built towers ranging from 10 to 20 storeys on a coastal strip near the San Sebastián Fault, where centuries of flooding had deposited loose soil. Experts told Associated Press (AP) reporters that buildings of that height can sway in sync with seismic waves until their columns break.
Because no building plans or inspection records are publicly available, it is not possible to verify independently whether the towers met Venezuela's building code. The government has not made the blueprints, soil studies or inspection records public. The families who moved in were assigned their apartments. The families who moved in were assigned their apartments through a state housing programme. They had no direct role in selecting the site or approving the structural designs. The state chose the site, approved the work, and still holds the files. Socialism puts the builder and the regulator in the same office, and nobody can take that office to court.
Before the quakes, the government had let its seismic instruments go dark, leaving scientists without measurements of how hard the ground shook in Caraballeda. A Stanford team had to reconstruct the motion frame by frame from security-camera footage. The government also has not released any official forensic findings explaining why the towers collapsed.
Venezuela’s economy shrank by roughly three-quarters between 2013 and 2021, after years of price controls and the seizure of private companies. When a country loses that much income, maintenance is one of the first things to go, and new buildings get whatever standard the budget can still afford.
Caracas, Venezuela, where the government's inadequate earthquake response left residents relying on neighbours and foreign rescue teams, raising serious concerns about accountability and disaster preparedness
When the shaking stopped, the state failed again. While local residents dug through piles of concrete with shovels and their bare hands, police and soldiers spent most of the first three days directing traffic in La Guaira. Official teams either brought no equipment at all or arrived with woefully inadequate gear. Survivors say that most of those pulled alive from the rubble owe their lives to their neighbours or to foreign rescue teams that arrived with thermal cameras and trained dogs. According to an Associated Press investigation, money and political connections determined which buildings received priority for aid. I cannot imagine a clearer illustration of an unaccountable administration than state officials who show up at a disaster site, take a selfie in front of the debris, and then simply walk away.
Government decisions are not the only factors affecting the death toll. The location of each earthquake, the population exposed, and the intensity of the shaking also matter. Geography accounts for part of the difference in death tolls. Panama's earthquake struck a relatively sparsely populated peninsula about 200 kilometres from the capital. According to USGS estimates, approximately 815,000 people were exposed to strong shaking or worse, including 201,000 who experienced very strong shaking and 6,800 who experienced severe shaking. In Venezuela, millions of people were exposed to severe shaking, according to early estimates from the Pan American Health Organization. The ground motion in Caraballeda was among the strongest ever documented.
This does not mean that all well-built towers would have remained standing. The record shows a government that built on ground its own history warned against and kept no public account of how it did so. Those were political choices, made in a system where nobody outside the state could object. In a market economy, lenders, insurers and buyers would have questioned them long before the ground moved.
Panama’s government has taken a fiscally responsible approach to earthquake recovery, prioritizing pre-arranged insurance coverage and donations, maintaining its deficit ceiling, and committing to transparency in reconstruction spending
Two days after the quake, Panama's Ministry of Economy and Finance said recovery costs could be accommodated within the 2026 deficit ceiling of 3.5% of GDP. The ministry said it would not ask the National Assembly to suspend that limit, even though the Cabinet had authorized such a request the day before.
Panama plans to pay for the recovery first with insurance it bought before the quake, along with donations and other funds that do not have to be repaid. The government will borrow only if those funds are insufficient. The government has established separate trusts to manage recovery funds, including one involving the National Bank of Panama and another administered by the private sector, and the government has promised to make the spending visible on a public website. Panama's finance ministry says it expects to cover the emergency costs without exceeding its existing deficit ceiling, prioritizing insurance proceeds and donations before considering additional borrowing.
Venezuela faces a much larger reconstruction bill and has far fewer resources to cover it. The World Bank puts the direct physical damage at $19.6 billion, and nearly half of that is housing. Most of the rest is roads, power lines and public buildings, which a country needs working before businesses can reopen and investors will come back. It warns that, without increased public and private investment, reconstruction could remain incomplete even after ten years. The challenge is attracting private investment. Investors put their money where contracts are honoured, and property rights are protected. Yet for two decades, the Venezuelan government seized private companies and land. Now it needs those same investors to come back and rebuild.
Panama City’s skyline stands as a reminder that strong construction standards, economic stability, and responsible investment play an important role in protecting lives and building resilience against future earthquakes
My thoughts are with the families in Panama and Venezuela who are still living with the consequences of these earthquakes. Some have lost loved ones, others have lost their homes, and many face months or years of rebuilding. With aftershocks continuing, the fear and uncertainty have not gone away. I hope those affected receive the help and support they need to rebuild their lives.
Earthquakes will keep coming to both countries, and nobody can stop them. What a country can change is how it builds before the next one, and that depends in part on whether its economy rewards doing the job properly.
For a family choosing where to live, a strong market economy is part of the safety plan and a source of jobs and growth. The economic system helps determine whether the building in which you live was checked by people with their own money at stake. But no system can guarantee safety, and buyers still need to do their own checks.
If you are considering buying property in Panama, understanding the local market, property rights, and the risks involved is essential before making a decision. To do so, download our free guide, Panama Real Estate: A Practical Guide for International Buyers.