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Varela inaugurated as Panamanian president

Tuesday - 7/1/2014, 6:12pm  ET

Panama's President Juan Carlos Varela, left, waves flanked by his wife Lorena Castillo after his swearing in ceremony as new president in Panama City, Tuesday, July 1, 2014. President Varela was sworn in at the Rommel Fernandez National Stadium before thousands of supporters and promised to introduce price controls on basic food products, which was a linchpin of his presidential campaign. (AP Photo/Arnulfo Franco)

PANAMA CITY, Panama (AP) -- Juan Carlos Varela assumed the Panamanian presidency Tuesday and immediately took steps that he said would reduce violence and control the price of food.

The former vice president issued a decree to stabilize the price of pantry staples in the Central American after taking office. He also announced an amnesty to allow gang members to surrender their weapons.

Varela, 50, was inaugurated to a five-year term in the capital's soccer stadium before thousands of supporters and dozens of hemispheric leaders under a cloudy afternoon sky.

The free-market conservative pledged to govern with honesty and transparency.

He takes office with a legislative minority that will force him to negotiate with the centrist and center-left politicians that dominate Congress. He will also take charge of maintaining the country's record-low unemployment rate and strong economic growth that averaged more than 8 percent annually in recent years.

Varela won the presidency in May after one of the toughest-fought contests since democracy was restored two decades ago. He captured 39 percent of the vote, compared to 32 percent for outgoing President Ricardo Martinelli's choice, political newcomer Jose Domingo Arias.

The win was interpreted as a rebuke to Martinelli, who was Varela's political ally before the two turned rivals in 2011, even as Varela continued to serve as Martinelli's vice president. No incumbent party has won re-election in Panama since the United States' 1989 overthrow of military strongman Manuel Noriega

Among the dignitaries in attendance Tuesday were U.S. Secretary of State John Kerry, Spanish Prime Minister Mariano Rajoy and Taiwanese president Ma Ying-jeou.

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