Panama

Panama connects Central America with South America, sharing borders with Costa Rica and Colombia. In 2007 the republic was home to more than 3.24 million people. Although independent for almost a century, Panama has for most of this time been a protectorate and reluctant ally of the United States, which operated a ship canal, railroad, and attendant military bases in the heart of the country. Since the implementation of the 1977 Panama Canal (Carter-Torrijos) treaties, however, the alliance has attenuated, with the transfer of ownership of the canal to Panama on 31 December 1999, and the withdrawal of all U.S. military troops. The nation's political history may be separated into several eras: the protectorate between independence and 1931, when the United States collaborated with elite families to build an effective government; the Arias decade (1931–1941), when Harmodio and Arnulfo Arias Madrid served as presidents; the rise to prominence of the National Guard, culminating in the presidency of commandant José Antonio Remón; the democratic interlude 1955–1968, when three elected presidents served out terms; the Torrijos era; and the Noriega years (1981–1989). Since the early 1990s, although troubled at first by lack of legitimacy and barracks unrest, Panama has witnessed the development of political stability.

INDEPENDENCE AND PROTECTORATE PERIOD

Panama declared its independence from Colombia as part of a larger plan to give the United States the right to build a canal there and to end its eighty-two-year attachment to Bogotá. Leadership for the plot came from the managers of the Panama Railroad Company, which had run trains across the isthmus since 1855, and from the Conservative Party. The U.S. government played an important part, for the Colombian Senate had just rejected a treaty with the United States authorizing the transfer to it of the excavations and rights of the French-owned Compagnie Nouvelle du Canal de Panama. The company, high U.S. officials, and Panamanian leaders conspired to declare independence and authorize canal construction. Two people deeply responsible for the success of the plan were Philippe Jean Bunau-Varilla, a former canal engineer unofficially representing the French, and William N. Cromwell, counsel and lobbyist for the railroad and the French company.

The declaration of independence proceeded as expected on 3 November 1903. The conspirators, led by elderly Manuel Amador Guerrero, bought off the Colombian garrison, and railroad officials prevented reinforcements from arriving. U.S. warships on the scene (ostensibly maintaining the peace) protected the rebels, and within three days the United States extended recognition to the Republic of Panama.

During the nineteenth century Panamanians seceded from Colombia on several occasions, usually led by Liberals, only to be brought back into the federation by force. Now the stakes were much higher than in previous revolts. Panamanians had fielded several armies during the War of the Thousand Days (1899–1902) and could not expect favorable treatment from Bogotá. Also they faced the possibility that the United States might abandon them and build a canal in Nicaragua, long the preferred site. Or even if the United States went forward with the Panama canal, most of the contracts and payments would be transferred to Bogotá, as had happened during the French era. From the point of view of most Panamanians, then, independence under the protection of the United States offered more advantages than did continuation as a Colombian province.

Bunau-Varilla, rewarded for his activities with an appointment as Panamanian minister in Washington, and U.S. secretary of state John Hay quickly signed a treaty even more advantageous to the United States than the previous one with Colombia. The Hay-Bunau-Varilla Treaty gave the United States a 10-mile-wide zone through the heart of Panama for the purpose of building, operating, and defending a ship canal. The $10 million paid to Panama represented about 2 percent of the construction cost, or $28 per acre.

Amador Guerrero, chosen president by a constitutional assembly, organized a bureaucracy, promulgated law codes, and disbanded the army. Panama enjoyed the protection of the United States, which was empowered to deal with external and domestic problems alike. The president received counsel from the U.S. minister on all important matters and prevented disruptions in canal construction (1904–1914). Over 150,000 immigrants flooded the country to work on the canal, permanently altering the ethnic, racial, and cultural makeup of the country.

In 1912 the Liberals, led by Belisario Porras, won the elections, inaugurating a twenty-year period of control. Porras celebrated the opening of the canal with an international exposition in 1915. This was a period of nation-building efforts to turn the backwater province into a modern state. Schools, hospitals, railroads, and highways were built, and businessmen created prosperity in the form of banana plantations, logging firms, truck farms, cattle ranches, and urban construction. Panama remained dependent upon canal jobs and transfers, but the republic grew apart from the Canal Zone, which became a self-sufficient compound run by the U.S. government. The governor of the Panama Canal acted as spokesman for U.S. interests in Panama and occasionally sent troops or advisers, or sometimes friendly advice, to the Panamanians. No one doubted that Panama was a protectorate whose existence owed much to the canal that divided it.

THE ARIAS DECADE

Nationalist sentiments arose in the 1920s to protest Panama's subservience, and the secret Acción Comunal (Common Action) group lobbied for better treatment by the United States. It managed to block a treaty governing relations with the zone and eventually took power in a 1931 coup. The brothers Harmodio and Arnulfo Arias Madrid emerged as leaders in the coup, and Harmodio assumed the presidency in 1932–1936. Taking advantage of the noninterventionist policy of Washington, they strengthened the police in order to maintain political control. In 1936 Harmodio oversaw the signing of a new treaty (Hull-Alfaro) that ameliorated some abuses by the canal and adjusted annuity payments, but the depression years created great hardships in a services-dependent economy with little industry or mining and only a modest agriculture. Harmodio tried to improve relations among the country's ethnic groups and founded the University of Panama in 1935. An associate carried on Harmodio's policies during the next presidential term.

Arnulfo Arias won election in 1940, after a violent campaign by his Panameñista Party. He promulgated the nationalist Constitution of 1941 that revoked the citizenship rights of nonwhite immigrants and extended his term to six years. Amazingly energetic, he began a number of initiatives that later bore fruit. His anti-American posturing and harsh treatment of domestic opponents, however, soon generated a coup that overthrew him in favor of a moderate who immediately cooperated with the U.S. defense effort. In jail and then exile, Arnulfo continued to build his populist following among the native poor and children of immigrants, promising to fight exploitation by the United States and to reduce the power wielded by the white elite, the rabiblancos.

THE RISE OF THE NATIONAL GUARD

Defense and construction expenditures during the war brought high employment to Panama, but the postwar years saw a collapse in prosperity and rising political conflict. The 1946 Constitution returned the country to democratic procedures, which allowed Arnulfo Arias to mobilize mass support for his nationalistic party. Soon, however, the national police, under the command of José Antonio Remón, assumed the role of political mediator, and it denied Arnulfo's victory in the 1948 election. A confusing period ensued, in which lack of authority exacerbated economic depression. Remón finally allowed Arnulfo to be president in 1949; during his brief second administration Arnulfo stirred up more trouble by feuding with the National Assembly and the Supreme Court, and by attempting to promulgate the 1941 Constitution again. Facing impeachment by the legislature in 1951, he was removed by Remón in a nearly bloodless coup.

Kingmaker by now, Remón (urged by his ambitious wife, Cecilia) decided to run for president in 1952. Elected largely by dint of his power and patronage, he nonetheless tried to be a better president than the country had ever known. He promoted economic development, fiscal responsibility, social reforms, and less dependence on the canal. He renamed the police the National Guard, giving them quasi-military status. He also pushed U.S. president Dwight Eisenhower to sign a new treaty (Eisenhower-Remón) that increased Panama's benefits from the canal. Still, hints of scandal and corruption tainted Remón's presidency, which ended with his gangland assassination in 1955.

DEMOCRATIC INTERLUDE

Efforts by Remón's successors Ernesto de la Guardia (1956–1960) and Roberto Chiari (1960–1964) to improve the economy and strengthen the nation were overshadowed by growing discontent with U.S. canal policy. Students in particular insisted that Panama's flag be flown in the zone and that the canal's toll profits be shared. They denounced the canal as an instrument of U.S. imperialism, a belief widely shared throughout the hemisphere. Several concessions were wrested from the United States—token flags, equal employee and retirement systems for U.S. and Panamanian canal workers, and some foreign aid—but the basic problem remained unchanged: Panamanians demanded sovereignty over the zone, and the United States would not accede to their demand. The Kennedy administration did, however, agree that the old treaty should be scrapped if and when arrangements could be made to build a sea-level canal. But it was too little too late.

Panamanian frustration erupted in the studentled Flag Riots of 1964, which left two dozen dead and led to suspension of relations between the countries. For the first time, Panama's elite did not go along with suppressing anti-American demonstrations and instead used them for diplomatic pressure. Late that year presidents Marco Aurelio Robles and Lyndon Johnson agreed to negotiate three new treaties to govern the existing canal, to provide for its defense, and to authorize a sea-level canal. Stepped-up aid expenditures helped to relieve unemployment and to stimulate business. Panamanians were optimistic until the treaty drafts were leaked in mid-1967. Robles, already unpopular, avoided impeachment thanks to the military. The draft treaties were met with skepticism—they offered little financial relief, protracted U.S. operation of the canal, and continued the U.S. military presence—and were soon tabled.

THE TORRIJOS ERA

Arnulfo Arias ran for the presidency in 1968 and won a substantial victory, attesting to his staying power with the masses. Wary of the military, which had removed him twice, he made plans to retire or reassign top guard officials. When he did so, eleven days into his administration, a group of officers led by Major Boris Martínez and Colonel Omar Torrijos deposed him. Torrijos, whose senior rank and political skills made him popular among guard officers, shouldered Martínez aside and exiled him in early 1969. The so-called revolutionary government, staffed with intellectuals, brought in representatives of labor, students, and peasants but failed to create a firm coalition. Given these troubles and no support from the United States, Torrijos assumed dictatorial powers, which were enforced by the guard.

In 1972 the Torrijos regime mustered a constituent assembly to give the country a constitution that made "el General" head of state but designated a president for ceremonial purposes. Strongarm police repression, employing surveillance, censorship, torture, exile, and murder, characterized most of his era. He did, however, enact legislation that favored workers, and his constant attention to agrarian problems brought him acceptance by the rural poor. He also fostered an offshore banking industry whose huge deposits and modern buildings gave the illusion of affluence. These accomplishments, plus his easygoing manner and a steady stream of publicity, helped to ameliorate his dictatorial methods.

Torrijos reinitiated talks with the United States regarding a new canal treaty in 1974. The 1967 drafts served as a basis for the operating treaty; the sea-level canal no longer beckoned; and the defense treaty gave the United States rights to four military bases through 1999. About two-thirds of the former zone was given back to Panama in a land trust, and Panama received more income from the canal. Torrijos and President Jimmy Carter signed the treaties in 1977; the U.S. Senate narrowly approved them in 1978; and they were implemented in 1979.

THE NORIEGA YEARS

Panama was changed by 1980, not so much by the treaties as by the process of achieving them. To appear less autocratic, Torrijos had created the Democratic Revolutionary Party, and after 1978 he increasingly shifted responsibility onto the new president, Aristides Royo. The treaties had not brought great new wealth to the country, and indeed Torrijos's generous spending had left the country with the largest per-capita foreign debt in the world. When Torrijos perished in a plane crash in 1981, signs for the future were already ominous.

Civilian leaders, demoralized by the long dictatorship, recovered slowly in the 1980s. General Manuel Antonio Noriega, meanwhile, consolidated his control over the guard, which he renamed the Panamanian Defense Force (PDF) in 1983, and behind the scene set policy for the government. For a time there was hope that Nicolás Ardito Barletta, a U.S.-trained economist elected fraudulently in 1984, might become a strong president. The United States poured in economic and military aid in hope of separating the two "branches" of government. But Barletta failed to build a strong political base and was forced out by Noriega in 1985. The turmoil of Panamanian affairs stood in marked contrast to the orderly implementation of the 1977 canal treaties.

Noriega, who rose to power from very humble origins, proved cunning and versatile. He exacted unwavering loyalty from his officers, whom he rewarded with money and opportunity for graft. Opponents met with torture and sometimes cruel deaths. Unconcerned with the daily problems of government, left to puppet presidents, Noriega proceeded octopus-like to engage himself in the most nefarious and farflung enterprises. Since early in his career he had profited from the drug trade, and by the mid-1980s he had become a major link between the Colombian cartels and the U.S. market. Yet he also produced an occasional drug runner or tip for the U.S. Drug Enforcement Agency. He helped the Reagan administration run arms illegally to the Contra forces in Nicaragua, yet he also sold guns to the Salvadoran rebels. During his regime Panama became a regional arms emporium. He multiplied his own forces and equipped them with the best matériel available. He brokered intelligence for several governments, even double-crossing the U.S. services. Yet the CIA and the U.S. Army kept him on generous informer payrolls. He arranged for high-tech equipment to be shipped to the Soviet Union, circumventing a U.S. ban on such exports. It was a remarkable record to accumulate in such a short time.

From mid-1986 on, civilian unrest mounted, and U.S. authorities increased their pressure on Noriega to reform his regime or step down. In early 1988 the U.S. Justice Department issued indictments against Noriega for drug crimes, and the Reagan administration enacted economic sanctions against Panama, to little avail. For eighteen months the feud went on, including U.S. threats, failed PDF coups, a canceled election, and harassment of U.S. servicemen in Panama. Finally, on 20 December 1989, some 12,000 U.S. forces invaded Panama and destroyed PDF headquarters in an effort to capture Noriega, who was eventually taken in custody to Miami, where he stood trial on narcotics charges and was sentenced to forty years in prison.

At the time of the Christmas invasion, the United States installed Guillermo Endara as president, claiming that he had won the canceled elections. Endara, not a strong leader, shared power with two ambitious vice presidents, the U.S. authorities in Panama, and a new military force built largely out of the remnants of the PDF. His scandal-plagued government presided over reconstruction, funded by a billion dollars in U.S. aid.

In 1994 Panamanians for the first time since 1968 returned to fair elections. They elected Ernesto Pérez Balladares of the Democratic Revolutionary Party (PRD), who won the presidency with a little over 33 percent of the votes. Gilberto Guardia, a Panamanian, took over as administrator of the Panama Canal Commission, guiding the last phase of the 1977 treaty enactment. In 2004 Martín Torrijos also a member of the PRD, and the son of the former dictator Colonel Omar Torrijos, was elected to a five-year term. Panama's government has embarked on an extensive project to expand the canal's capacity, which remains important to the service-oriented economy. Located near the entrance of the canal is the Colón Free Trade Zone, the largest tax-free zone in the Americas and the second-largest in the world, renowned for its modern facilities. It serves as an important conduit for goods between industrialized countries and Latin American markets.

See alsoEndara, Guillermo; Noriega Moreno, Manuel Antonio; Panama Canal; Panama Canal, Flag Riots; Panama Canal Treaties of 1977; Porras, Belisario; Torrijos Herrera, Omar.

BIBLIOGRAPHY

Larry La Rae Pippin, The Remón Era (1964).

Gustavo A. Mellander, United States in Panamanian Politics (1971).

David Mc Cullough, The Path Between the Seas (1977).

Steve C. Ropp, Panamanian Politics (1982).

William J. Jorden, Panama Odyssey (1984).

Walter La Feber, The Panama Canal, rev. ed. (1989); Panama, a Country Study, 4th ed. (1989).

Michael L. Conniff, "Panama Since 1903," in Cambridge History of Latin America (1990), vol. 7, pp. 603-642.

Michael L. Conniff, Panama and the United States (1991).

Additional Bibliography

Avila, Víctor. Panamá: Luchas sociales y afirmación nacional. Panamá: Centro de Estudios Latinoamericanos "Justo Arosemena," 1998.

Bonilla, Heraclio, and Gustavo Montañez, eds. Colombia y Panamá: La metamorfosis de la nación en el siglo XX. Bogotá: Universidad Nacional de Colombia, 2004.

Center of Military History. Operation Just Cause: The Incursion into Panama. Washington, DC: Author, 2004.

Harding, Robert C. The History of Panama. Westport, CT: Greenwood Press, 2006.

Howe, James. A People Who Would Not Kneel: Panama, the United States, and the San Blas Kuna. Washington, DC: Smithsonian Institution Press, 1998.

O'Reggio, Trevor. Between Alienation and Citizenship: The Evolution of Black West Indian Society in Panama 1914–1964. Lanham, MD: University Press of America, 2006.

Pearcy, Thomas L. We Answer Only to God: Politics and the Military in Panama, 1903–1947. Albuquerque: University of New Mexico Press, 1998.

Reyes Rivas, Eyra Marcela. El trabajo de las mujeres en la historia de la construcción del Canal de Panamá, 1881–1914. Panamá: Universidad de Panamá, Instituto de la Mujer, 2000.

Sánchez, Peter Michael. Panama Lost?: U.S. Hegemony, Democracy, and the Canal. Gainesville: University Press of Florida, 2007.

Siu Lok, C. D. Memories of a Future Home: Diasporic Citizenship of Chinese in Panama. Stanford, CA: Stanford University Press, 2005.

Szok Peter A. La última gaviota: Liberalism and Nostalgia in Early Twentieth-Century Panamá. Westport, CT: Greenwood Press, 2001.

Ward, Christopher. Imperial Panama: Commerce and Conflict in Isthmian America, 1550–1800. Albuquerque: University of New Mexico Press, 1993.

                                   Michael L. Conniff