Panama
The State Dismantled
Envío team
Two years after the US invasion of Panama called "Operation Just Cause," President Guillermo Endara's government has become a subjugated, weakened and internationally isolated regime with little, if any, prestige. Its almost total economic and political dependence on Washington was underscored during 1991 and the occupation has been institutionalized to such a degree that Panamanians run the risk of effectively losing their country.
The key objectives of the December 20, 1989 invasion were to eliminate Noriega and destroy the Panamanian Defense Forces, thus guaranteeing US hegemony as well as its control over the Canal after the year 2000. US determination to control Panama's economic and political destiny for an indefinite period was palpable. The events returned Panama to the bourgeois democracy that had prevailed before 1968, when General Omar Torrijos took power.
In the first days of March 1992, Endara's lack of leadership reached tragicomic proportions: the US Secretary of Defense met with Endara for less than 15 minutes; another invasion of Panama figured among the seven world scenarios the Pentagon put forward to justify its budget; the government for the umpteenth time had to denounce a coup attempt, this one dubbed "Kill the Fat Man"; polls indicated that the population thinks anyone is better than the "fat man"; the Southern Command decided to carry out social projects that the government is not interested in heading up; and Panama's Vice President paid out $685.7 million to the World Bank, the Inter-American Development Bank, the International Monetary Fund and the Paris Club in exchange for their granting $700 million in new credits for 1992-93.
A treaty mortgages the nationA rereading of the 1988 Santa Fe II documents reveals that the State Department and USAID are willing to strictly apply their recommendations to Panama regarding the reform of its Constitution and judicial system. This has already been partially achieved with the signing and ratification of the Mutual Legal Assistance Treaty (TALM) between the United States and Panama, put forth as a condition of US foreign policy. From the time the treaty negotiations began in 1990, US officials, led by Michael Kozak, principal assistant to Under Secretary of State for Inter-American Affairs Bernard Aronson and future ambassador to El Salvador, conditioned any future economic assistance on the signing of the treaty.
The Endara government may not yet realize that the nation's future is being mortgaged, but it is more probable that Endara has been forced to cooperate, with reminders of his links to former Chilean secret police chief General Manuel Contreras, along with rumors that his fortune, estimated at $17 million, comes largely from his law firm's alleged links with the mafia and drug traffickers. With or without pressure, the fact is that the United States is an occupation force and thus can impose its will. Since the invasion, the US has officials in all of the Panamanian government's ministries and institutions.
Another "free associated state"?Although it seems exaggerated to say that the TALM transforms Panama into another "Free Associated State," the sad reality is that it formalizes the country's neocolonial status as a "hostage state." It makes the country's judicial system an appendage of the US Department of Justice and grants semi-legal status to the US presence. One Panamanian analyst said the TALM "guarantees the United States the right to impose its own legislation on Panama in any area of its territory."
"The Panamanian Constitution," reads one of the Santa Fe II documents, "should be modified to permit the extradition of Panamanian citizens guilty of crimes" committed in the United States, as well as Panamanians who have violated US laws. This is exactly what the strictest interpretation of the TALM formalizes. But the United States also imposed five other treaties, related in one way or another to anti-drug policies, as part of its foreign policy priorities. These treaties include the control of chemical substances used in processing cocaine, the interception of Panamanian boats at sea to search their cargo and confirm that they are not transporting drugs, the patrolling of the country's coasts—to be paid for by the Panamanians, in violation of their Constitution—and Panama's re-involvement in the Peace Corps program.
The US decision to remain in Panama until the year 2000 or for an indefinite period is also underscored by the fact that the US Drug Enforcement Agency (DEA) patrols all ports of entry and exit—including the country’s airport. US officials have also seized control of Panama's banking system and, by agreement, the US Treasury receives all economic information directly from the Panamanian treasury.
According to a Panamanian Foreign Ministry adviser who participated in the "negotiations" that brought about this situation, the real US interest is to destroy certain banking centers in the country that compete with US banks, and thus deal a mortal blow to the Panamanian banking system as a whole and the service economy that has flourished in the country in recent years. The TALM and all other agreements and treaties discussed here essentially lay the foundations for the dismantling of the Panamanian state.
"Panama is the canal"It is said that "Panama is the Canal and the Canal is Panama." The future of both is uncertain. During US Secretary of Defense Dick Cheney's February visit, a protocol was signed reaffirming that the United States will withdraw all its military bases in the Canal Zone, but US Ambassador Deane Hinton has already categorically stated that two military installations will remain. These installations, as suggested in the Santa Fe documents, will maintain ongoing intelligence activities and serve as a base for the US military force in the region. With control thus assured over the Panamanian state, there was no need for Cheney to speak more than 15 minutes with Endara. The majority of US bases will be dismantled as part of the Pentagon's planned budget cuts, but the behavior of both the Endara government and the Bush Administration make it clear that the groundwork is being laid to prolong US control over the Canal and that Panama is serving as a guinea pig for a far more ambitious project: "legalization" of US political, economic, social and cultural control over the Central American nations.
The civic activities of this year's "Strong Roads" operation, carried out annually by the Southern Command since the invasion, are substantially different from the penetration road projects of the previous two years. This year, the communities in the Veraguas province—near the Canal Zone and one of the areas most affected by the invasion—are being showered with hospitals, schools, housing units, access roads and medical attention. This attempt to win the hearts of the Panamanian population has the second aim of demonstrating the Endara government's inefficiency and general inability to govern, all on the eve of a discussion about whether Panama will have its own army or will prohibit the presence of any army in the country. Sectors of the Right want to convert this debate into a referendum on a constitutional reform dealing with the permanence of the US bases and the Panamanians' ability to administer the Canal.
The Canal brings in $5 billion annually and the Endara government has done nothing to facilitate its recovery. To the contrary, it has indicated that it cannot accept the transfer of the Canal installations because those that have already been handed over are deteriorating. Endara's negligence has provoked the US House of Representatives to express its concern that "Panama is not prepared to take control of the waterway in the year 2000." Some Panamanian politicians support this position and have begun to point out that the Panamanian state does not have the administrative capacity necessary to assume its responsibility after December 31, 1999. They therefore argue that the 1977 Carter-Torrijos treaties should be renegotiated.
This could mean that, within the plan to privatize all state goods and industries that the Panamanian Legislative Assembly will be discussing in 1992, the government is preparing as well to parcel out the Canal's administration and operation among large multinational corporations, among which US companies would take priority. Surveys carried out in 1991 indicate that 60% of the population is willing to accept US bases in Panamanian territory in order to keep more jobs. The population's attitude towards the US forces, whom they received as heroes during the invasion, is today one of indifference: there is neither rejection nor affection, but rather a sense of resignation in the face of what is considered an "inevitable evil."
During 1991, the Panamanian economy grew significantly—between 5 and 6.1%. This was due in part to the reactivation of exports in the Colon free zone, banking activity and a boom in construction, manufacturing and industry. Nevertheless, some sectors of the economy, including agriculture, are depressed, and payment of the foreign debt continues to be the principal obstacle to fulfilling the adjustment strategy. An estimated $314 million was paid in interest alone during 1991. As if to make it exceedingly clear what the Panamanian people can expect for 1992, Vice President Guillermo Ford announced on February 3 that the goal of his visit to Washington was to pay a total of $645.8 million to the World Bank, the Inter-American Development Bank, and the International Monetary Fund, and $39.9 million to the Paris Club. In exchange, Panama will receive new credits of $700 million for the 1992-93 period—a whopping net gain of $14.3 million.
It should be taken into account that US sanctions against the Noriega government caused losses to the country of approximately $2 billion, the invasion damages were estimated at $1.5 billion and the Panamanian debt has soared to $5.1 billion, $4 billion of which is foreign debt. The United States has given Panama only a little more than half of the $420 million approved by the US Congress in 1990 and has not earmarked one cent more for the 1992 fiscal year. Sealing its commitment to Panama, the US government reduced its programmed USAID package from $430 million to $27 million.
The "Ford Plan" turns the screwsIn addition to giving priority to the foreign debt as if this were its only raison d'être, the government's economic plan, known as the Ford Plan, is well on its way with the approval of reforms to the Social Security system in December 1991 and the tax reforms passed early this year. The Legislative Assembly will decide on the privatization of state industries in the near future. Other aspects of the plan consist of the "voluntary" resignations of 22,000 public sector employees and deep cuts in social spending. The privatization program proposes to sell off eight state-owned industries and transfer 16 others to the private sector, as well as to reform state enterprises, including the electric utility and port services. Salaries have also been drastically reduced and personnel in public services such as health and education have been cut back.
The social cost of the structural adjustment plan is clear: 50% of the population cannot meet its basic needs. Unemployment fluctuates between 25% and 30% and the country is experiencing an intense period of political agitation and anxiety.
The discrediting of Endara's government becomes more acute with the passing of time. His lack of charisma, total inability to govern, absolute indifference to the country's social problems, lack of vision about how to lead the country at this crucial moment and lack of concern about effecting an authentic democratic transformation have led the country to a severe crisis of governability which tragically symbolizes the type of government necessary to promote a neoliberal adjustment package. The triumvirate of Endara, Arias and Ford, which won the 1989 elections with 72% of the vote, has been completely delegitimized, not only because it came to power thanks to foreign military intervention, but also because it has been unable to either reconstruct the weakened political system it inherited from Noriega or build a new sense of nation and democracy without falling into such complete servility that it permitted the reinstallation of a colonial regime.
In two years, the Endara government has gone from 95% approval ratings (January 1990) to 17.4% (December 1991). In the January 1991 elections, only 50% of the registered voters went to the polls (in 1989, it was 72%), and the winners were from the opposition PRD. Endara's party lost every single one of the nine assembly seats open.
How could the PRD win more votes, when it was the party most tainted by its long involvement with Noriega? In large part, this is due to the Endara government's clumsy administration and the fact that since the governing coalition came to power, it has been more interested in defending its political space than authentically resolving the nation's problems. In the agreements made before 1989, the traditional right wing was left with control of the economic ministries and used that position to thwart the power of the other ministries by reducing their budgets. For their part, Endara and his supporters had their territory cut back to little more than the executive branch. They in turn began to break the agreements and block the activities of other sectors through the office of the nation's Comptroller.
Coup d'état? These political conflicts came to a head in April 1991, when Endara cut the Christian Democrats from the Cabinet and they joined the opposition. One of their leaders, Ricardo Arias Calderón, stripped entirely of his government functions, has since dedicated himself to denouncing government corruption in international forums. Since that time, and with increasing frequency, Endara has been inventing "coup d'etat" threats. There have been nearly a dozen governmental charges of potential coups, always revealed at moments of particular crisis. The most recent "coup" attempt, under the slogan, "Kill the Fat Man," took place two days after the attempted coup in Venezuela and a wave of social explosions in Panama during January. The government seized the opportunity to announce the creation of a new "antiterrorist police force," named the Elite Tactical Arms Unit, equipped with sub-automatic weapons with silencers that are manufactured in Brazil. The "coups" have also served to justify an increase in the military budget during 1992, in spite of across the board budget cuts imposed by the neoliberal plan in the rest of the state.
It is worth asking why and to what end these coups in a country already intervened. Each of the different US intelligence and security agencies is working with recently created Panamanian counterparts. The CIA is assisting the Council for Security and National Defense, which was secretly created in February 1991 under the auspices of the Presidency. The FBI is working with the Police, while the Drug Enforcement Agency is closely coordinating its activities with Panamanian anti-drug agencies.
Until now Costa Rica has been the only Central American country without an army, at least on the level of myth. The new "demilitarization" of the region has begun with the dismantling of the Panamanian army. In both models (Panama and Costa Rica), the goal is to transform their armies into police forces, with one difference. The new Panamanian police force, as is also the case in Nicaragua, has a sharply reduced budget, miserable salaries and is not sufficiently armed to combat increasing crime. An estimated 18,000 crimes were committed in Panama in 1991, including 335 homicides, and nearly 9,000 lbs. of cocaine, valued at $200 million, were captured. Panamanian criminals are better armed than the police and can compete on that level with their colleagues in Washington, New York, Los Angeles or Chicago.
Given all this, another question arises: Do the armed forces recently created by Endara and operating under his direction, have as an objective to impose the President's authoritarianism or to "control" the population's growing discontent? The adjustment plan is anti-national and unpopular and has created a wave of constant protests in these two years against the economic policy and in favor of national sovereignty. In one way or another, all sectors of civil society have been demonstrating against the government measures and have scored some victories, such as the reforms to the Social Security system law in December 1991 and changes in the retirement age.
The popular movement, however, still completely lacks a clear direction and is not yet using all the political space available, in part because it is still dealing with the burden of the crisis provoked by the Noriega regime. On the one hand, some unions and their leaders have been discredited as antidemocratic for having been involved with the former government. On the other hand are the sectors linked to the Civilist Crusade, which supported the right wing and the invasion forces. What is positive about what is happening now is the participation of marginalized sectors of the population who never before were organized and are now engaged in militant actions, rejecting the rhetoric of traditional political parties and leaders. One especially active group is made up of the residents of extremely poor barrios who are threatened with being thrown off their land.
An alternative is beginning to take shape. And, for the Panamanian people, it is better than the "fat man." Will this alternative be the "Papa Egoró" (motherland in the Guaymí indigenous language) registered as a political party by salsa star Ruben Blades? It remains to be seen whether or not Blades can achieve the support of at least half of the population living in misery which receives no benefits at all from the neoliberal project.
It also remains to be seen whether the United States is willing to accept a government less docile and servile than the Endara administration. The challenge for those Panamanians who resist becoming a US colony is to consolidate a social movement that links the economic and nationalist fight with the struggle for democracy.
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