Panama: Whose agenda?
Berryman, Phillip
INVASION AFTERMATH ONE CRISIS MAY LEAD TO ANOTHER When General Manuel Noriega walked out of the nunciature, Panama's fifteen days in the spotlight ended. A CNN reporter waiting in line for his...
...However, accompanying the crucial U.S...
...In cash terms the greatest cost incurred in the invasion was not the physical destruction, calculated to be $100 million, but the looting, in which merchants lost an estimated $700 million in merchandise and $200 million in plant and equipment...
...That might include some version of "Torrijismo," labor movements, and pressure groups from popular sectors...
...Although the new government will be trying to stimulate employment, it will be laying off large numbers of government workers...
...Communism may be dead," observed a priest, "but anti-communism isn't...
...Deposits plateaued and then declined (to $8 billion today) and the market for the goods of the Free Zone fell off...
...A CNN reporter waiting in line for his boarding pass can...
...One indication is the fact that a U.S...
...Since its currency is the dollar, Panama has been an attractive place for Latin American oligarchs and businesses to keep deposits-and inevitably for money laundering...
...The crucial question is not whether a security force be designated an army or a police force, but how it behaves...
...Two immediate difficulties come to mind...
...One test of whether the new government is truly democratic will be its tolerance for a broad spectrum of opposition...
...As the Pentagon and its allies scramble for a new raison d'etre in the post-cold-war world, Panama may assume even greater importance...
...during the California gold rush, a transisthmian railroad...
...Possibilities suggested to me include Hong Kong-style industries (perhaps with capital from Chinese fleeing Hong Kong) and efforts to stimulate nontraditional agricultural exports...
...Unemployment is estimated at around 35 percent...
...Panama does not have to defend its borders...
...In abolishing the army, Figueres calculated that he was eliminating a potential threat to himself, should he become president...
...Panama was also a haven for "paper" companies...
...Over the longer run the future of the U.S...
...One economist believes that the government will inevitably have to use repression to quell dissent against the economic policies it will be forced to enact...
...The Bush administration is already urging Panama to modify its bank secrecy laws to enable U.S...
...These losses, plus the effects of the U.S...
...invasion to resolve one crisis may engender others...
...authorities to investigate suspected money laundering...
...dollars is a large contingent of military and civilian planners and experts, who, one fears, may constitute a shadow government, laying down the parameters and leaving only the execution (and unpopular decisions) to the Panamanian government...
...Panama's economic future seems to entail more than reactivating the existing economy...
...The Bush administration has accepted responsibility for the physical reconstruction, but regards the loss from the looting as an insurance matter...
...Bush administration representatives insist publicly that the new Panamanian government must rapidly take charge...
...Thus Panama's hopeful steps toward demilitarization are taking place in an atmosphere of ambiguity...
...However, a representative of the Banking Association of Panama assumed it was in Panama's interests to maintain its present legislation...
...In addition there is to be a small, professionally trained body for carrying out investigation, and some specialized combat units for dealing with serious armed threats, whether from potential guerrilla groups or possibly international drug rings...
...Thus observers expect that the economic measures may produce social discontent, which the government might find it necessary to quell with repression...
...Developments in Panama, however, are sure to resurface as policy problems for the United States...
...responsibility for economic reactivation...
...A revised version of his Inside Central America (Pantheon) will be published this fall...
...didly told me they were now shifting their attention to the Soviet Union...
...The Santa Fe Committee's "proper force projection" no doubt means the ability to intervene militarily in Latin America, carry out military exercises and surveillance, or simply to intimidate putative enemies...
...In that connection it may be germane to recall that Costa Rica's decision to abolish its army was not immaculately conceived...
...Labor leaders with whom I talked strongly suspected that the new government would be repressive...
...If they had only a police force and not an army lusting after late model weapons, the savings could be applied to education, health care, and other programs, as is done in Costa Rica...
...economic sanctions, whose burden fell on the business community and the general public more than on Noriega himself, explain why Panamanians were saying the U.S...
...The Free Trade Zone in Colon functions essentially as a warehouse operation for merchandise, largely Japanese, destined for sale in Latin America and the Caribbean...
...Labor leaders and economists fear that the new government will take steps in this direction...
...Small specialized units could patrol the areas around the canal for such eventualities, but no conceivable Panamanian force could defend the canal from a strategic air attack...
...Panamanians see themselves as a trading country, and would like to assert their neutrality...
...They are convinced that with Panama awash in weapons, the wealthy might easily pay to have their dirty work done by death squads, as in Guatemala or El Salvador...
...The numerous high rises visible in TV reporting on the invasion reflected the period of expanding banks, financial services, and borrowing...
...Unless the new government can take measures that serve the needs of the poor majority, both urban and rural, many Panamanians might sour on the new order...
...congressman just back from a trip to Panama could breezily summarized his understanding of the 1977 Carter-Torrijos Treaties this way: "the Panamanians get the canal and we get the bases"-seemingly unaware that the treaties oblige the United States to give up the bases by the end of 1999...
...It is worth noting that the Santa Fe Committee, whose 1980 report served as a blueprint for the Reagan administration's Latin America policy, in a similar document issued in 1988 looked beyond the Noriega crisis to assert the need for discussions on "a realistic defense of the canal after the year 2000," which would include "the United States's retention of limited facilities in Panama...for proper force projection throughout the Western Hemisphere...
...Although it has an agro-export sector (bananas, coffee, beef, sugar), Panama's economic mainspring has been its "transit function": during colonial times, the gold shipped through Panamanian ports to Spain...
...in addition, some people, particularly those involved in the Civic Crusade, which led the anti-Noriega campaign and is the core of the new government, see the twenty-one years of military rule, including the populism of General Omar Torrijos (1968-1981), as negative...
...and during this century, the canal...
...In fact, the best guarantee for the safety of the canal would be a stable, prosperous, peaceful-even demilitarized-Panama...
...Unprecedented numbers of people are joining gun clubs to learn how to shoot...
...Starting in the 1960s Panama became a major finance center to the point where it now has 110 banks (only 17 of them Panamanian...
...In addition to such rational considerations, one can sense a visceral reaction to the country's recent experience...
...Many of the functions that Noriega's military had carried out, such as running the prison system, immigration, and transportation, would pass into civilian hands, and the new security bodies will no longer be financially independent but will be accountable to civilian authorities...
...military bases in Panama is likely to prove problematic...
...These various issues-demilitarization, the bases, economic recovery, the political future-all point toward the U.S., which holds most of the cards...
...The base issue should be kept in mind in connection with what I see as the most positive outcome of the invasion, the possibility that the new Panamanian government might opt not to have an army...
...Ironically, whereas in neighboring Central America the business sector relies on military repression, in Panama the same sector is the most enthusiastic over the possibility of demilitarization, while it is nationalists and the miniscule Left that is most suspicious of the proposal...
...Some Panamanians are more concerned about a crime wave with which the still small Public Force seems unable to cope...
...Panama's political future is unclear...
...Increasing the debt was no longer an option, and in fact even under Noriega the International Monetary Fund and the World Bank began to pressure Panama toward structural adjustment (reduced public expenditures, and in a more general sense reorienting the economy away from services and toward production...
...Installed by U.S...
...More than one person sensed a witch hunt in the making...
...PHILLIP BERRYMAN Phillip Berryman, a writer and translator, lived in Panama and Guatemala/or twelve years...
...Vice-President Arias Calderon believes the possibility of Panama's internal demilitarization can be unlinked from that of the bases and he implied that the changes sweeping the world should eventually make it easier for the United States to relinquish the bases as the treaty demands...
...on one side stands armyless Costa Rica, and on the other, the eastern half of the country leading to Colombia is a dense jungle with no road of any sort...
...Predictably, the insurance companies, most of them foreign, argue that they are not liable for acts of war, while the merchants' representatives view the looting as robbery, for which they are covered...
...As Vice-President and Minister of the Interior Ricardo Arias Calderon explained the plan to me, the bulk of the new Public Force would carry out police functions...
...Destruction of the dams that maintain the water level of Gatun Lake at its center would in effect pull the plug on the canal and put it out of commission for a long time...
...The most pressing immediate concern is economic reactivation...
...In the go-go atmosphere of economic growth, the Torrijos government could continue to borrow...
...He also told me that the amount of money laundered in Panama is not as large as is often imagined...
...troops and dependent on massive aid, the new government will have little leverage when it comes to defending Panamanian interests in any clash with the Bush administration...
...At the moment, concerns focus around U.S...
...In the early 1980s deposits reached $32 billion (as compared with the country's GNP of $5 billion at that point...
...No one doubts that the ticket headed by Guillermo Endara won the election last May overwhelmingly-I heard no calls for new elections...
...Repudiation of the Noriega regime is universal...
...Moreover, those occupying cabinet and other top administrative positions are acknowledged to be upright and competent...
...As an economist explained it to me, the deeper economic crisis antedates Noriega's fallout with the United States...
...The war was fought against a coalition that had instituted social reforms-which the leader of the opposing and ultimately winning side, Jose Figueres, largely adopted...
...It was the outgrowth of the 1948 civil war in which two thousand people died...
...Or, as a former U.S...
...President Guillermo Endara welcomed the Bush administration's proposal of $1 billion in aid, half of which is to be used for debt servicing-the Noriega government stopped payment a couple of years ago-and the other half for development projects and economic reactivation...
...military attache speculated on "Nightline," terrorists could attack ships passing through the canal to the point where insurance companies would no longer issue policies...
...Demilitarization has considerable rational appeal...
...Through internal transactions with their Panamanian affiliates, transnational companies can evade taxes...
...The Latin American economic decline and debt crisis brought that kind of growth to a screeching halt in 1982...
...To some observers, however, they look like a rerun of pre-1968 civilian politics...
...should provide $1.5 to $2 billion in new aid...
...Nationalists fear that demilitarization would make it all the easier for the United States to argue its need to retain the bases since Panama would obviously be unable to defend the canal...
...The U.S...
...Actually the canal seems largely indefensible...
Vol. 117 • March 1990 • No. 5
