Political Culture in Panama: Democracy after Invasion

Political Culture in Panama

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Pérez

Political Culture in Panama Democracy after Invasion

ORLANDO J. PÉREZ

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POLITICAL CULTURE IN PANAMA

Copyright © Orlando J. Pérez, 2011. All rights reserved. First published in 2011 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN: 978–0–230–10251–4 Library of Congress Cataloging-in-Publication Data Pérez, Orlando J. Political culture in Panama : democracy after invasion / Orlando J. Pérez. p. cm. ISBN 978–0–230–10251–4 (hardback) 1. Political culture—Panama. 2. Democracy—Panama. 3. Political participation—Panama. 4. Public opinion—Panama. 5. Panama—Politics and government. I. Title. JL1656.P47 2010 306.2097287—dc22

2010021549

A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: January 2011 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.

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Dedicated to my wife and children, Leyda, Rogelio, and Alexandra

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Contents

List of Figures and Tables

ix

Acknowledgments

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1 Democracy in Post-Invasion Panama: Theory and Case

1

2 The Shaping of Elite Political Culture During the Ancien Regime, 1903–1968 3

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An Enduring Relationship: The Military and Politics in Twentieth-Century Panama

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4 Ending the Relationship: Economic Crisis, Political Opposition, and the U.S. Military Invasion, 1981–1989

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Demilitarization and Elections: Institutional Reconversion in Post-Invasion Panama

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6 Reconciliation and Social Dialogue in Post-Invasion Panama

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7 Mass Democratic Culture in Panama: The Meaning of Democracy

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8 Supporting Stable Democracy: System Support and Political Tolerance

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9 Conclusions and Implications: Can Democracy Emerge after an Invasion?

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Notes

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References

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Index

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Figures and Tables

Figures 5.1 Ideological Distribution of Party Sympathizers 7.1 Alternative Conceptions of Democracy 7.2 Alternative Conceptions of Democracy: Panama in Comparative Perspective 7.3 Alternative Conceptions of Democracy and Education 7.4 Alternative Conceptions of Democracy and Urban vs. Rural 7.5 Preference for Democracy or Authoritarianism 7.6 Preference for Strong-Hand Government 7.7 Satisfaction with Democracy 8.1 Trust in Institutions 8.2 Political System Support: Five Key Items 8.3 Political Tolerance

110 135 136 137 138 139 140 141 144 145 148

Tables 3.1 Budget and personnel of the National Guard (1950–1959) 3.2 High military government officials occupying public office in Liberal governments 3.3 Members of the commercial and industrial elite who participated in the military regime 4.1 May 1984 elections 5.1 Results of the three referenda held since the restoration of democracy 5.2 Presidential election results since the restoration of democracy

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44 52 54 70 102 105

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5.3 Distribution of seats by party for the three legislative sessions since the restoration of democracy 7.1 Analytical Framework for the Various Concepts of Democracy (Response code in parenthesis) 8.1 Theoretical relation between tolerance and support for the system 8.2 Empirical relation between tolerance and support for the system in Panama, 2004, 2006, and 2008

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107 134 149 150

Acknowledgments

This book represents close to 20 years of studying and learning about Panama, its politics, leaders, and people. I have dedicated this book to my wife and children, but I want to acknowledge them first, for without their love and support throughout the years, this project would have never been completed. My wife, who is Panamanian, in particular, kept me, literally, connected to this beautiful and fascinating country in Central America. Above and beyond anyone else, Mitchell A. Seligson deserves my gratitude for being far more than a mentor. Mitch has been a friend and colleague since I began graduate school. He has encouraged and supported my interest in Panama and Central America. He taught me most of what I know about survey research, and a great deal of what it is to be a good political scientist. I can say without any reservation that without Mitch’s support, few of my professional successes would have been possible. In addition, Mitch has involved me from the very beginning in his AmericasBarometer surveys, and its umbrella project the Latin American Public Opinion Project (LAPOP). This effort, to measure mass political culture in Latin America, started modestly at the University of Pittsburgh and is now housed at Vanderbilt University, where it is now among the leading public opinion projects in the world. The public opinion data that serves as the basis of this book’s analysis comes from LAPOP, and I am very grateful to Mitch for allowing me to work so closely in this project for so many years. Another mentor, friend, and colleague who deserves a great deal of thanks is Richard L. Millett. Richard and I met at a LASA meeting in the early 1990s. He was a distinguished scholar and I a beginning graduate student with a great deal to learn. Richard took me under his wings, as he has done with countless others, and I am still benefitting from his support and encouragement. Richard opened doors in Panama and Washington, D.C., without which this project would have never come to fruition, and was the first scholar to teach me about the unique, and often baffling, nature of Panamanian politics. His unselfish manner and unique ability to bring people together have been invaluable to me as I have moved through my career.

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Other scholars to whom I owe a debt of gratitude include: in the United States, William Furlong, Margaret Scranton, Michael Conniff, and John Booth; each in their own way taught me a great deal about Panama and Central America, and I am grateful for their wisdom and friendship. In Panama, Marco Gandasegui has been a friend and colleague. Other Panamanians to whom I am extremely thankful include Guillermo Cochez, Eduardo Vallarino, Alfredo Castillero Hoyos, Jorge Giannareas, Harry Brown Arauz, Vilma Ritter, Ernesto Pérez Balladares, Raul Leis, Charlotte Elton, and Alfredo Figueroa Navarro. A special word of thanks must be extended to Berta Ramona Thayer. Berta has been a friend since I first arrived in Panama in 1991. She and I have had many a breakfast at Monolo’s in Via Argentina or at the Trapiche restaurant. Over coffee and carimañolas, we have discussed Panama’s political system, its problems and opportunities, and gossiped about the goings on of various political figures. Berta, perhaps above anyone else, has opened doors with Panama’s elites and helped me understand their intricacies. I treasure our discussions and she is the first person I call whenever I am visiting Panama. I would like to take this opportunity to thank two individuals who have been my friends and colleagues for many years: Andrew Stein and Ricardo Córdova Macías. Both were colleagues in graduate school and both have remained close friends ever since. Their friendship and encouragement continue to mean a great deal to me. Beyond individuals, I owe debts of gratitude to a number of institutions. First, the University of Pittsburgh nurtured my early interest in Latin America and provided a wonderful setting for learning and scholarship as I was pursuing my Ph.D. The Centro de Estudios Latinoamericanos “Justo Arosemena” (CELA), headed by Marco Gandásegui, was my institutional home during my early visits to Panama. For the past 12 years, Central Michigan University has been my institutional home. I want to thank the support of colleagues and staff of the Department of Political Science for their encouragement and assistance. Finally, I wish to thank Robyn Curtis at Palgrave Macmillan for her support and patience as I have worked on completing the book. I am sure that at times she wondered whether I would ever complete it. I have no doubt her guidance was essential in putting the final touches on this endeavor.

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Chapter 1 Democracy in Post-Invasion Panama: Theory and Case

Can democracy emerge from a military invasion by an extraterritorial power? Can external forces influence positively the development of national institutions conducive to stable democratic regimes? Can these same forces change elite and mass political attitudes and behavior in a ways that help rather than hinder the process of democratization? Given the history of United States military interventions in Latin America and Southeast Asia in the twentieth century and Iraq and Afghanistan in the twenty-first century, these questions have consumed the attention of scholars and policy makers for decades. Books with provocative titles such as Gunboat Democracy (Crandall 2006), Democracy at the Point of Bayonets (Peceny 1999), and Democracy by Force (von Hippel 2000) have explored the history and consequences of United States military intervention in the developing world with varying conclusions, often examining the same cases. The first two, by Russell Crandall and Mark Peceny, find evidence that U.S. interventions have a positive influence on democratization; the latter, by Karin von Hippel, questions the results of military interventions. A dearth of scholarly research, however, has examined in-depth the political, institutional, social, and cultural changes resulting in the aftermath of a U.S. military intervention. This book seeks to fill this vacuum by examining the case of Panama. Perhaps few countries in the world have been influenced more by U.S. policies. As the United States grapples with the aftermath of military interventions in Iraq and Afghanistan, and efforts to build democracy in both nations, the case of Panama offers a unique opportunity to understand the long-term effects of U.S. policy and the challenges of building democracy after a military invasion. Pérez

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This book represents the most comprehensive and empirically grounded analysis of the institutional and attitudinal factors that have shaped Panamanian politics since the U.S. invasion of December 20, 1989. Using multiple methods, the book traces the development of the Panamanian nation-state: from its early days after independence from Colombia, to the struggles to build democracy after the U.S. invasion, through the presidential elections of May 2009. The study makes use of extensive interviews with political and economic elites, as well as the most comprehensive series of public-opinion surveys ever conducted in Panama. The surveys are part of the AmericasBarometer conducted in 2004, 2006, and 2008 in more than 20 nations of Latin America. As such, they provide a wealth of data on democratic values and place Panama in comparative perspective. The book focuses specifically on answering the following questions: Can historical patterns of authoritarianism be broken by the actions of an extraterritorial power? or are they so deeply ingrained in the political and cultural fabric of a nation that they will inevitably reassert themselves? Can elites who for decades exhibited anti-democratic attitudes and behavior change after a crisis? or are those attitudes immutable? and, if so, will they threaten democracy? These are important questions for democratic theory because they relate to the conditions under which political actors found democracy and the conditions under which they are able to preserve it.

Competing Theories of Democratization For decades, scholars have argued about the conditions that give rise to democracy. For some, Latin American countries lack the mass and elite political “culture” to sustain stable democratic regimes. For example, Russell Fitzgibbon and Julio Fernández argue that “the countries of Latin America are probably not developing along a democratic-participant cultural path” (1981, 350). Glen Dealy asserts that Latin Americans’ conception of democracy is not based on traditional Western notions of pluralism and representation, but rather on “political monism or monistic democracy: that is, the centralization and control of potentially competing interests” (1974, 73). Society and the state are viewed as an organic whole, and competing interests are viewed as threatening their survival, requiring their elimination or control. Howard Wiarda maintains that U.S.-style democracy is unlikely to prosper in Latin American countries “because they are Catholic, corporate, stratified, authoritarian, hierarchical, patrimonialist, and semifeudal to (the) core . . . (and) locked in this traditional pattern of values and institutions” (1974, 269–270). Pérez

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The connection between political culture and democracy has been a concern of social scientists since Gabriel Almond and Sidney Verba’s 1963 breakthrough book, The Civic Culture, identifies a cluster of attitudes and values that, they argue, led to stable democracies (Almond and Verba 1963). Ronald Inglehart subsequently pioneered cross-national research that built on, and empirically tested, Almond and Verba’s assertions. In his model, the prevalence of a few specific individual attitudes and values— overall life satisfaction, interpersonal trust, and a disdain for revolutionary change—strongly increased the likelihood that democracy would persist in any given country (Inglehart 1990). Other scholars, such as Edward Muller and Mitchell Seligson, argue that Inglehart had it backwards: democratic experience causes the development of civic culture—or at the very least, there is a reciprocal relationship (Muller and Seligson 1994). Parallel to this debate over civic culture, political scientists have also been arguing over the concept of “social capital.” In Robert Putnam’s 1993 study of regional governments in Italy, he finds that what best explains the performance of democratic institutions is not socioeconomic development, but rather “civic community”: participation in public affairs, conditions of political equality, norms of trust and solidarity, and, above al,l the existence of a vibrant civil society. Taken together, Putnam dubs these individual and collective civic attributes “social capital” (Putnam 1993). According to those who propose a cultural theory of democracy (Inglehart 1990), the pervasive influence of the United States ought to help incubate democratic values, particularly among elites, who presumably are the most closely attuned to U.S. cultural norms. But take the case of Panama, arguably the country most highly penetrated by the United States of any nation in Latin America.; it is the only country in the region that, since its independence, has housed in its very capital city a major set of U.S. air bases and defense installations, along with thousands of U.S. military and civilian personnel. No other country in Latin America was as highly dependent on U.S. foreign economic assistance as was Panama. In the decade 1953–1963, for example, U.S. economic assistance per capita amounted to $80, only exceeded in the world by U.S. assistance to Israel ($180 per capita). Furthermore, foreign investment per capita in Panama, largely U.S., in 1967 was higher than for any other country in the world, nearly twice as high as Venezuela (ranked number two) and six times as high as Panama’s neighbor, Costa Rica (Muller 1983). Given this level of penetration, one might assume that some of the political culture of the United States would have “rubbed off” on the Panamanians. However, except for brief periods in the 1930s and 1960s, movement toward democracy has been invariably blocked by repeated military interventions and electoral fraud (McDonald and Ruhl 1989; Guevara Mann 1996). Pérez

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Other scholars dismiss culture and emphasize instead various aspects of economic, social, and political structures as the determinants of democracy. Some assert a positive relationship between the level of socioeconomic development and democracy. Low socioeconomic development may intensify the competition for power by increasing the stakes for political actors. When resources are limited, political elites tend to restrict mass mobilization in order to safeguard their economic and political interests (Lipset 1981). Guillermo O’Donnell (1973, chap. 1) points out, however, that cross-national statistical studies about the existence of democracy are premised on the validity of modernization theory, or what he prefers to call the “optimistic equation.”1 The “optimistic equation” assumes that socioeconomic change generated the conditions appropriate for democracy in the West and that such changes are producing similar outcomes in the contemporary third world. Yet, as O’Donnell shows, the validity of modernization theory hinges upon a pair of questionable premises. First, it assumes that the direction taken by social and political change in any given country over an extended period of time can be inferred from an analysis of the juxtaposition of all extant societies along a number of quantifiable continua at one point in time. Second, this theory also assumes that the societies at one end of these continua—the “underdeveloped” world—will, in the future, resemble those at the other end—the “developed” world. The fallacy, however, of believing that synchronic comparisons between nations can be used to predict the nature of historical change within a country is exposed by the existence of economically and socially relatively underdeveloped countries such as India and Costa Rica that succeeded in institutionalizing democratic practices. In contrast, Panama exhibits relatively high rates of socioeconomic development, yet has been unable to establish a stable and durable democratic regime. For example, Panamanian GNP per capita in 1988 reached $2,120, exceeded in Latin America only by Uruguay, Venezuela, Argentina, and Brazil. Life expectancy in 1988 was 72 years of age, surpassed in Latin America only by Costa Rica. Finally, per capita energy consumption (a recognized measure of economic development) was 1,627, 2.5 times larger than Costa Rica (557) (World Bank 1991). These figures indicate that socioeconomic development may not be a necessary nor sufficient condition for the establishment of stable and durable democratic forms of government. Other scholars focus on the sequence of the key crises of modernization—identity, penetration, legitimacy, participation, and distribution. Democratic regimes are likely to become established in countries, Eric Nordlinger argues, where “a national identity emerges first, followed by the institutionalization of the central government and then by the emergence of mass parties and a mass electorate” (Nordlinger 1971, Pérez

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458). While crisis and sequence theories may discern contiguous historical phases seemingly conducive to the emergence of a democratic regime, they do not specify the political mechanisms necessarily linking such phases. It is unclear why Nordlinger’s sequence inevitably leads to the consolidation of democratic regimes. Elite democratic theory, in contrast, argues that while most democracies can withstand some anti-system actors, if the political and economic elites are ambivalent or hostile towards democracy, prospects for democracy are dim (Dahl 1971). Putnam argues that if there is a weak commitment by leaders to allow political competition and to accept the outcome of elections, then open and responsive government becomes improbable (1976, 105). Adam Przeworski (1985) argues that democracy emerges when political actors find it necessary to construct democratic practices to mediate existing conflicts. Therefore, democracy is viewed as a contingent institutional compromise among key political actors. Agent-centered explanations focus on the ability, or inability, of political actors to determine the policies and institutional structures of the state. They seem to suggest that inadequate political leadership in polarized political situations leads to the breakdown of democracy, while political ingenuity leads to its foundation. While one should not underestimate the importance of leadership in shaping political outcomes, individuals do not craft political institutions in the absence of a historically defined context. A number of studies (Collier and Collier 1991; Scully 1992; Yashar 1997) have focused on the nexus between structure and agency. They begin with the premise that historical structures and institutions condition political choices and seek to explain the conditions under which those choices generate new institutional structures. At critical junctures, particularly in moments of crisis, elites possess significant autonomy and latitude to alter the political structures and rules of the game. In turn, these new structures sustain a historical legacy by shaping as well as constraining subsequent action and discourse. In addition, previously established historical and institutional patterns constrain the choices of elites during critical junctures. Mattei Dogan and John Higley (1998) argue that “the composition and functioning of political elites is . . . the most important determinant of the type of regime that exists in a country” (20). Elites may have wide latitude to rearrange existing institutional structures, particularly during critical junctures or crises. However, elites are constrained by the historical and cultural patterns that have shaped the development of the nation-state. Elites may be able to alter historical patterns of authoritarianism and establish a democratic system after a traumatic event such as a war, or military invasion by an extraterritorial power, but they can also revert to authoritarianism. Pérez

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Mass political culture also plays an important part in determining the prospects of democratization. While elite beliefs and behaviors may determine the institutional shape of a democratic regime, mass attitudes are key to establishing the long-term stability of a regime. It is difficult to see how a stable democratic regime can be sustained without a substantial number of citizens expressing views supportive of democratic values. As mentioned earlier, several authors have questioned whether Latin Americans have the requisite set of beliefs conducive to stable democracy. However, the region saw widespread movements toward the establishment of democracy throughout the 1980s and ‘90s. The transition away from authoritarianism—which began in southern Europe in the 1970s—-was labeled the “Third Wave” of democracy (Huntington 1991). The good news about democracy in Latin America is that all countries, with the notable exception of Cuba, are governed by elected leaders. Competitive elections are now seen as the only legitimate means of selecting those who will lead and represent the citizenry in the halls of power. Elections, of course, are not the sole measure of institutional democracy, but they are an important component. In many countries, the electoral mechanisms have improved, with significant advancements in the development of independent electoral management institutions and increased popular accountability and transparency. Even in countries such as Venezuela and Haiti, where the conduct of elections has been questioned, political power has been determined through electoral contests. In the past decade, most countries have witnessed alternation in power between opposing political parties through the ballot box rather than through the barrel of a gun. If one observes the scores from Freedom House,2 one finds a significant and overall improvement among Latin American countries. In 2006, among the 35 countries in the Americas, 33 were classified as electoral democracies. In addition, 24 states were rated as Free (69 percent), nine as Partly Free (26 percent), and two—Cuba and Haiti—as Not Free (6 percent). Another positive indicator is that Latin American citizens express overwhelming support for the idea that democracy is the best form of government, despite its many difficulties. In addition, substantial majorities in most countries of the region identify democracy with intrinsic and normative values, such as liberty and freedom (Pérez 2009). The combination of these two factors is important because legitimacy is rooted in citizens’ belief that democracy is better than the alternative regimes. Latin America has historically experimented with many different political and economic regimes; many citizens no longer recall the repression of the military-led governments of the 1960s and ’70s, and, thus, may easily fall victim to the siren call of authoritarian alternatives, particularly of a populist nature, if they are promised quick solutions to the nation’s problems. However, to Pérez

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the extent that citizens are willing to support democracy based on normative values and look beyond immediate problems, democracy will have a stronger footing in the region.

Why Panama? Panamanian democracy today emerged after a prolonged crisis and confrontation with the United States, and, ultimately, a military invasion. The invasion, along with the imminent turnover of the Panama Canal and adjacent lands, created the necessary incentives for elites to alter their historical behavior, restructure the institutional framework of the state, and set the foundations for a liberal democratic regime. The book shows that elites in post-invasion Panama have been able to build a series of agreements that, taken in their totality, resulted in an elite convergence. This convergence transformed an elite that was disunified on the basic framework of the political regime into one that is consensually unified on the fundamental rules of democratic governance. Three factors help explain this transformation: (1) The political and economic crises initiated by the rupture of the military-led governing coalition and the economic sanctions imposed by the United States; (2) The trauma of the U.S. military invasion of December 20, 1989; and (3) The imminent transfer of the Panama Canal. The book examines how and why each of these factors developed, and their impact on the transformation of Panamanian politics. Historically, Panama has been at the “Service of the World” since Vasco Nuñez de Balboa initiated the conquest of the isthmus in the sixteenth century. The national motto is Pro Mundi Benefisio. Both Panamanian and extraterritorial elites have seen Panama as a function of its strategic location, and thus have sought to deepen its insertion into the world commercial system by enhancing the mechanism by which the location is exploited. This phenomenon has shaped the nature of the Panamanian political class, its relationship with subordinate groups and extraterritorial powers, and the structures of the Panamanian state. For most of the twentieth century, democracy was sacrificed in order to maintain the political stability demanded by world commercial interests. Between 1903 and 1968, Panama had a political system controlled by an urban commercial elite in alliance with U.S. military, economic, and political interests. For the United States, this alliance provided the necessary political stability for the smooth operation of the Panama Canal. For Panamanian elites, the alliance secured their right to govern the country through a system of tight social and political networks that excluded Pérez

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popular sectors from political participation and from enjoying the benefits of the transit route. In 1968, a sector of the Panamanian commercial elite, together with the United States, supported the overthrow of an elected civilian president by the National Guard, ushering in 21 years of military-dominated politics. The military government sought to broaden the ruling alliance by incorporating previously excluded sectors such as labor and the peasantry, while continuing to maintain the support of the urban commercial elite. In addition, the military government sought to renegotiate the terms by which the United States controlled the Panama Canal. Those negotiations culminated in 1977 with the signing of the Torrijos-Carter Treaties,3 by which the United States agreed to gradually draw down its military presence on the isthmus, culminating in the transfer of the Panama Canal to Panamanian hands on December 31, 1999. The 1980s were a decade of political turmoil in Panama and of significant changes in U.S.-Panamanian relations. The United States, which had worked closely with the military-led government, now saw it as a threat to its strategic and political interests in Central America. The distancing between the U.S. and the military-led government precipitated a rupture of the alliance between the commercial elite and the military-led government. The former sought to mobilize opposition to the military by organizing civil society into a National Civic Crusade. The military-led government managed to survive despite the domestic opposition and economic sanctions by two U.S. administrations. When all else had failed, the United States, ushering in a “New World Order,” decided to invade on December 20, 1989. In the decade after the invasion, Panamanians have successfully established the institutional foundations of a liberal democracy. Since 1990, Panama has held four free and competitive elections in which the opposition parties have emerged victorious. Much of the success of the elections is attributed to the institutionalization of an autonomous Electoral Tribunal. Another major accomplishment is the dismantling of the military apparatus and the creation of a new security structure that promotes civilian control. Moreover, there are clear signs—which are analyzed further in this book—that Panamanian elites have learned to behave in a more democratic and conciliatory fashion, thus promoting the necessary agreements to establish democratic rules of the game. Nevertheless, Panama still faces significant challenges to the full consolidation of democracy. Some of these challenges are economic, such as chronic unemployment and underemployment, and widespread poverty in more than half of the population. Some are related to the efficient management of the Panama Canal and billions of dollars worth of land and infrastructure Pérez

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turned over by the United States. Others stem from a number of national security concerns, ranging from increased drug trafficking to incursions by Colombian guerrillas into Panamanian territory. And still others derive from institutional and structural conditions, such as government corruption, a weak political party system, and asymmetrical power relations between the executive and other branches of the government.

Data To examine mass political culture, the study employs statistical analysis of a series of national surveys known as the AmericasBarometer conducted by the Latin American Public Opinion Project (LAPOP) at Vanderbilt University in 2004, 2006, and 2008. In Panama, the surveys employed a national probability design of voting-age adults,4 with a total sample of 1,639 people in 2004, and 1,536 in 2006 and 2008. Samples of that size exhibit a margin of error ±2.5%5 at the 95 percent confidence level.6 For purposes of this study, elites will be defined as those individuals who, by virtue of the position they hold, either in government or in powerful organizations and movements, including dissident ones, or their reputation, are able to influence national political outcomes regularly and significantly. The analysis of elite attitudes is based on two waves of interviews conducted with more than 100 political, business, and civic leaders in 1992–1994 and 2004–2005. In addition to interviews, the study uses content analysis of official and personal documents. Documents include decrees, laws, annual reports from key ministries (Memorias), political party platforms and statutes, and various government reports. Personal documents include private correspondence and papers of key elites, particularly during the first half of the twentieth century.

Organization of the Book Following the theoretical introduction, the book is divided into two parts: The first part, consisting of chapters 2–4, examines the historical development of the Panamanian nation-state from independence to the United States invasion of 1989. The second, encompassing chapters 5–8, analyzes the post-invasion period emphasizing the institutional transformation and the political culture of Panamanian citizens. Chapter 2 deals with the period from 1903, when Panama successfully separated from Pérez

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Colombia, to 1968, when the National Guard took control of the nation. The investigation of this period focuses on four factors that shaped the nature of politics on the Isthmus: (1) The nature and extent of ideological consensus among Panamanian elites; (2) The influence of the transit route in shaping the economy and influencing the mentality of elites; (3) The effects of U.S. influence on Panama; and (4) The tight control held by the commercial elite over the apparatus of government. Chapter 3 focuses on the origins and evolution of militarism in Panama. The chapter examines the rise and development of the military-led governments from the coup of 1968 until the death of General Omar Torrijos in 1981. Torrijos’ government was sustained in power by a multi-class alliance between the armed forces, popular sectors (primarily labor), and the commercial elite. The chapter explores the impact of four factors that contributed to the development of this alliance: (1) The intermediary role assumed by Torrijos and the National Guard to mediate between divergent social classes; (2) The ability of the regime to use the resources of the service economy to “purchase” the support of both business and labor; (3) The issue of the recovery of Panamanian sovereignty over the Panama Canal, which tended to rally support for the government; and (4) The historical and inherent pragmatism and opportunism of Panama’s elite sectors. Chapter 4 examines the breakdown of the military government after the death General Torrijos. The investigation traces the evolution of this breakdown throughout the crisis years of the 1980s up to the U.S. invasion of December 20, 1989. The chapter focuses on the following factors: (1) The power vacuum left by the death of Torrijos; (2) The economic crisis suffered by Panama as a result of increasing debt, diminishing private investment, and global recession; (3) The neoliberal economic policies implemented by the post-Torrijos governments, which eroded the regime’s support among labor; (4) The increasingly bitter relationship between Panama and the United States; (5) The rise to power of Manuel Antonio Noriega; and (6) The development of a vocal domestic opposition, with significant backing from business sectors and the United States. Chapter 5 examines the institutional changes in post-invasion Panama. Particular attention is given to the process of demilitarization and electoral reforms. In 1994, Panama took an important step in securing democracy by constitutionally prohibiting armed forces. The process, however, began early in 1990 with the dismantling of the Panamanian Defense Forces and the creation of a new civilian dominated Public Force [Fuerza Pública]. Another set of institutional changes relating to the strengthening of the independence of the Electoral Tribunal were instrumental in the development of free and competitive elections. Pérez

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Chapter 6 analyzes the extensive process of reconciliation and social dialogue instituted in post-invasion Panama. Through political learning and a series of directed dialogues, Panamanian political and social leaders built an impressive series of agreements that helped to institutionalize consensus-building as a key component of democratization. Particularly important were dialogues leading to the 1994 elections and to the institutionalization of the legal framework for the management of the Panama Canal. Chapters 7 and 8 explore mass political culture in post-invasion Panama. Chapter 7 focuses on the conceptualization of democracy and support for democracy over authoritarianism by focusing on the results of surveys from 2004, 2006, and 2008. Chapter 8 focuses on two key variables for measuring democratic values: political tolerance and system support. Moreover, the chapter examines support for and satisfaction with democracy. Finally, in chapter 9, I analyze the successes and failures of U.S. policies and their impact on democracy in Panama. In addition, the chapter evaluates the prospects for a stable democracy in Panama in light of the historical, structural, and attitudinal factors discussed in the book. Ultimately, the success or failure of Panamanian democracy will speak directly to the ability of the United States to shape political events in Latin America.

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Chapter 2 The Shaping of Elite Political Culture During the Ancien Regime, 1903–1968

This chapter discusses the historical and structural factors that shaped the nature of Panama’s elites at the start of the republican era. First, the extent to which the predominance of the transit route shaped the nature of the Panamanian economy. Panama’s economy since the colonial period has been tied to the transfer of goods across the narrow stretch of the Isthmus. This phenomenon has affected the behavior and values of elites, as well as the institutional structures of the State. Second, the increasing political influence and intervention of the United States. The Panamanian constitution of 1904 gave the United States the right to intervene militarily to “secure the public peace” whenever the United States deemed necessary. The treaty for the construction of the Panama Canal also gave extraordinary powers to the United States. Third, a high level of ideological consensus among Panamanian elites. Liberal economic ideas have dominated the political dialogue of elites since before the establishment of the republic. Both conservative and liberal elites saw Panama as a function of its geographic position, and thus supported the development of political and economic structures that deepened Panama’s insertion into the world commercial system. Fourth, the existence of a commercial elite that has, in alliance with the United States, held tight control over the apparatus of government and the principal mode of production. While the ruling class has been open to the incorporation of wealthy, European and U.S. immigrants, they have traditionally excluded popular sectors from participating in the nations’s politics. In many ways, the structure of Panama’s economy weakened the development of strong labor and popular groups. Pérez

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The Impact of Geography on Politics and Culture Since the discovery of Mar del Sur (as Spaniards called the Pacific Ocean), the Isthmus of Panama has been used as a zone of transit. With the passage of time, Panama developed into the most important intercontinental transit route. For Panamanians, that is the principal role assigned to the Isthmus by history. Panama’s motto is Pro Mundi Beneficio (“At the Service of the World”). Panama demonstrates how the physical environment shapes the formation and development of the social institutions of a nation. In the case of Panama, this phenomenon has been called transitismo (pre-eminence of the transit route). According to Panamanian historian, Alfredo Castillero Calvo, the Spanish Crown assigned a transit role to the Isthmus. In other words, to serve as a land bridge for the transportation of gold, silver, and other merchandise between the Pacific and Atlantic oceans. Between 1543 and 1748, Panama became the center of a mercantile system based on galleons and fairs with a local productive sector that, while not dedicated exclusively to supporting this system, depended enormously on it (Castillero Calvo 1973, 18–21; 1980; 1983). As a result, and differently from other regions of Latin America, the dominant class came to be composed primarily of merchants. The pattern of colonization also favored the capital city. For example, in the first census of 1607, almost half of the 12,000 people living on the Isthmus lived in the capital city of Panama (Castillero Calvo 1973, 26).

An Economy at the Service of the World The Panamanian colonial elite based the economy on monopolistic control of the transportation of goods from one ocean to the other, the renting of property, and the representation of foreign interests. In reality, the limitations of this economy placed the local elite in a dependent position, even lacking the stability that capital finds necessary for its operation and expansion. Local commerce was subject to the frequency of the fairs held in the Atlantic city of Portobelo to sell the goods crossing the Isthmus from other parts of the Indies. This caused prolonged periods of economic stagnation as the fairs became more sparse. After 1750, the Isthmus entered a period of deep economic depression as the route around Cape Horn became cheaper than crossing Panama (Castillero Calvo 1980, 13–33).

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Between 1821 and 1903, when Panama formed part of Colombia, after independence from Spain, the dominant class was composed of the urban commercial bourgeoisie, “urbanized” rural landowners, and foreign merchants tied to the local elite. Their economic power was based on the representation of foreign commercial interests and urban property (Figueroa Navarro 1982, 358–359). The completion of the transisthmian railroad in 1855 favored international commerce by reducing the time and cost of transporting goods across Panama. In that way, Panama received an influx of foreign capital larger than domestic production would justify. The result was the deepening of the hypertrophy in the tertiary sector and the dependence on global commerce. Beyond this, the construction of the railroad and the Panama Canal placed in foreign hands control of the most productive sector of Panama’s economy. In large part, Panama’s separation from Colombia in 1903 was a function of the desire of Panama’s elites to deepen the transit nature of Panama’s economy. The refusal by the Colombian Senate to approve the Herran-Hay Treaty, which provided for the construction of an interoceanic canal through the Isthmus, moved a significant sector of the elite to push for independence from Bogota (Lemaitre 1971, 386, 388, 392; Teran 1976). During the debate in the Colombian Senate on the ratification of the treaty, Isthmian leaders made dire predictions about the future of Panama if the treaty was rejected. José Agustín Arángo, the ideologue of the separatist movement, expressing the urgency of the situation stated, “and then (speaking of the rejection of the treaty) I saw only one way—our separation from Colombia—to save the Isthmus from the ruin in which it would be thrust” (Arángo 1922, 13). The group that supported the separation from Colombia was composed of leaders of various political orientations. There were prominent liberals such as Eusebio A. Morales, Carlos A. Mendoza, Federico Boyd, and General Domingo Díaz Arosemena, and conservatives like José Agustín Arángo, Tomás Arias, Nicanor A. de Obarrio and Manuel Amador Guerrero (Linares 1989, 59). The motivation that united both groups was the idea of independence as a way of saving the project of building an interoceanic canal. That project constituted the ultimate expression of the geopolitical doctrine that saw the Isthmus as the center of world commerce. The elite, however, could not gain financial advantage from the operation of the Canal. The productive infrastructure of the country was underdeveloped and the restrictions of the Canal treaty prevented access of Panamanian merchants to the Canal Zone market. Furthermore, the local commercial elite was at a tremendous disadvantage with respect to competition from North American capital in the provision of services to the Zone. As a result, the local commercial elite would seek the renegotiation of the Canal treaty as a way of correcting these problems (Manduley 1980, 60–61). Pérez

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The struggle to gain access to the Canal Zone would constitute one of the major unifying factors among Panamanian elites throughout this century.1

Cultural and Political Effects of the Transit Economy Ricardo Arias Calderón, former vice-president of Panama, has stated that “Panama is a transactional, rather than a confrontational society” (Arias Calderón 1987/88, 329). Panama, therefore, can be characterized as the nation of the “deal,” where everything is for sale. This modus operandi is closely tied to the nature of the economy. The model of economic development shaped the way elites thought and behaved. The lack of a well-integrated national economy led to the weakness of labor and other popular sectors. Lacking a strong economic base, these sectors could not hope to seriously challenge the political dominance of the commercial elite. As a vital zone of transit for global commerce, the Isthmus was subject to the military, economic, and political interests of Seville, Madrid, London, Bogota, and Washington. The climate that prevailed during the early period of colonization, as described by Castillero Calvo, was one of “to be there to get rich.” Later, the local commercial elite would serve as representatives for European companies that exported manufactured products—mainly British—and imported products from South America (Jaén Suarez 1979, 9; Castillero Calvo 1980, 46; Figueroa Navarro 1982, 18, 29). As Castillero Calvo points out, an elite that depended on foreign interests, of necessity must be pragmatic and liberal rather than insular and conservative (Castillero Calvo 1973, 29–30). The geographic position of Panama thus promoted tolerance, pragmatism, and opportunism among the dominant class. The conservative provincial mentality which could have been the product of 200 years of closely knit social networks, was transformed by the constant flow of people, merchandise, and ideas across the Isthmus. The location of Panama’s residents at the crossroads of different cultures with their respective values and beliefs promoted tolerance.

Ideological Consensus Both liberals and conservatives saw the development and “salvation” of Panama as a function of the construction of an interoceanic canal. The

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organic weakness2 of the conservative forces and the dominance of the service sector reduced ideological confrontation. The size of the nation, as well as the social and economic networks that sustained the dominant class regardless of party affiliation, also helped to diminish ideological confrontations. Julio E. Linares, writing about the differences between liberals and conservatives, writes, “In speaking of Panamanian conservatives, we must warn [the reader] that the ideological differences between them and the liberals were much less in this land [speaking of Panama] than in the rest of Colombia” (Linares 1989, 15). Linares attributes this phenomenon to two factors: the absence of feudal forms of socioeconomic organization, which were the basis of conservative thought throughout the rest of Latin America, and Panama’s relative isolation from the rest of Colombia. The latter gave rise to a commonality of political and economic interests among Isthmian liberals and conservatives. The government of Manuel Amador Guerrero (1904–1908), the first constitutional president and a conservative, was instituted on the basis of a political pact between conservatives and liberals. This pact is reflected in the makeup of the cabinet, which was formed in equal proportions by conservatives and liberals (Materno Vasquez 1987, 268). Pablo Arosemena, one of the founders of the new republic and a leader of the Liberal Party, said, “I find no cause of division among Isthmian citizens that arises from political ideas. The factors that motivate the formation and subsistence of political parties in the world, were resolved in our Constitution . . . neither conservatives or liberals will attempt to change that” (Materno Vasquez 1987, 251). Historian Humberto Ricord laments the lost of ideology in the political scene of Panama since the construction of the Canal, attributing this phenomenon to the “mercantilization” of Panamanian society, which in turn promoted “individualism and materialism” (Ricord 1989, 114–115, 329). In a nation in which personalism, clientelism, pragmatism, and opportunism were the principal components of politics, ideological parties had difficulty finding an audience. In a pragmatic environment, political leaders could change parties without having to pay a significant political price. The changes were often made based on personal convenience. Moreover, leaders who maintained a principled or ideological position often suffered heavy criticism and alienation. The defense of principle or ideology is offensive in a pragmatic society that depends on personal relationships. Financed by major economic interests, political parties’ structures were created on the basis of personalism, social networks, and patron/ client relationships. A major factor shaping this political environment was the size of the nation in terms of geography and population. The population of Panama Pérez

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City slowly increased from 5,000 in 1607 to 7,000 in 1736. It was not until 1850 that immigration significantly increased the local population (Jaén Suárez 1979, 41, 45, 94). With such a reduced population, daily political, social, and economic activities were carried out among persons united by a complex network of family, economic, and friendship relationships (Castillero Calvo 1985, 136–141; Figueroa Navarro 1982, 64–66). In that way, there was no separation between the public and private life of individuals. Since colonial times, individuals and families had depended on their social networks to survive and prosper. The dominant class used these social networks to increase and maintain their economic and political power. The lower classes depended on the relationships they could foster with individuals from the dominant class. Patron/client networks served to solidify the hold of the ruling elite over the population. For the lower classes, they represented the means of gaining selective economic and social benefits from a system stacked heavily against them. The history of Panama in the last 200 years is like a theatrical drama dominated by the same personalities. As political actors grew old or died, they were replaced by relatives or friends with similar names and mentalities. Two families that illustrate this point are the Chiari and Arángo families. The Chiari family built their political power on their control of a vast economic empire that includes the largest agro-industrial complex in the nation, Compañia Azucarera La Estrella and Compañia Ganadera de Cocle. They also owned the second biggest television station in the nation, TV Dos (Gandásegui 1993, 156–157). Two members of the family (Rodolfo and Roberto, father and son, respectively) were president of the republic. Rodolfo Chiari dominated Panamanian politics during the 1920s. He was twice a member of the cabinet and president between, 1924–1928 (Zentner, Jr. 1984, 91). Roberto Chiari was president between 1960 and 1964. A grandson of Rodolfo Chiari, Rodolfo Chiari de León, was minister of government and justice during the Noriega regime in the mid-1980s.3 Ricardo Manuel Arángo Remón, a merchant, was member of the Municipal Council of Panama City in the nineteenth century and governor of the Department of Panama, 1886–1893. His brother, José Agustín Arángo Remón, also a merchant and banker, represented Panama in the Colombian Senate, and was chief of the Separatist Movement in 1903. That same year, José Agustín Arángo became president of the First Provisional Government Junta. He married Josefa Matilde Chiari, thus, linking the Chiari and Arángo families. One of their grandchildren, Ricardo Adolfo De La Guardia Arángo, was president of Panama from 1941 to 1945. José Augustín Arángo Chiari, general manager of the National Bank of Panama and son of José Agustín Arángo, was superintendant of Santo Tomas Pérez

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Hospital, governor of the Province of Panama, and ambassador to France. Ricardo Manuel Arángo Jované, a civil engineer and employee of the Panamanian Railroad Company, was a member of the Municipal Council of Panama City in 1903 and worked in the construction of the Panama Canal. Raul Arángo Navarro was a member of the National Assembly, ambassador to Spain, and twice-elected vice-president of the republic (Zentner Jr. 1984; Conte Porras 1986, 16–18). His son, Raul Arángo Jr., married a daughter of President Roberto F. Chiari (1960–1964), was a member and president of the National Assembly, 1964–1968, and is a former minister of the presidency (i.e., presidential chief of staff) during the Pérez Balladares administration (1994–99).

The Structure of Domination Constructed by Panamanian Elites Entrance into the social networks controlled by the elite was possible only to the extent that persons entering the network could provide specific economic, social, or political benefits to its members. In this way, we find many immigrants who easily became part of the social networks because they were “white” and brought significant economic benefits to the local elite. The dominant political elites in Panama are integrated via a process that is reflected in the following circumstances: (1) concentration of the prosperous economic groups (either in local retail commerce, the Colón Free Trade Zone, the banking center, or the industrial sector); (2) The concentration within the economic groups has the effect of establishing significant links among the various entrepreneurs, links made in relation to the capabilities of gaining financing from major banks and domination of the small domestic market; and (3) The links are enforced as groups that remain outside of the top network are placed at a disadvantage in relation to their competitors. From these economic networks, the top entrepreneurs come together to meet the challenges posed by social and political problems. In Panama, the concentration of wealth and political power is reflected in the fact that most civic leaders are powerful entrepreneurs. For example, the president of the Rotary Club is often the general manager of a large commercial or industrial enterprise, as well as a member of the board of directors of one or more banks or commercial interests (Materno Vasquez 1987, 82). Tight social and political networks are not unique to Panama or to the developing world.4 However, given the small size of Panama and the dominating role of one sector of the economy, the concentration of wealth Pérez

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and power becomes much more significant. The concentration of power within the hands of the commercial elite has been perpetuated by the dominant role of particular families, dating back to the colonial period. The Panamanian commercial elite developed close economic and social ties with foreign interests. Because of those ties, the urban commercial elite was open to the incorporation, through marriage or business, of immigrants who came to Panama to work in the transit route or to take advantage of Panama’s open economy. These immigrants brought capital and new blood into the Panamanian oligarchy. In this sense, Panama’s dominant class was more open than those of other Central American nations. The local elite, as we have seen before, are imbued with a keen spirit of commerce. The selling and buying of goods and services constitutes their raison d’etre. In this environment, the selling and buying of family names, position, and fortunes becomes a natural extension of doing business. The pragmatism and opportunism that derives from the open economy leads Panamanian elites to seek “white and wealthy” immigrants in order to preserve their economic power (Figueroa Navarro 1982, 310). At times, they have been willing to accept “less fortunate” but white immigrants, with the hope of preserving their wealth and racial hegemony. Alfredo Figueroa Navarro identifies three circumstances that accentuated this tendency: (1) The economic recession following independence from Spain in 1821. Under the dire economic situation the local elite sought outside capital to maintain their position; (2) The racial and caste mentality that seeks “white” European immigrants, rather than local mestizo merchants for marriage; and (3)A keen sense of their economic and political interests, coupled with a level of xenophilia that promotes the interrelationship with Europeans and North Americans.

Origins of The Urban Commercial Elite The social structure of the Panamanian commercial elite arose from the construction of the Panamanian Railroad in the mid-1800s. Prominent members of the commercial elite held high positions in the railroad company.5 The Panama Railroad Company united and consolidated the commercial elite by facilitating its goal of independence. The management of the company played a crucial role in securing United States support for the separatist movement and in preventing Colombia from stopping it.6 After independence, the tight relationship between the railroad company and the commercial elite served to expand the economic base of the latter by

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giving them entry into the lucrative Canal Zone market. The commercial elite took particular advantage of the labor force brought to construct the Canal by renting housing to them. During the construction phase of the Canal, this became an incredibly lucrative economic endeavor. Families such as de Obarrio, Vallarino, and Chiari made huge fortunes renting rooms to Canal workers (Gandásegui 1989). The end of the construction of the Canal also ended the privileges the commercial elite had enjoyed within the Canal Zone market. The end of the construction phase meant the end of the Taft Agreement,7 which had opened the zone market to the Panamanian commercial elite. From 1914, the year in which the Canal was opened to world commerce, the commercial elite has sought the renegotiation of the Hay-Bunau Varilla Treaty so as to secure further access to the lucrative market going through the Canal. In 1926, 1936, 1955, and 1967, the commercial elite led the fight for new treaties. Their concern was not Panamanian sovereignty over the zone, but rather the ability to sell their goods to those living in the Canal Zone and those passing through it. As stated earlier, the fight to renegotiate the treaties became a unifying element among the commercial elite. Having lost access to the Canal Zone market, the commercial elite sought to open the Panamanian economy to the world market and, thus, take advantage of Panama’s geographic position. They did so by establishing the “Law of Incorporation” (Ley de Sociedades Anonimas), which facilitated the formation of corporations with little initial capital. This made Panama a haven for foreign investment and laundering of money. Another way of opening the economy was the establishment of lax banking rules, enabling Panama to become an international banking center. Moreover, Panama became one of the leading countries in the registering of merchant vessels. The Monetary Act of 1904, which set the U.S. dollar as the national currency, greatly facilitated the other endeavors (Materno Vasquez 1987, 107). With the 1936 Arias-Roosevelt Treaty, the commercial elite achieved substantial concessions from the United States.8 During World War II, the commercial elite benefitted greatly from the military presence of the United States. In the late 1940s and 1950s, the commercial elite, with the support of the United States, sought to implement a program of import substitution industrialization. The program sought to diversify the Panamanian economy by using the proceeds from the transit route to expand the domestic market. The import substitution industrialization program was opposed by the most conservative sector of the commercial elite—composed of property speculators, retail merchants, and those who represented foreign interests on the Isthmus. The program, however, was instrumental in creating an emerging industrial class.9 Pérez

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The United States and Panamanian Politics The proclaimed right of the United States to intervene in the internal affairs of Panama goes back to the middle of the nineteenth century. In 1846, the Republic of New Granada, of which Panama was a part, and the United States signed a treaty regarding the “neutrality and freedom of transit across the Isthmus of Panama.” The document is known as the Mallarino-Bidlack Treaty. The treaty had been requested by New Granada, wishing to make “firm and durable the friendship and good will that happily existed between the two nations.” However, the true purpose of the treaty was to seek the protection of the United States against the imperial aspirations of Great Britain in Central America. Both the United States and Great Britain sought to secure control of a future interoceanic canal. Dalva Acuña states, “The protection sought by New Granada of the United States was contrary to the national sovereignty of the country. However, the advantages of the proposed treaty prompted New Granada to accept the treaty, which was signed on December 12th, 1846” (Acuña 1967/1968, 32). Article 35 of the treaty was the most important. By virtue of this article, New Granada was committed to grant to the citizens of the United States the same commercial prerogatives that its citizens enjoyed. At the same time, the United States “guaranteed to New Granada . . . the neutrality of the previously mentioned isthmus with the objective that under no circumstances . . . [would] the free transit from ocean to ocean be obstructed. As a consequence, the United States [guaranteed] the sovereign rights and property that the New Granada [had] and [possessed] over said territory” (Castillero Pimentel 1988, III–IV). Beyond legitimizing the right of the United States to intervene in the internal affairs of Panama, the Mallarino-Bidlack Treaty would negatively affect the legal status that Panama had acquired since its independence from Spain in 1821.10 Article 35 of the treaty established that “the citizens, ships, and merchandise of the United States would enjoy in the ports of New Granada, including those in the part of New Granada generally known as the Isthmus of Panama . . . all the franchises, privileges, and immunities relative to commerce and navigation.” The article, as stated earlier, would continue by assuring New Granada that the United States would guarantee their control and ownership of the Isthmus. Victor Florencio Goytía argues that the article ended the “moral personality” of Panama by transforming the Isthmus into property whose use was granted equally to New Granada and the United States. Goytía goes on to argue that such status violated the extant Grenadine constitution and all future Colombian constitutions (Goytía 1987, 75).

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The Hay-Bunau Varilla Treaty The legal limits to the U.S. right of intervention would expand considerably with the signature of the “Hay-Bunau Varilla Treaty” of 1903. The eccentric minister of Panama in Washington, the Frenchman Phillipe Bunau Varilla, and Secretary of State of the United States John Hay, signed the pact by which the United States and Panama set the basis to “ensure the construction of a canal for ships across the Isthmus of Panama to communicate the Atlantic and Pacific ocean.” The treaty, in Article 2, gave the United States in perpetuity “the use, occupation, and control of a zone of land and land under water for the construction, maintenance, operation, sanitation, and protection of said Canal.” Article 3 granted the United States “all rights, power, and authority within the zone . . . which the United States would possess and exercise as if it were the sovereign of the territory . . . to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority.” In return, Panama received a one-time payment of $10 million and an annuity of $250,000, beginning nine years after the exchange of the instruments of ratification (Castillero Pimentel 1988, XLIX-L and LIII). In relation to the right of intervention by the United States, the new treaty in its first article stated, “The United States guarantees and will maintain the independence of the Republic of Panama.” In Article 7, the United States was granted the “right and authority . . . for the maintenance of public order in the cities of Panama and Colon and the territories and harbors adjacent thereto in case the Republic of Panama should not be, in the judgment of the United States, able to maintain such order” (emphasis added) (Castillero Pimentel 1988, XLIX-LI). The treaty fulfilled the dreams of the commercial elite which dominated political and social life on the isthmus. Through the construction of the Canal, Panama would finally achieve its “manifest destiny” to become the center of world commerce. Moreover, the guarantee and maintenance by the United States of the independence of Panama was extremely important for the founders because it prevented Colombia from militarily threatening the new state. On January 15, 1904, the provisional government explained to the National Constituent Assembly why they supported and signed the treaty: An essential part of the treaty is the obligation, in perpetuity, to guarantee the independence of our country the United States has accepted. That point is so important because it relates to the very existence of the nation. Without this guarantee we would be exposed to external aggression that would force us to be in a constant state of military readiness. This obligation is clear evidence of the good will and spirit of justice that motivates the United States (Arauz et al. 1979, 28).

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The Hay-Bunau Varilla Treaty was signed 15 days after the United States had explicitly violated the Mallarino-Bidlack Treaty by supporting the separation of Panama from Colombia. The latter treaty had committed the United States to guaranteeing the sovereignty and property of New Granada (later the Republic of Colombia) over the territory of Panama. The Hay-Bunau Varilla Treaty was signed two years after John Hay and Lord Julian Pauncefonte, ambassador of Great Britain in Washington, had signed the Hay-Pauncefonte Treaty, by which the Clayton-Bulwer Treaty of 1850 was abrogated, leaving the road clear for the United States to build an interoceanic canal in Central America. Thus, the treaty came to solidify the influence of the United States over Panama and the region. For the United States and the commercial elite, however, the treaty was not enough. They sought to permanently establish the influence of the United States by incorporating the right of intervention into the national constitution.

Article 136 of the National Constitution Members of the Conservative Party in the Constituent Assembly, in connection with the U.S. representative in Panama, William Insco Buchanan, proposed to include into the new constitution a clause that would extend to the rest of the nation the powers of intervention granted to the United States under Article 7 of the Canal Treaty. This proposal was accepted on January 27, 1904, and became Article 136 of the new constitution (Cuestas Gómez 1990, 48–55). Article 136 of the Panamanian Constitution of 1904 gave the United States the right to intervene anywhere in the Republic of Panama to reestablish “public peace and constitutional order.” Pablo Arosemena (one of the founders of the new republic) justified Article 136 by stating that it “took away our right to kill each other.” To Arosemena, as well as other leaders, the article assured their political and social position, not to mention the survival of the new nation (Araúz et al. 1979, 31).

Effects of United States Intervention There are five direct manifestations of the legal rights granted to the United States. Those manifestations, most, in fact, going beyond the strict reading of the documents, would directly jeopardize Panamanian

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sovereignty. First, the elimination of the army in 1904, at the insistence of the United States, directly transferred responsibility for maintaining order to the United States. Second, Panama renounced its right to establish an independent monetary system. By virtue of the Monetary Act of 1904, Panama agreed to place the nation’s monetary system under U.S. control. By this accord, Panama adopted the U.S. dollar as the national currency. Third, Panamanians established an administrative dependency by turning over key public administration positions to officials recommended by the extraterritorial power.11 Fourth, they developed the practice of asking the United States for supervision of elections, coupled with the need for obtaining U.S. consent over potential presidential candidates. Fifth, the construction of the Canal subordinated the national economy to the “Canal economy.” The creation of the Canal Zone divided Panama in two; the interior of the country languished as the service-oriented economy tied to the Canal prospered. Furthermore, the militarization of the Canal Zone incorporated Panama into the global defense system of the United States. Panama thus became militarily allied to the United States ad perpetuum. Panamanian elites used the right of the United States to intervene in the internal affairs of Panama as a way of securing individual and sectoral political interests. As stated above, the United States repeatedly supervised elections in Panama. This form of intervention was not contemplated either in the Treaty or in Article 136 of the Constitution. The supervision of elections resulted from the direct request of political elites. Up until the late 1920s, victory or defeat in elections depended to a great extent on the supervision, or lack thereof, by U.S. officials. The United States intervened “to safeguard the purity” of the electoral process in the elections of 1906, 1908, 1912, and 1918 (Castillero Pimentel 1988, 235– 245). The opposition asked the United States to intervene in the elections of 1928, but on this occasion the United States refused, ending direct U.S. supervision of Panamanian elections (Castillero Pimentel 1988, 240–241; Linares 1989, 267–268). The refusal of the United States to intervene in the elections of 1928 did not end U.S. intervention or influence all together. In 1918, 1921, 1925, 1964, and 1989, the U.S. militarily intervened in Panama to “maintain public peace and constitutional order.” In most cases, Panamanian officials requested the intervention.12 United States influence on the Isthmus has served as an easy way of solving internal conflicts. By resorting to United States intervention, elites have been able to secure their hold on power without the violence characteristic of other nations of the region. Moreover, violence tends to negatively affect commerce, something antithetical to Panamanian elites.

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The Urban Commercial Elite and Their Control of Government Given the dominant position of the urban commercial elite, it is not surprising that they held most of the top government positions and tight control over public policy. I have already mentioned how their vision of the Isthmus (as a service center for world commerce) has shaped economic policy-making. Panama’s legal framework is geared toward an open, externally oriented economy in which the flow of money and goods is freely permitted and encouraged (Zimbalist and Weeks 1991).13 Economic policy has traditionally favored the tertiary sector, to the detriment of agriculture and industry. Divided among the various political parties, most with the same ideological underpinnings, the dominant class was able to win most of the legislative seats and control this branch of government.14 The dominant class also held a tight rein over the executive branch. However, an important statistic that helps to understand changes experienced by the dominant class in the 1930s is the difference in the average times served in the cabinet between 1904–1930 and 1931–1968. During the 1904–1930 period, the average time served was two years; during the 1931–1968 period, it was 1.2 years. In the first period, 11 individuals exceeded the average; in the second, only four did so. The 1930s saw the emergence of a middle and professional class that, for a time, challenged the dominance of the commercial elite. The governments headed by Arnulfo Arias brought into government elements of that middle class. More will be said later in the chapter about the impact of Arnulfo Arias on Panamanian politics during and after the 1930s. In the first period (1904–1930), we find names such as Arángo, Arias, Boyd, de la Espriella, Galindo, Arosemena, Alfaro, and Chiari, all representing the urban commercial elite. If one compares a list of legislators from the urban bourgeoisie, one will find the same families (in many cases, the same individuals) serving both in congress and in the cabinet. For example, Alfredo Alemán served in congress between 1936 and 1945 and in the cabinet during 1952–1956. The Boyd family has been involved in Panamanian politics since the early part of this century. Federico Boyd, the patriarch of the family, was one of the founding fathers in 1903. A descendant of his, Augusto Samuel Boyd served in the cabinet in 1968 and other descendants, Federico A. Boyd, Alfredo A. Boyd, and Aquilino E. Boyd, served in congress from 1940 to 1968. Aquilino E. Boyd continued to be active in politics during the military regime, serving as foreign minister and vice-presidential candidate in 1989. The Arosemena family, of Pérez

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Colombian origin, counts among its members Justo Arosemena, the most prominent political thinker of nineteenth-century Panama. Justo Arosemena’s son, Pablo, served in the cabinet in the early years of the republic and was president in 1910–1912. Carlos Arosemena was a member of the cabinet in 1910–1912. Florencio Harmodio Arosemena, a grandson of Pablo Arosemena, was president from 1928 to 1931. Fabio Arosemena served in the cabinet in 1918–1920 and in congress from 1932 to 1936. Leopoldo Arosemena served in the cabinet during two presidential terms, 1932–1936 and 1936–1940. Ruben Arosemena Guardia served in the short-lived cabinet of Arnulfo Arias in 1968. During the second period (1931–1968), the presence of the traditionally dominant families continues but the turnover is greater. This is partly explained by the entrance into politics of emerging middle and professional classes, and the proliferation of political parties that occurred after 1930. The bourgeoisie spread their support and presence among many political parties, and as these parties alternated in power so did the individuals who represented them. The divisions were functional for the maintenance of power, since ideological differences among parties were minimal, and none threatened the economic dominance of the urban commercial elite. During the brief tenure of Arnulfo Arias as president (1940–1941), we find a significant reduction in the number of members in the cabinet from the traditional families. Arnulfo Arias, as I detail in the next section, attempted to challenge the dominant bourgeoisie with a highly nationalistic appeal that frequently mobilized popular support. During the brief periods in which Arnulfo Arias was president, particularly the first two, policy differences from those of the dominant elite can be detected. During the first period, 1940–1941, Arias promoted a highly nationalistic program that included the nationalization of retail commerce and increased expenditures on state bureaucracy. In the second, 1949–1951, Arias promoted social welfare programs (Conte Porras 1990).

Coping With Non-Elite Challenges By the late 1920s, the impact of a world depression served to exacerbate tensions between Panamanians and the United States. Panamanians found themselves competing for unskilled jobs on the “silver roll”15 with West Indian Blacks, whose forefathers had been imported by the U.S. Panamanian Canal Company to supply manual labor for canal construction. Panamanians now condemned the foreigner—whether U.S.

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technician or West Indian laborer—as an invader who seized the profits of the international waterway while Panamanians suffered economic deprivation (Lewis 1980; de Lewis 1979; and Maloney and Priestly 1975). The ill effects of the depression were especially acute in the terminal cities of Panama and Colón. In these ports resided the emerging middle class of Panama, who depended on the commercial prosperity of the canal for their livelihood. Most of the middle-class groups had migrated from rural to urban areas, where they had managed to acquire the rudiments of an education and had entered business or government service. As much as the unemployed Panamanian who competed with blacks in the Canal Zone, the middle classes of Panama City and Colón resented U.S. policy in Panama and sought greater commercial benefits from the Canal. Similarly, these elements were xenophobic, expressing hostility toward the encroachment of Anglo-Saxon norms in Isthmian life. They were constant agitators for nationalization of foreign-owned businesses. Isthmian nationalism found expression in the Acción Comunal (precursor of the Panameñista movement) coup of 1931. Founded in 1926, this group represented an important opposition to the Liberal presidency of Florencio Harmodio Arosemena, whom it accused of having organized electoral fraud to capture the executive office. The basic ideological tenants of Acción Comunal were nationalist and fervently anti-U.S.; the slogan adopted by the organization was “Patriotismo, Accion, Equidad y Disciplina” (“Patriotism, Action, Equality, and Discipline”) (Beluche Mora, 1981; Acción Comunal, VIII, No.127, April 1931; IX, No.171, June 1932; IX, No.177, August 1932). By 1931, accusations of financial corruption and political scandals involving Arosemena reached a high pitch. On January 2, Acción Comunal launched a coup that successfully unseated the Panamanian president. After the coup, a transitional government was established to rule until the elections of 1932. Those elections were won by Harmodio Arias, brother of Arnulfo Arias the leader of Acción Comunal and founder of the Panameñista movement. The Acción Comunal coup was the first violent overthrow of a sitting president in Panamanian history, and it would not be the last. The depression and the emergence of a politically mobilized middle class divided the ruling elite. The 1940s saw Arnulfo Arias win the presidency twice, in 1940 and 1948. On both occasions, he was overthrown by the National Police with the support of the commercial elite and the United States. In 1940, Arnulfo Arias founded the National Revolutionary Party (political party expression of the Panameñista movement). His program called for a new governing alliance, composed of the most dynamic sector of the bourgeoisie (i.e., the industrial), small agricultural producers, and Pérez

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rural peasants. His program attempted to reconstruct the coalition that supported and brought to power the “Popular” Liberals of Belisario Porras in the 1910s. The slogan adopted by this movement was “Panama for the Panamanians,” representing the xenophobic nationalism of Arias’s program. The new constitution imposed by Arias in 1941 was explicitly racist, placing strong restrictions for immigration and naturalization, as well as restrictions on employment based on race (Conte Porras 1990; Sepulveda 1983). Arnulfo Arias became the great caudillo of Panamanian politics. He ran for the presidency five times (1940, 1948, 1964, 1968, and 1984); three times (1948, 1964, and 1984) he was denied his electoral victory through fraud, and three times (1941, 1951,16 and 1968) he was overthrown by the military. Arias’s dominance of the party was total. The Panameñista Movement went from a political organization that canalized popular discontent with the corrupt practices of the liberal regimes, to a political party that furthered the personal political ambitions of Arnulfo Arias. In other words, a party that had initially defended a well-developed doctrine succumbed to the historical and structural patterns and became one more individualistic and “pragmatic” political entity. By the 1960s, the party came to base its appeal almost exclusively on the personal charisma of Arnulfo Arias. It was with this charisma that he was able to attract popular support while moving the party away from the more nationalistic and progressive ideals it expressed in the 1940s. The party also went from allying itself with the most dynamic sectors of the bourgeoisie and small agricultural producers to supporting the traditional commercial class and large landowners. In the 1968 elections, Arnulfo Arias’ coalition included the most traditional sectors of the powerful commercial elite. His vice-presidential candidate was Dominador Kaiser Bazán, leader of the Republican Party, and one of the wealthiest man in Panama. Kaiser Bazán was the son of an immigrant father and had built one of the largest agro-industrial complexes in the nation.17 While Arnulfo Arias and his movement represented a challenge to the dominant commercial class, Arias himself had married into the Panamanian oligarchy,18 and incorporated many of its members into his political movement. In the end, his movement came to represent sectoral interests that could easily be reconciled with the interests of the dominant commercial elite; Panamanian political culture made this reconciliation inevitable. Many of the problems encountered by Arnulfo Arias’ governments came largely from U.S. opposition. The United States feared his xenophobic nationalism would endanger U.S. interests on the Isthmus. During Arias’ first government, 1940–1941, he was accused of sympathizing with

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the Axis powers (Conte Porras 1980, 105–106). Arias’ refusal to lease extensive tracks of land to the United States for military purpose precipitated U.S. acquiescence of an internal coup against his government (Linares 1989, 388; De La Guardia 1977, 192). Again in 1951 and 1968, the United States implicitly supported coups to oust Arnulfo Arias from power.

Challenges to Elite Rule: The Impact of Counterhegemonic Groups during the Twentieth Century The extent to which leftist or progressive movements have been able to challenge the dominance of the traditional commercial elite during this century has been rather limited. However, their role in Panamanian politics cannot be ignored. In fact, the Socialist Party was able to make some inroads into the legislative branch during the 1940s.19 Between 1912 and 1924, the liberal governments of Belisario Porras created the institutional basis upon which the Panamanian political system rests. In addition, this period saw the establishment of the three most important social divisions that have served to mark the challenges to the hegemonic rule of the liberals. First, despite the efforts— superficial as they were— of Porras to construct a Workers Federation, the relationship between workers and liberalism did not progress. Second, although liberalism has historically been tied to the aspirations of the petite bourgeoisie, the emergence of large agricultural and industrial capital was not accompanied by the necessary mechanisms to reconcile the differences between the two groups. Finally, the political destruction of the conservative forces did not eliminate them economically or ideologically (Gandásegui 1989:55). Before World War I, the political demands of the workers were expressed through the Liberal Party. The first anti-liberal worker’s organization emerged as a result of the Russian Revolution. In 1918, radicalized workers expressed their solidarity with the Bolsheviks and a year later formed the “Communist Group” (Gandásegui et al. 1990). The 1920s were characterized by social and political mobilizations (El Heraldo August 1925; March, April, July, August, October, November, and December 1927). However, it was not until 1930 that a group of workers, intellectuals, and other radicals founded the Communist Party (Partido del Pueblo 1971). The Socialist Party was founded during the same year, with a program that called for a worker-peasant alliance. While the Communists followed

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the doctrine of the Communist International, the Socialists sought to establish a bridge between the working class and the most progressive sectors of the bourgeoisie. The Communist International, however, believed in the conspiratorial nature of political power and the state (Porras 1947). In 1925, the original members of the Communist Group actively participated in the organization of the Sindicato General de Trabajadores (SGT), as well as the Renter’s League. Both movements provoked armed intervention by the United States. The emergence of the Renter’s League was directly tied to the recessionary conditions caused by the end of the construction phase of the Panama Canal. The urban commercial elite made great sums of money during the construction of the Canal by selling goods and renting rooms to workers brought by the United States to work in the Canal Zone. The reduction in personnel and investments that resulted from the termination of work on the Canal, and primarily the isolation to which the Canal Zone was subject to by the United States,20 left both the local government and merchants in a precarious position. In order to meet the growing need of the national treasury, the government imposed a tax on property, which the owners passed along to the renters. The increase precipitated the formation of the Renter’s League and led to massive protests in the streets of Panama City. The government, lacking a well-organized or equipped police force, invoked Article 136 of the National Constitution and called for U.S. military intervention to end the mobilizations. The incidents were an affirmation of the political weakness of the ruling elites vis-a-vis the popular sectors. The response of the elites manifested their reliance on U.S. military power to resolve internal political problems (Cuevas 1980; El Heraldo August 1925). The composition of the Socialist Party was heterogenous. Some were old “popular liberals,” others Bolshevik sympathizers, and still others were leaders of the SGT and the Renter’s League. They believed in a workerpeasant alternative, with the cooperation of the petite bourgeoisie. During the 1930s, the Socialists organized in the rural areas, developing a network of peasant activists. During the 1940s, particularly after the fall of the first Arnulfo Arias government, the Socialist Party had several political victories, sending three deputies to the National Constituent Assembly in 1946. In 1943, the Communist Party dissolved itself into the Partido del Pueblo (People’s Party, PP). The PP had certain success within the trade union movement and radical sectors. In the 1950s, the PP initiated the organization of the countryside, identifying itself with peasant resistance to the expansion of large scale agricultural production. In the province of Veraguas, they organized the Peasant Leagues. The PP also led the struggles

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in the banana plantations. Their success was impressive within university student bodies. The students were frustrated by the policies of the extant regime, facilitating PP takeover of the student movement. After the Cuban Revolution, the PP was divided into two factions: Vanguardia de Accion Nacional (VAN) that focused on the rural areas, and Movimiento Universitario Revolucionario (MUR), which concentrated on the student movement (Gandásegui 1981; Bell and Bloise 1979). At the end of the 1950s, conservative forces were mobilized to recapture some of their lost influence within the popular sectors. The Christian Democratic Party (PDC) was founded with financial and ideological support from abroad. With an anti-communist and anti-liberal discourse, the PDC attempted to gain support from student, professional, and business sectors (Sosa 1977). Their effort was a failure. First, the most conservative sectors of the bourgeoisie were committed to Arnulfo Arias and his movement. Second, most of the professionals who would have supported the PDC under different circumstances were attracted to the Liberal Party by their new technocratic discourse, one that was promoted by the U.S. Alliance for Progress. The country’s internal situation during the 1960s deteriorated so badly that it reached a point of stagnation, which peaked during the Robles administration (1964–1968). This political crisis led to the fragmentation of the ruling elite, which in turn led to a loss of hegemony. This loss of hegemony provided the grounds for the National Guard takeover which ended the ancien regime. The crisis of the 1960s is explored in detail during the next chapter, but is worth stating at this point that the events of the 1960s represented a period in which the political unity of Panamanian elites was at its lowest point since 1903.

Conclusion This chapter has focused on four historical and structural factors that have shaped Panamanian politics since the colonial period: (1) The dominance of the transit economy; (2) The influence of the United States; (3) The ideological consensus among Panamanian elites; and (4) The evolution of tight social and political networks that have helped the dominant elites control politics and society. Those factors were conducive to the creation of a limited and exclusionary system of government from 1903 to 1968. While elections were held, participation in them was restricted by formal and informal means. The system was dominated by the urban commercial elite and backed by the

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military and political might of the United States. That U.S. influence served as the basis of stability and as a unifying element among the political elite. Political conflict was primarily based on personal differences, and political parties were mainly distinguished by the political leader or family that directed it, not by their ideology. Counterhegemonic opposition groups failed to successfully challenge the dominance of the commercial elite. In fact, personal divisions among the elite gave the facade of democratic competition, without endangering the dominant class. During this period there existed an explicit accord among the various political elites, sanctioned and promoted by the United States, that served to consolidate the regime and to safeguard U.S. and elite interests. During the 1960s, the internal divisions among the local elite became irreconcilable. Under these circumstances, a sector of the political elite, with the acquiescence of the United States, supported a military coup against the elected president. The role of elites in the process of regime-building has been of interest to scholars for years. Greek philosophers like Aristotle and Plato, Italian Renaissance thinkers like Machiavelli, nineteenth-century British theoreticians like John Stuart Mills, and contemporary political scientists like C. Wright Mills and Robert Dahl, have all grappled with the questions of who are the elites? Are they important? And if so, in what way? In more recent scholarship the role of elites in building democracy has received close scrutiny.21 This chapter has attempted to add to that body of knowledge by focusing on an elite whose origins and trajectory are unique for the region within which they are located. The dominant class in Panama was composed primarily of merchants—both retail and wholesale. Thus, unlike other parts of Latin America, debate among elites over the principal mode of production was virtually nonexistent in the early period of nationbuilding. Both conservative and liberal elites saw the Panamanian economy and their self-interest tied to the geographic position of the country, and its insertion into the world economy. The nature of elite relations in Panama during the early period of nationhood is remarkably devoid of violence. It is not until after the 1930s that an emerging middle class, allied to a sector of the commercial elite, attempts to challenge the dominance of the commercial elite. However, it will not be until the late 1960s that this middle class, by then allied to an emerging industrial class and the National Guard, succeeds in challenging the power of the commercial elite. The next chapter explores how that became possible.

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Chapter 3 An Enduring Relationship: The Military and Politics in Twentieth-Century Panama

In the previous chapter, I analyzed the historical and structural factors that shaped the development of the political culture of Panama’s elites during this century. I identified four phenomena: (1) the dominance of the transit route as the principal mode of production; (2) the influence of extra-territorial powers, particularly the United States; (3) the level of ideological homogeneity among elites; and (4) the level of control over government demonstrated by those who ruled Panama. A major contention of the book is that those four factors influenced the behavior and beliefs of contemporary elites. In addition, those factors help explain the rise, maintenance, and ultimate destruction of the military regime that ruled Panama from 1968 to 1989. This chapter examines the nature of that military regime. Moreover, it analyzes the ability of the military regime to build a multi-class alliance and remain in power for 21 years. The chapter concludes by examining the nature of the political crisis that ultimately led to the United States military invasion on December 20, 1989, and the end of that military regime.

The Military and Politics Any analysis of the Panamanian military regime must begin with a review of the extant literature on military rule in Latin America. It is important to

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place the Panamanian military intervention of 1968 in the context of a region-wide move toward military regimes. The move was initiated with the Brazilian military coup of March 30, 1964, and culminated with the coups in Chile and Uruguay in September 1973. While the military interventions of the 1960s were not the first in the region, they differed in the extent to which the military undertook the task of governing the nation. Previously, the military institutions of the region had intervened in politics at the service of a dominant elite or to rescue a failing populist party. In the 1960s, however, the armed institutions intervened at the service of an ideology that attempted to place the military above politics and society.1 In their seminal work that inspired the study of dependent development, Fernando Cardoso and Enzo Faletto posited that the manner in which a country was inserted into the world market produces specific class configurations and political arrangements (Cardoso and Faletto 1969). In nations undergoing dependent development, the military was seen to be at the service of an alliance between the national and international bourgeoisie. The military’s role was to maintain stability and order without interfering in the political and economic affairs of the nation. Beginning with the work of Guillermo O’Donnell, theoretical attention shifted from the broad outlines of dependency itself to a more specific concern with regime types in general and authoritarian regimes in particular, with specific reference to the “projects” or policies implemented by such regimes (O’Donnell 1973). O’Donnell classified the new military regimes that emerged in the 1960s as bureaucratic-authoritarian. The bureaucratic-authoritarian regime was “excluding” and non-democratic, with a dominant coalition of high-level technocrats (military and civilian) working in close association with foreign capital. O’Donnell argued that bureaucratic-authoritarian regimes emerge as a response to popular mobilization and are characterized by policies designed to demobilize popular sectors and favor private enterprises. Through such measures, these regimes endeavor to fundamentally restructure society. Bureaucratic-authoritarian regimes emerged as a response to the difficulties inherent in the process of modernization. Traditional caudillismo and militarism were a product of societies in which the hacienda and the agrarian or mineral export economy was predominant. Bureaucraticauthoritarian regimes were a product of societies struggling with incipient industrialization and growth in the size and mobilizational force of the urban sector. Moreover, the military of the 1960s contrasted sharply with military institutions of the past, in their organizational integrity, ideological unity, professionalism, and capabilities. However, not all military interventions followed the path of O’Donnell’s bureaucratic-authoritarian regime. Other studies have drawn attention to authoritarian regimes that have engaged in preemptive mobilization and Pérez

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the channeling of popular support for the regime in conjunction with redistributive measures. Peru in 1968 is a case in point, with Mexico under Cárdenas, Brazil under Vargas, and Argentina under Perón viewed as precursors. Because of the mobilization of a mass base through the enactment of policy and other measures, these regimes have come to be labeled “inclusionary authoritarian regimes.” Work on Peru, in particular, but also on the other cases, have suggested that these inclusionary authoritarian regimes drastically altered the political landscape in countries where they have been in power (Stephens 1983). The Panamanian military regime is an often-ignored case of such a military regime. The Panamanian military regime is an important and interesting case for several reasons. First, the regime was able to construct a multi-class alliance that served as its base of political authority. Second, although characterized as personalistic, the regime managed to survive for eight years following the death of Omar Torrijos. Moreover, it is not clear that the regime would have collapsed at all had it not been for U.S. military intervention. The United States invasion itself constituted a failure of attempts by the United States and domestic opposition to oust Manuel A. Noriega (Torrijos’s successor) from power. Despite the efforts of the United States and the domestic opposition, the military retained a firm grip on national policy-making, continued to exclude members of the civilian opposition from the decision-making process, and successfully withstood efforts by three U.S. presidential administrations to curb military power. This chapter explores the success and failure of the Panamanian military regime, in order to better understand the nature of “inclusionary” military governments. Moreover, I focus on the historical evolution of Panamanian militarism as a way of understanding the rise and eventual demise of the military regime.

Origin and Evolution of the Panamanian Armed Forces Militarism in Panama has two historically defined origins. First, the geopolitical factor that placed Panama at the center of United States expansionism in the hemisphere, and second, the strategic importance of the Panama Canal to the United States. The first explains the large influence of the United States in Panamanian politics and its role in shaping the nature of Panama’s military. The second explains the military program that emerges in the context of a dominant ideology that understands the Isthmus of Panama as a function of its geographic position. Pérez

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The influence of the United States in the formation of the Panamanian armed forces has been felt throughout the twentieth century. As a result of U.S. pressure, the original Panamanian Army was dissolved in 1904 and replaced by the National Police (Arias 1977). In 1916, that police force was disarmed on orders from the governor of the Canal Zone, George Washington Goethals (Zuñiga 1973). In 1943, the National Police was militarized by the United States in order to meet the security needs posed by World War II (Arosemena González 1953). In 1953, scarcely ten years later, the police force was transformed again by the United States into a National Guard capable of carrying out the dual tasks of economic development and national security. Finally, in 1983, the National Guard was transformed into the Panamanian Defense Forces to meet Canal security obligations acquired under the 1977 Canal Treaty (Wong 1988; Palacios 1989; Delgado Diamante 1988).

The Formative Years: 1903–1931 At the time of Panama’s separation from Colombia, on November 3, 1903, the armed forces on the Isthmus were composed of three small units: (1) the “Colombia” Battalion, headed by General Esteban Huertas, a veteran of Colombia’s civil wars; (2) the Second Isthmian Battalion, made up of 200 men, commanded by General Domingo Diaz Arosemena and Commander Pedro de Icaza, both Panamanian; and (3) a police force, in charge of maintaining public order, headed by Jóse Fernando Arángo, also a Panamanian. These military leaders and the troops serving under them, were united behind the separatist movement (Nicholson 1970). After the separation of the Isthmus from the rest of Colombia, Huerta’s forces become the new nation’s military institution. The circumstances under which the new nation was born, however, made the military institution, and the state they were entrusted to defend, a virtual protectorate of the United States.2 For the United States, order and stability were the principal concerns. Having supported the separatist movement, the United States was not about to allow any force, internal or external, to jeopardize its ability to establish the necessary political and social stability needed for the successful construction of an interoceanic canal. Thus, the United States came to regard the existence of a Panamanian army as a threat to the stability of the country. On November 18, 1904, by means of “Decree # 17,” signed by General Santiago de la Guardia, Minister of War and Navy, General Esteban Huertas was dismissed from the army (Castillero Reyes 1962, 159). The next day, all troops serving in the military were given an Pérez

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indefinite leave of absence. Those actions followed the dissolution of the Second Isthmian Battalion, decreed on March 23, 1904 (159). With these actions, the new Panamanian nation-state was left without an armed institution. Defense of Isthmian sovereignty was left entirely in the hands of the United States. Colonel Carlos Arosemena González (retired) (1970), former executive secretary of the National Guard, indicates that between 1908 and 1916, the relationship between the National Police and the Canal Zone Police was tense. In 1916, the National Police was disarmed. The bulk of the armaments, consisting of Springfield rifles, were transferred to the Canal Zone Police (Pereira 1979, 10). Between 1916 and 1931, Panamanian security was entirely in the hands of U.S. military forces stationed in the Canal Zone. The remnants of the National Police were incapable of maintaining internal order and security, let alone protecting the nation from external threats.

The Emerging Power of the National Police and its Commander-in-Chief, 1931–1953 Beginning in 1931, major changes occurred in the National Police, with two events crucial in bringing about those changes: (1) the coup d’etat of Acción Comunal against the Liberal government of Florencio Harmodio Arosemena; and (2) revisions to the 1903 Panama Canal Treaty. During the 1920s, a group of middle-class professionals and intellectuals organized a secret organization known as “Acción Comunal.” Among its leaders were lawyers such as Victor Florencio Goytía, José Manuel Quiróz y Quiróz, and Harmodio Arias Madrid, as well as the physician Arnulfo Arias. While their ideology was vague and their organization resembled a Masonic lodge, Acción Comunal was able to attract an emerging middle class with their anti-imperialist and anti-corruption themes (Beluche Mora 1981; Conte Porras 1990). On January 2, 1931, armed commandos of Acción Comunal stormed the police headquarters in Panama City and Colón and the presidential palace. For the first time since Panama had separated from Colombia, an elected president had been overthrown by a coup d’etat. The coup demonstrated the inherent weakness of the National Police. In addition, the United States refused to answer the pleas of the Arosemena Administration to intervene on its behalf. The U.S. non-intervention marked a significant shift in U.S. policy toward Panama. The new Panamanian government proceeded to dissolve the extant police structure.

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Harmodio Arias Madrid, a supporter of the Acción Comunal coup, won the 1932 presidential elections. Arias proposed, and the United States accepted, the renegotiation of the 1903 Canal Treaty that had given the United States the right to intervene in the internal affairs of Panama. Given collapse of the Panamanian police during the armed insurrection, U.S. officials now questioned the wisdom or logic of maintaining tight control over the Panamanian National Police. From the moment Acción Comunal dissolved the police and the United States agreed in principle not to intervene in the internal affairs of Panama, institutional order was left to the mercy of the most powerful political and economic groups in the nation. The ability, therefore, of the state to exercise social control was significantly diminished (Pereira 1979, 11–12). Under those circumstances, a need arose for an institution that could maintain public order. Thus, the National Police was strengthened and reorganized. The newly armed institution needed autonomy from the prevailing political forces, plus the ability to guarantee order under conditions in which the United States would no longer intervene directly to protect the interests of the dominant commercial elite. The new police needed better-trained officers and commanders. President Arias named a career officer, Jóse Antonio Remón Canteras, as commander of the Police Central Headquarters. His mission was to professionalize and fully train the new police force. Training and new equipment came primarily from U.S. armed forces stationed in the Canal Zone. The ratification of the 1936 Arias-Roosevelt Treaty meant that the National Police was officially and constitutionally recognized as the sole institution responsible for guaranteeing the independence and sovereignty of the nation. Of course, the formal role of the new police did not end the informal and significant relationship between the United States and the Panamanian state. The United States, in general, and the Canal Zone officials, in particular, continued to have an important role in the internal affairs of the Panamanian police and of the state. In 1941, the Panamanian government began a process of militarization of the National Police. The process can be divided into two periods: 1941– 1947 and 1947–1953. The earlier period began with the promotion, in October 1941, of Jóse Remón Canteras to the position of Second Commander of the National Police (the second highest position within the institution). First, the promotion meant an increase in power for the architect of the police’s recent professionalization and institutionalization, and second, it represented the recognition of those in power that the National Police was now a force to be reckon with. President Adolfo de la Guardia, who earlier in the year had carried out a bloodless coup against Arnulfo Arias, considered it unwise to challenge the power of the National Police. Pérez

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The promotion of Remón was an attempt by the dominant commercial elite who ruled Panama to win over the semi-professionalized military sector. Remón was promoted to First Commander of the National Guard on February 14, 1947. With Remón as de facto head of the police, the budget of the institution went from less than $1 million in 1939 to more than $2.5 million by 1942. The monthly salary of rank and file personnel was increased from $45 to $60 (Memorias de la Secretaria de Gobierno y Justicia, 1942). A former cavalry officer, Remón paid special attention to this section of the National Police. The cavalry was modernized and turned into an extremely effective anti-riot unit. The small transit department was transformed into a motorized unit equipped with automatic weapons. The youngest agents were grouped into several infantry units headed by officers armed with machine guns. And the central headquarters was equipped with heavy artillery units. Three important events marked the second period within the militarization of the National Police: the Filos-Hines Treaty of 1947 and its rejection by the National Assembly, the political crisis of 1948–1951, and the victory of Remón in the 1952 presidential elections. On December 10, 1947, the Panamanian Minister of Government and Justice, Dr. Francisco A. Filos, and the Secretary of State of the United States, Frank T. Hines, signed a treaty that extended the United States lease for the military base of Rio Hato. The base was the final military installation outside the Canal Zone held by the United States after the end of World War II. The signing of the treaty unleashed the most massive anti-U.S. and popular movement yet seen in Panama. The movements were led by the Student Federation of Panama and the Patriotic Youth Front, with encouragement from the daily La Hora.3 On December 12, the Federation and the Front led a massive protest in front of the National Assembly, with the purpose of preventing the ratification of the treaty. Minister Filos ordered the forceful dissolution of the crowd. In compliance with the order, Commandant Remón used cavalry and motorized units to break up the demonstrations. The incident made evident the new capabilities of the National Police. While there was only one person seriously hurt, the student Sebastian Tapia, the amount and nature of the force used made it plain that the National Police had become a significant power broker within the political system (Castillero Pimentel 1988, 305–316). From that moment, it was clear that the National Police possessed the power to arbitrate conflicts among the ruling elite and to put down mass uprisings. The increased power of the police gave rise to an antimilitarist movement led by professionals and middle-class intellectuals, led by leaders of the Patriotic Front, Jorge Illueca, Carlos Ivan Zuñiga, and Pérez

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Ramon H. Jurado. The target of their attacks was the commander of the National Police, Jóse Remón Canteras. The antimilitarist movement organized in opposition to the alleged “corruption” of the extant government; they warned of the intentions of the government to “steal” the 1948 presidential elections (La Hora January 12, 1948). The fraudulent election of Domingo Díaz Arosemena as president in 1948 led to the political crisis of 1949. The election discredited a dominant class that had held power since 1903, yet which had been incapable of solving the major economic and social problems arising from an expanding urban population and the end of the boom economy associated with World War II. The dominant class was also incapable of incorporating a mobilized and politically aware middle class yearning to participate in politics and share in the economic benefits of the service economy. Moreover, the fraud was unacceptable to a modern sector of the bourgeoisie closely tied to an emerging industrial class. To this sector, fraud and corruption was not conducive to political stability and, thus, not helpful to the maintenance of power. The sudden death of President Díaz in 1949 pitted the two sectors of the bourgeoisie against each other. As part of the conflict, leaders of the Patriotic Front insisted that Arnulfo Arias, the “loser” of the 1948 elections, be restored to power. Díaz’s successor, Vice-President Daniel Chanis, attempted to defuse the crisis by asking for the resignation of the top police commanders. In response, however, Remón ordered the arrest of Chanis and forced his resignation. There was an attempt to turn power over to the second vice-president, Roberto Chiari, but he refused, arguing that Chanis was the constitutional successor. In the midst of the crisis, Remón decided to reverse the 1948 elections, claiming the results had been fraudulently obtained and ordering a recount. To no one’s surprise, the recount gave the victory to Arnulfo Arias, who was subsequently sworn in as president (Conte Porras 1990, 225–276). The return of Arias to the presidency was clearly facilitated by a tacit alliance between the commander of the police and the former president. Arias assured popular support and stability at a time when the regime had been threatened and was able to neutralize the liberal forces who still controlled the legislative and judicial branch, as well as the forces of radical change, such as the Patriotic Front and the Student Federation. The new power of the National Police was manifested in increased expenditures on the armed institution. In 1950, the budget of the National Police went from $1.6 million to $2.59 million. The amount represented 8 percent of the national budget. Active-duty personnel increased from fewer than 1,850 to 2,347 during the same year (Memorias del Ministerio de Gobierno y Justicia, 1951). Pérez

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By 1951, however, Arnulfo Arias had overplayed his hand and on May 10 he was overthrown. During his short period in the presidency, Arias repressed most of the student, labor, and professional organizations. He was able to divide the upper classes by using the power of government to favor those who supported him and to hurt those who opposed him. Through the use of government contracts, patronage, and bank credit, he was able to build up and protect the economic interest of those members of the bourgeoisie who supported the government. Two incidents precipitated the overthrow of Arnulfo Arias: (1) the government attempt to take over the Banco Feduciario (Fiduciary Bank), excluding from the board of directors the Duque family, owners of the major newspaper in the country, La Estrella de Panama, and one of the wealthiest and most important families in the country. The attempt to take over the bank threatened the deposits of the Caja de Ahorros (state-owned savings & loan company),4 which served the vast majority of the lower and middle classes; (2) Arnulfo Arias attempted to replace by decree the liberal 1946 Constitution with the fascist 1941 Constitution5 he had promulgated during his first stint in the presidential palace. The combination of the repression and the actions mentioned above led a vast majority of the Panamanian people—including upper, middle, and lower classes—to call for the overthrow of the government. A transitional government was instituted after the coup, but the real power was wielded by Jóse Remón Canteras, commander of the National Police. In the presidential elections of 1952, Remón was nominated by the National Patriotic Coalition and went on to win the elections.

The Consolidation of Power by the National Police, 1953–1968 On December 28, 1953, President Remón signed Law 44, by which the National Police was transformed into the National Guard (Gaceta Oficial, December 24, 1953: 2–3). The new status recognized the advancement in professionalization and technical capabilities of the police force. The new role also reflected the concerns of the United States for regional security and stability during the height of the cold war. Table 3.1 shows the budget and personel of the National Guard (1950–1959). Remón’s administration had a significant impact in altering civil-military relations as the National Guard consolidated its role as arbiter of political outcomes. The United States supported the strengthening of the Pérez

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POLITICAL CULTURE IN PANAMA Budget and personnel of the National Guard (1950–1959)

Year

Budget (dollars)

Personnel*

1950 1951 1952 1953 1954 1955 1956 1957 1958 1959

2,590,795 2,654,015 2,792,628 2,823,458 2,835,238 3,152,248 3,465,342 3,880,946 4,089,928 4,188,525

2,347 2,348 2,349 2,389 2,392 2,403 2,586 2,756 2,750 2,751

* (This number represents troops and officers only, excluding musicians, secretaries, and other civilian members of the National Guard). Source: Arosemena, 1970: 157–159.

National Guard as part of their regional cold war strategy. The urban commercial elite needed the National Guard to suppress the mobilization of popular groups. Remón, himself, was part of the commercial elite, having familial ties with the Chiari family, arguably the wealthiest in the country.6 Remón, however, did not live to finish his term in office. On January 1, 1955, he was assassinated while attending the horse races. In the following years, the Liberal party7 returned as the dominant force in Panamanian politics, during the crisis of legitimacy that aided in the downfall of the Ancien Regime by 1968. Since the colonial period, Panamanian politics had been characterized by a pragmatic, opportunistic, and non-ideological ruling class that had held sway over politics through significant social and economic networks. As illustrated in the previous chapter, the ruling urban commercial elite were united by a vision of the Isthmus as the epicenter of world trade and commerce. The exploitation of its unique geographical position had been the raison d’etre of the Panamanian economy since Vasco Nuñez de Balboa had set foot on its shore in 1501. While personal differences continued to exist among the commercial elite, they managed to subordinate any deep ideological differences to economic interests. Those interests required order and stability, as did the extraterritorial powers who were instrumental in the maintenance of the service economy. Since World War II, elements of the commercial elite had sought to expand the industrial sector. In 1943, the Panamanian government took the first steps to promote and protect domestic industry. However, it was not until the Remón Administration that significant steps were taken toward the promotion of import substitution industrialization. The

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Remón-Eisenhower Treaty of 1955 increased the access of Panamanian merchants and producers to the lucrative Canal Zone market. The treaty also required the more than 10,000 Panamanians working in the Zone to purchase goods and services within the national economy. Food and beverage production benefitted the most by the new policies. By the 1960s, however, significant divisions had emerged among the dominant class. On the one hand, there were those who favored significant fiscal and economic reforms in order to promote industrial development. This sector sought to implement the program of the Alliance for Progress. The sector was led by President Marco Robles (1960–1964) and his finance minister (and, later, 1968 presidential candidate), David Samudio. On the other hand, there were those who feared that further industrialization might encourage continued popular mobilization. Moreover, they disliked the fiscal reforms demanded by the Alliance for Progress; reforms aimed at increasing the revenues of the central government by restructuring the tax system. The Alliance could point to several popular mobilizations since 1961 as evidence of the potential problems further reforms might bring: (1) The strike by banana workers in Chiriquí and Bocas del Toro in 1961; (2) A strike by university students in August 1962; and (3) The mobilization of Peasant Leagues (Pereira 1979, 99–100). These incidents, however, paled in comparison with the violent confrontations during January 9 and 13, 1964, between high school students and Canal Zone residents. The confrontations began when a group of Panamanian high school students attempted to raise the Panamanian flag in front of Balboa High School, located within the U.S.-controlled Canal Zone. The students were prevented from raising the flag by a group of “zonians” (name given to U.S. residents of the Canal Zone). In the struggle between the students and the zonians, the Panamanian flag was ripped and trampled. When the news reached the population of Panama City and Colón, thousands of angry citizens attempted to storm the Canal Zone area, where they were met by U.S. military forces. While the Panamanian National Guard did nothing to stop the demonstrations, looting and vandalism of U.S.-owned property ensued in Panama City and Colón. Not until January 13, when 23 Panamanians and four U.S. soldiers had lost their lives, did the Panamanian National Guard restore order in the two cities. The events precipitated a brief break in diplomatic relations between the United States and Panama and the subsequent start of negotiations aimed at finally abrogating the 1903 Canal Treaty. Through new treaties, the United States sought to stabilize its relations with Panama by removing the most onerous provisions of the earlier treaty, while preserving U.S. control over the interoceanic waterway and promoting political stability on the Isthmus (Conniff 1992, 120–121). The rioting illustrated the deep resentment that Pérez

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Panamanian citizens felt toward the United States and the total reliance of the central government on the National Guard to maintain stability. Subsequently, the United States agreed to finance an increase of 500 soldiers in the troop levels of the Panamanian National Guard (U.S. National Security Council, DDRS, 1991–527). In July 1967, Panama and the United States signed the “Three in One Treaties,” the main provisions of which were: (1) Alteration of the “in perpetuity clause” (which had given the United States control of the Canal Zone in perpetuity), for one stipulating a period of 99 years; (2) Exclusive rights to the United States for the construction of a second, “sea level” canal; (3) The legalization of the 14 U.S. military bases in the Canal Zone and the right of the United States to build more, if deemed necessary. Moreover, the new treaties increased the amount of money received by Panama for the use of its territory and called for a joint Panamanian-U.S. Board of Directors (four Panamanians and five U.S. citizens) to manage the Panama Canal. Due to massive popular protests in opposition to the treaties, however, the National Assembly postponed debate on ratification until after the 1968 presidential elections; the debate never occurred and the treaties died. The failure of the treaties illustrated a loss of control over the political situation by the Robles regime, furthering the political crisis (Conniff 1992, 122–124; Pereira 1979, 101). The economic reforms, the popular protests, and the loss of the treaties precipitated deep divisions within the government coalition. The coalition finally ruptured when David Samudio was selected as the government candidate for the 1968 elections. Samudio had angered powerful sectors of the commercial elite by promoting fiscal policies that raised taxes on powerful industries, particularly sugar and cement.8 These sectors sought to support a presidential candidate that could secure political and economic stability. In an ironic twist of fate, they finally allied themselves with their historical enemy, Arnulfo Arias, seen as the only politician who could command enough popular support to promote political stability. Emboldened by their majority in the National Assembly, the opposition, with the support of Arnulfo Arias, sought to impeach President Robles for his alleged “unconstitutional” support of the Samudio candidacy.9 The impeachment proceedings began in March 1968. The National Assembly voted to remove Marco Robles from office and called upon Max del Valle to assume the presidency. The National Guard prevented Max del Valle—now an ally of Arnulfo Arias—from taking over by disrupting the sessions of the National Assembly and arresting many of Arias’s supporters (Ricord 1983, 57–101). In the end, Marco Robles was restored to the presidency, but it was evident that the National Guard was the real power. Pérez

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While the impeachment crisis was underway, several National Guard officers urged its commander, Bolivar Vallarino, to carry out a coup to put an end to the political crisis. Washington, however, feared that such action might engender further political instability and jeopardize the ultimate approval of the 1967 treaties, both in Panama and the United States. The U.S. Ambassador, Charles Wallace Adair urged Vallarino not to carry out the coup. Meanwhile, the U.S. government assured Panamanians of their “willingness to work with whomever won the elections” (U.S. Department of State March 1968, 1981–371C). Moreover, Ambassador Adair assured the State Department that “the best hope for moderation and cooperation on behalf of the National Guard, now and in the future, as well as for free elections, reside with Vallarino” (U.S. Department of State, March 1968, 1981–372B). The United States feared an uprising within the National Guard against Vallarino, led by Omar Torrijos, executive secretary of the National Guard Headquarters, and other anti-Arnulfo officers. Torrijos’s brother, Moises, characterized by the United States as “leftist and antiU.S.” (U.S. Department of State March 1968, 1981–372A), was a candidate for the National Assembly on the Samudio ticket. Ambassador Adair went on to advise Washington that Moises Torrijos had vigorously opposed and criticized the 1967 treaties, “and Omar, it is said, has supported [Moises] position and has referred to his brother as one of the few patriots that defend the interests of the motherland. If [Moises] becomes a political advisor to his brother, while Omar becomes Commander of the National Guard, we cannot expect a friendly or cooperative regime. Since Torrijos and his supporters are strongly anti-arnulfista, we do not expect that Torrijos would promote free elections while Arnulfo is a candidate” (U.S. Department of State March 1968, 1981–372A). While the United States prevented a coup during the early months of 1968, the diplomatic efforts of the United States could not prevent the National Guard from actively and violently supporting the candidacy of David Samudio. Despite the efforts of the National Guard, however, Arnulfo Arias won the election May 12, 1968. The pressures from Washington and the desire to avoid further political instability persuaded Vallarino to come to an agreement with Arias. The accord included the recognition of Arias’s electoral victory and the voluntary retirement of the National Guard commander after the presidential inauguration on October 1. In turn, the president-elect promised to respect the hierarchical structure of the military institution. With this move, Vallarino sought to satisfy the electorate, the military, and the United States Embassy (Ricord 1983, 84–88). The defeated liberals, however, felt betrayed by the National Guard commander. Many Guard officers who had received and followed orders to

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manipulate the voting in favor of the government, watched in amazement as the commander and Arias, their sworn enemy, came to an agreement. Vallarino, it was thought, had secured his honorable retirement while leaving his subordinates to the mercy of the victorious caudillo. Amidst rumors of a self-imposed coup by President Robles to prevent the rise to power of Arnulfo Arias, the “samudista” press launched a virulent campaign against the commander of the National Guard. One of the main critics, Jaime Padilla Béliz, wrote a series of “Letters to the National Guard” in which, while openly calling for a military coup, he argued a case for the illegitimacy of the political system. “The latest political events,” wrote Padilla, “must have alarmed these young officers from the middle class, who are now part of the shameful spectacle of a marriage between their superiors and the most reactionary forces in the country.” Padilla encouraged them to “correct, before it is too late, the social and political mistakes that confront the nation.” Padilla continued by encouraging the National Guard to become a “third force, without complicity with the affairs of the local oligarchy, a force that would emanate from the people and would support the interests of the people . . . How else could this be achieved but with a coup d’etat?” asked the journalist. He encouraged all “honest” officers to give Panamanians “a lesson in dignity and civility,” by replacing the constitutional authorities with a military dictatorship (Ricord 1983, 107–110). The content of the articles by Padilla must have attracted the attention of the majority of the Guard officers who were members of the middle and lower classes. On the other hand, the authoritarian manner of the presidentelect constituted a real threat to the authority and power of the National Guard. Officers who opposed Arnulfo Arias were destined to lose their position and privileges. Arias played into those fears by violating his agreement with Bolivar Vallarino. On October 7, 1968, seven days after taking office, Arias made significant changes in the command structure of the National Guard. Arias, in explicit violation of his agreement, ordered the retirement of Lieutenant Colonel José Maria Pinilla, in line to become commander of the National Guard, and replaced him with Lieutenant Colonel Bolivar Urrutia. Lieutenant Colonel Omar Torrijos was named military attache in El Salvador and Guatemala and observer to the Central American Defense Council (El Mundo October 8, 1968,1; October 11, 1968:1; El Panama America October 10, 1968,1, 8-A). The move aimed to purge the National Guard of opponents or potential opponents. However, it served to convince a majority of National Guard officers that Arnulfo Arias represented a significant threat to the institutional integrity of the National Guard. On October 11, 1968, the National Guard ousted Arnulfo Arias from the presidency. It is important to note that the immediate aims of the coup, as made clear above, were the protection of the National Guard and not

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the implementation of a “revolution,” as supporters of the military regime later claimed. The popular reforms implemented by the regime, as will be seen later in the chapter, were not instituted until after 1970, two years after the coup. Thus, a military regime that was characterized as populist and inclusionary began as an effort in self-preservation by the armed institution. In fact, there is evidence that immediately following the coup the presidency was offered to Arnulfo Arias’s vice-president Raul Arángo Navarro (Díaz 1993, 144). In fact, the initial statements by the coup plotters emphasized return to constitutional order and a promise of future elections. The statement by the military junta, issued on October 12, said that it was the sworn duty of the National Guard to “impose respect for the Law and the Constitution of Panama.” The statement went on to indicate that the “Movement of October 11” placed power “provisionally” in the hands of the National Guard (Vásquez 1989, 21–22). The promises of reform were reiterated in their call for “a revolution without dictatorship and liberty with order,” made on October 20. The junta rejected Communism and promised to “purify” the executive and judicial branches, assured Panamanians that free and just elections would be held in the immediate future, and promised to remove the National Guard from any political activity (Koster and Borbon 1990, 90). The following sections trace the evolution of the military regime through to its demise on December 20, 1989. The emphasis, however, is on the ability of the regime to build a multi-class alliance that enabled it to survive longer than any of the military regimes initiated in the region during the same period. Such multi-class alliance constituted an elite agreement for the purpose of consolidating an authoritarian government.

The Making of an Inclusionary Military Regime While it may seem that the military regime lasted 21 years (1968–1989), I argue that we must divide it into two distinct military regimes: (1) The first, between 1968 and 1981, was characterized by a multi-class alliance that promoted economic development and national sovereignty (2) The second, following a brief transition, corresponds to the period 1983–1989 and was characterized by an increase and consolidation of political and economic power in the hands of the armed institution. The second period is discussed in chapter 4. The Torrijos regime formed an alliance with those sectors of the dominant class that had opposed the Arias government of 1968. These sectors promoted a national development program that sought to use the resources

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of the transit economy to promote the modernization of the Panamanian state and the diversification of the economy. The bourgeoisie saw in the military government the means by which to finally carry out its development program. The dominant class, unable to promote a political movement capable of carrying out a national development project within a democratic context supported the 1968 coup. In a doctoral thesis that compares the Panamanian and Peruvian military regimes, Robert Miller argues that the initial resistance to General Torrijos came from the oligarchy (Miller 1975, 172). The reality was different. Support for the military government came from the highest levels of the oligarchy. This support continued a pattern of behavior that was established during the colonial period: pragmatic accommodation to the status quo and the search for stability required by local and international commerce. The cabinet named by the Provisional Junta on October 11, 1968, included prominent members of the oligarchy such as Rafael Zubieta as minister of Agriculture, Commerce and Industry; Henry Ford as minister of Finance; and Eduardo Morgan as minister of Government and Justice. When the “Popular Front Against the Dictatorship,” composed of more than 30 student, professional, and labor organizations, called for a 72-hour general strike on October 21, 1968, it failed for lack of support from the business sector. On the first day of the strike, the Panamanian Construction Chamber (CAPAC) published a statement calling for peace and offering support to the regime. The Transportation Chamber visited the military junta to offer its unconditional support (Voz Universitaria October 18, 1968; La Calle October 22, 1968, 7; Informe Diario October 22, 1968, 13; El Mundo October 22, 1968, 1-A, 8-B). On October 22, 1968, the bishop of Santiago, Monsignor Marcos G. McGrath, made the first official statement from the Church hierarchy. The statement was ambiguous and called for a “radical change” from the practices of the pre-1968 regime (La Estrella de Panama October 22, 1968, 1). The statement confused the opposition and bolstered the military government, who took it as a sign of tacit approval. The coalition that supported the candidacy of David Samudio also supported the military regime. Years later, Boris Martínez (a leader in the military coup) would tell Robert Miller that before the 1968 elections, President Marco Robles had asked him to carry out a military coup and install a junta composed of David Samudio and other followers of Robles. Martínez also told Miller that various members of the Republican Party had asked the commander of the National Guard, Bolivar Vallarino, to carry out a coup to prevent Arnulfo Arias from winning the elections (Miller 1975, 40, 43). Pérez

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Later in 1968, an official government statement would note that prominent members of the banking sector—Fernando Díaz, Cesar del Campo, Ricardo de la Espriella,10 Jorge Zubieta, Joaquin de la Guardia, Eduardo de la Guardia, Arturo Muller, Andrew Lawson, Abelardo A. Botín, John González, Robert Wallis, Welton Hewitt, and Guillermo Ford—had given the government their unrestricted support (Semana November 29–December 5, 1968, 9). The most important business organization, the National Council of Private Enterprise, supported the new government (La Estrella de Panama January 1, 1968, 28, 30, 29). General Torrijos understood that in order to stabilize and consolidate his regime, he needed the support, or at least the acquiescence of, major sectors of the dominant commercial elite. In that vein, several technocrats and politicians of the previous Liberal governments served in the new regime. Moreover, throughout the military government, prominent members of the industrial and commercial class supported and participated in the government. Tables 3.2 and 3.3 illustrate the level of participation among members of the previous government and those of the commercial elite. In May 1979, the president of the Republic, Aristides Royo, named an Economic Consultative Council, composed of the following members: Federico Humbert, Stanley Fidanque, Jaime Arias, Osvaldo Heilbron, Juan Jóse Garcia, Samuel Lewis Galindo, Gabriel de la Guardia, Guillermo Chapman, Jóse Battack, and Carlos Perret. Federico Humbert and Jaime Arias were board members of the Empresa General de Inversiones, S.A., of which Banco General, S.A., the largest Panamanian-owned bank in the country, is an integral part. Osvaldo Heilbron was a major stockholder of Banco Continental and Harinas Panama, S.A. Juan Jóse Garcia is president of Levapan de Panama, S.A. and BANCOLAT. Samuel Lewis Galindo was general manager of Cervecería Nacional, S.A. (referred to before as National Brewery), the largest brewery in the nation, and president of Banco del Istmo, S.A. Gabriel de la Guardia was president of Banco Internacional de Panama, S.A., Xerox de Panama, S.A., and was among the largest stockholders in Compañia Nacional de Seguros, S.A. (CONASE) and Primer Banco de Ahorros (PRIBANCO). Guillermo Chapman is president of a major economic consulting firm, INDESA, S.A., and a strong supporter of neoliberal economic policies11 (Directorio Bancario, 1984 and 1990; Directorio de Establecimientos, 1990). The individual members of the Council were representative of the dominant commercial elite, particularly the banking and insurance sectors. The influence and power of this sector is evident in the fact that these individuals would be chosen to serve in a council that would advise the government on economic matters. Torrijos was able to gain the support of the commercial elite through a combination of selective benefits, repression, and nationalistic appeal.

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Table 3.2

High military government officials occupying public office in Liberal governments

Name

Office Occupied in the Military Government Office Occupied in Liberal Government

Nicolas Ardito Barletta

Minister of Planning and Economic Policy, 1970–1978; President of the Republic, 1984–1985.

Director, Department of Planning.

Gerardo González

Vice-Minister of Commerce and Industry, 1969–1972; Minister of Agriculture; Vice-President of the Republic, 1972–1978.

Technocrat, Office of the Comptroller General.

Arisitides Royo

Minister of Education; President of the Republic, 1978–1981.

Secretary General, Attorney General’s Office.

Edwin Fabrega

Director of National Hydro-Electric Institute; Minister of Public Works, 1970–1974.

Deputy Director, Office of Planning.

Ricardo de la Espriella

General Manager, National Bank; Vice-President of the Republic, 1978–1981; President of the Republic, 1981–1983.

Deputy General Manager, Caja de Ahorros (National Savings & Loan).

Nilson Espino

Member, Legislative Commission. Member, Legislative Commission. Minister of Agriculture.

Member, Agrarian Reform Commission.

Manuel Balbino Moreno

Deputy Comptroller General.

Note: When dates of service are not given, information could not be ascertained. Sources: Memorias, Various Ministries 1968–1988; Revista Análisis Vol. X, No. 10–11, Oct./Nov. 1988; Pereira 1979, 142–144.

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The benefits included the expansion of the Colon Free Trade Zone,12 the creation of the International Banking Center,13 the construction of the Chiriquí Oil Pipeline, and the promotion of an integrated national economic plan that would utilize the resources from the service economy to promote industrialization and agricultural production. In December 1974, the government launched a series of programs aimed at subsidizing industrial production, including a massive housing program, aimed at low- and middle-class wage earners, that provided a boost to the construction industry. These policies served to ameliorate any tensions between the government and business. A statement made by a leading business group representing the industrial sector said that “these measures facilitated a greater understanding between the public and private sector” (Revista Industria 1976, 20). A year later, in December 1975, the government created the National Financing Corporation (Corporación Financiera Nacional—COFINA) in order to “finance and promote important projects, particularly in the areas of manufacturing production, export, tourism, transport and the exploitation of natural resources” (Statement made by President Demetrio Lakas, quoted in Pizzurno and Araúz 1996, 553). By September 1976, COFINA had invested more than $75 million in a variety of projects ranging from hotels to a steel mill. In 1979, following the advice of the International Monetary Fund (IMF) and the World Bank, Torrijos implemented a new export incentives law that exempted companies exporting 100 percent of their output of corporate and sales taxes (Zimbalist and Weeks 1991, 38). The government’s economic program was part of a development strategy, drawn up by a team of economists around Nicolas Ardito Barletta, that called for a progressively outward orientation with major state investments in human capital and infrastructure (Ministerio de Planificación y Política Económica 1978). Part of the efforts in human capital and infrastructure were aimed at co-opting popular and labor sectors, including the growth in the state bureaucracy through the creation of several state enterprises;14 increased investment in health, housing, and other basic needs; and the elaboration and implementation of a new and progressive Labor Code.15 By seeking the support of the labor movement, the regime neutralized the potential fronts of major opposition (labor and business). In order to carry out this developmentalist strategy, the government was forced to borrow heavily in the international market, particularly as private investment fell and the nation suffered from the oil crisis of the early 1970s. As explained later in the chapter, by the early 1980s, this indebtedness would undermine the military regime and initiate the process of political decomposition that led to its demise in 1989.

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Table 3.3 Members of the commercial and industrial elite who participated in the military regime Name

Position Within the Military Government

Commercial and Industrial Endeavors

Eduardo Morgan Jr.

Minister of Government and Justice, 1968

Carlos Lopez Guevara

Minister of Foreign Affairs; Member Negotiating Team, Torrijos-Carter Treaties of 1977.

Senior Partner, Morgan & Morgan law firm, among the most prominent in the country. Partner, Fabrega, Lopez & Pedreshi law firm; Legal Advisor, Arnulfo Arias Campaign, 1968.

Rafael Zurita Henry Ford Boyd

Minister of Agriculture, 1968 Minister of Finance

Demetrio Lakas

President of the Republic, 1972–1978.

Jóse de la Ossa Fernando Manfredo

Miguel A. Sanchiz Carlos A. Hoffman

President, National Cattle Ranching Association. President, National Chamber of Commerce.

Board of Directors, Panamanian Society of Architects & Engineers. Minister of Housing; Minister of Finance Board of Directors, Panamanian Bankers Association. Member, Electoral Tribunal, 1968; Board of Directors, National Industrial Association; Minister of Commerce & Industry, 1969–1971 Director of Several Industrial Companies (mainly and 1972–1975; lumber). Minister of the Presidency; Deputy Administrator, Panama Canal, 1979–1989. Minister of Finance, 1975 Employee, Chase Manhattan Bank Minister of Commerce & Industry, President, Panamanian Association of 1983–1984. Business Executives, 1978–1979; President, National Council of Private Enterprise; President, Containers de Panama, S.A.

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Arturo D. Melo

Juan Jóse Amado III

Gabriel Lewis Galindo Rodolfo Chiari de León Tomas G. Altamirano Duque

Ernesto Pérez Balladares

Minister of Commerce & Industry, 1980–1982; President, Grupo Melo, S.A. (involved in Minister of Finance; poultry, transport equipment, lumber) Minister of Labor. Minister of Commerce & Industry, President, Amado Industrial Corporation (monopoly 1978–1980; of aluminum production); Minister of Foreign Relations. Member, Panamanian Association of Business Executives. President, Empaques de Colon, S.A. Ambassador to the United States. Minister of Government and Justice, Board of Directors, Compañia Azucarera 1984–1985 and 1986–1989. La Estrella, S.A. (largest agro-industrial company) Minister of Housing, 1972–1978; President, Dutigrafia, S.A.; Minister of Public Works, 1980–1982; The Star & Herald Co.; Director, National Sports Institute. Molino de Arroz-Arroz Tio Fito; Director, National Brewery. Member, Legislative Commission, 1975; Banker; Minister of Finance, 1976–1980; Employee of First National City Bank of Panama. Minister of Planning and Economic Policy, 1980–1982.

Note: When years of service are not given, such information could not be ascertained Sources: Memorias, Various Ministries 1968–1988; Directorio Bancario, National Banking Commission, 1984; Industria, Journal of the National Association of Industry, 1980–1985; Revista Análisis, 1983–1985.

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While the regime was able to provide benefits to the bourgeoisie and the popular sectors, it also utilized selective repression to counteract any potential opposition. The government imprisoned some labor and business leaders and exiled others. In 1973, the business community protested the implementation of various laws aimed at regulating residential, commercial, and industrial rental prices. The CONEP (Consejo Nacional de la Empresa Privada), APEDE (Asociación Panameña de Ejecutivos de Empresa), SIP (Sindicatos de Industriales), and Chamber of Commerce—the major business organizations—called for a general strike for October 15 (El Panamá America October 15, 1973, 1, 11). Around the same time, the government announced that it would exile any business leader who would “threaten the public peace.” After a series of confrontations and fruitless negotiations, in January 1976, the government exiled several prominent business leaders (Interview with Alberto Quiros Guardia October 20, 1992; Comisión Interamericana de Derechos Humanos 1978, 92–93).16 An announcement by the government justified the deportations because of the “manifest and proven participation of those individuals in plans to undermine State security, primarily in the economic sector and particularly in agriculture, and to promote class warfare.” The government went on to accuse the business leaders of “plotting with international forces linked to a presidential candidate in the United States, in exchange for unpatriotic concessions during the discussion of new Panama Canal treaties” (Quoted in Pizzurno and Andrés 1996, 581). While several business organizations sought to mount a national strike to pressure the government for the return of the exiled leaders, the move failed and on January 26 the president of APEDE, Juan José Amado III, announced the end of the strike and asked for the continuation of a “dialogue . . . aimed at finding a solution that would return tranquility to the Panamanian family and to the homes directly affected” (Quoted in Pizzurno and Andrés 1996, 581–582). Brittmarie Jason Pérez (1993) reports that the archbishop of Panama, Marcos McGrath, “censured” the private sector for promoting actions that increased social division. A communique from the Church hierarchy made reference to the Canal negotiations and the need for national unity (90). In a society in which pragmatism and opportunism have always prevailed, repression and benefits acted as “carrot and stick.” In the end, both labor and business leaders saw it in their personal and sectoral interests not to oppose the regime. To the extent that key elements of both groups sought an alliance with the government, and to the extent the government maneuvered to partially or completely satisfy the various demands, we can claim the presence of an elite17 agreement that served as the basis of regime stability. Pérez

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Nationalism and the Return of the Panama Canal to Panama The issue of sovereignty over the Panama Canal had an important impact in helping to bridge the gap between all sectors. The government used the negotiations for new Canal treaties to silence opposition to its policies. Since the opening of the Panama Canal to world commerce in 1914, the dominant commercial elite had sought to gain access to the lucrative Canal market. The United States set up a zone that isolated the Canal from Panama and prevented the local bourgeoisie from fulfilling their ultimate dream: to have direct access to the transit route. During the 1920s, 1930s, 1950s, and 1960s, the national bourgeoisie was able to reach agreement with the United States on the terms of new treaties; only in 1936 and 1955, however, did the National Assembly ratify the new treaties. In 1926 and 1967, popular opposition to the treaties led the Assembly to reject them. Both in 1936 and 1955,18 increased access to the canal market was given to the local commercial elite. However, by the 1960s, the concessions made in those treaties were not enough. The local elite, fueled by their economic interests, sought the complete reversion of the Canal to Panamanian control. One of the major goals of the Torrijos government was to negotiate new treaties and gain total Panamanian sovereignty over the Canal Zone. With an appeal to national pride and unity, the government sought to silence any opposition in lieu of the “sensitive” treaty negotiations. The government used the argument that Panamanians needed to be united in the face of U.S. opposition. A unified Panama, so the argument went, would be able to utilize the international support it had already acquired to effectively pressure the U.S. government for better terms. Torrijos explained that “we need a climate of peace so that our negotiating team does not think that the people want just any treaty” (Torrijos 1974, 103). In the same speech, he said, “If we do not maintain national unity, we would not be capable of guaranteeing to future generations that they would not suffer the same problems that forced the National Guard to topple the previous government” (Torrijos 1974, 102). The 1975 Annual Conference of Business Executives, dedicated exclusively to the issue of the Panama Canal, issued 15 recommendations on the subject, among them, “That Panama has the right to the unquestionable exercise of its sovereignty over the natural resources and the absolute exploitation of the same, for the benefit of the entire nation.” The document went on to state, “That it is the responsibility of the national government to strengthen the unity of all Panamanian sectors, in lieu of the problems of Pérez

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the Canal.” In support of the regime’s attitudes toward the United States presence in the Canal Zone, the business executives stated, “The neutrality [speaking of the Panama Canal] is incompatible with the concept of military bases and installations with offensive purposes present in the Canal Zone in violation of the 1903 Treaty.” They went on to urge a continuation of the “diplomatic efforts” of the national government (Revista El Ejecutivo 1975, 78). By 1976, the magazine of the National Association of Industrialists, Industria, was repeatedly extolling the virtues of “dialogue,” “national unity,” and a “social pact” to achieve sovereignty over the Panama Canal. In the struggle to reform the 1903 Treaty and acquire concessions from the United States, no Panamanian organization would side with the United States against the stated wishes of the national government. This reluctance gave the military regime the political latitude it sought to negotiate with the United States. In the end, being true to their historic pragmatism and opportunism, the commercial elite would support any efforts that would increase Panamanian sovereignty and commercial access to the Canal Zone, regardless of the nature of the regime.

Liberalization from Above After the signing of the Torrijos-Carter Treaties in 1977, General Torrijos announced a “return to the barracks” and the beginning of a process of liberalization that would lead to open presidential elections by 1984. Unlike in other nations of Latin America, the liberalization process in Panama was not preceded by popular unrest or an immediate economic crisis. The process was initiated by the military government after its most significant triumph and at the height of its popularity.19 General Torrijos explained the liberalization process in terms of returning the armed forces to “their place of origin: the barracks.” Torrijos went to say, “The armed forces that exercise power permanently exhaust themselves to the point of losing their professionalism, ending therefore its capacity for leadership, and all institutions of public order must live while the republic lives” (Torrijos 1992, 5). Many have speculated that the liberalization program was the price Torrijos had to pay for U.S. ratification of the canal treaties. Miguel Antonio Bernal, a law professor and ardent critic of the military regime, stated in an interview with the author that “the liberalization program was initiated because of an accord between the military and U.S. senators in order to ratify the Torrijos-Carter Treaty.” Bernal went on to say, “The return to the barracks was a charade . . . There was never any will to democratize the nation” (Interview with Miguel Antonio Bernal October 7, Pérez

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1992). Guillermo Sanchez Borbón, a prominent journalist, writer, and social commentator, supported Bernal’s position by stating, “The liberalization program [was] initiated because the United States imposed it” (Interview with Guillermo Sanchez Borbón December 3, 1992). There are others who argue that Torrijos announced the liberalization program because the regime had accomplished its primary mission. Romulo Escobar Bethancourt stated, “With the signing of the TorrijosCarter Treaty, one phase of the regime had ended and another was to begin . . . In this new phase, it was necessary to consolidate a presidential system with a civilian in charge” (Interview with Romulo Escobar Bethancourt January 28, 1993). Juan Materno Vásquez (1987) argues that Torrijos never intended to perpetuate his rule beyond the ratification of the treaties. The 1972 Constitution had given Torrijos extraordinary powers to conduct the political, economic, and foreign affairs of the nation.20 Article 277 of the Constitution was to expire on October 11, 1978, at which time the National Assembly of Municipal Representatives was to elect a new president, and there was speculation that Torrijos would be chosen. Vásquez argues that Torrijos never intended to accept the office and that, having achieved his major accomplishment, he decided it was time for the military to “return to the barracks.” Vásquez goes on to say, “Omar announced his retirement. The Armed Forces, promoters of the October Process [name often given to the military coup of 1968], because they understood they had accomplished their mission to decolonize the Canal Zone and steer the nation on the path to development, abandoned power in the hands of civilians committed to the process” (Materno Vásquez 1987, 239–244). Whether the liberalization process was initiated because of pressure from the United States or because Torrijos decided it was time to step back, the truth is that liberalization in Panama was initiated from above, with the regime attempting to control and manipulate it every step of the way. As part of the political opening, the role of both the National Council of Legislation and the National Assembly of Municipal Representatives21 were modified to reflect the desire of the regime to impart a more traditional liberal democratic character to the institutions of government. In a further effort to promote “liberalization,” parties were legalized and the regime formed its own party, the Partido Revolucionario Democratico (PRD). The organizational efforts of the party were facilitated by the increased number of state employees. The regime sought to create an organization that would serve as the political expression of the multi-class alliance that had backed the regime’s efforts to negotiate the Torrijos-Carter Treaties. In effect, the party brought together urban and rural workers, businessmen, and government employees in a political coalition aimed at dominating future electoral contests and perpetuating the “revolutionary process” in power. Like the Pérez

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Institutional Revolutionary Party (PRI) of Mexico, the PRD was not born as a political organization to reach political power, but rather was born in power. And like its sister party, the PRD sought to create a corporatist structure through which functional groups in society were represented within the state via the party. Organizationally, the party is built around a number of frentes (fronts or groups) representing a number of social sectors: youth, women, professionals, public employees, workers, peasants, and businessmen. Until the U.S. military invasion, the PRD served as the political arm of the National Guard (later the Panamanian Defense Forces). Along with the PRD, the National Liberal Party (Partido Liberal Nacional—PLN), and the pro-regime Broad Popular Front (Frente Amplio Popular—FRAMPO) are the first political parties to emerge during the initial period of legalization. The Liberal Party represented the traditional elite forces that had governed Panama for most of the 1903–1968 period. The party was led by David Samudio, the losing presidential candidate in the 1968 elections. Following the historical pattern of fragmentation, the party was split among those who supported an alliance, or at least an understanding, with the regime, and those who sought to join the opposition; the latter were led by one of the old politicians of the liberal forces, Arnulfo Escalona. In March 1979, a coalition of eight parties called the National Opposition Front (Frente Nacional de Oposición, FRENO) was formed to battle the PRD in the 1980 legislative elections, the first free elections to be held in a decade. FRENO was composed of parties on both the right and the left of center in the political spectrum, including the strongly nationalistic Authentic Panameñista Party (Partido Panameñista Auténtico, PPA), which was led by the aged but still popular former president, Arnulfo Arias; the PLN; the reform-oriented Christian Democratic Party (Partido Democrata Cristiano, PDC); and the Social Democratic Party (Partido Social Democrático, PSD), which was left of center and reform-oriented. Three right-of-center parties—the Republican Party (Partido Republicano, PR), the Third Nationalist Party (Tercer Partido Nacionalista), and the Labor Party (Partido Laborista, PALA)—had also joined the FRENO coalition. The Independent Democratic Movement (Movimiento Dmocrático Independiente), a small, moderately left-of-center party, completed the coalition. Such diverse ideologies in the opposition party suggested a marriage of convenience. FRENO opposed the Panama Canal treaties and called for their revision on terms more favorable to Panama. On September 28, 1980, nineteen members of the National Council of Legislation were popularly elected, with the remaining 38 members chosen by the National Assembly of Municipal Representatives. The PRD won 40.4 percent of the vote and ten of the 19 seats; the Liberals won five seats; the Christian Democrats won two; and two seats were taken by Pérez

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independent candidates. About 60 percent of the eligible voters turned out to vote (Scranton 1991, 56). The elections exposed significant divisions within the opposition. Arnulfo Arias and his Panameñista movement— perhaps the largest party within the opposition coalition—boycotted the elections. Carlos González de la Lastra (1980), a leader of Acción Popular (Popular Action) created by the fusion of the Social Democratic Party and the Independent Democratic Movement, stated “neither the Christian democrats nor the liberals are truly opposition forces . . . If one accepts the rules of the game of those who hold power against the will of the people, one cannot be in opposition” (González de la Lastra 1980, 24). An editorial in the magazine Revista Análisis argued that “the diversity of parties and their reciprocal rivalries impede [the opposition] from presenting to the public clear options that would allow them to manifest their will” (Revista Análisis 1980, 14–15). Some members of the opposition talked openly of a “national unity” government, along with the calling of a National Constituent Assembly to rewrite the 1972 Constitution (Quijano 1980).

Conclusion In this chapter, I examined the nature and evolution of Panamanian militarism during this century, analyzing the rise and fall of a populist and inclusionary military government. The chapter has shown that patterns of beliefs and behaviors on the part of Panamanian elites, discussed in chapter 2, shaped the involvement of the military institution in the political affairs of the nation. Panamanian elites have been affected by certain historical and structural factors that have shaped the development of the Panamanian nation-state since colonial times. Those factors involved the predominance of the tertiary sector of the economy, the control of the principal component of that sector by extraterritorial powers, the ideological homogeneity among the dominant commercial elite, and the personal and sectoral differences that shaped the political debates within the commercial elite. Those factors gave rise to a closed and exclusionary political system that, encouraged by the United States, valued stability over democracy. The ancien regime was further characterized by the manipulation of elections, the repression of counterhegemonic ideologies and the groups that espoused them, and explicit as well as implicit violations of the Constitution. This chapter analyzed the rise of a military institution that was used by the commercial elite to maintain their hold on power. The military institution, by the 1950s known as the National Guard, was utilized by the commercial elite to manipulate elections, depose presidents, and control Pérez

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protests, all with the acquiescence of the United States. With the rise of Jóse Remón Canteras to the presidency, the National Guard became the ultimate arbiter of political outcomes in Panama. By the 1940s and 1950s, a sector of the commercial elite sought to use the revenues of the service economy to promote import substitution industrialization (ISI). The project intended to diversify the Panamanian economy, while maintaining the concentration of control within the hands of an elite whose principal means of wealth were derived from the tertiary sector. The process of ISI deepened the personal and sectoral differences among the Panamanian elites. A sector of the bourgeoisie supported the new policies, but another (particularly those tied to sugar, construction, and brewery interests) opposed them. The period of the 1960s was marked by increased popular opposition to the corrupt policies of the liberal regimes, continued divisions within the political elite, and an increase in the professionalization and institutionalization of the National Guard. Those events, and the turbulent 1968 elections, precipitated a political crisis that ended in the overthrow of the civilian elected government on October 11, 1968. While the stated goal of the coup supporters was to restore “constitutional order,” by 1970 the military had abandoned that goal and initiated the institutionalization of a populist military regime with the explicit support of a significant sector of the national bourgeoisie. The chapter showed how the multi-class alliance helped to stabilize the political situation and enabled the regime to survive longer than any military government in the region. After the signing of the 1977 Canal treaties by the governments of Panama and the United States, the regime initiated a “liberalization” project that would supposedly culminate in free and competitive elections for president and the institutionalization of a democratic regime. This process failed and the military dominated regime ended with the military invasion of the United States on December 20, 1989. The next chapter examines the failure of the liberalization process as a function of a number of factors: (1) The power vacuum left by the death of Torrijos; (2) The economic crisis suffered by Panama as a result of increasing debt, diminishing private investment, and global recession; (3) The neoliberal economic policies implemented by the post-Torrijos governments, which eroded the regime’s support among labor; (4) The increasingly bitter relationship between Panama and the United States; (5) The rise to power of Manuel Antonio Noriega; and (6) The development of a vocal domestic opposition with significant backing from business sectors and the United States.

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Chapter 4 Ending the Relationship: Economic Crisis, Political Opposition, and the U.S. Military Invasion, 1981–1989

Panama’s post-1969 period of political stability ended with the sudden death of Omar Torrijos on July 30, 1981. The next several years saw considerable turmoil, both in the National Guard and among the political leadership, as various individuals jockeyed to fill the void created by Torrijos’s untimely death. Command of the National Guard was initially assumed by Colonel Florencio Florez Aguilar, but in March 1982, a struggle for power among the officers resulted in his replacement by Colonel Rubén Darío Paredes, who promptly promoted himself to general and, four months later, forced President Royo to resign, replacing him with vice-president Ricardo de la Espriella. In December, further changes in the National Guard’s command structure saw the emergence of Colonel Manuel Antonio Noriega as chief of staff and the likely successor to Paredes. In November 1982, a commission was established to draft a series of proposed amendments to the 1972 Constitution (Fábrega 1986 758–759; Pedreshi 1991, 715–720).1 The PRD supported the amendments and claimed they would limit the power of the National Guard and help the country return to a fully democratic system of government. The reforms reduced the term of the president from six to five years, created a second vice-presidency, banned participation in elections by active members of the National Guard, and provided for the direct election of all members of the Pérez

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legislature (renamed the Legislative Assembly) after nomination by legitimate political parties. The changes to the constitution were approved in a national referendum held on April 24, 1983.2 General Paredes, in keeping with the new constitutional provision that no active Guard member could participate in an election, reluctantly retired from the National Guard in August 1983. He was succeeded immediately by Noriega, who was promoted to brigadier general. During the same month, Paredes was nominated as the PRD candidate for president. National elections were only five months away, and Paredes appeared to be the leading presidential contender. Nevertheless, in early September, President Ricardo de la Espriella purged his cabinet of Paredes loyalists, and Noriega declared that he would not publicly support any candidate for president. These events convinced Paredes that he had no official government or military backing for his candidacy. He withdrew from the presidential race on September 6, 1983, less than a month after retiring from the Guard. Although Paredes subsequently gained the support of the Partido Nacionalista Popular (PNP, Popular Nationalist Party) and was able to appear on the 1984 ballot, he was no longer a major presidential contender. Constitutional reforms notwithstanding, the reality of Panamanian politics dictated that no candidate could become president without the backing of the National Guard and, especially, its commander.

From National Guard to Panamanian Defense Forces With Paredes out of the way, Noriega was free to consolidate power. One of his first acts was to have the Legislative Assembly approve a bill to restructure the National Guard, which thereafter would operate under the name of Panamanian Defense Forces (PDF) (Fuerzas de Defensa de Panamá – FDP). Nominally, the president of the republic would head the PDF, but real power would be in the hands of Noriega.3 Opposition parties strongly criticized the new law, claiming that it “implies the militarization of national life, converts Panama into a police state, makes the members of the armed forces privileged citizens, and gives the commander of the National Guard authoritarian and totalitarian power” (Pizzurno and Araúz 1996, 600–601). The functions of the PDF as stated in the organic law were broad, giving it an increased role and bringing other organizations under its control. Major functions included protecting the life and property of Panamanians and foreigners living in Panama; cooperating with civilian authorities to

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guarantee individual rights in the republic; preventing crime; defending the Panama Canal in cooperation with the United States, as specified under terms of the treaties; regulating traffic; and cooperating with civilian authorities in the areas of drug trafficking, contraband, and illegal immigration. The new organizational structure created a “public force” that brought a broad array of institutions under a single operational command. The PDF encompassed the General Staff, military regions and zones, ground forces, Panamanian Air Force, Navy, police forces, National Guard, the traffic bureau, the national investigations bureau, and the immigration service. In addition, the PDF would include any institution created in the future that might perform functions similar to the institutions listed above. One effect of these changes was to reduce the National Guard to only one of a number of co-equal military institutions within the PDF structure that was bound together, as the Guard had been, through a single command and commander in chief. Although the constitution designated the president of the republic as the supreme chief of the PDF, this role was largely symbolic. The law specified that the president “will exercise his command by means of orders, instructions, resolutions, and regulations which will be transmitted through the commander in chief.” The PDF enjoyed administrative autonomy that in effect allowed it to determine its own internal procedures in regard to personnel policies, disciplinary sanctions against PDF members, organizations created to further the social welfare of members, and recommendations for the defense budget. Since there was no role for civilian officials in determining PDF policy and the organization was under a single military command, the law itself provided the only parameters for the commander in chief ’s role. The duties of the commander in chief were very broad and sometimes simply restated duties assigned to the PDF as a whole. The commander in chief was charged, for example, with adopting “measures needed to guarantee the security of inhabitants and their property and the preservation of the public order and social peace.” The commander in chief was also required to keep the president abreast of any developments in the area of national security and to participate in all modifications of the law that would affect the PDF. Within the PDF, the commander in chief was responsible for promotions, transfers, and awarding military decorations. He supervised disciplinary measures and was to improve “the moral and material condition of the institution as well as the cultural and intellectual condition of its members.” The president of the republic could replace the PDF’s top officer in case of retirement, death, disobedience of orders that were supported by constitutional provisions, and personal incapacity. In a letter to Pérez

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then-Minister of Government and Justice Justo Fidel Palacios, General Noriega justified the new law because: We find ourselves at a critical point in our history combining vital events such as the upcoming elections of May 1984, during which a new president of the republic will be directly elected; thus completing the democratization of the Panamanian State. In the international arena the generalized, concatenated, and growing conflict in the Central American countries, from whose consequences and decisions Panama cannot escape . . . Above all else, at the international relations level, progress in the implementation of the Torrijos-Carter Treaty dictates the decrease of United States military forces and the increase of the Panamanian forces (República de Panamá 1983, 7).

Between 1983 and 1989, the PDF not only grew, but it modernized its administrative, recruitment, and security apparatus. The PDF redefined its role within Panamanian society, from a mediating force among competing social forces to claiming an exclusive role in defending the national interests. The most important role, however, was control and operation of the Canal, which, as a result of the Torrijos-Carter Treaty, would occur on December 31, 1999. Despite the doubts as to the necessity or possibility of militarily defending the Panama Canal, the drafters of the Canal treaties spelled out the modus operandi for joint defense in the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal.4 Among the six binational bodies established by Panama and the United States to handle all matters concerning the canal until December 31, 1999, two— the Combined Board and the Joint Committee— were set up to take care of defense affairs.5 The Combined Board consisted of an equal number of senior military representatives from each country, who consulted and cooperated on all matters dealing with defense. Specifically, the board was charged with coordinating such matters as the preparation of Canal defense contingency plans and the planning and execution of combined military exercises. The board was further charged with reviewing defense needs and making recommendations to the respective national governments, and assessing at five-year intervals the resources provided by the two countries for their defense commitments. The Joint Committee, which also consisted of senior military officers and their deputies, looked after the day-to-day contacts and cooperation between the two defense forces. The U.S. half of the committee also dealt with U.S. military personnel and civilian employees and their dependents under the status-of-forces agreements. The Agreement in Implementation of Article IV of the Panama Canal Treaty6 spelled out in detail the complex responsibilities and functions of the Joint Committee. To accomplish its numerous and varied tasks, the committee was divided into subcommittees, each having several sections.7

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Between 1979 and 1985, at least 16 joint military exercises involving Panamanian and U.S. forces took place, testing combined capabilities to defend the Canal. Beginning in 1982, a series of exercises called “Kindle Liberty” were conducted, practicing the rapid movement of support troops from the United States, evaluating operational terrain, and testing joint troop coordination and performance. Generally, Kindle Liberty exercises involved Panamanian companies from Battalion 2000 and the Peace Battalion and U.S. forces from the 193rd Infantry Brigade stationed in the Canal area and from Fort Bragg, North Carolina. Combined troop participation normally ranged from 3,000 to 5,000. Series of operations called “Black Fury” were also conducted between 1979 and 1981 in the Canal area. Their primary purpose was to simulate defending the Canal from an attack by guerrilla forces, by mobilizing troops in both Panama and the United States. Black Fury training exercises involved approximately 5,000 U.S. troops, including some from various state National Guards (Meditz and Hanratty 1987, 244–245; Ropp 1982). Joint military exercises held in the mid-1980s were larger than those held previously. “Minuteman II” in 1985, for example, involved 10,000 U.S. troops from various National Guard units in Puerto Rico, Florida, Texas, Alabama, Missouri, and Louisiana, in addition to 5,000 members of the PDF. These exercises also dealt more with scenarios of guerrilla or low-intensity conflict. For example, in early 1986 a joint exercise called “Donoso 86” was held on a remote portion of the Atlantic coast west of the Canal. The scenario called for a large band of guerrillas operating with extensive foreign backing to have gained the support of the local population. The primary Panamanian forces involved in this exercise came from Battalion 2000, and the main U.S. contingent was from the 193rd Infantry Brigade. In early 1987 a joint exercise called “Candela 87” was conducted on the border with Costa Rica, using various tactical units of the PDF, including the Peace Battalion (Meditz and Hanratty 1987, 246). By summer 1987, however, these exercises came to an end as U.S. relations with Panama began to deteriorate.8 In fiscal year 1988, the U.S. Congress prohibited the use of funds for military exercises in Panama (Yates 2008).9

Restructuring the Economy In addition to the changes within the military institution, the early 1980s also saw significant economic changes that tended to alter the relationship between the various sectors of the Panamanian economy and the state. In the 1970s, Panama’s average annual GDP growth rate fell to 3.4 percent, Pérez

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compared with 6.4 percent in the previous decade, with many factors contributing to the decline. In the international arena, reduced Canal use (especially after the Vietnam War), rising oil prices, international inflation, and recession in the major industrial countries negatively impacted Panama’s economy. Domestically, investment fell in response to the government’s populist policies of agrarian reform, expropriation of private power companies, creation of state industries, protection of labor, controls on housing, subsidies, and high support prices. In addition, the prolonged negotiations between the United States and Panama over the Canal adversely affected investor confidence. The government sought to regain private investment by promoting large infrastructure projects and by expanding or acquiring productive enterprises. Two-thirds of the new jobs created in the 1970s were in the public sector. The public-sector deficit expanded, and the government was forced to borrow money from abroad. One of the major legacies of the Torrijos government was a large external debt. In the 1970s, the government relied increasingly on loans, essentially from abroad, to finance its expansionary and countercyclical policies. The external public debt increased from US$150 million at the beginning of 1970 to US$774 million at the end of 1975, partly due to external factors, such as the rise in oil price. By the end of 1978, Panama’s external debt was nearly US$1.9 billion, about 80 percent of GDP—one of the highest ratios in the world. In 1985, the external debt reached US$3.6 billion, or 73.5 percent of GDP, which, on a per capita basis (US$1,636), was one of the largest in the world. Most of the debt (US$3.27 billion) was long-term in its maturity structure; US$2.13 billion was owed to private creditors and US$1.14 billion to official creditors (US$741 million to multilateral agencies and US$403 million to bilateral sources) (See República de Panamá, Panamá en cifras various years). By the end of the 1980s, Panama had incurred a nearly US$4 billion foreign debt. The Panamanian economy experienced a brief period of growth immediately following the signing of the Torrijos-Carter Treaties. The growth was the result of a number of short-term factors, including increase private investment spurred by the resolution of the Canal negotiations and a new export incentive program pushed by the World Bank and the International Monetary Fund. Investment from the private sector went from a low of US$171 million in 1977 to US$419 million in 1979. In turn, government expenditures increased substantially from US$433 million in 1977 to US$534 million in 1978 and US$814 million in 1979. As a result, GDP grew at an annual rate of 6.4 percent between 1977 and 1982. Growth, however, was a result of externally driven factors that simply could not be sustained in the long-term. By 1982, Panama, like most of Latin America, was feeling the impact of the world recession. Once again, the government sought to remedy the Pérez

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decline in private-sector investment through increased public expenditures. In the same year, the public-sector deficit reached 11 percent of GDP. The death of General Torrijos a year earlier, the decline in economic growth, an increasing fiscal deficit, and a large public debt, all provided the setting for the implementation of a structural adjustment program suggested by the IMF. Public investment was reduced by 20 percent in 1983 and by a further 8 percent in 1984. The public deficit was also cut, to about 6 percent of GDP in both years. In addition, the government undertook structural adjustment measures in the areas of industry and agriculture and instituted changes to streamline the public sector. The simultaneous recession and reduction in public expenditures caused GDP to fall in 1984, the first decline in more than 20 years.

The First Presidential Elections under the Liberalization Process The economic crisis was the backdrop for the first presidential elections since 1968. The 1984 contest would be the first held under the new constitutional reforms adopted a year earlier. Beyond electing a president, Panamanians also would vote for a new unicameral National Assembly. The government, with the express backing of the PDF, supported the candidacy of Nicolas Ardito Barletta (vice-president of the World Bank), under the premise that he could assure the flow of international investment capable of counteracting the economic recession the country was suffering (Gandásegui 1989, 72; Arias de Para 1984, 24–26). Barletta’s candidacy was supported by the industrial, banking, and export-oriented sectors of the bourgeoisie, along with international capital and the U.S. government. The government coalition consisted of the Partido Revolucionario Democratico, PRD (Revolutionary Democratic Party), Partido Laborista (Labor Party), Partido Republicano (Republican Party), Partido Liberal (Liberal Party), and the Partido Panameñista Revolutionario (Revolutionary Panameñista Party), forming the National Democratic Union (Union Nacional Democrática, UNADE).10 The opposition, on the other hand, formed the Alianza Democrática de Oposición (ADO, Democratic Opposition Alliance), composed of the Partido Panameñista Autentico (Authentic Panameñista Party PPA), the Christian Democratic Party (PDC), and the Movimiento Liberal Republicano Nacionalista (Liberal Republican Nationalist Movement). The opposition coalition was headed by the octogenarian Arnulfo Arias, who would make his last run for president (Conte Porras 1990, 488–489, 518; Gandásegui 1989, 72–73). The Pérez

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opposition coalition represented those forces that had traditionally opposed the military regime, such as the PDC, and the rural and more traditional sectors of the bourgeoisie. As table 4.1 indicates, the election was extremely close, with fewer than 2,000 votes separating the leading candidates. The elections were plagued with irregularities, particularly in the indigenous zones of the highlands of the western province of Chiriquí. The opposition assured the international community that only fraud could explain Barletta’s victory (Arias de Para 1984).11 The United States, however, supported his victory and Secretary of State George Shultz, a former teacher of the president-elect at the University of Chicago, traveled to Panama for the presidential inauguration (Dinges 1990, 196–199).

The Barletta Government and the Breakdown of the Ruling Coalition The relations between Panama and the United States rapidly deteriorated after the honeymoon that followed the election of Ardito Barletta. The president did not control the National Assembly, which made passage of his legislative initiatives difficult, nor did he exercise influence over the Panamanian Defense Forces, which advanced their own political program, independent of the executive. In essence, the elections of 1984 marked a turning point in Panamanian history, toward a period of permanent crisis that would not end until the U.S. invasion of December 20, 1989. On November 13—to meet IMF requirements for a $603 million loan renegotiation—President Barletta announced a series of economic austerity measures, including a 7 percent tax on all services and budget cuts for cabinet ministries and autonomous government agencies. The measures provoked massive protests from businessmen, students, labor unions, and professional groups. The Consejo Nacional de Trabajadores Organizados

Table 4.1

May 1984 elections

Candidates Nicolas Ardito Barletta (UNADE) Arnulfo Arias (ADO) Others Source: The Electoral Tribunal

Pérez

Votes

Percentages

300,748 299,035 40,410

46.9% 46.7% 6.3%

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(CONATO, National Council of Organized Workers)12 mobilized 10,000 workers to march on the presidential palace, a protest that marked an important rupture in the relations between the government and one of its most important allies (as stated earlier, labor had formed one of the central pillars of the military regime). The most important organization to emerge out of the protests, however, was the Coordinadora Civilista Nacional (COCINA, National Civilian Coordination). The group brought together students, teachers, health professionals, lawyers, and businessmen. Among the organizations that formed part of COCINA were the National Medical Association, the Independent Teachers Movement, the National Association of Professors, the Unionized Lawyers Association, and business organizations such as the National Council of Private Enterprise (CONEP), Panamanian Industrialist Union, and the Panamanian Construction Association. COCINA would form the basis for what would later be the National Civic Crusade, which led the opposition to Noriega during the final years of the military regime. On November 22, COCINA published a letter sent to the president in which it made a series of demands, among them the repeal of the new tax legislation (Law 46), the publication of the PDF’s budget, and measures to combat corruption.13 The demands not only focused on the government’s immediate economic policies, but sought to undermine the regime itself. The problem with this strategy was that some members of COCINA, particularly in the business sector, were not prepared at the time to question the legitimacy of the entire system. The business community had been among the most important supporters of Barletta’s candidacy (Interview with Miguel Antonio Bernal October 7, 1992). On November 27, CONEP withdrew its support for a national strike called by COCINA, thus helping to neutralize an organization they helped to found. COCINA continued to protest as an organization composed primarily of middle-class sectors, led primarily by health professionals. The divisions between the business and middle-class professional sectors would continue to plague the opposition throughout the 1980s. While the two groups would largely come together to fight the regime after 1987, the inability of the domestic opposition to oust Noriega from power, thus forcing the United States into a military invasion, was due primarily on the divisions along class lines within the opposition. On December 9, President Barletta revoked the new tax law and announced the reversal of many of the earlier austerity measures. In the end, President Barletta could not get support for his structural adjustment program demanded by the IMF. It became evident that the president lacked any political base from which he could govern. Many in the Revolutionary Democratic Party (PRD) saw Barletta as an interloper and Pérez

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an opportunist who had been imposed on the party by the PDF.14 The more leftist members of the party, members of the so-called Tendencia faction, were opposed to the economic policies on the grounds that they represented an abandonment of General Torrijos’s program. Those on the right saw Barletta as too weak politically to push the necessary economic reforms (Analisis 1985, 17). Barletta himself recalls that “under the pressure of taking tough, but necessary measures, my political allies abandoned me . . . I could not continue to govern without the support of the National Assembly controlled by my own party.”15 In fact, Barletta had become a member of the PRD on the day the party nominated him for president. The political situation continued to deteriorate throughout 1985, with COCINA and other groups mounting street demonstrations and general strikes. The only thing that sustained President Barletta in office was the support of the PDF. However, by August that support was waning. On August 12, 1985, General Noriega questioned the ability of the government to handle the “socioeconomic crisis” (Martinez 1990, 77). While the president denied any rift with the armed forces, it became clear that the PDF saw the situation as untenable and Barletta’s days as president numbered. The only factor that seemed to be holding the PDF back was the support that President Barletta had from the United States. The final straw was the assassination of Hugo Spadafora, a physician who had supported the Torrijos government and had been vice-minister of health during the general’s government. Spadafora had left Panama to help the Sandinista movement in Nicaragua and in March 1984 had issued statements accusing Noriega of involvement in drug trafficking (Dinges 1990, 181, 191, 211– 214; Kempe 1990, 132). On September 18, 1985, two days after Spadafora’s decapitated body was found in a small village on the Costa Rican side of the border with Panama, President Barletta appeared on national television to announce a full investigation of the incident. On September 27, 1985, however, Barletta was forced to resign;16 the vice-president, Eric Arturo Delvalle, became president. In his letter of resignation, Barletta said, “A president requires the support and the collaborative help of those political parties and forces that back the government. Since I no longer can count, because of divergent opinions, on the support of those groups . . . I take this decision [to resign] recognizing that without an effective coalition in the National Assembly, one cannot work” (quoted in Martinez 1990, 79). On the one hand, for those in the opposition, the resignation of Barletta was a clear indication of General Noriega’s, and other high ranking officers’, involvement in the murder of Hugo Spadafora.17 On the other hand, members of the PRD argued it was a necessary move to stop the political hemorrhaging caused by the economic crisis.18 Thus, virtually no one in Panama cried over the dismissal of Nicolas Ardito Barletta. The consternation, however, Pérez

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was evident in Washington, D.C., where Elliot Abrams, the new Assistant Secretary of State for Inter-American Affairs, encouraged Barletta to stand firm (Buckley 1991, 34). After Barletta’s resignation, the United States increased the pressure on Noriega, as U.S. embassy officials visited the offices of La Prensa, the leading opposition newspaper and one that had implicated Noriega and the PDF in the Spadafora murder. In addition, the U.S. embassy received members of the Spadafora family, and the U.S. ambassador in Panama, Everett Briggs, declared in a public speech that true democracy requires supremacy of civilian authority over the military (Scranton 1991, 89–91). Later, in a highly symbolic measure, the State Department diverted US$14 million in aid from Panama to Guatemala, where a new civilian president had just taken office (Buckley 1991, 46). At the same time, however, the CIA and the DEA continued to view Noriega as a vital asset and sent him the opposite message. CIA Director William Casey summoned Noriega, still on the CIA payroll, to Langley, Virginia, for a meeting on November 1, 1985. The State Department expected Casey, whom Noriega highly respected, to warn the general about the troubling political situation in Panama. Casey, however, did not raise any of the disturbing questions about the Spadafora murder and the forced resignation of Barletta, and assured Noriega that the Reagan administration would continue to support him (Kempe 1990, 169–170). The DEA and the White House continued to praise Noriega for his cooperation in drug enforcement efforts (Mower 1988). Given the mixed signals, Noriega calculated that he had nothing to fear from the United States. Under the presidency of Eric Arturo Delvalle, the political deterioration continued. The new administration initially attempted to reverse the rising tide of discontent by returning to the populist policies of the Torrijos era. Prices of milk, rice, and petroleum were lowered, and President Delvalle announced that any agreement with the IMF would include discussions with labor and business sectors. Economic realities, however, soon forced the government to impose an austerity program remarkably similar to that advocated by Ardito Barletta and to introduce, over strong objections from the unions, sweeping reforms in the Labor Code, designed to make Panama more attractive for foreign and domestic investment. The measures known as the “three-in-one” laws also included deregulation of the agricultural sector and reductions of protection to domestic industry in order to promote competition (Zimbalist and Weeks 1991 134–135). Panama’s domestic problems were paralleled by growing criticism in the United States, primarily from Congress. In March 1986, the Subcommittee on Western Hemisphere Affairs of the Senate Committee on Foreign Relations began holding hearings on the situation in Panama, and the Pérez

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following month hearings also began in the House of Representatives. In June, a series of articles by Seymour Hersh alleging involvement by Panamanian officials in drug trafficking, the murder of Spadafora, and the passing of sensitive intelligence to Cuba, were published in the New York Times (Hersh 1986). Both within and outside Panama, the increased criticism focused attention on the military and on General Noriega. Delvalle’s government found it increasingly difficult to contend with the perception that it was little more than a pliant tool of the military. On October 19, the president is quoted as saying, “We are friends of the armed forces, why would we hide it . . . [The armed forces] guarantee the institutional stability in Panama”(Arauz 1994, 21). Despite massive protests by workers, teachers, professionals, and others, the government’s hold on power seemed unshaken. The ability of the military to gain a certain level of autonomy from societal actors was conducive to its long-term survival. Steve Ropp (1992) argues that the military’s ability to directly and indirectly extract economic resources from Panama’s large service sector was a deciding factor in maintaining them in power (Ropp 1992, 215). The resources obtained through the monopolization of the quasi-licit and illicit activities of the service sector allowed the military institution to maintain its own independence and to partially subsidize the “popular bureaucracy” that served as its political power base within the larger structure of the authoritarian regime. In 1986, the government successfully divided the labor movement by securing the acquiescence of FENASEP, the federation representing state employees. In essence, FENASEP broke with CONATO, the main labor umbrella organization, by abandoning a national strike at its most crucial moment (Martinez 1990, 88–89). In addition, the selective distribution of resources to the commercial elite was instrumental in securing their support for the regime. However, the comfortable relationship between the commercial elite and the National Guard that had secured the stability of the regime gradually came to an end as Noriega expanded the reach of the military. The PDF went from an intermediary organization capable of negotiating with all social classes, to imposing their vision of Panama on all sectors of society. Ropp argues that the rift between the military and the commercial elite was mainly the result of the concentration of economic resources in the hands of the military, to the exclusion of the commercial elite, stating that Noreiga “surrounded himself with a new class of both civilian and military entrepreneurs who increasingly forced the elite to accept them as silent partners. Equally important was the fact that the officer corps was beginning to challenge the commercial elite for social status. The predominantly white elite strongly resented the presence of the drug-tainted mestizo and colored nouveau riche in their exclusive urban neighborhoods” (Ropp 1992, 229). Pérez

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The Panamanian commercial elite has traditionally seen their economic and political interests closely tied to those of the United States. Therefore, as long as the United States was perceived as supportive of Noriega, the elites would not break with the regime. However, by 1987, it was evident that sectors of the U.S. government were growing weary of Noriega’s illicit activities and regional policies,19 along with the increasingly difficult economic situation. All these problems threatened the political stability required by the United States for the implementation of the Torrijos-Carter Treaties. Therefore, the growing animosity between Noriega and the United States freed the traditional commercial elites to oppose the regime, without incurring the wrath of their Northern “godfather.” In fact, by mid1987, elite opposition to Noriega was both encouraged and financed by the United States.

The National Civic Crusade Divisions within the armed forces surfaced in July 1987, providing the civilian opposition with the ammunition to escalate its fight against the regime. On March 8, 1982, Ruben Paredes, Manuel Noriega, Roberto Díaz Herrera, and Armando Contreras, each a Lt. Col. in the National Guard, signed a secret pact known as Plan Torrijos, in which the four would rotate the leadership of the National Guard among themselves, with Paredes moving to the presidency in 1984 with the explicit support of the armed forces.20 According to the plan, Noriega was to assume command in the first quarter of 1984 and hold it until July 31, 1987, when Díaz Herrera was schedule to take over. However, on June 5, 1987, Noriega announced that he would remain commander for another five years and assigned Díaz Herrera to a diplomatic position, leaving Díaz Herrera bitter and frustrated. The following day, Díaz Herrera retaliated against Noriega by publicly revealing details about Noriega’s crimes (Dinges 1990, 261; Scranton 1991, 107–109; Kempe 1990, 212), accusing Noriega of orchestrating the murder of Spadafora and rigging the 1984 elections, and blaming Noriega for the death of Torrijos, claiming that Noriega had placed a bomb in Torrijos’s plane. The result was widespread rioting. The opposition demanded that both Noriega and Delvalle resign, and numerous civic and business groups formed the National Civic Crusade (Crusada Civilista Nacional, CCN) to press for changes in the government. As demonstrations spread, the government declared a state of emergency, suspending constitutional rights and instituting censorship (CEASPA 1987; La Estrella de Panama June and July 1987; Dinges 1990, 267–268; Soler Torrijos

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1993, 165–167). The CCN responded by calling a national strike that paralyzed the economy for several days. Violent actions by government forces and antigovernment demonstrators further polarized public opinion. The leadership of Panama’s Roman Catholic Church criticized the government but urged a peaceful solution to the crisis. Such calls were ignored by the government, which, instead, threatened to arrest those involved in the protests and seize the property of businesses that joined in the strike, and closed the schools and unleashed a virulent propaganda campaign accusing its opponents of being linked with U.S. interests that wanted to abort the Panama Canal treaties.21 The NCC was initially composed of 26 organizations representing teachers, lawyers, health professionals, students, and businessmen. The latter were represented by the main business groups, the Chamber of Commerce, the Industrialist Union (SIP), the Panamanian Association of Business Executives (APEDE), and the National Council of the Private Enterprise (CONEP). The first leaders of the Crusade were all members of the business sector: Aurelio Barría Jr., president of the Chamber of Commerce; Eduardo Vallarino, presidente of APEDE and CONEP; Alfredo Arias, head of SIP; and prominent businessmen such as Roberto Brenes, Gilbert Mallol, and Carlos González de la Lastra, and Fernado Boyd, among others (Lewis 1990, 5–7). Two key questions surround the emergence of the NCC: (1) Did it represent a true spontaneous popular uprising, or was it an elite organization responding to the interests of the business community?; (2) What was its relationship with the leading opposition political parties? Roberto Brenes, for example, said, “The Civic Crusade was a spontaneous organization that emerged during a particular political juncture . . . It represented a large group of organizations from all sectors of Panamanian society.” He went on to say, however, “Obviously, the business community took a leading role because those organizations were composed of the leading citizens and many who had been active in the opposition throughout the military government.”22 Brenes identifies four stages in the development of the Crusade: (1) The “nonviolence stage,” in which the organization promoted activity on the streets during the initiation and early days of the movement, June-August 1987; (2) The “grassroots work,” from January 1988 to early 1989, characterized by attempts to broaden the nature of the movement by organizing at the community level and building support among more popular sectors of society; (3) The “electoral effort,” concentrated during the March-May 1989 period leading up to the presidential elections on May 7, 1989. This period is characterized by the domination of the movement by the political parties and the creation of the Alianza Democrática de Oposición Civilista (ADOC, Civilian Democratic

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Opposition Alliance); and (4) The post-electoral period, where “everyone stood with the winners,” and the ADOC sought to vindicate their electoral victory. Brenes considers the first three stages part of a grand strategy designed to challenge the military regime, build an opposition network at the neighborhood level, and then translate that network into an electoral victory. The first stage represented the peak of the civilista movement, when hopes were high and expectations about a quick end to the dictatorship were focused on an intense, but short, struggle (Jason Pérez 1993, 176–191). The second stage coincided with the regime’s repressive reaction which, though mild by regional standards, was the worst Panamanians had ever experienced. On July 10, 1987, Noriega deployed heavily armed riot squads against the protesters, marking both a climax in civilista activity and a turning point in the movement (Scranton 1991). Thereafter, opposition press was severely curtailed, political freedoms were denied, and protesters faced consistently severe sanctions. Another key leader of the NCC was Aurelio Barría, president of the Chamber of Commerce. In the spring of 1987, the National Endowment for Democracy (NED) financed a trip by Barría to the Philippines. The purpose was for Barría to learn the operation of a Filipino national civic and political action organization, NAMFREL (National Movement for Free Elections). NAMFREL had played a key role in monitoring the 1986 Philippine elections. Through parallel tabulation, NAMFREL was able to expose the fraudulent “re-election” of Ferdinand Marcos and then help mobilize the “people power” that forced him out. As it happened, the Agency for International Development (AID) gave NAMFREL nearly $1 million for its work in the 1986 elections. John Maisto, a career diplomat who has served as U.S. ambassador to Nicaragua and Venezuela and on the U.S. National Security Council staff, and was the charge a’affaires at the U.S. embassy in Panama, is credited with sponsoring Barría’s trip to Manila. Maisto had worked at the U.S. embassy in the Philippines during the creation of NAMFREL. Barría’s plan was to set up a NAMFREL-style organization Movimiento de Elecciones Libres y Honestas (MODELHO) in Panama in preparation for the 1989 elections—still almost two years away—in the likelihood that Noriega would again manipulate the count. However, just as Barría returned from Manila, Díaz Herrera’s statements rocked Panama and Barría decided to alter the nature of the group. According to Barría, “We had to make a quick decision about whether or not to join the popular protests that were motivated by Díaz Herrera’s remarks. People were in the streets, and we decided that we had to respond.”23 In Barría’s mind, the National Civic Crusade was riding a wave of spontaneous popular mobilization caused by the revelations of Díaz Herrera regarding the regime’s repression, corruption, and murder.

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For supporters of the regime, and some scholars, the NCC was part of an effort orchestrated by the United States to destabilize Panama (Soler Torrijos 1993); for these, the involvement of Maisto was proof that the NCC was a U.S. plot. In his memoirs, Noriega argues, “The United States orchestrated the formation of the Civic Crusade, essentially the work of the U.S. embassy charge d’affaires, John Maisto, the diplomat who was brought in from the Philippines to work the same magic he had produced against Marcos” (Noriega and Eisner 1997, 133). Others argue that the Crusade was an elite-created and -dominated organization that used popular discontent to advance the interests of the business community, at the expense of national sovereignty.24 So who is correct? As in many of these debates, the truth lies somewhere in the middle. First, since the late 1970s, when teachers had protested against the educational reforms implemented by President Royo, and later in the 1980s, with the development of COCINA and CONATO’s opposition to the structural adjustment policies, there had been popular movements against the military-led regime. Popular discontent had been rising since the fraudulent elections of 1984 and the imposition by Barletta and Delvalle of harsh austerity programs. A “civic” movement had already been created in COCINA and had mobilized against the regime itself. Opposition to the regime was real and came from teachers, students, professionals, and labor unions (Jason Pérez 1993). Therefore, the National Civic Crusade did not create popular resistance; if anything, they took advantage of it. In fact, the business community had always cooperated with the military-led regime, and was a pillar of the Barletta administration. They had been reluctant to support COCINA and undercut its efforts to promote a general strike in November 1984. If one analyzes the Civic Crusade’s January 1988 proposal for a transitional government, it is clear that they did not oppose the neoliberal policies adopted by presidents Barletta and Delvalle. Their concern was with the leadership of the State, rather than with the direction of economic policy (Martinez 1990, 111– 112). Second, the United States’s involvement in the birth and growth of the NCC is clear. The National Endowment for Democracy funded Barría’s trip to Manila and continued to fund many of the Crusade’s subsequent actions, including their electoral efforts in 1989. In addition, elite sectors of Panamanian society did not mobilize against the regime until U.S. policy toward Noriega changed. This policy shift is evident in the fact that, shortly after Díaz Herrera’s statements, the U.S. Senate approved a non-binding resolution by an overwhelming vote of 84 to 2 (S. Res. 239), calling upon Noriega and his principal officers to step down pending a “public accounting” of Herrera’s charges. Noriega struck back by sending government Pérez

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workers to demonstrate near the American Embassy. The demonstration turned into a riot, with workers throwing rocks, smashing windows, and overturning and damaging employees’ cars. This incident reminded Secretary of State Shultz of the 1979 Iranian attack on the American Embassy in Teheran, and it led him to tell Arthur Davis, the U.S. ambassador in Panama, “If that’s the kind of relationship [Noriega and the PDF] want, that’s the kind of relationship they’ll get” (Kempe 1990, 223). Subsequently, the State Department suspended military aid to Panama, the Pentagon reduced military contacts between the U.S. Southern Command (SOUTHCOM) and the PDF, and, most important, the CIA removed Noriega from its payroll. As explained earlier, Panamanian elites are highly pragmatic and opportunistic. Given the internal political changes that Noriega had implemented within the PDF which concentrated power in his hands and excluded many in the business community from lucrative government contracts, and the new U.S. policy, which sought to remove the general from power, many in the commercial elite saw the opportunity to rid themselves of an odious upstart and to support the United States at the same time. As one prominent businessmen said to me, “[The commercial elite] understood very well that once Noriega lost support from the United States, it would not be wise or in our interest to support him.”25 In addition, once the United States imposed economic sanctions on Panama, the business sector understood that the only way to improve the economy and, thus, their own personal economic situation was to openly and vigorously oppose the regime.26 Roberto Arosemena Jaen, a history and philosophy professor and one of the leaders of COCINA, explains that, “In 1984, ‘85, and ‘86, the opposition was led by the middle class and professional groups. By 1987, with the formation of the Civic Crusade, the opposition movement becomes part of the business sectors linked to lobbying groups within the U.S. Congress.” Arosemena goes on to argue that the United States from then on controlled the opposition movement.27 Having said this, however, it is important to recognize that, since the 1970s, there had been important business leaders, such as Roberto Eisenmann, Carlos González de la Lastra, Ruben Dario Carles, Guillermo Ford, Winston Robles, among others, who had opposed the military-led government and suffered for it; these particular men were all sent into forced exile. Other prominent Panamanians, such as Arnulfo Arias, Manuel Antonio Bernal, Alberto Quiros Guardia, Ricardo Arias Calderón, Osvaldo Velásquez, and others also consistently opposed the regime. The NCC also involved a number of younger members of the commercial elite who were participating actively in politics for the first time: Gilberto Mallol, Roberto Brenes, Aurelio Barría, Fernando Boyd, Manny Suarez,

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Irene Perurena, among others. Margaret Scranton describes these individuals as “a ‘thirty-something’ generation of the commercial elite comprising well-trained professionals accustomed to participating in an international business culture. They were committed to using nonviolent action, particularly economic coercion, against the regime” (Scranton 1991, 7). This group rejected the accomodationist stand of the traditional members of the commercial elite and opposed any negotiations with Noriega. For the United States, the National Civic Crusade served as the “moderate” and “sensible” opposition with whom they could work to build a transitional government that would replace Noriega until elections could be held. Since the 1950s, U.S. policy in similar situations has always been to work with, or develop, a sector of the domestic political opposition that could counter the efforts of more “progressive” opposition elements, and serve as a vehicle for a transition that did not affect negatively U.S. interests; this was the case with the Cuban and Sandinista revolutions, the El Salvador civil war, and the situation in Haiti. In some instances, such as the Cuban revolution, these efforts failed. In others, such as El Salvador and, for a short time, Nicaragua, the efforts succeeded. In Panama, the “moderate” opposition was never able to topple the regime on its own and the United States invaded Panama in December 1989. The invasion did not occur, however, until it was evident, from the U.S. perspective, that economic sanctions, the National Civic Crusade, elections, and coup attempts by members of the PDF had all failed to do away with Noriega. The economic sanctions were placed in July 1987, when the United States suspended economic aid to Panama. On March 3, 1988, the U.S. State Department froze $50 million of deposits of the Banco Nacional de Panama (BNP) in New York banks. The purpose of the U.S. strategy was to “starve” the Panamanian economy of cash. The results of the sanctions were not the ousting of Noriega from power, but rather the decimation of the Panamanian banking system, the shattering of the private sector, and the creation of untold misery for the country’s poor (Zimbalist and Weeks 1991, 136–155). There is also evidence that economic sanctions undermined the efforts of the Civic Crusade to gain support within the labor movement and poorer sectors of Panamanian society.28 The other major issue for the NCC was its relationship with the political parties that opposed the regime. These included traditional oligarchical parties such as the Movimiento Liberal Republicano Nacionalista (MOLIRENA) and the Liberal Party, as well as more reform-minded parties such as the Christian Democrats and, of course, Arnulfo Arias’s Panameñista party. Many in these groups were committed to partisan politics, partly out of habit and partly due to the traditional use of patronage jobs as a reward for electoral support. Severe conflict between purists Pérez

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within the NCC and partisans occurred over whether to participate in democratic transition negotiations, an electoral strategy, and, if they did remove Noriega, the make-up of the new government. That conflict has marked Panamanian politics throughout the post-invasion period. For Fernando Boyd, a young dentist and member of one of the oldest and most prominent families in Panama, but someone who had just recently gotten involved in politics himself, the most troubling aspect of Panamanian politics was the mentality of those who traditionally have held political office. He described the traditional politicians as driven by personal and sectoral interests rather than philosophy or clear programs. To traditional politicians “politics is a game, a game of seeing how much you can get out of it for your own good, not the good of the nation.”29 Roberto Brenes argues that “the National Civic Crusade made a terrible mistake by ceding the arena to the traditional political parties.”30 For Gilberto Mallol, an young architect, the NCC “made a mistake by allying itself with the traditional political parties . . . Their idea of politics was not what I and others in the civic movement wanted for Panama.” However, as he also admitted, “in 1988 we had no choice, because Arnulfo and others were the most prominent opposition leaders and once a decision to participate in the 1989 elections was made, we had to work in conjunction with the political parties.”31 The decision to participate in the elections was an agonizing one for many in the civic movement. In mid-1988, the National Civic Crusade had decided not to participate in the elections because of the government’s unwillingness to guarantee basic political and civil rights, particularly access to the media. Civilista leaders such as Roberto Brenes, Aurelio Barría, and Gilberto Mallol argued that to participate in the elections was to legitimize the regime, and play in their field by their rules. They supported continued mass protests, broadening of the opposition coalition, and a firm stand against any negotiations with Noriega. However, not everyone in the opposition agreed with this strategy. Political party leaders, particularly the Christian Democrats, which at the time were the best organized party in the country, advocated contesting the elections—as the surest way of illustrating the lack of popular support for the regime and, thus, weakening it internationally. In May 1988, after the failed attempt by President Delvalle to remove Noriega as head of the PDF, Arnulfo Arias, who at the time was living in Miami, gave orders to his spokespersons in Panama to begin negotiations directly with the armed forces in order to resolve the political crisis (Conte Porras 1990, 631). Leading members of the Arnulfista and Liberal Authentic Party, such as Guillermo Endara, Joaquín Fernando Franco, and Arnulfo Escalona, had extensive business dealings with the regime, and sought to protect those interests by promoting a solution that included a

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transitional government that would include members of the PRD and the opposition, as well as Noriega’s retirement from the PDF. On the one hand, the regime used these negotiations as a way of dividing the opposition and to buy time in which it could resolve its internal contradictions thus strengthening its position vis-a-vis the United States. On the other hand, the staunch opposition by the NCC to any negotiations, along with the internal divisions among the political parties that made up the opposition forces, made a negotiated solution virtually impossible.

Negotiating a Way Out of the Crisis The United States had early on decided to use a dual-track approach: on the one hand, imposing economic sanctions on the other, pursuing a series of negotiations to persuade Noriega to step down as chief of the PDF and leave Panama. Between August and December 1987, the United States made three different attempts to present Noriega with several plans and deals for his resignation. The first attempt was made by Jose Blandón, the Panamian consul general in New York, who was a close associate of Noriega. The second was initiated by Noriega, who invited retired Admiral Daniel J. Murphy to meet with him in Panama in August and November 1987. Finally, on December 30, 1987, Richard Armitage, assistant secretary of defense for International Security Affairs, met with Noriega in Panama. The first effort led to the Blandon Plan, which called for the retirement of Noriega and his inner circle of PDF officers by April 1988 at the latest, the establishment of a transitional regime under President Delvalle that would rule the country until the May 1989 elections, an independent media, and the resumption of U.S. aid (Scranton 1991, 118–119). When Admiral Murphy met with Noriega, he reiterated the terms of the Blandon Plan, but changed the timetable. Murphy told Noriega he had until the May 1989 elections to leave. Noriega concluded that the tough timetable in the Blandon proposal did not reflect U.S. policy, and, thus, he felt free to reject the proposal altogether and fire Blandon in the process (Buckley 1991, 106–108). On December 30, 1987, Armitage went to Panama to send Noriega a “tough” message and to tell him that all the branches of the Reagan administration had adopted a unified position seeking his departure. Armitage may have offered Noriega an incentive to resign, such as agreeing to stop the investigation into his drug-trafficking activities (Scranton 1991, 126–127). It is not clear, however, whether Armitage carried out this mission. The press briefings in Washington on the meeting Pérez

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conveyed a tough American stand, but according to one source, “Armitage never asked Noriega to leave” (Buckley 1991, 112). Complicating matters further, in February 1988, Noriega was indicted by two federal grand juries in Tampa and Miami for racketeering, drug trafficking, and money laundering. The indictments exposed deep divisions within the U.S. government on the handling of the Panamanian situation. It is clear that President Reagan and Secretary of State Shultz did not know of the indictments until after they were issued (Shultz 1993:1052; Kempe 1990, 250). Moreover, the indictments were deeply embarrassing for the administration, since they demonstrated that the United States had been aware for years of Noriega’s involvement in illegal activities but did nothing, in order to preserve his cooperation with U.S. policy in the region, particularly the anti-Sandinista campaign. In Panama, the situation was complicated further by the failed attempt of President Delvalle to oust Noriega as head of the PDF. In response, Noriega toppled Delvalle and imposed restrictions on the press and on demonstrations. The United States hoped for a popular uprising against Noriega and in support of Delvalle, but none occurred. The National Civic Crusade did not trust Delvalle, because of his earlier support for Noriega, and the labor and popular movement opposed him because of the imposition of neoliberal restructuring programs. A failed coup attempt by Colonel Leonidas Macias, chief of the police, on March 16, 1888, further strengthened Noriega’s position. In light of the situation, the United States tried again to negotiate a deal with Noriega. On May 23, 1988, Deputy Assistant Secretary of State Michael Kosack arrived in Panama with a deal in which the indictments would be dropped if Noriega resigned on August 12, 1988, the fifth anniversary of his elevation to PDF commander. The United States imposed a deadline of May 25, the day President Reagan and Secretary of State Shultz were to depart for a summit meeting in Russia, for Noriega to respond to the offer. Under pressure from Congress and hardliners within the administration, Shultz withdrew the offer after Noriega indicated a willingness to accept it but a need for time to convince other PDF officers. Confidential minutes of a series of meetings by the Strategic Military Council, a group created by Noriega in early 1988 composed of loyal high-ranking PDF officers, shows that they met several times from May 24–26 to “evaluate” the Kosack proposal. In the end, the Council recommended the rejection of the proposed deal.32 Why did all these negotiating attempts between the United States and Noriega fail to resolve the crisis? The main problem was the conflicting signals sent by the United States, which caused Noriega to doubt the resolve of the Reagan administration for his removal. Noriega never thought the United States would opt for a military solution, and since the

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terms offered by the United States kept getting “better,” he figured his best chance to strike the most beneficial deal was to hold out as long as possible, particularly through the May 1989 elections, to guarantee the victory of a candidate who would preserve the integrity of the PDF.33 However, it is also probable that he only wanted to confuse and frustrate the United States and never had any intention of negotiating a settlement.

Elections Under Crisis Having failed through negotiation and economic sanctions to force Noriega to resign, the U.S.administration of president George H.W. Bush sought to use the electoral route and encouraged the National Civic Crusade and the political parties to form an alliance and contest the scheduled May 1989 elections. In order to assure the success of the opposition, President Bush approved a covert plan that would funnel more than $10 million to the opposition, for printing materials, advertisements, transportation, and communication (The Washington Post April 23, 1989). By January 1989, the National Civic Crusade had decided to participate in the elections, and negotiations began between the NCC and the leaders of the political parties to define the parameters of their participation, particularly who would lead the opposition ticket. Arnulfo Arias, who had died August 10, 1988, would—for the first time since 1940—not lead the opposition forces. Initially, the leaders of the NCC offered the presidential nomination to Mireya Moscoso, Arnulfo’s widow, in the hopes that she would be the best person to carry the dead caudillo’s mantle and unite the opposition. Moscoso, however, declined the offer. Some argue her decision was due to fears that Noriega might manipulate a potential trial over Arnulfo’s inheritance, which she was disputing with his adopted son.34 The Christian Democratic Party and many leaders of the National Civic Crusade rallied around the candidacy of Ricardo Arias Calderón, who had run as the second vice-presidential candidate on the opposition ticket in 1984 and was a long-time adversary of the military-led regime. The Panameñista Party, however, was adamant that one of their own be the presidential candidate, basing their argument on the fact that they were the largest opposition party and were the party of Arnulfo Arias. To make matters worse, the Electoral Tribunal, which was manipulated by Noriega, recognized as the “official”head of the party Hildebrando Nicosia, a former secretary general of the party who had broken with Arnulfo to support the regime. By this action, Noriega managed to split the most powerful party opposing him. Legally, therefore, the Panameñistas could not appear Pérez

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on the ballot in support of the National Civic Crusade. The situation provided an opportunity for members of the small Partido Liberal Auténtico (Authentic Liberal Party) to manipulate the nomination process in their favor. Arnulfo Escalona and Joaquin Fernando Franco offered the presidential nomination to Guillermo Endara, former deputy secretary general of the Panameñista Party, in exchange for using their party label on the ballot, which under Panamanian rules would guarantee the survival of the party after the elections.35 After several weeks, during which the Christian Democrats and others in the opposition maneuvered to find an alternative to Endara, on January 24, 1989, Guillermo Endara was confirmed as the presidential candidate of the Alianza Democratica de Oposición Civilista (ADOC, Civilian Democratic Opposition Alliance).36 The parties in the opposition included the Christian Democrats, the Liberal Republican Nationalist Movement (MOLIRENA), the Authentic Liberal Party, and the anti-government faction of the Panameñista Party. The ticket was composed of Guillermo Endara as presidential candidate, Ricardo Arias Calderón of the Christian Democrats as first vice-president, and Guillermo Ford of MOLIRENA as second vice-president. The government forces, who had decided on January 5, 1989, to form the Coalición Liberal Nacionalista (COLINA) were headed by the Revolutionary Democratic Party (PRD) and included a number of small parties and factions of other parties.37 COLINA’s candidate was Carlos Duque, a friend and business collaborator of General Noriega. The first and second vicepresidential spots was filled by Ramon Sieiro and Aquilino Boyd, respectively (Martinez 1990,149–158). The forces of ADOC emphasized their anti-militarism and advocated the establishment of a liberal democratic system. COLINA emphasized national sovereignty and opposition to U.S. aggression. In the end, the elections were devoid of any real ideological or programmatic content. Except for pitting a distorted view of nationalism with a rather hollow vision of democracy, the two sides said little about what actual programs they would implement, if elected. In the early morning hours of May 8, and throughout that day, partial results from three electoral districts were published. The results favored the government candidates. While the government published the partial results it received from the National Counting Board, the Catholic Church announced the results it was given by the opposition. The differences were significant. While the government claimed their candidates had a two-toone majority in the electoral districts that had been counted, the opposition announced a landslide victory for their candidates. Supporters of Noriega have subsequently admitted that the opposition had won an overwhelming victory.38 Pérez

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On May 9, the flow of information from the district to the national level was interrupted. On May 10, in laconic fashion, the president of the Electoral Tribunal read a statement signed by all three magistrates, annulling the elections. The statement alluded to the fact that the great number of irregularities across the country made counting the votes impossible. The communiqué also mentioned the open interference of the United States in the elections, namely the alleged financial support provided to the opposition. In the demonstrations that ensued, the opposition candidates were badly beaten and the OAS (Organization of American States) strongly condemned the actions of the regime. Negotiations sponsored by the OAS between the two factions failed. The opposition insisted on speaking directly with the military, who they claimed were really in charge. Noriega, on the other hand, refused to negotiate and insisted that any talks had to take place between the civilian leaders of the regime and the opposition. In reality, neither side had any incentive to negotiate in good faith. Both believed that the United States was on their side and would come to their rescue. Noriega never believed that the U.S. opposition would lead to his removal. The civilian opposition believed that, in the end, the United States would get rid of Noriega for them. However, nothing was done to remove Noriega from power until October 3, 1989. On that day, 200 members of the Panamanian Defense Forces mounted an attack on the Panamanian military headquarters. The attempted coup failed, partly because the United States refused to intervene on behalf of the coup plotters. (For details about the coup, see Scranton 1991, 185–192; Buckley 1991, 197–218; Kempe 1990, 369–397; and Dinges 1990, 305–306.) After the failed coup, Noriega seemed stronger than ever. The domestic opposition had been defeated and neutralized, the U.S. sanctions had inflicted pain but failed to topple the regime, and the verbal condemnations from the OAS had no effect whatsoever. Noriega continued throughout November and December to challenge the United States, even to the point of having the rubber-stamp National Assembly of Community Representatives pass a resolution stating that a “state of war existed between Panama and the United States.” On December 15, the same day that the Assembly declared the “state of war,” PDF soldiers stopped a U.S. military patrol car and held the officer at gunpoint. The following day, Panamanian soldiers fired at an American vehicle in a checkpoint and killed Marine Corps Lieutenant Robert Paz. A Navy lieutenant and his wife who witnessed the shooting were arrested and beaten. The woman was also sexually assaulted. In a separate incident, other U.S. soldiers were detained at the airport and their weapons were confiscated. On the morning of Pérez

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December 17, a U.S. officer shot a policeman, thinking the Panamanian was reaching for his weapon. The escalating tensions between the two nations reached a climax on December 20, 1989, when the United States finally decided to remove Noriega from power. On that day, 20,000 U.S. troops invaded Panama to “safeguard American lives, restore democracy, and bring General Noriega to trial.” With the U.S. invasion, 21 years of military control of politics were brought to an end. In the years subsequent to the invasion, the Panamanian government has attempted to institutionalize a civilian-led, democratic regime. Those efforts, both at the macro and micro level, are the subject of the remainder of the book.

Conclusion The evidence suggests that after the death of Omar Torrijos, the military institution, under the control of Manuel Antonio Noriega, altered the rules of the game by changing the relationship between the commercial elite and the military, and by monopolizing control of politics and the economy. Those changes, plus the changes in U.S. policy toward the region under President Reagan, initiated a period of political crisis that ended in the military invasion of Panama by U.S. forces on December 20, 1989. Since colonial times, Panamanian elites had operated under a system based on tight social and economic networks greased by pragmatism and opportunism. That system had enabled the elite to prosper, while the primary element of the service economy—the Panama Canal—was under external control, and during a populist military regime whose rhetoric was clearly anti-elite. The resourcefulness of Panamanian elites is probably one of its most enduring qualities. The first four chapters of this book have given the reader a detailed examination of the political evolution of the Panamanian state since its separation from Colombia on November 3, 1903. The next chapters explore the institutional and cultural changes in post-invasion Panama, examining whether the patterns of belief and behavior developed in the twentieth century survived the military invasion, and whether elites and the mass public exhibit values conducive to the consolidation of a stable democracy.

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Chapter 5 Demilitarization and Elections: Institutional Reconversion in Post-Invasion Panama

Since 1990, Panama has institutionalized a political system characterized by free, competitive elections and a multiparty system, though with a tendency toward bipartisanism. Four general elections for president and the legislature have been held since 1990. In three presidential elections, power has shifted between the country’s two dominant parties, the Partido Revolucionario Democrático (PRD, Democratic Revolutionary Party) and the Partido Arnulfista (Arnulfista Party); in 2009, a new political party, Cambio Democrático (CD, Democratic Change), in alliance with the Arnulfista Party, won the presidential contest. In addition, three constitutional referenda put forward by the government have been held; in two of them, the government accepted defeat. The consolidation of free elections are largely the result of the institutionalization of the Electoral Tribunal as an independent institution dedicated to supervising and regulating the country’s electoral process. Despite the consolidation of elections, there is a marked weakness in the party system, which is characterized by low levels of support for political parties. While President Guillermo Endara (1989–1994) lacked strong leadership in dealing with many of the structural problems facing Panama and failed to stem the tide of corruption that has been a tradition among Panamanian governments, his administration was able to take significant steps in building the institutional structures of a democratic regime. Democracy was furthere strengthened with the victory of Ernesto Pérez Balladares in 1994. While Balladares’s administration was mired in a number of corruption Pérez

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scandals stemming from the misuse of state funds and the inappropriate allocation of state contracts, his victory represented the first peaceful transfer of power between opposition parties since 1968. In addition, Balladares’s victory signaled the emergence of the PRD, the party that supported the military regimes as committed to playing by the rules of the democratic game. In 1999, Panamanian democracy came full circle when Balladares transferred power to the opposition led by Mireya Moscoso. This chapter examines the institutional changes in post-invasion Panama. Particular attention is given to the process of demilitarization. In 1994, Panama took an important step in securing democracy by constitutionally prohibiting armed forces. The process, however, began early in 1990 with the dismantling of the Panamanian Defense Forces and the creation of a new civilian dominated Public Force (Fuerza Pública). Other important institutional changes were made in the conduct of elections, and the transformation of electoral institutions such as the Electoral Tribunal and political parties.

Demilitarization The traditional role of the military has been severely questioned in the new “post-military societies” of Latin America. The traditional functions of the region’s military were to promote capitalist development, guarantee internal stability, and secure regional defense. For 40 years, these objectives were incorporated into the curriculum of military academies, as well as into government policy. The end of the cold war, however, as raised serious questions about these objectives. In this new scenario, the United States has proposed several alternatives to the traditional role of the military, two of which are: (1) Converting the military institutions into forces capable of confronting threats to domestic security (i.e., drug trafficking, etc.); (2) Concentrating on the solution of social problems. This might include fighting poverty and building infrastructure (i.e., civic action programs). Some of these ideas have found propitious terrain in post-invasion Panama. After the invasion, the Panamanian Defense Forces (PDF) was dissolved, and its personnel were the subject of a massive reorganization. From the ashes of the PDF emerged the Fuerza Publica of 12,000 men and women. Three factors were decisive in demilitarizing public security: (1) The invasion destroyed the operational capabilities of the Panamanian Defense Forces; (2) The looting and ensuing anarchy dramatized the urgent need for an organization whose task could ensure public security; Pérez

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and (3) The country required a new security apparatus, independent of the party in power. The minister of government and justice at the time, Ricardo Arias Calderón, decided in February 1990 to replace the PDF with a Public Force composed of three services: the National Police, the National Air Service, and the National Maritime Service. Decree 38, which created these entities, assigned them responsibility for public order and national defense, and envisioned the possibility that special units with external defense functions might be created in the future. Yet these services were almost completely demilitarized in terms of their structure, philosophy, weapons, and training—though not in terms of their personnel, who were largely recruited from the former PDF. The new security forces were subordinated to civilian authorities through direct control by the Ministry of Government and Justice and budgetary oversight by the Office of the Comptroller General as well as by the Legislative Assembly.1 Decree 38 also created a Public Security and National Defense Council to coordinate public policy in matters of national security: it is chaired by the president and composed of key ministers and senior government officials. In February, the government also created the Institutional Protection Service (SPI) to provide security for the president. This unit was placed under the control of the minister of the presidency, entirely separate from other security forces.2 The Departamento Nacional de Investigaciones (DENI, old intelligence service) was reorganized as the Technical Judicial Police to carry out criminal investigations under the control of the Attorney General’s office. Transit, penitentiary, and immigration security services were all brought under the Ministry of Government and Justice. The re-structuring of the personnel policy encompassed several components. Of the 16,000 members of the former Panamanian Defense Forces, 12,000 positions were assigned to the National Police, 400 to each of the Air and Maritime National Services, 300 others to the Institutional Protection Service, and 750 to the Technical Judicial Police. The system of living in barracks was ended, and eight-hour service shifts were established. As a result at any given moment only approximately 3,500 police were in service. Many of the exclusive perks enjoyed by the PDF, such as separate health, banking, supermarket, and social club facilities were abolished. The purpose of these measures was to dismantle the separate style of military life and to integrate the policemen into civilian life. In addition, a new uniform was adopted; military equipment and weapons were replaced with those corresponding to police functions, such as 9mm pistols, .38 caliber revolvers, and 12-caliber shotguns, leaving in reserve a restricted number of T65, M16 rifles and Uzi submachine-guns. Pérez

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Official titles and military ranks were modified: from “commander-inchief” to “director general,” from “General Staff” (Estado mayor) to “Directorate,” from “base” to “station.” In 1994, all military titles for ranks above major were changed to those of “sub-commissioner” and “commissioner.” By 1990, of the 1,121 officers, ranked from sub-lieutenant to general in the PDF in 1989, only 608 remained; 525 in the National Police, 62 in the National Air Service, and 61 in the National Maritime Service. No general, colonel, or lieutenant colonel remained. Finally, numerous properties accumulated by the Defense Forces were transferred through an Inter-Ministerial Committee. From 1990 to 1991, 17 bases and eight residences of the chiefs of Military Zones and of the Association of Wives of the Defense Forces were handed over to diverse civilian agencies. All equipment of the Military Engineering Battalion was transferred to the Ministry of Public Works. Twelve military planes, including a Super Puma with a market value of $10 million, were placed at the disposition of the new government. These changes reflected significant advances over the previous national security model. One notable achievement was the clear separation of state security agencies with distinct mandates for law enforcement, air rescue, coastal surveillance, criminal investigation, presidential security, and so on. The second major accomplishment was the subordination of all state security agencies to civilian authority through legislative, judicial, and executive oversight and control. The changes to the Panamanian security forces were in equal part a demilitarization process, a police reform, and an (imposed) transition to democracy in which the political domination of the Panamanian security forces came to an abrupt end. The defeat, purges, and sudden change in status experienced by PDF officers were not easily accepted. This became apparent when delays in the payment of wages in November 1990 sparked a protest. This was the last collective stand (to date) undertaken by Panamanian security forces. Under the leadership of Colonel Eduardo Herrera Hassan, hundreds of officers occupied the police headquarters in Panama City. The protest ended after the authorities requested that U.S. troops storm the building, a request that underlined where real power lay in the country. The “mutiny” led to a final round of purges that completed the forceful subjugation of the Panamanian security forces. This process constituted an essential step towards their political neutralization, shifting the balance of power firmly in favor of civilian politicians and their U.S. backers, and providing the foundation for the security reform project undertaken in the 1990s. The process of de-politicization of Panamanian security forces went considerably further than merely ousting the military from power. The prohibition on any form of overt political party activity or affiliation beyond that of voting—included in Law 20 of September 1983, though it Pérez

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was never respected—was now confirmed by a civilian government willing and able to enforce it. Furthermore, the restrictions imposed upon the political activities of the security forces were expanded to include public statements of a political nature and later enshrined in the constitutional amendments in 1994 that institutionalized the demilitarization of the Panamanian security forces. Yet problems remained. The division of security agencies became tied up with struggles within the governing coalition, hampering transparency in the intelligence service, and undermining coordination of law and order efforts. Serious conflicts between Public Force personnel and their civilian leaders have led the president to call on U.S. military forces for support at least once (in December 1990) since the invasion. The dispute stemmed from the final aspect of the new regime of political neutrality imposed upon the security forces which related to the restriction of their collective activities. The prohibition of union and strike rights was first established in 1990, following a short power struggle between the government and the then director of the security forces, Colonel Eduardo Herrera Hassan (who went on, as noted above, to lead the short lived “mutiny” of December 4–5, 1990). Within a month he was “retired,” and shortly afterwards the positions of security directors were filled by “civilians,” further eroding the collective power of security personnel. The security forces retained a right of association, and in 1990 the Asociación de Miembros de la Fuerza Pública (AMIFUP), a security forces association, was established. AMIFUP has a large voluntary membership (half of the National Police staff are members), but virtually no public profile. The association focuses on welfare issues such as operating savings and retirement funds for members of the security forces. In fact, the security forces have no collective bargaining rights; they cannot set up a trade union and they do not have the right to strike. Another lingering problem is the question of national defense. Although it left the door open to the creation of a defense force in Decree 38, the government eventually decided against this option on the grounds that Panama did not face external security threats, that the Canal could not be defended by conventional military means, and that an army would constitute a renewed threat to democracy. In keeping with this outlook, the government proposed reforms to the Constitution that would have eliminated the option of creating a defense force altogether, pending further constitutional changes. In November 1992 those reforms were put to a vote in a national referendum. Over half of the eligible voters abstained, yet those who voted rejected the changes by an overwhelming majority. There are many reasons why the constitutional amendments were rejected or simply ignored by most Panamanians, and it seems the unpopularity of Pérez

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the Endara government was much more salient than the content of the specific proposals on national defense or other issues. The rejection of the constitutional package did not settle the defense issue. Having failed to abolish the army through a referendum, the Endara government opted for another solution to reform the constitution. In July 1994, President Endara proposed to the National Assembly a series of constitutional reforms, including the abolition of the army. The reforms placed responsibility for public order and security on the police. In case of foreign aggression, Panama would organize special police forces to defend the national territory. The reforms prohibited the Public Force as an institution and its individual members from participating in political protests, making political declarations, or intervening in political party rivalries. However, members still retained the right to vote in elections. The constitutional reforms were approved on August 23, 1994, by the outgoing National Assembly, following an agreement between Endara and the president-elect Ernesto Pérez Balladares to ensure the incoming president’s approval. Paradoxically, a majority of the PRD, once considered the political arm of the Defense Forces, agreed to the dissolution of the army. The president-elect said he backed the reforms under the condition that they include a provision for a temporary armed force in the event of a foreign invasion. Pérez Balladares qualified his demand by assuring that this would by no means reactivate an army, but would instead expand the role of the National Police. Many viewed the decision to constitutionally abolish the army as unwise. PRD president and legislator, Gerardo González, strongly opposed the reforms. During the legislative debate in August 1994, González said that the elimination of the army would convert the country into a “U.S. protectorate.” González, referring to the incident in 1990 when Endara asked the United States to intervene in a police riot, said, “We are exposing the country to the humiliation of having to call foreign troops each time the police get angry.” Other problems related to the issue of Canal defenses after the year 1999 when Panama would receive control of the waterway. While the reform stipulated that the Public Force would defend the national sovereignty, it did not specify how the Canal would be defended after Panama had control. Before the invasion, Canal protection was in the hands of a combined committee, made up of high-ranking U.S. and Panamanian military officers. Critics claimed the Endara government wanted to prolong the presence of U.S. troops until after 1999 by ensuring that there would be no Panamanian armed forces to defend the Canal.3 The continued presence of U.S. military personnel in Panama after December 1999 has been the subject of much debate in Panama, as well as in the United States. In 1996, the two governments initiated negotiations to establish a Multilateral Anti-Drug Center at Howard Air Force Base. Pérez

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The purpose of the center was to assist the United States and other countries in the region in fighting drug trafficking by providing logistical and intelligence support. The center, to be run by civilians, was designed to be multilateral, providing berths for representatives from a number of Latin American countries. By August 1998, it was clear that the negotiations had failed. The United States blaimed the failure on the inability of the Panamanian government to “get its act together” on the exact nature and extent of the center, and its insistence on payment for the use of its territory. The Panamanian government complained that the United States wanted to include a clause in the agreement that would allow the United States to carry out “other [unspecified] missions” from the center. Panama feared that among those “other missions” might be an invasion or military intervention in another Latin American country. On their part, United States argued consistently that any anti-drug center must have a military component. Finally, few countries in the region expressed an interest in participating in the center, and thus the multilateral nature never materialized. While the anti-drug center never materialized, the issue of U.S. security assistance and the presence of U.S. military personnel in Panama has remained an important institutional and geopolitical issue for all succeeding Panamanian governments. The institutional success of demilitarization in Panama is bound to the internal changes in the PRD. Without acceptance by the PRD hierarchy of the preeminence of civilian authority, along with the constitutional and institutional changes undertaken since December 1989, it is doubtful demilitarization would have been consolidated. The embrace of demilitarization was the result of both internal structural changes within the party that purged the influence of former members of the PDF and their most ardent supporters, but more importantly, a change in attitudes toward the role of the military within the State. The latter was perhaps more due to political convenience than real conviction, but it was important. The PRD did not totally repudiate its connection with the PDF, picking out the most popular elements, while remaining within the norms of the new political order, accepting the new rules of the game and making no attempt to destabilize the reforms. The Pérez Balladares-led PRD that won the 1994 elections was clearly different from the party that had previously done little but rubberstamp the policies of the military regime. By supporting the institutionalization of the demilitarization process, the PRD consolidated its new credentials. The victory in the 1994 general election vindicated this approach and demonstrated to party members that support of the security forces was not necessary to gain political power. Civilian politicians within the PRD were no longer subordinated to the security forces, and for the first time since the creation of the party in 1978, civilians were in control both Pérez

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of the party and of the government. By voting for the constitutional amendment that institutionalized the demilitarization of Panama, the PRD had nothing to lose, since the PDF had already been dissolved. Once the constitution was amended, it was possible to institutionalize the other aspects of public security reform, notably with the drafting of the Organic Law for the National Police. The PRD administration set up a cross-party commission that brought together politicians, members of civil society (including representatives of the Church and human rights organizations), and former directors of the police forces to draft the new law. In contrast to earlier attempts to reform the public security apparatus, the law was drafted, passed, and implemented without generating much opposition. Overall, the National Police’s Organic Law (Law 18 of June 3, 1997) consolidated the changes that had already taken place within the security forces since 1990. Key aspects of the law emphasized the civilian nature of the institution—for instance, by replacing “ranks” (rangos) with “levels” (niveles), they defined how and when force could be used and eliminated the concept of due obedience. The law reiterated the subordination of the police to civilian authority, clearly stating the prohibition on political activities, intervention, and partisanship—all punishable by dismissal from the institution. Law 18 facilitated the professionalization of the security forces by clearly establishing the mission, functions, and regulation of the police, including a strict code of conduct and a clear career path. The law served two purposes: (1) unifying what had been an ad hoc public security reform process and anchoring the process into Panamanian law; and (2) ending most of the political disputes that had surrounded public security issues since the early 1990s. The strengthening and professionalization of the security forces (especially the PNP) continued throughout the mid 1990s, with budgets increasing from $77,286,258 in 1995 to $103,929,183 in 1999; and the number of PNP staff increased from 12,000 in 1994 to 16,000 by 2002. The argument for strengthening the security forces to improve their ability to carry out their public security duties has been established since the mid 1990s and has not attracted negative publicity or engendered debates. Recent changes, however, have been more controversial, as were the plans of the Torrijos administration discussed below. On the one hand, the United States has encouraged the strengthening of the Panamanian security apparatus, including augmenting the military capacity of the forces. In 2003, for instance, General James T. Hill, commander in chief of U.S. Southern Command, openly criticized the lack of military capability in Panama, arguing that this left Panama vulnerable to terrorist attacks or drug-trafficking Pérez

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networks. In addition, the U.S. State Department has underlined the need to reinforce the border area (notably with U.S. troops) in order to deal with the aftermath of the implementation of Plan Colombia and the Andean Regional Initiative, as well as spill-over from the Colombian conflict. By the time Martín Torrijos Espino was elected president in 2004, concerns abounded as to the effectiveness of the Panamanian security forces to meet the new challenges posed by international criminal networks, terrorism, and drug trafficking, among others. The United States, concerned over this situation, encouraged Panama to restructure its security apparatus. Torrijos obliged by pushing the first significant re-organization of security agencies since the early 1990s. Of particular note, on August 18, 2008, the Cabinet Council approved the creation of the National Intelligence and Security Service (SENIS) and the modification of Article 41 of the National Police Organic Law, to allow former military officers to be named as chief of the National Police. Two days later, the remaining three Torrijos reforms were passed, consolidating the Air and Maritime Services into the National Naval Air Service, creating the State Border Service, and reorganizing the Council on Public Security and National Defense as a separate entity.4 Torrijos justified his highly controversial reforms in large part because “the Colombian military is pushing the Revolutionary Armed Forces of Colombia (FARC) so hard,” that they are illegally transferring their operations to Panama.” In August 2009, Ricardo Martínelli, the winner of the 2009 presidential elections, criticized Torrijos’s reforms and sought to repeal the decree that created the National Intelligence and Security Service (SENIS). Martínelli, nevertheless, has made additional significant changes to Panama’s security apparatus in order to deal more effectively with rising rates of crime and other perceived challenges to national security. On March 31, 2010, the National Assembly approved the draft law establishing the Ministry of Public Security. This change comes after the Ministry of Government and Justice was basically split in half and turned into two new, smaller ministries. The Ministry of Security will be composed of the National Police, State Border Service (Senafront), the National Naval Air Service (Senan) and the National Immigration Service (SNM). The other part of the split— the new Ministry of the Interior—will be responsible for the Civil Protection System (SINAPROC), the Office for Attention to Refugees, the post office system, the Office of Indian Policy, the office for coordination with local governments, the passport office, the Ground Traffic and Transportation Administration (ATTT), the Civil Aviation Authority, and prisons. It remains to be seen how effective the new agencies will be. The transformation of Panama’s security forces has moved forward under administrations of different parties and ideological orientation. The Pérez

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initial process of demilitarization, purging, and constitutional reforms was successful in moving Panama beyond the institutional power and role the military apparatus had under General Noriega’s regime. The near-universal acceptance of this process by political actors, particularly the PRD, ensured its success. Subsequent changes, and the political debates surrounding them, however, are the result of a number of unresolved issues stemming from a changed security environment and geopolitical pressures for Panama to more effectively protect the Panama Canal, as well as its borders. Nonetheless, Panama’s basic constitutional prohibition on the establishment of traditional armed forces has been sustained. Demilitarization, thus, has been a pillar of the countries process of democratization; a process that could only be successful as a result of the U.S. invasion, which destroyed the Panamanian Defense Forces and altered the political environment in the country.

Electoral Institutions Demilitarization by itself could not sustain democratization. Significant domestic institutional changes have taken place. Perhaps among the most significant were in the electoral system. In Elections in Central America, John A. Booth and Mitchell A. Seligson set a high standard for judging elections: “For elections to be meaningful,” he says, “their outcome cannot be predetermined: challengers must have the potential to beat incumbents. Institutionalization of uncertainty implies that victor and loser accept this uncertainty as a fundamental rule of the game. So long as they do not, an election becomes merely one mechanism, not the mechanism, for acquiring the right to rule” (Booth and Seligson 1995, 2) This creates a paradox: The more certain the electoral process, the less certain is its outcome; the more predictable the rules of the contest, the less predictable are candidates’ chances. Similarly, the crucial distinction between democratic transition and consolidation involves the diminution of uncertainties about the rules of the game. Mainwaring and company expresses this point well: Upon consolidation, “All major political actors take for granted the fact that democratic procedures dictate government renewal,” whereas, “the elected governments of transitional democracies operate in a political environment in which democratic continuity is still uncertain” (Mainwaring, O’Donnell, and Valenzuela 1992, 20). In Panama, the organ of government most responsible for institutionalizing uncertainty under civilian rule has been the Electoral Tribunal. Its Pérez

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magistrates have been the driving forces for reform of the nation’s electoral process. Political practices set under 21 years of military rule, and equally fraudprone politics prior to 1968, have been superseded with new practices. So impressive was the conduct of the 1994 election that international observers judged the process to be a model for the hemisphere. In addition, despite initial misgivings, the performance of the Tribunal during the August 30, 1998, referendum on presidential reelection provided further evidence of legitimacy and institutionalization. Since 1990, Panama has held four presidential and legislative elections (1994, 1999, 2004, and 2009), plus three referenda, 1992, 1998, and 2006. Each election has been judged to be fair, free, and competitive. The Electoral Tribunal provides a case of rapid transformation of a formerly discredited institution. Not only has the Tribunal changed significantly, it has also had a successful impact on the behavior of political parties and politicians and on citizen confidence in the electoral process. Since 1990, the Electoral Tribunal has made greater strides toward professionalization and instituting modern practices than any other organ of government. The years 1990–1996 witnessed substantial progress in making and applying new rules for electoral politics. During these years, the Tribunal established its autonomy and maintained a reputation for even-handed treatment of all political parties. After holding a free and fair election in 1994, the Tribunal initiated further reforms to make the process even more tamper-proof and efficient. A transition within the Tribunal began in 1997, two years prior to the next national election, when a representative of the ruling party, the PRD, replaced one of the three sitting Electoral Magistrates. What differed most, between elections held under the military-led regimes and after 1990, was the political context: the former were showcase or demonstration elections with outcomes determined in advance; the latter were free and fair. The role of the Tribunal since 1990 has stood in stark contrast to the elections of 1984 and 1989, when the Tribunal of the time allowed the military and the official governing party to manipulate the voting. Since 1990, the Tribunal has been independent of political parties and incumbent politicians, a result not just of amending the constitution but also of the intent and conduct of the magistrates in office bolstered by strong non-partisan supporting organizations from civil society. The magistrates have taken pains to articulate and put into practice electoral norms and values consistent with changes in the Electoral Code and Constitution. Since 1990, the decisions, decrees, and regulations issued by the Tribunal have taken on a new status, as independently determined and authoritative administrative law. Pérez

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The current Constitution, ratified in 1972 and amended in 1983, addresses the Electoral Tribunal, in conjunction with political rights (as opposed to articles on the three branches of government) in Title IV, Chapter III, Articles 136–139.5 Most significant, in terms of intent and principle of law, is the first statement in Article 136: “In order to guarantee liberty, honesty and efficacy of the popular vote, an autonomous Tribunal is established.” To further its autonomy, the Tribunal is granted legal standing, its own resources, and the right to administer those resources. The powers granted to the Tribunal in Article 136 are: 1. To interpret and apply the Electoral Law, 2. To direct and oversee: (a) records concerning vital statistics, naturalization, and other legal actions affecting the civil status of persons, (b) issuance of personal identity cards, and (c) all phases of the electoral process.6 To exercise these powers, the Constitution grants the Tribunal jurisdiction throughout the country. Three presiding magistrates are the highest authority of the Tribunal. The qualifications for Electoral Magistrate are the same as those for magistrates of the Supreme Court; the term of office is ten years.7 Decisions of the Tribunal can only be appealed to the Tribunal itself; once appropriate procedures have been completed, those decisions are definitive, irrevocable, and binding, except for cases concerning the constitutionality of acts of the Tribunal. The Constitution provides two types of checks to balance the power of the Tribunal within the government: a selection mechanism that involves all three branches, and sanctions for committing offenses or crimes. Each magistrate is selected by a different branch of government: legislative, executive and, for the judiciary, by the Supreme Court. No one serving or holding office in a branch may be nominated for magistrate by that branch. Two substitute magistrates (suplentes) are also nominated; these persons may not hold office in the Electoral Tribunal. To promote good behavior in office, the Constitution provides that Magistrates may be held responsible to the Supreme Court for offenses or crimes committed in exercising their powers, according to specified provisions (Articles 202, 205, 207– 209, and 213) of the judicial title of the Constitution.8 The Tribunal has shared jurisdiction over two functions: taking the Electoral Census and processing records concerning migration and naturalization. Thus, the Tribunal is intimately involved in deciding who shall vote, on an individual basis and in terms of the electorate as a whole. Pérez

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The magistrates are responsible for putting electoral procedures and personnel in place for balloting and tallying votes. Another body, the National Counting Board (Junta Nacional de Escrutinio, JNE), composed of nine members with voice and vote, and 45 party delegates with voice only, is trained and supported by the Tribunal. The JNE is responsible for compiling the vote count and proclaiming results. Connected to and operating as an independent element of the Electoral Tribunal is the Electoral Prosecutor (Fiscal Electoral). The relationship between the magistrates and the prosecutor’s office is complex. Article 138 establishes the Office of the Electoral Prosecutor, an agency with independent procedures, which works in conjunction with the Electoral Tribunal. The electoral attorney is nominated by the executive branch and confirmed by the legislature. The term of office is ten years; qualifications are the same as for a magistrate of the Supreme Court. The functions of the electoral attorney are: to safeguard citizens’ political rights; to oversee the conduct of public officials concerning electoral rights and duties; to investigate electoral offenses and violations; and to exercise additional functions provided by law.9 The prosecutor’s office is responsible for investigating violations of electoral procedures allegedly committed by authorities, candidates, partisans, or citizens. Thus, the prosecutor’s office has both investigative and judicial powers. Punishments that the electoral prosecutor can impose include fines and jail terms. Decisions by the prosecutor are, however, appealed to the magistrates. To strengthen the power of the Tribunal vis-a-vis other office holders, Article 139 specifies that public officials are obligated to respect and comply with orders and decisions made by officials with electoral jurisdiction, and to offer them the obedience, cooperation, and aid needed to discharge their functions. Omission or negligence in complying with these obligations is punishable according to law.10 The first practical public test of the Tribunal’s ability to direct, coordinate, and manage balloting and counting came in January 1991. The new magistrates had been in office for barely seven months when they had to conduct a partial election to fill nine legislative seats and numerous municipal offices, due to the fact that the 1989 results for these positions could not be used to select winners because the Noriega regime annulled the elections before enough ballots had been counted. The partial elections were judged to be a good test of new voting and counting procedures. Magistrate Marquez later commented on the utility of this project: it provided an immediate goal for logistical planning for all the elements of an election, but on a manageable scale. The next test, managing the November 1992 constitutional referendum, provided a bigger challenge: a nationwide proving ground. The ballot

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was simple—on one side a “NO” vote box, a box for checking “YES” on the other. The rest of the process—casting and counting ballots, totaling tally sheets, and conveying tally sheets to counting centers—provided a full-fledged test “drive” of procedures for the 1994 election (for results see table 5.1). The most challenging and serious test for the Tribunal came during the campaign and election of 1994, the country’s first post-transition election. A total of 358 Electoral Delegates, direct representatives of the Electoral Magistrates, were stationed at voting and counting centers to oversee procedures and ensure compliance with electoral law and decrees of the Tribunal. As is now widely known and documented, by hundreds of international observers as well as a parallel count and exit poll conducted by the Justice and Peace Commission, the election was a model of transparency. So few legal challenges were filed that the president of the JNE, Roberto Lombana, proudly claimed “impugnación (election challenges) is a word that has passed into history.”11 After four difficult years under an abruptly installed civilian government, Panama held a “Costa Rican election”—free, fair, and peaceful. A new feature of Panamanian politics—an ethical pact—contributed to the absence of violence and relatively low levels of disruption of rival campaign activities. This pact, the Compromiso Etico Electoral de Santa María la Antigua, was named for the university where it was signed by all party presidents, the rector of the University Santa María la Antigua, Stanley Muschett, and officials of the Justice and Peace Commission. This document set forth basic and practical rules for the campaign, such as not defacing another party’s propaganda. Initially disparaged as just another ceremony, the pact took on a significant role during the campaign, as rival candidates took their allegations of violations to weekly meetings of the Justice and Peace Commission for hearing and redress. Instead of charging

Table 5.1

Results of the three referenda held since the restoration of democracy

Yes No Blank Vote Annulled Vote Abstention Source: Electoral Tribunal

Pérez

1992

1998

2006

% 31.2 63.9 N.D. 4.9 59.9

% 34.3 63.8 1.0 0.9 34.6

% 77.8 22.2 1.08 0.83 56.7

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each other directly, party politicians availed themselves of the Justice and Peace Commission as an intermediary. The ethical pact, along with a series of national reconciliation dialogues among elites that was facilitated by the United Nations Development Program, bolstered the legal norm setting and enforcement of the Tribunal. For the first time since 1960, the presidential vote actually dictated the succession; losing incumbents and other candidates accepted defeat. Outgoing President Endara promised a smooth transition, despite the fact that his party, the Arnulfistas, came in second. The winner, Ernesto Pérez Balladares of the PRD, graciously visited rival candidates and party leaders, such as former Vice-President Ricardo Arias Calderón. The Electoral Magistrates presented credentials to the winners eight days after the election, and President Pérez Balladares took office, as expected, on September 1, 1994. The 1994 elections marked a turning point in Panamanian politics for several reasons, among them: (1) They were the first in the history of Panama to be held under a political environment that promoted free and competitive elections; and (2) They were the first elections since 1960 in which the opposition candidate won and were allowed to take power. The victory of the PRD also marked a significant step forward for this organization, since the party, created under the military regime and for many years the political arm of the military, now seems to have shed its dubious past and become an active supporter of democratic rule.12 While the 1994 elections were important because they illustrated the capacity of Panamanians and their government to hold free and competitive elections, the elections held in May 1999 were probably even more important for several reasons: (1) The government elected in May 1999 received the keys to the Panama Canal on December 31 of that year, and, thus, became responsible for showing the world that Panamanians are indeed capable of managing that important global interoceanic waterway; (2) Holding one free and competitive election is rather easy—many countries have done so, only to fall back to dictatorial regimes shortly after— but the ability to hold two free and competitive elections in a row would go a long way in assuring the world community that Panama was capable of consolidating a democratic regime; and (3) Many in Panama and the United States questioned whether the PRD was capable of putting its checkered past behind them and commiting themselves to honest and clean electoral politics. Therefore, their performance in the 1999 elections—ones they presided over—was closely watched. The year before the 1999 elections was consumed with the debate over a referendum to approve or disapprove a package of constitutional amendments, among which was one allowing the president to seek reelection. The

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attempt in Panama was part of a larger trend in Latin America, starting with Carlos Menem of Argentina, Alberto Fujimori of Peru, and culminating with the reelection of Fernando Henrique Cardoso of Brazil in October 1998. The debate was bitter, with the opposition claiming that Pérez Balladares and the PRD wanted to institute a civilian dictatorship. In the end, the vote became a referendum not on constitutional reforms, but on the performance of the incumbent administration. Pérez Balladares had angered many voters by implementing a program of privatization and reductions in state expenditures that had hurt many of the PRD’s most loyal supporters. In addition, there were many who opposed the reforms on principle, arguing that a fledgling democracy like Panama could not afford the risk of allowing the president to seek reelection, because he/she would use the power of the state to manipulate the electoral process. There is plenty of historical precedent in Panama for the validity of that argument. In the end, the voters rejected the proposed reforms by a vote of 63 percent against and 34 percent in favor (the remaining ballots were either blank or null) (see table 5.1). Having lost the possibility of supporting the reelection of Ernesto Pérez Balladares, the Democratic Revolutionary Party chose the son of the party’s founder General Omar Torrijos, Martín Torrijos Espino. In a general way, the 1999 elections were characterized by the absence of political debate that would allow the public to assess the strengths and capabilities of the contenders. The elections showed the public’s discontent as well as the efforts of the opposition, such as the Arnulfista and Molirena parties, to reach a lasting agreement that would allow them to jointly present a single candidate. In this way, Mireya Moscoso headed the list of a coalition of parties called Unión por Panamá (Union for Panama) in which, besides the Molirena and the Arnulfista parties, Morena and Cambio Democrático (Democratic Change) were also included. Mrs. Moscoso had also been the Partido Arnulfista’s candidate in 1994.13 In turn, the PRD nominated Martín Torrijos Espino, son of General Omar Torrijos, for which it maintained some of its 1994 political alliances, especially with Solidaridad (Solidarity), and at the last minute joined by Movimiento Papa Egoró (MPE), the movement led by Rubén Blades. The Christian Democrats, headed by Alberto Vallarino, dissident banker from the Partido Arnulfista, constituted a third force. Vallarino’s candidacy caused the already weakened party to fracture, as a group of party members who decided to not support him joined the ranks of the Partido Arnulfista. Moscoso beat Torrijos by more than 100,000 votes and inaugurated her government on September 1, 1999 (see table 5.2), becoming the country’s first female president. The 2004 election saw Martín Torrijos return as the PRD’s candidate. The government’s internal problems, especially the corruption charges, Pérez

Table 5.2

Presidential election results since the restoration of democracy 1994

Candidate (party)

1999

2004

2009

% of the Vote

Candidate (party)

% of the Vote

Candidate (party)

% of the Vote

33.3

Mireya Moscoso (PA/MOLIRENA) Martín Torrijos (PRD) Alberto Vallarino (PDC)

44.8

Martín Torrijos (PRD/PP) Guillermo Endara (PS) José Miguel Alemán (PA/MOLIRENA) Ricardo Martínelli (CD)

47.4

Ernesto Pérez Balladares (PRD) Mireya Moscoso (PA) Ruben Blades (PPE) Ruben Carles (MOLIRENA) Eduardo Vallarino (PDC) Samuel L. Galindo (PS)

29.1 17.1 16.1 2.4 1.7

Source: Electoral Tribunal

Pérez

37.8 17.4

30.9 16.4 5.3

Candidate (party) Ricardo Martínelli (CD/Arnulfista) Balbina Herrera (PRD) Guillermo Endara (Vanguardia Moral)

% of the vote 60.0 37.6 2.3

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divided the political forces that supported it, resulting in the candidacy of ex-President Guillermo Endara, a prominent member and founder of the Partido Arnulfista and supported by the Partido Solidaridad. The Arnulfistas nominated ex-Minster of Foreign Affairs, José Miguel Alemán. The businessman Ricardo Martínelli, representing the Cambio Democrático party, was a fourth candidate. The campaign mainly focused on the topic of corruption. In his second campaign, Torrijos beat ex-President Endara by a wide margin (see table 5.2). The next electoral test was a referendum to approve plans for the expansion of the Panama Canal. On May 24, 2006, President Torrijos formally announced the proposal to widen the Panama Canal by constructing a third group of locks and widening the navigation channel.14 On October 22, a referendum was held to approve the plan to widen the Canal. Panamanians approved the proposal, with 77.8 percent in favor and 22.2 percent against. The level of abstention was 56.7 percent (see table 5.1). In 2009, Panama held its fourth presidential elections. The elections held on May 3, 2009, pitted Balbina Herrera, a former minister of housing and legislator, against wealthy businessman Ricardo Martínelli. Herrera was the standard-bearer of the governing Revolutionary Democratic Party (PRD), and Martínelli led a coalition of opposition parties headed by the Democratic Change Party. The campaign was devoid of much substance and centered on personal attacks between the candidates. Herrera was accused of being a radical leftist who had received support from Hugo Chavez, the controversial president of Venezuela. Martínelli exploited Herrera’s past links to General Manuel Noriega’s regime and strong anti-American statements. Martínelli’s campaign also emphasized the need for change after five years of PRD-led government. For her part, Herrera accused Martínelli of being mentally unstable; rumors have abounded for years that Martínelli is bipolar. She also tried to use Martínelli’s wealth and business practices against him. Martínelli turned the charges in his favor by adopting the campaign slogan “the crazies are more” (los locos somos más). Herrera countered with the slogan “the poor are more” (los pobres somos más). In the end, the desire for change, despite robust economic performance during the last three years, and Herrera’s poor campaign, led to a landslide victory for Martínelli, who captured 60 percent of the votes. His coalition also won a majority of seats in the legislature. Martínelli’s victory was considered a setback for the recent leftist trend in Latin America (see tables 5.2 and 5.3). Importantly, Martínelli’s victory may indicate realignment in the political party dynamics because he represents the first presidential winner, since the reestablishment of democracy, not to come from either the Arnulfista Party or the PRD. Pérez

Table 5.3

Distribution of seats by party for the three legislative sessions since the restoration of democracy

Parties Partido Revolucionario Democrática (PRD) Partido Arnulfista (PA) Partido Demócrata Cristiano (PDC)/ Partido Popular (PP)1 Movimiento Liberal Republicano Nacionalista (MOLIRENA) Partido Liberal Auténtico (PLA) Partido Liberal (PL) Partido Laborista (PALA) Mov. Papa Egoró (MPE) Partido Solidaridad Partido Renovación Civilista (PRC) Partido Liberal Republicano (LIBRE) Movimiento de Renovación Nacional (Morena) Unión Democrática Independiente (UDI) Partido Liberal Nacional (PLN) Cambio Democrático (CD) Union Patriotica (UP) Independents 1

1994–1999 (Total=72)

1999–2004 (Total=71)

2004–2009 (Total=78)

2009–2014 (Total=71)

30 14 1 5 2 2 1 6 4 3 2 1 1

34 18 5 3

41 17 1 4

26 22 1 2

4 1

9

1 3 2

4 3

14 4 2

The Partido Demócrata Cristiano (Christian Democratic Party) changed its name to the Partido Popular (People’s Party) for the 2004 elections.

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Executive-Legislative Relations A key problem for democracy in post-invasion Panama is the nature of executive-legislative relations. In Panama, the Constitution gives extensive legislative powers to the executive, and gives to the president exclusive powers to formulate and introduce laws relating to the national budget (Article 264), wages (Article 153, Section 2), treaties and other international agreements (Article 153, Section 3), creation of administrative departments (Article 153, Section 12), and those relating to finances and customs (Article 195, Section 7). In other words, in matters relating to the national economy and expenditure of funds, the executive has exclusive legislative initiative. In matters of treaties and international agreements, the legislature can only approve or disapprove the measure; it cannot make any changes to the proposed document. In the case of the national budget, if the legislature does not approve one by a certain date, the budget submitted by the executive becomes law without legislative action. This means that if the president does not want the legislature to change the budget, the president can work with allies in congress to block legislative action. This can occur particularly before an election when the president “packs” the budget with pork-barrel projects to aid his friends and party. The lack of budget initiative means legislators are at the mercy of the executive to satisfy constituent needs. The various community allocations (partidas) must have prior approval of the president. The amounts disbursed to individual lawmakers are entirely at the discretion of the president, who uses the funds as a means of obtaining legislative support for an agenda. Moreover, these funds provide lawmakers with additional opportunities for rent-seeking, since the expenditure of the allocated moneys is wholly at the discretion of the individual legislator and there is virtually no effective control over their disbursement. This situation tends to reduce significantly the independence of legislators vis-à-vis the president. Without significant powers to affect the national budget (probably the most important policy statement a government can make), the legislature cannot hope to become an active and effective branch of government. The institutional weakness of the National Assembly, along with the low reelection rate, creates incentives for legislators to engage in rent-seeking. Legislators thus exploit their position for personal gain. Guevara-Mann argues that the institutional and political environments, within which Panamanian lawmakers operate lead them to pursue “corporate prerogatives—such asensuring their immunity from prosecution for transgressions of the law, as well as on maintaining and expanding such privileges

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as exceedingly high salaries, exemption from taxation, and other perquisites” (1998, 19). While the post-invasion regimes have taken steps to strengthen the National Assembly vis-à-vis the executive branch, constitutionally, politically, and financially the legislature in Panama remains a rather weak institution. Constitutionally, the executive has extensive legislative powers and the assembly is subordinate on important economic, budgetary, and international matters. In addition, legislators are incapable of or unwilling to exercise some of the limited oversight powers vested in the National Assembly by the Constitution. Historically, the Panamanian executive, not unlike other executives in the region, has enjoyed the power and status of the viceroys during the colonial period and of the caudillos during the nineteenth and early twentieth centuries. Moreover, the institutional changes made by the military regimes during the period 1968–1989 left a legacy of clientalism and particularism that the legislature has yet to shed. Under the current circumstances of executive dominance of the legislative process and constitutional constraints on the assembly’s legislative initiative, practically no significant role is left for deputies to play, except as peddlers and providers of particularistic benefits.

Conclusion While the political context is conducive to free and competitive elections, the weakness of the political party system continues to be an obstacle to the consolidation of a democratic regime. Panamanian political parties have traditionally represented narrow economic interests rather than broad popular sectors. Parties lack the two most important elements of institutionalization: stability and value. With few exceptions, political parties lack stable roots in society, do not play a significant role in policy-making (other than through control of executive office), and have no great support among the population. Despite the levels of trust accumulated by the Electoral Tribunal, and participation levels reaching 75 percent, Panamanians exhibit very low levels of confidence in political parties. When asked if they sympathize with any party, overwhelming majorities say no. More than 79 percent in 2006 and 68 percent in 2008, an election year, expressed a negative attitude toward political parties.15 Slightly more than a third of Panamanians believe that political parties represent their supporters or listen to people like them, while more than 60 percent believe corruption is rampant within political parties.

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PRD

6.1

Democratic Change

6.0

Arnulfista

5.7

Molirena

5.7

Moral Vanguard

5.6

Other

3.0

1

Figure 5.1

2

3

4

5 6 Ideology

7

8

9

10

Ideological Distribution of Party Sympathizers

Finally, we find very small ideological differences among sympathizers of different political parties; reflective of a significant level of ideological consensus among Panamanian citizens and political party elites. Figure 5.1 shows the mean ideological distribution of party supporters in 2008. One can observe that supporters’ ideological mean are all within a narrow range of the ideological spectrum (the mean for ideology in Panama on a 0–10 scale is 5.8). The outlier are the most extreme on the left, but the respondents of “other” are rather small; nonetheless, it reflects the fact that the center of political gravity in Panama is in the center-right. Such a result can help explain the victory of Ricardo Martínelli in the elections of May 2009. Furthermore, the lack of deep ideological fissures among Panamanian political parties is one of the reasons that consensus on major issues has been possible in post-invasion Panama. Chapter 6 explores two key consequences of this ideological affinity: political learning among elites and extensive social dialogue process; both have been instrumental in developing democracy in Panama.

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Chapter 6 Reconciliation and Social Dialogue in Post-Invasion Panama

Mattei Dogan and John Higley (1998) argue that invasions and other crises have a profound effect on a nation’s political elite. Such crises create critical junctures within which elites are able to transform their values and behavior. One of the key elements in building stable democratic governance is the ability of elites to recognize past mistakes and their willingness to correct them. Crises or traumatic events often force people to reconsider long-held ideas and beliefs, and this is true with political thoughts and learning. The idea of political learning is based on the notion that beliefs are not fixed immutably in childhood, says Nancy Bermeo, and that they can be “affected by political events” such as the crises associated with regime change (Bermeo 1992, 274). In order for democracy to be established over some other alternative government, elites must change their evaluation of the relative effectiveness of democratic institutions for the attainment of their goals.1 In order for this to happen, at least one of the following changes must take place: (1) Elites must change their evaluations of the alternatives to democratic rule; (2) Elites must change their evaluations of democracy itself; (3) Elites must change the ordering or nature of their goals; and (4) Elites must change their perceptions of one another. These are all examples of political learning. They may occur individually, but they can also occur simultaneously, and the “likelihood of reconstructing democracy increases if they do” (Bermeo 1992, 274–275). Political learning also has limitations. On the one hand, dictatorial governments might not induce pro-democratic cognitive changes; in fact, Pérez

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under certain conditions, they can perpetuate conflict and violence. On the other hand, even if a nation turns to democracy, political learning might only occur at the superficial level, therefore changing only the tactics of elites rather than their fundamental normative beliefs. In these circumstances, any crisis that challenges the interests of elites can alter their instrumental rationality away from democracy, with democracy becoming a second-best-option. In addition, as with any psychological process, political learning occurs at the individual level, and since individual cognitive processes are shaped by environmental stimuli, the learning experience can vary between individuals and groups (Bermeo 1992, 275). If different sectors of the elite learn different things, then conflict and violence might be the result, rather than democracy. Finally, political learning might be thwarted by longstanding political beliefs, which serve as cognitive shields to the learning of new attitudinal and behavioral patterns. If political elites have developed a mode of behavior that has prevailed for centuries, beliefs that were in part conducive to the rise of authoritarianism, the end of the authoritarian experience might not be enough, regardless of how traumatic, to change the political behavior of those elites.2 Bermeo argues that the cognitive changes that affect elites emerge from processes of “comparison and interaction” (1992, 283). Elites tend to evaluate problems and solutions with reference to their own experiences in their nation’s past. As elite’s experience with democracy become more favourable than with dictatorship preference for the former will prevail.3 International comparisons are also important. Events in one country can influence the behavior of elites in another; for example, the domino effect of the breakdown of communist states in Eastern Europe is related to the examples set by pioneer states such as Hungary, Poland, and East Germany. One could argue that a similar situation occurred in Latin America during the mid-1980s (See Bruneau 1990, 9–10). Traumatic events, such as war or invasion by a foreign power, can also induce a “reappraisal of past errors.” Wars and invasions alter the extant political patterns and tend to transform society. Mancur Olson (1982), speaking of the effects of “distributional coalitions”4 on economic growth and development, argues, “Countries whose distributional coalitions have been emasculated or abolished by totalitarian government or foreign occupation should grow relatively quickly after a free and stable order is established.” Olson goes on to argue that economic growth in Germany and Japan was a result of the destruction of special-interest organizations during World War II. “In Japan and West Germany,” argues Olson, “totalitarian governments were followed by Allied occupiers determined to promote institutional change [toward democracy] and to ensure that institutional life would start almost anew” (75–76). In the same manner that war and Pérez

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invasion may promote economic growth by removing the impediments created by entrenched groups, so too can they promote democracy by removing and reshaping the psychological and institutional impediments to a democratic system. In chapter 5, we observed the significant institutional transformation—in demilitarization and elections—undertaken by Panamanian elites in the post-invasion period. Historian Richard Millett has stated that, “while countries that do not remember their past are bound to repeat it, countries that are obsessed with their past can never transcend it” (Millett 1995). A major component of political learning is the ability to recognize the mistakes of the past, and the ability to transcend them. Ernesto Pérez Balladares, the winner of the first post-invasion elections, was a prominent figure in the military regime, having served as minister of finance and director of the National Electrification Institute under the Torrijos regime, as well as campaign manager for the PRD during the 1989 elections. He understood the need to change behavior in order to succeed politically in very different circumstances. While one can attribute some of these changes to political convenience, the fact that he was successful in changing the internal organization of the PRD and consolidating the process of demilitarization provides clear evidence of true attitudinal and behavioral changes. In an interview conducted with the author, Pérez Balladares states, “We cannot repeat the errors of the past.”5 When asked specifically about which errors, he said, “In the previous period, the government [the Noriega regime] was too repressive of the opposition. Thinking that if they gave in to the opposition they would show weakness and play into the hands of the United States, they went too far.” He later adds, “I think there were legitimate complaints by the opposition that the government should have taken into consideration.” Another prominent member of the military regime was Romulo Escobar Bethancourt. Bethancourt was president of the Electoral Tribunal, minister of labor, president of the National University, chief of the negotiating team for the 1977 Torrijos-Carter Treaties, president of the Revolutionary Democratic Party, and senior advisor to General Noriega.6 Bethancourt notes that “significant mistakes were made by Noriega during the negotiations with the United States in 1988 and 1989.” Bethancourt, as a senior advisor to the general, was intimately involved in those negotiations. According to Bethancourt, Noriega should have accepted a deal offered by the United States in May 1988 that would have dropped the drug trafficking indictments in exchange for the resignation of Noriega as commander of the Panamanian Defense Forces, an offer refused, in Bethancourt’s opinion, because of the “wrong advice” of members of the National Strategic Council. Pérez

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When asked about the results of the 1989 elections, Bethancourt states, “It was a mistake to annul them.” He goes on to say, “The opposition did win . . . and perhaps we could have avoided what happened later [the U.S. invasion] had Noriega accepted the results.” “Democracy,” argues Bethancourt, “requires free and competitive elections . . . and the active participation of the public.” Asked if the military regime secured those rights, Bethancourt again makes the distinction between the regime led by General Omar Torrijos (1968–1981) and the one led by General Manuel Noriega (1983–1989): “Under Torrijos, people had access to basic services and were repeatedly consulted on major government decisions . . . Torrijos had a modus operandi that emphasized constant consultation with the people.” He went on to indicate that Noriega had altered that policy by isolating himself from the people an relying heavily on his cadre of supporters in the PDF.7 Throughout the interview, Bethancourt repeatedly extols the virtues of “participatory democracy.” Tomas Gabriel Altamirano Duque,8 another prominent civilian official of the military regime, served as minister of housing, director of the National Sports Institute, and legislator. He continued to be an active member of the Revolutionary Democratic Party after the U.S. invasion and was their candidate for first vice-president during the 1994 elections, and a member of the National Assembly. He was also among the wealthiest individuals in Panama, having owned one of the major daily newspapers (La Estrella de Panama) and extensive tracts of land east of Panama City. In an interview, Duque accuses the United States of “hypocrisy” for initially supporting Noriega and then opposing him. However, he also says, “Noriega was stupid to think that he could oppose the United States . . . He should have known that he could never win a confrontation with the United States and should have struck a deal with [the United States] to avoid the invasion.” When asked about the policies of the military regime, Duque praises the work of Torrijos but, as does Bethancourt, indicates that Noriega had abandoned the “Torrijista” principles and that this was a “major mistake.” The Torrijista principles he refers to were the populist policies that “helped the poor and the previously disenfranchised.” He accuses the civilian government of Guillermo Endara of being less democratic than the government led by Torrijos. Former presidents of Panama, Nicolas Ardito Barletta9 (1984–1985) and Ricardo de la Espriella10 (1982–1984), both of whom served during the military-controlled period, were adamant and eloquent in their denunciations of the excesses of the National Guard, and of the mistakes during the period of military dominance. Barletta, who was handpicked by the National Guard as the PRD candidate in the 1984 elections, expresses “deep regret Pérez

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that I could not control the National Guard while president.” He argues that “the PRD was too dependent on the National Guard . . . and this was a grave error.” He indicated that he had tried to consolidate democracy but was thwarted by the military and members of the PRD. When asked about the events preceding the invasion, Barletta places heavy responsibility on Noriega for “intransigence . . . and refusal to negotiate in good faith.”11 Barletta was overthrown by the National Guard in September 1985. Ricardo de la Espriella,12 who was also overthrown by the National Guard, speaks at length of his attempts to work out a deal between the government and the opposition so that the 1984 elections would be held under free and open conditions. The efforts of de la Espriella failed and he was overthrown several months before the elections.13 He goes on to say that he “regretted not being able to create the conditions for honest elections in 1984.” He accuses the National Guard and Noriega of “intransigence . . . [and] wanting absolute power.” The former president says that the National Guard must never again be allowed to gain power over civilian authorities: In a free society we must never allow the military to acquire more power than the civilian authorities. Civilian control of the military is perhaps the most important institutional characteristic of a democratic system of government . . . Free and open elections are also necessary and we cannot allow what happened to the 1989 elections to occur in the future. The annulment of those elections was shameful, antidemocratic, and simply wrong.

The appraisal of former members of the National Guard regarding the actions of the government they served so closely is critically important for understanding the presence of political learning. There can be no clearer evidence of political learning than if individuals who were closest to and benefitted the most from the regime now recognize its errors. Three former high-ranking officers of the National Guard: Colonel Daniel Delgado Diamante, Colonel Carlos Arosemena King, and Major Luis Delgado praise the work of Torrijos and generally defend Noriega for standing up to the United States. Colonel Delgado Diamante states, “Noriega fought against the United States to preserve the dignity and sovereignty of Panama.” He adds, however, “Noriega probably went too far in repressing the opposition.” In evaluating the contemporary situation of the military in Panama, the three officers indicate their support for civilian control of the military, with Colonel Arosemena King saying, “The National Guard went too far in controlling politics . . . [the military officers] did not realize the corrosive effect on the military institution of having so much control over national politics. In the end, we were blamed for all the country’s problems.”14

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The officers express support for electoral democracy and basic human and civil rights. Support for democracy might be based on instrumental rationality rather than a true commitment to its principles. It was clear from the interviews that the officers are bitter at what happened and blame the United States and the civilian leaders more than they blamed Noriega. However, it is also clear that they all recognize the excesses of the military regime and would, if for no other reason than to avoid the same outcome, make every effort not to repeat them. How do individuals who opposed the Noriega regime evaluate their behavior before the U.S. invasion? Do they recognize a share of the blame for what ultimately happened in Panama? And more important, do they recognize that transcending the actions of the military government is not enough, and that in order to build a true democracy Panamanians must overcome longstanding patterns of behavior? In other words, are they willing to change the practices that led to the rise of the military government in the first place? Chapter 3 explained the rise of the military government as a reaction to the insidious practices of the pre-1968 regimes: fraudulent elections, widespread corruption and manipulation of government, U.S. influence and direct intervention, personal rivalries among political leaders, and the exclusion from politics of large sectors of the lower and middle classes. If Panama is to build a strong and stable democracy, its political leaders must overcome those practices. When analyzing the behavior and beliefs of individuals who actively opposed Noriega, it becomes necessary to pay close attention to the practices of the pre-military regimes because many of them were political leaders during that period. Moreover, many of these individuals have served in leadership positions during the post-invasion government, giving them an important role in the building of democracy.15 Guillermo Quijano,16 minister of housing in the Endara government, and leader of the Liberal Party during the 1970s and ‘80s, vigorously opposed the Noriega regime. When discussing the opposition movement, Quijano says, “We in the National Civic Crusade . . . underestimated the intransigence of Noriega . . . Greater emphasis could have been made in negotiating with those inside the regime who opposed Noriega in order to secure a peaceful way out.” However, he adds, “The National Civic Crusade is not to blame for the U.S. invasion . . . The United States was disposing of someone they had helped to create.” Thus, while Quijano admits that efforts to negotiate a peaceful solution fell short, in the end it seems that the invasion was inevitable and justifiable on the grounds that the United States was cleaning up its own mess.17 Pérez

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More important are Quijano’s statements against the political practices of the pre-1968 system. Speaking of the personalism that prevailed, he said, “[Panamanian] politics were based on narrow economic and personal interests . . . Elections were fraudulent and manipulated by the incumbent governments.” Quijano added, “We must never return to those days . . . Democracy in Panama has to be built without the mistakes of the pre-1968 period and without the militarism of the 1970s and 1980s.” Supreme Court Justice Aura Emerita Guerra de Villalaz spoke of the “destructive policies” of the pre-1968 period, emphasizing the “personalism and pettiness” that characterized that period in Panamanian politics. She went on to say, “We cannot allow ourselves in the name of anti-militarism to return to the failures of the governments that ruled Panama before the military came to power . . . Democracy cannot be built by returning to that period.”18 Supreme Court President, Carlos Lucas López,19 echoed Justice Villalaz’s position and spoke of the changes that were necessary in order to reform the Panamanian justice system. Those changes included modernization of the judiciary in terms of technology as well as procedures, greater financial and legal independence, and a greater awareness on the part of politicians and the public of the importance of the judiciary for the functioning of a democracy. In several interviews, legislators such as Christian Democrats Eric Santamaría 20 and José A. Sosa,21 and Mario Rognoni22 of the Revolutionary Democratic Party express similar views about the importance of an independent National Assembly, which has traditionally been a rubber stamp for the executive. The interview with Rognoni was instructive, since he had served in several ministerial posts during the military regime and was an ardent supporter of Noriega. “[I]f we are to build a democratic government the National Assembly cannot behave as it did during the military government,” Rognoni said. “In those days, they feared the reaction of the National Guard if they asserted their independence; perhaps that was a mistake.” He adds, “The National Assembly is suppose to represent the people and, as such, should be an equal branch with the presidency.” The other two legislators fiercely opposed the military government. They of course bitterly attacked the practices of the military regime, but were also keenly aware of the problems of reestablishing a system similar to the one that prevailed before the military took power in 1968. Sosa argued, “[I]t is precisely because of the practices of the pre-1968 period that Panama suffered 21 years of military rule. It is extremely important that we [referring to the contemporary political class] not repeat the mistakes that politicians made in the 1960s . . . We do not want militarism, but we certainly do not applaud the way politics was conducted prior to 1968, that was not democracy [emphasis added].” Santamaría emphasized that democracy Pérez

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cannot be built upon “corruption, personalism, nepotism, and all the other things that marked the governments before the 1968 coup.” “While the military government was extremely corrupt,” argued Santamaría, “going back to politics as it was practiced before, is not the solution.” Besides prominent politicians, I interviewed several intellectuals who were actively involved in the opposition movement during the military regime. One of them was Roberto Arosemena Jaén,23 a professor of philosophy at the University of Panama and a co-founder of the Coordinadora Civica Nacional (COCINA).24 Arosemena Jaén was arrested and spent several months in prison for his opposition to the military government. During the Endara administration, he actively opposed what he called “the oligarchical and anti-democratic policies of the triumvirate [referring to Guillermo Endara and his two vice-presidents, Ricardo Arias Calderón and Guillermo Ford].” Arosemena Jaén helped found the Frente para el NO (FRENO), to oppose the 1992 referendum on constitutional reforms. In his interview, he was extremely critical of both the military government and the Endara administration, arguing that Panamanian politics has been characterized by the need to follow caudillos. This, according to Arosemena Jaén, is a result of “very low societal self-esteem . . . where society has the necessity of attributing to one leader all the qualities that it lacks.” Arosemena Jaén attributes this lack of self-esteem to the role of the United States in Panama, where the need to follow caudillos made Panama unable to build a free and open society. This historical and cultural characteristic must end “if Panama is to become a true democracy,” argued Arosemena Jaén. In articulating the necessity for change, he is arguing that Panama must transcend the practices of its troubled political past if it wishes to build a democratic system.25 As an early opponent of the military regime, Arosemena Jaén is uniquely qualified to speak about the actions of the opposition. In the interview, he expresses regret that COCINA was coopted by the National Civic Crusade.26 For him, the latter was “the captive of business interests and too close to the United States.” He argued that the relationship with the United States undermined the independence of the movement and reinforced historical patterns that are detrimental to the sovereignty of Panama. In his opinion, “[I]t was a major mistake to nominate Guillermo Endara as president,” who, according to Arosemena Jaén, lacked the political skills to lead Panama in the critical years following the military regime. Furthermore, he doubts Endara’s commitment to democracy. The evidence, however, shows that while Endara lacked the leadership skills necessary to deal with many of the structural problems facing the nation, he did create an atmosphere in which civil liberties were respected, and where free and competitive elections were possible. Pérez

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The interviews are indicative of the widespread recognition on the part of prominent Panamanians of their past mistakes and a desire to correct them. Moreover, there is awareness that pre-military practices must also change if Panama is to build a true democracy. As stated earlier, the first step in political learning after a traumatic experience is recognizing the errors that led to the crisis. For Panamanian elites, it is also important to recognize the mistakes that led to the rise of the military regime, which, in turn, led to the crisis of the 1980s. Of course, recognizing past errors is not enough to transcend them; concrete actions must be taken to transform the political system. Chapter 5 explored two key sets of reforms: demilitarization and elections. The remainder of this chapter examines the process of building consensus in post-invasion Panama.

Seeking Forgiveness: National Reconciliation in Post-Invasion Panama An important element in the process of democratic consolidation is national reconciliation. The process of national reconciliation involves not only a formal recognition of past errors, but concrete political actions that recognize and establish new identities and power relationships. Fundamentally, national reconciliation is the process by which former enemies “reconcile” their former differences in light of a new and more important goal, the consolidation of democracy. An important step toward national reconciliation is the creation of a government that may bring together former enemies. President Ernesto Pérez Balladares deliberately chose a cabinet that was diverse, including a number of individuals who had actively opposed the PRD in the past or had supported other candidates during the electoral campaign. For example, he chose Gabriel Lewis Galindo, a prominent businessman and brother of a rival presidential candidate, as minister of foreign relations; Carlos Sousa Lennox, a member of the Arnulfista Party and president of the National Ranchers Association, as minister of agriculture; Guillermo Chapman, a Christian Democrat, as minister of planning and economic policy; and José A. Sosa, another Christian Democrat, as attorney general. President Balladares also kept the chief of the National Police appointed by the Endara administration, Oswaldo Fernández, explaining his last choice as a signal that he was committed to civilian control over the National Police. The reappointment of Fernández sent a signal that the PRD would not use the National Police to seek vengeance on its former enemies.

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Another important element of national reconciliation is the legal status of political opponents of the regime. After the U.S. invasion, many Panamanians who had supported the military regime were arrested and others went into exile. Many of those that were arrested were never brought to trial, but were simply held in prison pending prolonged legal battles over their status. One of the most divisive issues during the Endara administration was the issue of presidential pardons of “political prisoners.” Many felt it was necessary that Panama wipe the slate clean and pardon all those who had supported the military regime. Others felt that presidential pardons would be tantamount to forgetting the atrocities of the military regime. On June 6, 1994, President Endara signed Decree No. 254, pardoning 542 civilian members of Noriega’s regime. Included were 75 members of the Council of State. This group, at Noriega’s insistence, had voted to approve Francisco Rodriguez as acting-president as of September 1, 1989, when a presidential new term began but could not be filled because the 1989 elections had been annulled. Also pardoned were 458 Representatives of Corregimiento (county) who had been called into session by Noriega, after he disbanded the legislature, to vote in December 1989 to grant extraordinary powers to Noriega as Maximum Leader and on a resolution declaring a “state of war” with the United States. The pardons, however, left unresolved the cases of several collaborators of Noriega and the case of Eduardo Herrera, who as chief of police in 1990 had led a mobilization of the police that Endara claimed was an attempted coup; Endara was adamant that Herrera not be pardoned. During 1992, and again in 1994, the issue of a general amnesty law was hotly discussed in the National Assembly. The Endara administration’s position was that general amnesty would be tantamount to forgetting the past and that selective amnesty was unworkable. In the end, no law could be approved. The issue of presidential pardons and/or amnesty continued to be a major source of contention after Pérez Balladares took office. In a sign that he was willing to put the past to rest, on September 23, 1994, the president approved a measure to pardon 222 ex-government and military officials of the Noriega regime. The pardon covered First Vice-President Tomas Altamirano Duque; lawyer Romulo Escobar Bethancourt; and ex-lieutenant Carlos Rumbo (presumably in exile in Costa Rica). Also pardoned were collaborators of the Endara administration, such as Christian Democrats Carlos Arellano Lennox and Guillermo Cochez, and Arturo Vallarino of the National Liberal Republican Movement (MOLIRENA). The long list also included journalists, ex-deputies, former local authorities and community leaders. The majority of those pardoned had been sentenced and others had yet to be tried after the invasion. Pérez Balladares justified the pardons Pérez

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in the name of national reconciliation, “This is the only way to put the past behind us, by closing, one by one, the wounds that crush the Panamanian family” (Central American Report October 14, 1994, 4). Opponents, however, saw the president’s action as “a mockery of democracy.” Former president of the Panamanian Committee for Human Rights, Roberto Troncoso, criticized the pardons, saying it “grants a license for impunity for human rights violators during the Noriega regime.” The question of reconciliation was entangled with that of seeking justice for the victims of the military dictatorship. In December 2000, President Mireya Moscoso announced the creation of a truth commission. The step was prompted by new discoveries of clandestine graves believed to date from the period of the military regime. The Panama Truth Commission was mandated to investigate human rights violations perpetrated during the military dictatorships of Omar Torrijos and Manuel Noriega between 1968 and 1989, and was explicitly prohibited from making conclusions on legal responsibilities of individual perpetrators. The commission was made up of seven commissioners, five men and two women, led by lawyer and Catholic activist Alberto Santiago Almanza Henríquez. The commissioners were appointed by the president. The truth commission proposal polarized opinion because the opposition PRD had been founded during the dictatorship, and party leaders accused the president of trying to use the discovery of the graves for political advantage. In September 1999, Moscoso promised to open an investigation after the remains of Colombian priest Father José Hector Gallego were found at Los Pumas de Tocumen military base near the capital. In defense of his father, Martín Torrijos, Secretary General of the PRD, accused Moscoso of trying to take political advantage of the discoveries to make gains against his party. He also accused Moscoso of practicing “selective justice.” He said that the investigation was focused solely on the 1968– 1989 period and that no attention was being given to disappearances and assassinations during the Arias regime or to the Panamanians killed in the U.S. invasion of 1989. The commission’s report was issued in April 2002. The report confirmed the culpability of the military and recommended reparations to relatives of the victims. The report documented 110 of the 148 cases the truth commission had examined. Seventy of the victims were murdered and 40 disappeared. Most of the violations took place between 1968 and 1972 against supporters of former President Arias. Some 40 other cases are yet to be investigated. The major part of the commission’s work was to locate clandestine graves, determine the identity of the victims, and fix the circumstances of Pérez

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their deaths. The commission discovered 24 sites and excavated 36 graves, many of which were located in military buildings in the provinces of Panama and Bocas del Toro, and at the prison facility on Coiba Island off the Pacific coast. Other graves were found under the runway of the Tocumen military airport, on the grounds of houses occupied by Panamanian Air Force pilots, in the old Los Pumas infantry barracks in Tocumen, and the firing range on the same base. More graves were found at the old cavalry base in Panama Viejo, on the grounds of the Joyita prison in Pacora, and at houses in the capital used by the secret police and other security units to interrogate and torture victims. Besides Gallego, the remains of other well-known victims of torture were discovered, including Dora Moreno, Hipólito Quintero, Floyd Britton, Encarnación González, and Hugo Spadafora. The report’s overall conclusion was that the military regime engaged in “torture [and] cruel, inhuman, and degrading treatment” of its victims. The commission recommended further systematic excavations at other suspected gravesites and advised the president to reactivate the office of Special Prosecutor to take legal action against those suspected of committing the atrocities. The commission also recommended that the government accept its obligations under international law relating to human rights by compensating relatives of the victims. It recommended the creation of a permanent government agency to take over the work of the commission and maintain its files. The commission report concluded that General Torrijos had not been directly involved in the deaths and disappearances. After the release of the report, an unofficial follow-up committee continued to work. On October 20, 2003, by Executive Decree 559, the Truth Commission was extended to December 31, 2004, and was renamed the Office for Follow-up of the Institutional Truth Commission (Comisión Institucional de la Verdad–Oficina de Seguimiento). The reauthorized commission reported to both the president and the Ministry of Justice.27 Efforts to pay reparations have been stalled because of budgetary consideration and the unanswered questions related to the victims of the U.S. invasion.

Building Consensus through Social Dialogue Throughout the 1990s and early 2000s, Panamanian political, social, and economic leaders undertook the extensive processes of consensus-building in a post-conflict society. The experience with prolonged crisis, the international situation, and the development of political maturity led to the forging

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of important political agreements that allowed for the successful 1994 electoral process (described in chapter 5). For the first time in Panama’s political history, opposing and even antagonistic forces were able to converse and agree on important issues, though in some cases dialogue was precipitated or “mandated” by the instrumental rationality of electoral interests. As described in chapter 5, on May 18, 1993, after three months of effort, all of Panama’s political parties signed on to the Electoral Ethics Pact of Santa María la Antigua (Compromiso Etico Electoral Santa Maria la Antigua)—named for the university where the work sessions were held. Leaders also established dialogue sessions that went on uninterrupted for more than a year. That dialogue had been called by the Justice and Peace Commission of the Catholic Church. Given the fear that the elections would upset the fragile social peace and incipient democratic transition, the Church had decided to create an informal space for a dialogue on ethics. The initiative was received enthusiastically by Panamanian political leaders, who demonstrated the same concern. The phenomenon of a political dialogue that would bring together all the parties was unheard of in Panama’s history and was a key factor in the success of the general elections of May 1994. The parties expressed their shared support for institutionalizing democracy, defending and strengthening the independence of the Electoral Tribunal, monitoring the elections to assure that no judicial institutions or any other state body were used as mechanisms of persecution or repression, and their commitment to a frank, harmonious, and peaceful transition to whatever government was elected. Following the success of the Electoral Ethics Pact, the United Nations office in Panama invited leaders of the country’s political and social organizations to enter into discussions on the vital issues facing the country. The invitation met with a favorable response28 and gave rise to the first “National Human Unity and Development Meeting” (UNDP) in the town of Bambito in August 1993. Second and third meetings were held in April and December 1994, on each occasion under the auspices of the UNDP. These processes are described below.

Bambito I: First National Human Unity and Development Meeting29 The objective of this meeting was to establish a commitment to dialogue and to foster among the participants an open process focusing on the important areas of concern arising from the political, economic, and institutional transition that Panama would be facing in the years ahead. Several Pérez

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working groups were formed and each was asked to identify the main problems that should form an essential part of the next government’s agenda. The groups succeeded in identifying the areas that would be required in order to carry through effective institutional, social, political, and economic reforms. The main subject areas identified were unemployment and poverty, education and health, the reverted land areas,30 and industrial modernization (Leis 1998). The “Bambito Declaration” focused on six priority objectives: 1. Strengthening of national independence and democracy; 2. Achievement of political agreements conducive to the successful administration and operation of the Panama Canal; 3. Economic and social development geared towards quality of human life, through combating unemployment and poverty; 4. Modernization of the education and health services; 5. Coordination of national energies to achieve the genuine integration of the land areas recovered and to be recovered, as part of the strategy for the economic and social development of the Republic of Panama; 6. Improving administrative efficiency and strengthening judicial independence. The assumption for the political parties was that these policy areas would form the basis of their platforms for the 1994 elections. The result of the meeting was the start of a dialogue on critical elements of a successful transition to democracy. The meeting also had the effect of raising the level of trust among social actors, bringing national political leaders together in an environment that afforded them an opportunity to discuss matters away from the pressures of the media. The informal agenda enabled the political elite to meet and to hold discussions aimed at boosting confidence in the process and in the electoral results. As one participant said in an interview, “Bambito served as the perfect setting for these meetings because it was isolated.” (Bambito is located in the highlands of Chiriquí, Panama’s Western most province.) He continues, “Along with the isolation, the place offered a relaxing respite from the participant’s hectic schedule, and thus allowed for more relaxed conversations. There were many informal moments for people to chat.”31 Ernesto Pérez Balladares, who participated as leader of the PRD, argues that “the first Bambito meeting was crucial to setting the foundations for the 1994 elections. Without Bambito and the subsequent meetings, the atmosphere of distrust that prevailed in Panama in the run-up to the elections could have led to violence or manipulation of the process to prevent [the PRD] from being able to

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win the elections.” Pérez Balladares reiterates repeatedly that for the PRD, it was essential that “the electoral process be fair and allow them to actively seek the presidency.”32 For the former president of Panama, the meeting’s success was not so much the agenda that was developed but the mere fact that a dialogue among political leaders and civil society was initiated, and the instrumental benefit of a guarantee of free, fair, and competitive elections. The latter was important for all political parties, but especially for the PRD, who feared the Endara government would seek to disqualify them. As discussed in chapter 5, the successful reforms of the Electoral Tribunal probably made such fears unfounded, but Pérez Balladares had plenty of experience with manipulated elections and wanted to make sure that it did not happen to him.33

Bambito II: Second National Human Unity and Development Meeting As a preamble to the national elections of May 8, 1994, the presidential candidates and representatives of Panamanian civil society came together on the morning of April 4 for the Bambito II meeting, to reiterate their commitment to the Bambito Declaration of August 1993. The meeting was attended by five presidential candidates, members of the Labor Foundation, representatives of the Catholic Church, the rectors of the country’s universities, and officials from the United Nations office in Panama. Among those who did not participate were Mireya Moscoso, candidate for the Arnulfista Party, and Rubén Blades of the Papá Egoró Party, who were to take second and third place in the elections held on May 8. The various presidential candidates34 ratified the Bambito I agreements in Panama City and put forward proposals relating to each of the priority topics identified by the participants in the previous Bambito meeting. The meeting was also significant by virtue of the fact that Panama’s political and social organizations once again expressed their interest in pursuing consensus-based responses to the major challenges and problems facing the country. While not having the weight or significance of its predecessor, Bambito II served to confirm the spirit of political detente and boost confidence in the process, while enabling the presidential candidates to reiterate their commitment to the agreements of Bambito I. In other words, it helped establish a climate of calm and confidence within which the 1994 elections could take place. The successes of Bambito I and II were seen in the reduction of political tensions and the advent of the fairest and most competitive elections in Panama’s history (Solórzano 1997, 19) Pérez

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Bambito III: Third National Human Unity and Development Meeting: Once again under the auspices of the UNDP and of the universities of Panama and Santa María la Antigua, the third National Human Unity and Development Meeting—Bambito III—was held on December 4–6, 1994. This meeting took place three months after Pérez Balladares was inaugurated president on September 1, 1994. The government was initially skeptical of participating, since it felt any agreements could limit their authority. As Pérez Balladares says, “We generally supported the process, but did not want our program to be derailed or delayed through endless negotiations.”35 On the basis of consultations36and the findings they produced, the UNDP drew up a proposed agenda for the discussions. However, the objectives proved to be out of step with the prevailing political climate, with a recently elected government that was starting to make decisions relating to its own agenda and within its own style of government, a political opposition which had yet to recover from the trauma of its electoral defeat, and a proposal for dialogue that was ambiguous and confused. Indeed, during his address to Bambito III, President Pérez Balladares shared his views on the question of institutionalizing the mechanisms for dialogue and consultation, stating that “any legal obligation to hold consultations which are not binding in nature results in those consultations becoming an obstacle to the decision-making process, and, therefore, effective consultations cannot be guaranteed. The country has many useful consultation channels of which little use has been made, such as the local government bodies, which tend to be closer to the feelings of the majority than are the major bureaucratic entities. As in the government, I have on many occasions come upon extremely valuable opinions within unions that do not coincide within institutional positions. Where there is a genuine readiness for discussion, the fewer the formalities, the more fruitful will be the dialogue. Furthermore, a legal obligation to engage in nonbinding consultations entails the risk of making those consultations a formality that is complied with for compliance’s sake, in the absence of any practical significance whatsoever.” These views were greeted with concern by a number of political representatives attending the same event. Camilo Brenes, representing the Christian Democratic Party, said, “I have to say that he has left us concerned because perhaps we did not clearly understand the significance of what was said in last night’s address regarding the purpose or obligation assumed by the State in these non-binding—or effectively non-binding—consultations, because the fact is that many of us Pérez

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were left with the impression that the administration is perhaps unwilling to lend an ear and give a serious follow-up to what we are proposing here, and I believe it to be very important that we should at least clarify matters and make it very clear that we are not here just for the fun of it.”37 Participants and subsequent evaluations concluded that while Bambito I and II were highly successful, the same could not be said of the third meeting. Held too soon after the inauguration of a new administration and with a largely vague agenda, Bambito III simply could not overcome the mistrust among the parties and the unwillingness of the extant government to yield so early in its period in office. These deficiencies of Bambito III, however, were instrumental in constructing an altogether different model for the post-Bambito meetings.

The Panama 2000 Process: National Dialogue on the Panama Canal The UNDP developed a new strategy that took account of the prevailing political atmosphere characterized by mistrust between the government, opposition, and civil society. One crucial event, however, galvanized Panamanian political actors, namely the return of ownership of the Panama Canal to Panama, scheduled for December 1999. The process centered around a series of meetings held in the resort town of Coronado, during which consensus was gradually obtained on the vital institutional changes needed for Panama to successfully meet the challenge of managing the Canal. Preliminary to the first meeting, an elaborate multi-stage process was developed, intended to increase mutual trust among participants and to lay the groundwork with a detailed and mutually accepted agenda.38 The agenda focused on the following items: The Panama Canal in the twentyfirst century; future challenges and governance; and guaranteeing political and legal stability to canal users and the international community. The first meeting took place at the Hotel Coronado on May 26, 1996. The Arnulfista Party was not represented. Three working groups were established for each item on the agenda. Their work culminated in the final declaration, entitled National Vision “Panama 2000 and beyond.” The first part set out a long-term vision in which participants agreed to achieve strategic objectives in the interests of national development and further develop democratic governance. The second part relates to the country’s commitment to the more effective management of the Canal, ensuring the absence of party political or sectoral interests in any decisions having to do with the Panama Canal Authority, and guaranteeing the appointment of members Pérez

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of the Management Board of the Canal Authority, as well as of the administrator and deputy-administrator of the Canal, on the basis of ability, merit, and integrity. The document also discussed the commitment to hold elections according to the established constitutional calendar, and the need to hold meetings as soon as possible in order to consider: ● ● ●

The draft bill on the Panama Canal Authority; The General Plan on Land Use; The Regional Plan of the Interoceanic Region Authority

Other topics for consideration included the conversion and re-use of U.S. military bases; the appropriateness of playing an active part in the Universal Congress on the Panama Canal, scheduled for September 1997; and sponsoring a permanent forum for interactive dialogue and national debate on the Canal. The second Coronado meeting took place on July 29, 1996, with a focus on the organization of the Universal Congress on the Panama Canal. Another aspect of the second meeting related to the law establishing the Panama Canal Authority, the agency that would eventually manage the Canal. By the end of August 1996, 31 of 34 items in the draft bill on the Canal Authority had been agreed through consensus. The third set of meetings took place September 22–24, 1996, and focused on the General Land use Plan and the Regional Plan of the Interoceanic Region Authority (ARI). Of all the meetings held within the framework of Panama 2000, Coronado III was the most difficult and controversial, since it sparked debate between different visions for the country on a series of economic issues, including the role of the state, local governments, and civil society in the nation’s economy, and, more important, the management of the Panama Canal. Despite the intensity of the debate and complexity of the issues discussed, those gathered reached an agreement. The outcome of the meeting was highly positive: the plans were approved, as was the draft bill to be submitted to the Cabinet and then to the Legislative Assembly. But above all, “This meeting opened the way for a more far-reaching dialogue between the participants, the institutions and, it has to be said, the social, political and government leaders, that dialogue having succeeded in establishing a climate of underlying confidence for strengthening of the democratic process.”39 This meeting partially concluded the “Panama 2000” process. Politically, the event demonstrated a genuine potential for dialogue on issues of national concern. From the government’s perspective, “Panama 2000” demonstrated that when a government is serious about dialogue and compromise it can find an opposition also willing to negotiate in good Pérez

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faith. Also clear was the important role of the UNDP. They served as an honest broker with no hidden agenda or instrumental rationality and could, therefore, mediate between mutually distrustful parties.

National Vision 2020 Another major process of dialogue between civil society, political parties, and the government, again facilitated by the UNDP, was the Vision 2020 talks held in June 1997, in which the main objective was to define how the country should look by the year 2020. The goal was to provide the nation with a shared strategic objective in relation to the rest of the world, an objective that would represent the widest possible sectoral interests, while at the same time allowing the political parties enough latitude to implement their political agenda. The success of the Coronado meetings provided the impetus for the idea of bringing key government and civil society leaders together focusing on four key factors in the historical development of the country: (1) The growing awareness of the dynamics of the change taking place in the world; (2) The transfer of the Canal, associated property, and adjacent areas from the United States to Panama; (3) The effort by Panamanians to consolidate a democratic system; and (4) The belief in the possibility of achieving, through dialogue, medium- and long-term agreements between the political and social actors. One of the most important byproducts of this exercise was the multiperspective visualization of what it means to be responsible for administering the Panama Canal and the benefits that such responsibility represents for the country. This, in turn, led to reflection on the importance of broad dialogue on the Panama of the future. The result was the identification of five fundamental areas in the “national vision:” democratic institutions, self-determination, economic development, equity, and sustainability. The “national vision” established a long-term time scale (up to the year 2020), based on an analysis of extant conditions as well as Panama’s economic challenges and opportunities. Representatives from all of Panama’s political parties and from organizations of civil society signed the document “National Vision 2020” on May 29, 1998. The document laid out steps to stregthen three broad areas of public policy: (1) democratic insitutionalization; (2) economic development; and (3) equity and ethical behavior. While the document represented a consensus among government and civil society on the fundamental policies that were needed to move Panama forward, the agreement had no

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enforcement mechanism and relied entirely on the good will of participants, particularly the government. As expressed by Raul Leis, a key promoter of the “National Vision 2020,” the ideals of the agreement remain viable, although most of the proposals have yet to be implemented (La Prensa, Saturday, December 19, 2009).

Conclusion Political learning, reconciliation and social dialogue form the basis upon which democracy has been built in Panama. Conflict and mistrust still exist, and political leaders repeatedly “behave badly,” but there is no doubt that significant advances in building consensus and institutionalizing dialogue have been made. The process for developing the National Vision 2020, plus the earlier Bambito and Coronado meetings, established the primacy of dialogue among Panamanian political and social actors. In the years since the initial process started a series of “dialogues,” some more successful than others, have debated such items as educational reform, reform of the social security system, and labor-business relations. Furthermore, the establishment of organizations, such as the Labor Foundation, bringing together business and labor leaders to promote dialogue and compromise, has served to establish a culture of compromise vital to democracy. While some commitments of agreements have not always been fulfilled, and at times the dialogue has broken down along partisan, personal, or sectoral lines, the process itself has served to ameliorate conflict between political rivals, and between government and civil society.

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Chapter 7 Mass Democratic Culture in Panama: The Meaning of Democracy

So far I have discussed how elite political culture and behavior can affect democratic governance. However, democracy can only be sustained if citizens are supportive of key democratic values. In this and the following chapter, I explore the political culture of Panamanians by examining their attitudes toward democracy. The evidence is derived from the AmericasBarometer surveys conducted in Panama and more than 20 other countries in Latin America every two years since 2004.1 By the end of the twentieth century and the beginning of the twentyfirst, the concept of “democracy” acquired a universal acceptance that leaves it, in many cases, without any real foundation. All governments try to legitimize themselves by claiming to be democracies. Citizens “learn” this lesson and tend to “pray before the temple of democracy.” But the key question is, does the public know the true meaning of democracy? In addition, what does democracy mean, in conceptual terms, to citizens? The modern usage of democracy dates from the revolutionary transformations in Western societies from the end of the twelfth century (Palmer 1959, 13–20). As popular participation in government increased toward the end of the nineteenth century, the concept of democracy came to be considered favorably. During the 1920s and ‘30s, opposition to democracy became respectable again among radical political and economic groups in Europe and Latin America. With the defeat of the Axis Powers in World War II, the organized opposition to democracy virtually disappeared, not only in the West but throughout the world. Near universal support for “democracy,”

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however, took place at the cost of disagreement over its meaning. Political leaders and scholars defined democracy according to his or her own interests and each had a favorite type of democracy. A condensed list of typs of democracy could include: direct democracy, representative democracy, liberal (or bourgeois) democracy, proletarian democracy, social democracy, totalitarian democracy, industrial democracy, plebiscite democracy, constitutional democracy, associative democracy, pluralist democracy, economic democracy, people’s democracy, and participative democracy. Various theorists have noted the differences between rationalist, utopian, and idealist definitions of democracy on the one hand, and empirical, descriptive, and institutional definitions on the other. Invariably, they conclude that only the latter definition provides the analytical precision and empirical reference points to make it a useful concept (Dahl 1971, Sartori 1962). Among North American academics, the arguments about democracy as a normative theory have weakened and have been replaced by initiatives to understand the nature of democratic institutions, their operation, and the reasons for their success and failure. The key institution in a democracy is the election of leaders through competitive elections. In a democracy, people become leaders through elections in which the governed participate. In 1942, Joseph Schumpeter made the most important modern formulation of this concept of democracy. In his pioneering study, Capitalism, Socialism, and Democracy, Schumpeter discovers the deficiencies of what he calls the “classic theory of democracy,” which defined democracy in terms of “the people’s will” (source) and “the common good” (purpose). Discarding such suggestions, Schumpeter constructs what he calls “another theory of democracy.” He points out that “the democratic method is that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people’s vote” (Schumpeter 1947, 269). Following Schumpeter, but widening the categories that define the democratic system, Robert Dahl (1971) shows us that democratic governments are fundamentally characterized by their ability to respond to citizens’ preferences without establishing political differences between them. For this to take place, all citizens must have an equal opportunity to: (1) formulate their preferences; (2) publicly manifest these preferences among their fellow partisans and before the government, both individually and collectively; and (3) be treated equally by the government. That is, the government should not discriminate in any way regarding the contents

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and origins of such preferences. These three basic conditions should be accompanied by eight guarantees: 1. 2. 3. 4. 5. 6. 7. 8.

Freedom of association. Freedom of speech. The right to vote. Eligibility for public office. The right of political leaders to compete for votes. Diverse sources of information. Free and fair elections. Institutions that make government policies depend on the vote and other forms of preference expression.

Dahl’s definition favors institutional processes that guarantee a level of popular sovereignty in the determination of who governs. In this sense, it does not address concepts of socioeconomic rights or guarantee any conditions of equality among citizens. Liberal or representative democracy is currently founded on institutions that structure the competition between political elites and guarantees that all citizens participate equally in the country’s political processes. The AmericasBarometer surveys have always contained various questions that measure attitudes about democracy and democratic government. However, given the problems of the concept’s universality, for the 2006 survey an effort was made to measure the different ways that citizens conceptualize democracy. For this analysis, the survey asked a series of semiopen questions that required respondents to give up to three different definitions of democracy. The analysis focused on a question which asked respondents to identify the most important definition they provided. (If only one definition was given, the analysis focused on this one). Table 7.1 gives us the framework we used to classify the various responses. The table illustrates that there are definitions that go beyond a rational, profit-maximizing calculus to focus on abstract aspects or political and institutional norms. The people for whom such definitions are more important conceive of democracy as a system based on principles and political processes, without hoping for personal or family gain from democratic practices. Logic suggests that as more citizens identify democracy with abstract or normative values, the more stable their support for the democratic political system will become, since this support will not be subject to the ups and downs of the national economy, political scandals, or the weakness of the ruling government.

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Table 7.1

Analytical Framework for the Various Concepts of Democracy (Response code in parenthesis)

Normative and intrinsic concepts of democracy

Instrumental concepts of democracy

Empty or non-specified concepts of democracy

Negative concepts of democracy

– Freedom (without saying what kind) (1) – Freedom of expression, of voting, of electing, of human rights (3) – Freedom of movement (4) – To be independent (6) – Right to choose leaders (13) – Elections, voting (14) – Free elections (15) – Equality (without specifying) (17) – Economic equality, or class equality (18) – Gender equality (19) – Equality before the law (20) – Racial or ethnic equality (21) – Participation (without specifying) (24) – Minority participation (25) – Power of the people (26) – Human rights, respect for rights (27) – Justice (29) – Obeying the law, less corruption (30) – Non-military government (31) – Living in peace, no war (32)

– Economic freedom (2) – Well-being, Economic progress, growth (7) – Capitalism (9) – Free trade, Business freedom (10) – Work, greater opportunities of (11)

– Has no meaning (0) – Other response (80) – Don’t know or no response (88)

– Freedom, lack of (5) – Well-being, lack of, no economic progress (8) – Work, lack of (12) – Fraudulent elections (16) – Equality, lack of, inequality (22) – Participatory limits (23) – Disorder, lack of justice, corruption (28) – War, invasions (33)

Source: AmericasBarometer (www.americasbarometer.org).

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Obviously, when the public shows greater support for negative or “empty” concepts, the stability and survival of the democratic regime will be in greater danger. It is important to note that even when people have negative or empty opinions of democracy, this does not mean an inevitable breakdown of the democratic order. After all, we are not analyzing the views of the country’s political leaders or important political sectors that, ultimately, have the power to cause the breakdown of the democratic political order. Nonetheless, public opinion is important for establishing the parameters of what is and is not acceptable for political leaders. That is, if a majority of the people do not believe in democracy, political leaders will have the green light to act undemocratically. In figure 7.1, we can see that 52.7 percent of Panamanians have normative values of democracy; 19 percent have utilitarian conceptions, and 22.7 percent empty values. Only 5.5 percent view democracy negatively. How do Panamanians’ conception of democracy compare to other citizens in the Western Hemisphere? Figure 7.2 shows the results for the countries surveyed by the AmericasBarometer in 2006. Here, we can see that Chile and Costa Rica have the greatest number of respondents who define democracy in a normative manner. Panama is fourth from the bottom tied

5.5%

22.7%

52.7%

19.0%

Alternative conceptions of democracy Negative

Figure 7.1

Empty

Utilitarian

Alternative Conceptions of Democracy

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Normative

100

0

14

2

0

13 22

80

3 5

2 6

3

16 16 17

4 4

4

4 5

5 9

8 2

2

5

2

7

7

9

4 6

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5 8

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4 3

19

23 27

27

25 29

35

Alternative conceptions of democracy

34 43 41

32 33 35 37 24

60

Negative Utilitarian Empty

40

86 83

78 76 76 76

Normative 69 67

64 61 61 61

56 55 54 53 53 52 51 51

20

0 United States Uruguay Canada Chile Venezuela Costa Rica México Perú Jamaica Haití Paraguay Colombia Guatemala Nicaragua Honduras Dominican Republic Panamá Guyana El Salvador Brasil

Percent

4

Figure 7.2 Alternative Conceptions of Democracy: Panama in Comparative Perspective

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with the Dominican Republic, and just above Guyana. Panama shows the greatest percentage of utilitarian concepts, with 19 percent. It is important to point out that in all countries; most respondents defined democracy in normative terms. The relative high level of support for “utilitarian” conceptions of democracy could be problematic for democratic stability in Panama, since it reflects an attitude which conditions support for democracy to tangible, mostly economic, outcomes. In the event of economic crisis or government inability to affect successful economic policy, Panamanians’ support for democracy itself could wane. Figure 7.3 shows the relation between educational levels and the different conceptions of democracy.2 We see that people without any formal education tend to favor a utilitarian conception of democracy. We assume most of these people have low incomes and lack basic economic means; thus, their concern for the tangible benefits that a democratic system can provide. However, we see an increase in normative opinions as educational levels rise. People with higher levels of education can understand normative conceptions of democracy

60.0%

Education Level None Primary Secondary University

Percent

40.0% 64.6 61.4 56.7 47.7

20.0% 26.4

23.4 20.3

14.9

0.0%

15.7

14.3 15.2

16.8

6.9 5.6 5.6 4.5

Negative

Empty

Utilitarian

Normative

Alternative Conceptions of Democracy

Figure 7.3 Alternative Conceptions of Democracy and Education

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and generally tend to have economic levels that allow them to concentrate on abstract aspects of the political system.3 Figure 7.4 shows the results of alternative conceptions of democracy by level of urbanization. We see that empty and utilitarian conceptions receive greater support in rural areas, and that the normative conception receives more support in urban areas.

Other Measures of Support for Democracy In this section, we analyze other ways of measuring Panamanians’ support for democracy. The AmericasBarometer survey asked a question that examines the extent to which citizens prefer democracy over authoritarianism:. “(DEM2). Which of the following three statements do you most agree with? (1) People like us do not care if there is a democratic or nondemocratic regime; (2) Democracy is preferable to any other kind of

60.0%

Urban Percent

Rural 40.0%

58.2

43.6

20.0% 25.9

25.0 21.4 14.9 5.5

5.6

0.0% Negative

Empty

Utilitarian

Normative

Alternative Conceptions of Democracy

Figure 7.4

Alternative Conceptions of Democracy and Urban vs. Rural

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government; (3) In some circumstances, an authoritarian government might be preferable to a democratic one; (8) Don’t know or No response.” Figure 7.5 shows an increase in the preference for democratic government between 2004–2008. In 2004, 77.7 percent of survey respondents preferred democracy to any other form of government. This figure fell to 68.3 percent in 2006, but rebounded significantly in 2008 to 86 percent. Also significant is the decrease of people who express indifference between democratic and authoritarian governments, from 19.1 percent in 2006 to 8.4 percent in 2008. These results indicate a near-universal preference for democracy among Panamanian citizens. In addition, the survey asked: “DEM11. Do you believe that our country needs a strong-handed government, or that its problems can be resolved with everyone participating? (1) Strong-handed (2) Everyone participating (8) No response.” In figure 7.6, we can see a significant increase in the support for a “stronghanded” government between 2004 and 2006, with no appreciable change in 2008. There are doubts about the substantive

100.0%

Percent

80.0%

Year 2004 2006 2008

60.0%

85.9 77.7

40.0%

68.3

20.0% 19.1 9.1

8.4

0.0% Make no difference

Democracy is Authoritarian regime always preferable preferable sometimes

Preference for Democracy or Authoritarian Regime

Figure 7.5

Preference for Democracy or Authoritarianism

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Percent

60.0%

Year 2004 2006 2008

40.0%

20.0%

0.0% Strong-hand government

Participation of everyone

Preference for strong Government or Everyone Participating

Figure 7.6

Preference for Strong-Hand Government

meaning of support for a “strong-handed” government, since for many people this can mean a government capable of dealing with the country’s problems, especially crime. Rising crime and corruption have been constant themes in post-invasion Panama. The media and political activists have continually highlight the increase in corruption among government and private sector, and in the past four or five years, increasing crime has become a significant issue for citizens and politicians alike. Thus, the increase for a “strong-hand” government could be attributed to these trends. Finally, figure 7.7 shows that satisfaction with democracy has steadily increased since 2004. In 2008, a majority of Panamanians expressed satisfaction with how their democracy was working. It is worth noting, however, the gap between satisfaction with and support for democracy. As seen earlier, more than 80 percent of Panamanians in 2008 said democracy as a political system was preferable to other regimes, however, only 53 percent express satisfaction with how it is working. The gap is explained by the conflict between expectations and reality. Most Panamanians prefer democracy over authoritarianism but many are skeptical of the way it is functioning in their country. Pérez

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Mean Satisfaction with Democracy

60

50

40

30 53.2

49.9

46.9

20

10

0 2004

2006

2008

Figure 7.7 Satisfaction with Democracy

Conclusion In this chapter I have examined support for democratic values by analyzing the various conceptions of democracy expressed by the general public in Panama. I used a framework that divides the conceptions into four groups: normative, utilitarian, empty, and negative. In Panama, 52.7 percent of the population has normative conceptions, 19 percent uses utilitarian definitions, and 22.7 percent holds empty views (i.e., they do not know what democracy means, do not wish to say, or think that democracy has no meaning). Educational level and urbanization are two key factors in explaining differences among the conceptualizations. Citizens with higher educational achievement and living in urban areas express greater tendency to support a normative conceptualization of democracy. Conversely, those individuals with little to no formal education, living in rural areas, are far more inclined to express utilitarian or empty conceptions. Other measures of support for democracy demonstrate that Panamanians tend to reject authoritarian solutions, since they prefer democracy, and prefer a government in which everyone participates to a government that applies a stronghand. However, there is a significant difference between support for the Pérez

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idea of a democratic government, which receives near universal approval, and attitudes about how democracy functions. A large number of Panamanians express real concern that democracy in their country is weighed down by problems that make it difficult for the political system to fulfill citizens’ expectations.

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Chapter 8 Supporting Stable Democracy: System Support and Political Tolerance

In this chapter we examine democratic values and Panamanians’ support for democratic political stability. The analysis we use in this chapter is based on a framework developed by Mitchell A. Seligson, in which support for the political system and support for political tolerance are requisites for democratic political stability (Seligson 2000). The emphasis on support for democratic stability stems from the premise that although public opinion is not totally determinant in a democratic regime, it is one of the most important factors behind political stability. In large measure, the legitimacy of the system depends on how citizens view that system. Juan Linz, in his work on the breakdown of a democratic system, says that legitimacy of political institutions depends largely on the public believing that existing institutions, despite their problems, are better than any alternatives (Linz 1978). Seymour Martin Lipset defines legitimacy as “the capacity of a system to generate and maintain the belief that the existing institutions are the most appropriate for the society.” Lipset’s theory is based on the premise that political systems that receive the public’s support and, therefore, legitimacy, can survive even in the face of an economic or political crisis (Lipset 1981 and 1994). David Easton (1975), in turn, talks about two important types of support: “specific” support and “diffuse” support. The first refers to the public’s support for the ruling government. Although this kind of support is important for those who govern, since it can influence the government’s capacity to implement its policies, it is not as important as the second type of support. “Diffuse” support refers to support for institutions, that is the political system and its institutions. The political system can Pérez

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survive when the administration or ruler in power is unpopular, but it is in danger when its institutions lose support and, therefore, legitimacy. The legitimacy of the political system has long been viewed by scholars as a crucial element in democratic stability. Research has emphasized the importance of legitimacy for many aspects of democratic rule (Booth and Seligson 2009; Gilley, 2009).

Institutional System Support The AmericasBarometer survey asked respondents how much trust they had in various political and private institutions. Figure 8.1 compares the 2004, 2006, and 2008 results. We find a general decline in trust since 2004, with the Catholic Church as the institution with consistently the

Political Parties Congress National Government President Courts Police Canal Authority Electoral Tribunal Media Catholic church

2008

2006

2004

0.0

20.0

40.0

60.0 Mean

Figure 8.1

Trust in Institutions

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highest level of trust, followed by the media. In 2006 and 2008, the survey asked about the Panama Canal Authority and the results indicate that this institution has relatively high levels of trust. Another institution for which levels of trust are relatively high is the Electoral Tribunal. Political parties and the Congress are the least trusted institutions.1 No doubt, perceptions of increasing levels of corruption and crime have undermined support for political institutions.2 The framework used to examine democratic stability uses five items3 to measure broader system support. Figure 8.2 presents the mean of those five items for each year of the survey. Trust in institutions and in the extent to which the system deserves support has declined since 2004, while support for the courts has increased. The lowest level of trust is expressed for the notion that the system protects basic rights. Again, the evidence suggests an erosion of support for the political system since 2004. The decline reflects the impact of unmet expectations and rising levels of crime; in addition to increasing media focus on corruption scandals involving government officials. 60.0

Year 2004 2006 2008

40.0

62.0

51.9

60.1 51.6 51.3

48.5 49.0 49.0

47.6

47.9

49.1

44.3 44.0 44.4

20.0

41.2

0.0 Courts

Figure 8.2

Institutions

System protects basic rights

System Proud of Panamanian deserves political support system

Political System Support: Five Key Items

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Corruption is a major issue for institutional legitimacy. Panama was ranked 17 in the region by Transparency International (TI) Corruption Perception Index, with a core of 3.4 on the 0–10 point scale. Panama’s standing on the index has deteriorated since 2002 when the country’s score stood at 3.0. Scores below 5 indicate serious problems with corruption. Panama is ranked 84 among the 180 countries globally that were included in the 2009 TI survey. The general perception is that anti-corruption laws are not applied rigorously and that government enforcement bodies have lacked determination in prosecuting those who are accused of corruption, particularly in high-profile cases involving former presidents Mireya Moscoso, Ernesto Pérez Balladares, and Martín Torrijos Espino. The judicial system also has been repeatedly under a cloud of corruption. In 2002, two legislators allegedly accepted large sums of money in exchange for confirming the nomination of two prospective Supreme Court justices. In response to mounting evidence of bribery and blackmail, the country’s Public Ministry opened an investigation into the case; however, the Court ultimately declared the claim null, and the case was never fully heard. In 2005, another case was resolved in a discouragingly similar manner. In this instance, a Supreme Court Justice accused three of his colleagues of blatantly ruling in favor of drug-traffickers, citing six different cases in which he had observed preferential treatment being handed out by the Court. Despite a preponderant amount of evidence suggesting the validity of this claim and the U.S. Embassy’s rescission of two of the justices’ U.S. Visas, the case was never pursued. Reports by the Due Process of Law Foundation and the Alianza Ciudadana Pro Justicia suggest that Panama’s judicial system is plagued by executive interference. They also have noted the judiciary’s failure both to meet the standards of due process as stipulated by the Inter-American Commission on Human Rights and to establish a transparent, robustly participatory selection process for Supreme Court justices. According to the World Bank’s Worldwide Governance Indicators—which defines rule of law as “the extent to which agents have confidence and abide by the rules of society and in particular the quality of contract enforcement, police and courts, as well as the likelihood of crime or violence”—Panama places in the 50th percentile. Corruption in Panama can only be understood within an international context, as Panama’s history and traditions are strongly linked to its history as a service economy and the corresponding influence and relations with international economic, political and social forces, particularly those of the United States. Not only is corruption associated with Panama’s formal service-based economy, but with illegal arms trading, drug trade and money laundering, all vital facets of Panama’s informal economy. Pérez

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Political Tolerance Political tolerance is one of the most important democratic values. Political tolerance, defined as an individual’s acceptance of the rights of others to express varied opinions, is key to establish a stable democratic regime. There is an extensive literature on political tolerance,4 and one of the most debated topics is how to measure tolerance (Seligson 2002, 45–46).5 This study measures tolerance through an index based on the responses to a series of questions in the questionnaire. The original scale of these variables ranges from 1-to-10. The following questions were used for this analysis: D1. There are people who always speak badly of Panama’s form of government, not only the current administration, but the kind of government. How strongly do you approve or disapprove of these peoples’ right to vote? Please read me the number on the scale: [Probe: Up to what point?] D2. How strongly do you approve or disapprove that these people can conduct peaceful demonstrations in order to express their points of view? Please read me the number. D3. How strongly do you approve or disapprove that these people can run for public office? D4. How strongly do you approve or disapprove that these people appear on television to give speeches?

Figure 8.3 shows a decline in levels of political tolerance between 2004 and the remaining years. This implies that Panamanians generally have rather low political tolerance. The drop in levels of political tolerance is disturbing, since this concept is fundamental for living in a democracy. Multivariate analysis shows that ideology, education, and the size of the place of residence are the key factors in explaining levels of political tolerance. Generally, places with smaller populations show less political tolerance than those living in more urban areas. Individuals at the extreme right and left exhibit less political tolerance, and those with higher educational achievement exhibit higher levels of tolerance. The drop in tolerance since 2004 can perhaps be attributed to growing concern over corruption, crime, and other social problems, thus precipitating an “exhaustion syndrome” with the problems of democracy among Panamanian citizens. Another possibility, is that as democracy is consolidated, Panamanians become less willing to accept criticism of the political system. Pérez

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80.0

Year

60.0

2004 2006 2008 40.0 73.5 66.2 61.0

59.2 53.1

20.0

46.3

50.2

53.7 48.2

50.9

47.8 50.3

0.0

Right to vote

Figure 8.3

Peaceful protest

Run for office

Speech on TV

Political Tolerance

Support for Stable Democracy Here, I analyze the relation between political tolerance and support for the political system. The analysis is based on dividing each scale in half (50 of 0-to-100) and crossing both variables to obtain a 2-by-2 table that shows us the theoretical relation between tolerance and support for the system (see table 8.1). It is important to remember that this framework only applies to countries with an electoral democracy, since the effect of high and low levels of both support for the system and tolerance would be very different within an authoritarian system. Seligson explains the logic of the classifications in the following manner: “Political systems in which the public shows a high level of support for the system and high tolerance tend to be more stable. This prediction is based on the premise that the system needs strong support in non-authoritarian situations in order to guarantee its stability. By contrast, if people do not support their political system and have freedom of action, Pérez

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Theoretical relation between tolerance and support for the system

Support for the Institutional System

Tolerance High

Low

High

Stable Democracy

Authoritarian Stability

Low

Unstable Democracy

Democratic Breakdown

Source: (Seligson 2002)

this will almost inevitably produce an eventual change in the system.” In cases where tolerance is low, but support for the system is high, “the system should remain stable (given the high level of support), but the democratic government might be at risk. Such systems tend to move toward authoritarian (oligarchic) regimes which restrict democratic rights” A situation of low support for the system opens up the possibility of instability in the political system. Where there are high levels of tolerance, “it is difficult to predict if the instability will result in greater democratization or in a period of instability characterized by considerable violence.” If the tolerance levels are low, by contrast, “the breakdown of the democratic order would seem to be the most logical result” (Seligson 2002, 52). It is important to note that public opinions cannot cause the breakdown of a political system. There are innumerable factors influencing such an event, from economic conditions and the geopolitical climate to the policies adopted by the elite and ruling governments. Nonetheless, there is no doubt that a political system which has little support and whose citizens are intolerant is more susceptible to a breakdown of democracy. In table 8.2 we observe a significant reduction in the values supporting stable democracy and an increase in those favorable to a democratic breakdown from 2004 to 2006, with little change between the latter and 2008. It is important to reiterate that these results do not signify that Panamanians want a breakdown of democracy, and even less that it will occur. However, the deep relation between support for the political system and political tolerance result in opinions that do not strengthen stable democracy. In 2006, only 22.8 percent of Panamanians support the political system and demonstrate high levels of tolerance; 15.7 percent demonstrate high political tolerance but a low level of support for the system. These results indicate that, in Panama, only 38.5 percent of the population interviewed Pérez

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Table 8.2 Empirical relation between tolerance and support for the system in Panama, 2004, 2006, and 2008 Support for System

Political Tolerance High

Low

Stable Democracy High

2006

2008

2004

2006

2008

37.9%

22.8%

26.7%

16.1%

24.2%

23.6%

Unstable Democracy Low

Authoritarian Stability

2004

Democratic Breakdown

2004

2006

2008

2004

2006

2008

30.3%

15.7%

22.3%

15.7%

37.2%

27.4%

Source: Author’s calculations based on AmericasBarometer surveys.

in 2006 expressed opinions that would place them within the democratic supportive side of table 8.2. In 2004, more than 60 percent of respondents found themselves in these “democratic” cells. In 2006, 37.8 percent of Panamanians interviewed—a plurality of the respondents—expressed values favorable to a democratic breakdown. The “erosion” of system support and tolerance evidence a weariness on the part of Panamanian citizens about the utility of democracy to solve the nation’s problems. However, large turnout at elections and significant majorities expressing support for democracy in the abstract bode well for future democratic stability.

Conclusion In this chapter, I examined Panamanian citizens’ support for the political system, political tolerance, and values that favor stable democracy. The results presented here indicate a reduction in support for political institutions and the political system in general since 2004; a reduction in the levels of political tolerance and, as a consequence, a reduction in the values that favor stable democracy. Perception of growing corruption, as well as increasing dissatisfaction with rising crime rates,6 has undermined popular support for political institutions. It is important to Pérez

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note that these results, although interesting and troubling, do not indicate an inevitable breakdown of the Panamanian political system. As we saw in chapter 7, most Panamanians define democracy in normative terms, and the vast majority reject populist and strong-handed governments. In addition, the discussions in chapters 5 and 6 indicate that political elites in Panama are committed to playing within the democratic rules of the game.

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Chapter 9 Conclusions and Implications: Can Democracy Emerge after an Invasion?

Can democracy emerge from a military invasion by an extraterritorial power? This was the question that launched this study. The question has consumed the attention of policy makers and scholars for decades, as the United States sought to deploy its political and military weight in pursuit of advancing, as it claimed, democratic governance around the world. Success in Japan and Germany after World War II emboldened U.S. policy makers to pursue “democracy building” in Southeast Asia and Latin America throughout the second half of the twentieth century. Since the terrorist attacks of September 11, 2001, the United States has been engaged in a worldwide struggle, characterized in part by efforts to democratize large portions of the Middle East as a strategy against violence. Efforts to export democracy have engendered debate about the proper role of U.S. military power to promote democracy around the world. At the heart of this debate lies another critical question: Can democracy be transplanted? Answers to this question vary: there are those who argue that democracy can only be built indigenously through a nation’s own cultural patterns; those who argue that traumatic events, such as war, can break old norms and allow new values to develop that are more conducive to democracy; and still others who argue that democracies promote peace, stability, and welfare and, therefore, its advance across the world must be a cornerstone of international development efforts. The results from Iraq and Afghanistan are mixed at best. In Latin America, Haiti, Grenada, and the Dominican Republic were subjected to U.S. military interventions, with varying degrees of democratic success. Russell Crandall (2006), in a study of the effects of intervention in Grenada, Panama, and the Dominican Republic, argues Pérez

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that “the historical record suggests that in all three outcomes, democratic institutions emerged stronger than before the interventions” (227). Nonetheless, historical experience shows that only in rare cases can a democratic regime be set up using external military means. In terms of achievability, the trump cards in the hands of those who favor the policy are the examples of post-World War II Germany and Japan. So the question arises: How valid and relevant are the German and Japanese cases to the enterprise of creating new democratic regimes today? In the first place, the German and Japanese peoples were utterly defeated and crushed at the end of World War II. Second, Germany and Japan in 1945 were genuine nation states with homogenous populations and a strong sense of identity. Third, and most important, before falling into the hands of extremist regimes, both Germany and Japan had considerable experience of the rule of law and civil society, as well as some significant experience of democratic practice. They had well-educated populations and substantial middle classes. Few of these conditions are present in the states that are today the subject of democratization by force. A survey by the Carnegie Endowment for International Peace dedicated to U.S. involvement in military operations abroad in the twentieth century indicates that only rarely was democratization the result (Pei and Kasper 2003). In the first half of the century, the failed military operations involved countries that were neighbors of the United States and apparently easy to control: Panama (1903–1936), Nicaragua (1909–1933), Haiti (1915–1934), the Dominican Republic (1916–1924), and Cuba (1898– 1902, 1906–1909, and 1917–1922). Other militaryinterventions, such as in Korea in the 1950s, and South Vietnam and Cambodia in the 1960s and 1970s, were dictated mainly by the intention of blocking Communist expansion, and democratization was not even attempted. Even more discouraging is the record of the two European colonial powers, France and Britain, which almost never explicitly intended their military interventions abroad to favor democratic forces, but rather to follow the traditional logic of maintaining political influence. French and British interventions after 1945 almost always led to reduced political liberalization and to support of the existing regimes, even when those regimes were oppressive (Pickering and Peceny 2006). The focus here was Panama, a nation highly connected to and influenced by the United States since its birth, and one that was the subject of the most extensive military operations carried out by the United States in the Western Hemisphere in the twentieth century. No country in Latin America has been the subject of greater, more protracted international pressures than Panama. Since 1903, this pressure has been exerted by the United States, which had been in control of Panama’s major resource (i.e., the Pérez

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Canal). This study has shown that the influence of the United States has been a major factor in shaping elite political values and behavior. As we have seen throughout our analysis, Panamanian elites have frequently adapted values and modes of behavior to suit United States’ interests in the Isthmus. Most of the time, Panamanian elites and the United States have had congruent interests. At times, however, those interests have diverged; understanding how those differences manifest themselves in Panamanian politics is a key factor in understanding the process of democratization in Panama. Ironically, U.S. influence was a hindrance to democratic development throughout most the twentieth century. As explored in the earlier chapters of this book, the United States sought the political stability necessary to manage the Panama Canal over democracy. The United States allied itself with various sectors of the Panamanian elite to guarantee its interests on the Isthmus. Therefore, U.S. democratic promotion in Panama is in many ways a late-twentieth century phenomenon, and one that, to a great extent, was an afterthought. Nevertheless, the imperatives of political stability and economic development prompted a concerted effort before and after the invasion of December 1989 to advance the cause of democratization in Panama. This study has focused particular attention on the evolution of elite political culture and mass attitudes. I argue that only by changing historical patterns of behavior among political elites and promoting mass acceptance of democratic values can democratic governance be established and, more importantly, sustained.

Re-Living Panama’s Past Panama’s birth as an independent nation in 1903 launched a period that I have called the ancien regime, a period that culminated with the military coup of 1968. It was during this early period of nation-building that Panama’s contemporary elite took shape, both structurally and ideologically. The investigation of this period focused on four factors that shaped the nature of politics on the Isthmus: (1) The nature and extent of ideological consensus among Panamanian elites; (2) The influence of the transit route in shaping the economy and influencing the mentality of elites; (3) The effects of U.S. influence on Panama; and (4) The tight control held by the commercial elite over the apparatus of government. The analysis found an elite united by ideology, but divided on the basis of personalities. Elites in Panama developed a mode of behavior that emphasized pragmatism, opportunism, and tolerance. As long as their economic interests were advanced, ideology was irrelevant. Panama became, and still is, Pérez

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the nation of the “deal,” where everything is for sale, including political leaders. Given the dominance of commerce, it is no surprise that society and politics have been dominated by an urban commercial elite whose power is tied to the transfer of goods through the narrow stretch of the Isthmus, and the support it gets from external powers. The book has demonstrated how elite settlements can form the basis of authoritarian regimes. The analysis of militarism in Panama has demonstrated the close historical relationship between the commercial elite and the military apparatus, and the impact of U.S. policy on the development of the military institution. Moreover, it has shown that the military government established in 1968 was able to maintain itself in power through the construction of an elite authoritarian settlement. This settlement was built around the ability of the government to co-opt popular sectors through the selective redistribution of wealth, while at the same time guaranteeing powerful economic elites control of the major sectors of the economy. The crisis period of the 1980s was a result of the fragmentation of this settlement, a fragmentation that resulted from changes in the nature of the military institution and from the dynamics of the liberalization process initiated by the military regime in 1978. Domestic changes were tangled with geopolitical transformations across Central America and the broader world, which altered the political and strategic calculations of the United States regarding its partners in Panama. In turn, changes in U.S. policy triggered a crisis of allegiance among Panamanian elites that precipitated a period of intense rearranging of domestic alliances, resulting in violent protests and a breakdown of the political system.

Post-Invasion Panama and Democratic Governance Panama’s fledgling democracy was born after the U.S. invasion. The book has shown that the invasion and the crisis that led to it have induced a process of political learning among Panamanian elites that may have altered their values and behavior. The traumatic events of the invasion have taught elites that compromise and political pragmatism are necessary if another crisis is to be avoided. To a great extent, the answer to the question of democracy after an invasion lies with the people being invaded. In other words, the success of Panama’s post-invasion experiment with democracy lies with the Panamanians themselves. If all societies in which the United States has attempted to promote democracy had been populated by people with the

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political culture of Panamanians, promotion of democracy might be easier, not because Panamanian political culture is inherently democratic, far from it, but because Panamanians posses one quality that is key to democratic promotion: a transactional political culture. Panama’s elites were predominantly merchants; doing business is deeply engrained in their soul. Deal-making, transacting for the purpose of advancing an agenda or one’s economic or political interest, is a vital component of Panamanian culture. The crisis that preceded the U.S. invasion was one of the few periods in Panamanian history when elites could not transact their way out of problems. In fact, the evidence presented here suggest that part of the inability to compromise out of the crisis was due to U.S., not Panamanian, intransigence. Panama’s democracy has both assets and liabilities. The liabilities include problems with corruption. The very culture of transaction that enables elites to seek compromise also promotes corrupt deal-making. Instrumental rationality dictates that “the ends justify the means,” therefore, cheating, or as Panamanians say, juega vivo (play smartly), generates a tendency to cut corners and do what is necessary to succeed, even if it means violating the rules. In addition, as detailed in chapter 5, executivelegislative relations are often dysfunctional and significantly weighted toward the executive. The legislative branch is fairly weak vis-à-vis the executive, and the quality of legislators leaves something to be desired. Furthermore, political parties, also as expressed in chapter 5, are rather weak. There are only two parties with significant links to Panamanian society, the PRD and the Arnulfistas. The former has been weakened substantially by the results of the 2009 elections and may not survive as a unified political force into the next presidential elections in 2014. Other problems linked to a weak judicial system, rising crime rates, and making security forces more effective in dealing with the new security challenges will continue to face Panama’s political system. Perhaps no single challenge is more important than the necessity to manage the country’s most important asset, the Panama Canal, in an effective, independent, and transparent manner. The country recently undertook the enormous task of expanding the Canal to meet the growing demands of international commerce, making the waterway viable well into the next century. The ability of the country to finish this project without corruption and on time will define how Panama’s government and democratic system will be judged in the years to come. In the end, however, four key factors help explain Panamanian success in building the institutional foundations of democracy: (1) A process of demilitarization, made easier by the results of the invasion, that dismantled the old military and established firm civilian command of security forces. Pérez

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This process was successful because all political actors, despite their political affiliations prior to the invasion, supported it; (2) The consolidation of a free, fair, and competitive electoral process underpinned by the institutionalization of an independent Electoral Tribunal. As a corollary to that process, another important transformation was that undertaken by the Democratic Revolutionary Party (PRD), the party born under the military regime and that sustained it politically. The PRD became an organization that accepted and played by the democratic rules of the game; winning two national elections since the invasion and twice handing power to their opponents;1 (3) The development of a process of social dialogue that created an atmosphere within which political leaders could discuss vital issues facing the nation. The various meetings that sustained and furthered the process of dialogue enabled leaders to construct agreements for conducting elections and for developing policy responses to key national priorities, such as the management of the Panama Canal. The ability of Panama to successfully acquire control of the interoceanic waterway focused the mind and attention of political actors who understood that failure in that front would represent failure nationally and internationally; and (4) The study has shown that citizens in Panama support democracy as a political system. Significant majorities of Panamanians express the view that democracy is the best form of government despite all of its shortcomings. That is not to say that they express universal satisfaction with how their institutions operate, particularly a great amount of scorn is heaped upon political parties and Congress as institutions, but the evidence suggests that mass political culture in Panama supports, rather than undermines, democratic governance. Panama’s democratic regime might be far from fully consolidated, but compared to its neighbors in Central America, perhaps with the exception of Costa Rica, Panamanian democracy exhibits significant advantages. In 2009, Honduras, for example, suffered a military coup d’etat that toppled an elected civilian president. We would be hard pressed to devise a scenario where Panama’s Fuerza Pública (Public Force) would do the same. As detailed in chapter 5, reforms since 1990 have subordinated security forces firmly to civilian authority and Panama’s Constitution prohibits the country having a formal uniformed military. Unlike Guatemala, El Salvador and Nicaragua, Panama did not suffer prolonged civil wars. As I have shown, the political behavior of Panama’s elites promotes accommodation and compromise rather than violence and confrontation. The period prior to the U.S. invasion of 1989 was perhaps the most violent and conflictual in Panama’s history as an independent nation. The trauma of that period and the consequences for many elites in the business and political arena were so serious that few are willing to engage in actions that might precipitate similar circumstances. Pérez

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In July 2010, for example, president Ricardo Martinelli pushed Law 30 through the legislature that reformed the Labor Code, among other provisions. The law was roundly condemned by labor unions, human rights groups, and opposition political parties. Violence erupted when the government confronted protestors in the Western province of Bocas del Toro. Several dozen protestors were injured and at least three were killed. Despite heated rethoric from the government and opposition groups, the fact remains that the government suspended application of the most controversial parts of the law and has initiated a process of dialogue to find a way out of the impasse after weeks of negotiations, on October 10, 2010, President Martinelli announced the repeat of the controversial law. The incident illustrates the modus operandi that government and opposition forces have established in Panama since 1990; whereby the government pushes controversial measures, protests follow, but dialogue and compromise prevail in the end. As said earlier, Panama’s transactional political culture promotes compromise as the preferred method of settling disputes. Often this could result in less than ideal solutions to pressing problems, but it makes prolonged violence highly unlikely. In the end, Panama’s balance sheet of democratic assests and liabilities tilts toward the former, compared to its neighbors. The transformation of the country’s institutions and the nature of its political culture create the basis upon which democracy can take roots. Can democracy emerge from an invasion? Certainly, not in all circumstances. But in the case of Panama it is hard to believe the advances toward democratic governance would have been as deep or transformative without the December 1989 U.S. military invasion. The process of demilitarization, for example, was clearly helped by the destruction of the operational capabilities of the Panamanian Defense Forces (PDF). The deeper lesson of the Panamanian experience, however, lies in the essential role played by the country’s political culture to promote patterns of behavior that help rather than hinder democratization. Ultimately, success or failure in democratic promotion lies with the people to whom democracy is being promoted.

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Notes

1

Democracy in Post-Invasion Panama: Theory and Case

1. O’Donnell’s diagnosis of modernization theory’s crippling weaknesses is often overlooked. Most of the attention lavished on O’Donnell’s work concentrates upon critically examining his explanation of why democratic institutions failed to take root in Argentina, despite this nation possessing most of the trappings of “modernity.” His theory linking industrial “deepening” to the rise of what he calls a bureaucratic-authoritarian state remains controversial (see Serra, 1979:99–163 and Hirschman, 1979:61–98). 2. Freedom House is an independent watchdog organization that monitors the state of democratic governance and advocates for human rights (see, www. freedomhouse.org). 3. The treaty is named after General Omar Torrijos, head of the Panamanian military government, and Jimmy Carter, then-president of the United States. 4. The data set can be best described as a complex sample design, taking into account stratification and clustering. The sample was stratified by regions (metropolitan area, oriental, central, and occidental region) and by urban and rural areas. Respondents were selected in clusters of 6–8 in urban areas and 10–12 in rural areas. The sample consists of 76 primary sampling units (districts) and 112 final sampling units, which represent ten provinces in Panama. The total number of respondents surveyed in urban areas is 960, and 576 in rural areas. 5. The margin of error in the 2004 survey is ±2.4 because the sample is slightly larger. 6. With a sample of this size, the survey precisely represents people’s opinions, with an error not greater or less than 2.5 percent of the results we would obtain if we were to interview all Panamanian citizens. This kind of error means that if we were to conduct repeated samples of this size, 95 percent of them would reflect public opinion, with an inaccuracy no greater than ±2.5 percent.

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NOTES

2 The Shaping of Elite Political Culture During the Ancien Regime, 1903–1968 1. Both in 1936 (the “Arias-Roosevelt Treaty”) and 1955 (the “Remón-Eisenhower Treaty”), the United States and Panama signed treaties that expanded the access of Panamanian elites to the lucrative canal market. The 1977 “TorrijosCarter Treaties” would finally put in motion the transfer of the Panama Canal to Panamanian hands, which occurred on December 31, 1999. 2. In the rest of Latin America, conservative forces based their political and economic power on the ownership and control of land. Control of land gave them access to and domination over the lives of thousands of peasants, who served as their political sheep. In Panama, however, the weakness of the agricultural sector (both in terms of production and personnel), vis-a-vis the service sector, gave the commercial elite dominance over Panamanian politics. In a country were fortunes could easily be made through commercial endeavors, immigrants flocked to the terminal cities of Panama and Colón rather than to the countryside. Moreover, Spanish as well as Colombian policies never encouraged the agricultural sector. 3. The service of Rodolfo Chiari de León in the Noriega regime is indicative of the close working relationship between certain sectors of the commercial elite and the military government. This relationship is explored further in the next chapter. 4. See the work of C. Wright Mills (1956) for evidence of the same elite networks in the United States. 5. José Agustín Arángo and Manuel Amador Guerrero, member of the first provisional junta and first constitutional president, respectively, worked for the railroad company (Linares 1989, 45). 6. The Panamanian Railroad Company refused to transport Colombian troops from Colón to Panama City and William Nelson Cromwell, lawyer for the Railroad Company, helped to get Washington’s approval for the separatist movement (Linares 1989, 61–93; Teran 1976, 188, 181–183). 7. The agreement secured access by the local merchants to the workers brought by the United States to build the Panama Canal. Furthermore, it restricted the ability of the United States to compete with local merchants for the market (Castillero Pimentel 1988, LVII-LXV). 8. The treaty increased the annuity paid to Panama and eliminated Clause 1 of the “Hay-Bunau Varilla Treaty,” which had given the United States the right to defend the independence of Panama (Castillero Pimentel 1988, LXXXIIIXCI). 9. The major industrial complexes were in clothing and shoe manufacturing, breweries, cement and other construction material, and milk and its derivatives. Many of the immigrants who had earlier been incorporated into the commercial elite and had taken advantage of the Canal Zone market now sought to invest and take advantage of the new industrial opportunities.

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10. After Panama’s independence from Spain on November 21, 1821, Panamanian elites decided to form part of the Republic of New Granada. 11. Mayor Bocok as superintendent of Santo Tomas Hospital; Dr. Osterhcut, vice-consul of the United States, as official doctor of the Province of Bocas del Toro; Addison T. Ruan and Mr. Morrel as comptroller and sub-comptroller general, and the infamous Mr. Albert Lamb, who served for many years as inspector general of the National Police (Cuestas Gómez 1990, 57). 12. For a detail account of United States intervention in Panama, see Castillero Pimentel (1988), Cuestas Gómez (1990), Conniff (1992), LaFeber (1989). 13. The openness of Panama’s economy makes it a haven for money laundering and other shady dealings. The commercial elite has taken advantage of this fact and participated and benefitted greatly from the illicit activities. 14. It is worth noting that the legislative branch in Panama is unicameral and traditionally has had an average of 60 members. While the legislative branch has traditionally been subordinate to the executive, it nonetheless has served to give access to the State to the commercial elite. 15. Payment for Canal workers was divided between those paid in gold who were on the “gold roll,” and those paid in silver who were on the “silver roll.” The former was exclusively the domain of U.S. citizens, while the latter was for non-U.S. citizens. All Panamanians—white or not—were paid in silver. 16. In 1949, with the death of the president, the National Guard recounted the votes of the 1948 elections and declared that Arnulfo Arias had won after all. He was then inaugurated president, only to be violently overthrown in 1951. 17. The Republican Party had supported the liberal government of Marcos Robles (1964–1968). In fact, Dominador Kaiser Bazán had been vice-president during the Robles government. Toward the beginning of 1968, however, he broke with Robles and supported efforts to impeach him. For his efforts, he was rewarded by Arias, who made him his vice-presidential running mate in 1968. 18. Arnulfo Arias married a daughter of Enrique Linares. The Linares family was part of the urban bourgeoisie during the nineteenth century. Enrique Linares held several top bureaucratic positions during the early period of the republic. His scions have also served in government. One of his grandchildren, Julio Linares, was minister of foreign affairs during the Guillermo Endara administration (Linares 1989). 19. They elected three deputies to the 1946 National Constituent Assembly. 20. The United States prohibited the sale of goods by Panamanian merchants in the Zone and restricted access by those merchants to the ships crossing the Canal. 21. See, Diamond, Linz, and Lipset (1988); O’Donnell, Schmitter, and Whitehead (1986); DiPalma (1990); Field and Higley (1978) and (1980); Gunther, Sani, and Shabad (1986); Higley and Burton (1989); Higley, Field, and Groholt (1976); Higley and Moore (1981); Lane (1988); Lijphart (1977); McDonough (1981); Prewitt and Stone (1973); Putnam (1973), (1976), and (1993); Rustow (1970); Sartori (1987).

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3

An Enduring Relationship: The Military and Politics in Twentieth-Century Panama

1. The ideology developed at the National Military Academies became known as “The National Security Doctrine.” The doctrine stressed the role of the military as guarantor of the sovereignty and integrity of the nation from external, as well as internal enemies. 2. In chapter 2, I spoke of the legal pillars (Article 136 of the National Constitution and Articles 1 and 7 of the Hay-Bunau-Varilla Treaty) that sustained the protectorate status. 3. Independent newspaper founded on February 7, 1947, by the intellectual Manuel Maria Valdés. 4. The Caja de Ahorros and the Banco Feduciario had a close financial relationship. The former was the first savings and loan institution in the country catering to the small depositor and borrower, particularly small business. 5. The 1941 Constitution significantly increased the powers of the presidency and placed racial and ethnic restrictions on citizenship and immigration. 6. He was a first cousin of Roberto F. Chiari, patriarch of the family and future president of Panama. 7. Remón’s party, the National Patriotic Coalition, managed to win the 1956 elections, but lost power in 1960 to the liberal Roberto F. Chiari. By 1968, the National Patriotic Coalition had disappeared as a political entity. 8. The Liberal Party split between supporters of the government and the opposition. Former-president Roberto Chiari (1960–1964) led a faction of the Liberals that supported the opposition. Furthermore, the opposition could count on the support of the Republican Party, controlled by major sugar-producing industrialists, Marcel Penso and Max del Valle; the latter was Robles’s first vicepresident. The second vice-president, Bernardino González Ruiz, leader of the Democratic Action Party, also abandoned the government. 9. The Panamanian constitution prohibited the incumbent administration from using the power and resources of the government to support a candidate during the presidential elections, though of course, it was rarely adhered to. 10. De la Espriella would later serve in the military controlled government, including as vice-president (1978–1981) and president (1981–1983). 11. Evidence for his support of neoliberal policies can be found in a speech entitled “¿A donde estamos y hacia donde vamos?, given to the XXVI Annual Conference of Business Executives, May 7–10, 1992, sponsored by The Panamanian Association of Business Executives. Chapman was minister of Planning and Economic Policy during the 1994–1999 period. 12. Most companies operating in the Free Zone pay no income taxes, capital gains tax on the sale of assets held over two years, or a municipal tax. In addition, no Panamanian import or export taxes, excise duties, or consular fees are

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13.

14.

15.

16.

17.

18.

19.

165

levied on goods entering or leaving the Colon Free Zone, unless they are being sold to Panama. “Cabinet Decree No. 238” on July 2, 1970, reorganized Panama’s banking system, allowing both greater stability and efficiency. The decree abolished paper banks, requiring a minimum paid-in capital of $250,000, established new regulations for reserves and capital structure in domestic banking, and created the National Banking Commission, with regulatory authority. In addition, the decree added flexibility in bank licensing and provided significant incentives to attract offshore banking to Panama (Comisión Bancaria Nacional 1986). Including enterprises to provide the basic needs of water, electricity, and phone services (IDAAN, IRHE, and INTEL respectively) (Gandásegui 1982). The “1972 Labor Code” would become a point of contention between the bourgeoisie and the military regime. By 1976, however, the former was able to water down the effects of the Labor Code with the passage of Law No. 95. This legislation attempted to loosen many perceived rigidities of the “1972 Labor Code.” The code made collective bargaining mandatory for most private companies, payroll deduction of union dues automatic, wage reductions illegal, and worker dismissals extremely costly. The code strengthened the relatively weak labor movement by increasing the number of workers that belonged to trade unions. Between 1972 and 1976, an average of 5,083 new workers joined unions annually (Dialogo Social 1983:13; Gandásegui, Saavedra, Achong, and Quintero 1990, 127–129). The business leaders exiled included: Alberto Quirós Guardia, Roberto Eisenmann, Rubén Darío Carles, Guillermo Ford, Antonio Domínguez, Iván Robles, Winston Robles, Darío Santamaría, Porfirio Samudio, Gilberto Álvarez, and Jaime Aizpurúa. In this sense, the word elite is used in its broader meaning to mean all individuals who, by virtue of their leadership position within peak labor and business organizations, and/or their positions within government (including the military), have or may have influence on public policy. The first treaty was signed by Franklin D. Roosevelt and Harmodio Arias. The treaty increased the annuity paid to Panama by the U.S. government, opened the zone market to local merchants, and eliminated the right of the United States to guarantee the independence of Panama. The second treaty is the “Remón-Eisenhower Treaty.” A national referendum to approve the new treaties was held on October 23, 1977, with 67 percent voting to approve the treaties and 33 percent voting No (Escobar Bethancourt, 1981, 288). Romulo Escobar Bethancourt, an advisor to Omar Torrijos and one of the negotiators of the treaties, states that “the political opposition saw in the treaties a triumph for General Torrijos, and therefore, his consolidation as head of government and leader of the movement to recover the Canal Zone; as a result, they opposed the new treaties” (Ibid: 286). The victory of the treaties was, therefore, taken as a sign of popular support for the policies of the regime.

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NOTES

20. Article 277 made Omar Torrijos “Maximum Leader of the Panamanian Revolution.” 21. The National Council of Legislation and the National Assembly of Municipal Representatives were created by the 1972 Constitution as the legislative branch of the new government. The latter was composed of municipal representative elected in each of the Corregimientos in the country. The representatives then elected the members of the National Legislative Council, which was supposed to advise the president on legislative matters. Both, in fact, acted under the orders of the commander of the National Guard.

4

Ending the Relationship: Economic Crisis, Political Opposition, and the U.S. Military Invasion, 1981–1989

1. The membership of the commission was an eclectic mixture of prominent political party activists (both supporters and opponents of the regime) and constitutional scholars: Jorge Fábrega, Nader A. Pitty, Humberto Ricord, Carlos Bolívar Pedreshi, Campo Elías Muñoz, Guillermo Endara, Oydén Ortega, Fernando Manfredo, Carlos Enrique Landau, Hirisnel Sucre, José Antonio Sossa, Roberto Arosemena, Mario Galindo, Emeterio Miller, Roberto Alemán, César A. De León. The commission reflected the efforts of the regime to build consensus with the political opposition. 2. The reforms were approved by a vote of 85.5 percent in favor and 11.9 percent against (the remaining ballots were spoiled). In an indication of growing alienation with the political regime, the abstention rate rose from a very low 2.7 percent, for the 1977 treaty ratification referendum, to 33.2 percent. 3. Law 20 of September 29, 1983, reorganized the National Guard, in an attempted to strengthen its organizational and professional base. The law went on to concentrate power in the hands of the commander in chief of the new Panamanian Defense Forces (PDF) (Ley 20 de 29 de septiembre de 1983, Gaceta Oficial, Organo del Estado, No. 19.909, viernes, 30 de septiembre de 1983, Panamá, República de Panamá, 1–8). 4. See, Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, http://www.pancanal.com/eng/legal/neutrality-treaty.pdf. 5. The binational bodies were: The Joint Committee; The Combined Board; The Coordinating Committee; The Panama Canal Commission Supervisory Board; The Consultative Committee; and The Joint Committee on the Environment. The Joint Committee and Combined Board, both military entities, are discussed in a separate section entitled “U.S. Military Role in Implementation of the Panama Canal Treaty—Overview.” The Coordinating Committee was structured and functioned much like the Joint Committee. Officials of the Panama Canal Commission and Government of Panama made up this

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6.

7. 8. 9.

10. 11.

12.

13.

14. 15. 16. 17.

167

committee, which met on an as-required basis to discuss and resolve treaty issues impacting the Panama Canal Commission, its operations and maintenance, and its employees. Issues which could not be resolved by this committee or by the Joint Committee could have been elevated to the diplomatic level through the U.S. Embassy for resolution. The Panama Canal Commission Supervisory Board supervised the Commission, which, in turn, ran the Canal. The Consultative Committee was designed to be made up of an equal number of high-level representatives of both countries, who reviewed matters of policy concerning the operation of the Canal. Members were to advise both governments on such matters as tolls, employment and training, and international policies concerning the Canal. The Joint Committee on the Environment, with an equal number of representatives of the Unites States and Panama, met periodically to review treaty actions having an impact on the environment. Members made recommendations to the two governments on ways to avoid adverse environmental impacts of proposed treaty-related actions. Agreement in implementation of article IV of the Panama Canal Treaty (with annexes and agreed minutes). Signed at Washington on 7 September 1977. http://untreaty.un.org/unts/60001_120000/9/26/00017274.pdf. Ibid, Article III. “Panama Quits Joint Exercises,” The New York Times November 27, 1987. For a discussion of the state of U.S.-Panama relations in the late 1980s, see U. S. Congress Senate. Committee on Foreign Relations. Subcommittee on Western Hemisphere Affairs. The Situation in Panama. 99th, 2d Session (Hearings, March 10-April 21, 1986.) Washington: GPO, 1986 It is worth noting that the Republican Party and factions of the Liberal Party had supported the candidacy of Arnulfo Arias in the 1968 elections. James Cason, a second-ranked political officer at the U.S. embassy in Panama, conducted an extensive analysis of the election returns, in which he concluded that Arnulfo Arias had won by at least 4,000 votes. Cason went on to argue that there had been ballot stuffing, falsification of documents, systemic rigging of the vote count, and a pattern of rulings by the Electoral Tribunal that guaranteed a victory by Barletta (See Dinges 1990, 195–196). CONATO was founded in 1970 as a heterogenous umbrella organization that encompassed five national labor confederations and numerous federations and individual unions. The organization became a major supporter of Torrijos’s policies, and a fierce defender of the 1972 Labor Code. A number of corruption cases involving the armed forces surfaced during the same period. Among the most celebrated were the purchase of a French-made helicopter, in which officers had allegedly received kickbacks, and the gold fixtures installed in the bathroom of an officer’s home. Interview with Ernesto Pérez Balladares, Panama City, November 11, 1992. Interview with Nicolas Ardito Barletta, Panama City, December 4, 1992. For accounts of the Ardito Barletta’s presidency and his overthrow, see Dinges 1990; Scranton 1991; and Koster and Sanchez 1990. Interview with Miguel Antonio Bernal, Panama City, October 7, 1992; Interview with Guillermo Sanchez Borbón, Panama City, December 3, 1992.

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18. 19.

20.

21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37.

38.

NOTES The latter explained in excruciating detail, from “confidential sources that had leaked the information to him,” how Spadafora was killed. The details of the murder can be found in Koster and Sanchez Borbón 1990, 33. Interview with Jorge Ritter, Panama City, January 12, 1993. Andrew Zimbalist and John Weeks (1991) argue that Noriega’s increasing reluctance to involve Panama in U.S. policy to support the Nicaraguan Contra forces was a primary reason why the United States sought the general’s removal from power. The document was made public by Díaz Herrera in June 1987 and is reproduced in Velázquez 1993: 94–97. To read Díaz Herrera’s account of the agreement and of his relationship with Noriega, see Díaz Herrera, 1988. For a complete and detailed account of the protests and government reactions see, Jason Pérez, 1993: 175–191. Interview with Roberto Brenes, Panama City, December 7, 1992. Interview with Aurelio Barría, Panama City, April 19, 1993. Interview with Jorge Ritter, Panama City, January 12, 1993; Interview with Mario Rognoni, Panama City, May 6, 1993. Interview with businessmen who wanted to remain anonymous, Panama City, November 26, 1992. Ibid. Interview with Roberto Arosemena Jaén, Panama City, January 23, 1993. Interview with Roberto Brenes, Panama City, December 7, 1992. Interview with Fernando Boyd, Panama City, November 27, 1992. Interview with Roberto Brenes, Panama City, December 7, 1992. Interview with Gilberto Mallol, Panama City, December 9, 1992. The document was provided to the author by Romulo Escobar Bethancourt in an interview conducted in Panama City on January 28, 1993. Interview with Romulo Escobar Bethancourt, Panama City, January 28, 1993. Personal communication with Ricardo Arias Calderón, May 23, 2001. The Electoral Code stipulated that parties had to receive at least 5 percent in the presidential ballot in order to retain their legal recognition. Personal communication with Ricardo Arias Calderón, May 23, 2001; Interview with Fernando Boyd, Panama City, November 27, 1992. The coalition included a faction of the Liberal Party headed by former Minister of Government and Justice Rodolfo Chiari de León; a faction of the Republican Party that was opposed to the leadership of former President Delvalle; a faction of the Labor Party led by Ramon Sieiro, Noriega’s brotherin-law; the Revolutionary Panameñista Party; the People’s Party (the traditional Communist Party of Panama); the Democratic Worker’s Party; and the Nationalist Action Party. Most of these parties had few supporters and under normal circumstances would have never reached the threshold required for legal recognition. However, they were helped by the government in an effort to inflate the extent of their popular support. Interview with Romulo Escobar Bethancourt, Panama City, January 28, 1993; Interview with Mario Rognoni, Panama City, May 6, 1993.

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5 Demilitarization and Elections: Institutional Reconversion in Post-Invasion Panama 1. “Decreto de Gabinete No. 38 de 10 de febrero de 1990,” Gaceta Oficial, No. 21, 479 (20 de febrero de 1990). 2. “Decreto de Gabinete No. 42 de 17 de febrero de 1990,” Gaceta Oficial, No. 21, 485 (1 de marzo de 1990). 3. The Neutrality Treaty, signed as part of the 1977 canal treaties, stipulates that if Panama cannot meet its obligations to defend the canal the United States may, at its own discretion, take steps to do so. 4. The reforms sparked significant opposition from civil society groups who had fought the Noriega regime in the 1980s. Opponents claimed the proposals amounted to a “re-militarization” of the security apparatus, and thus violated the national constitution. 5. Constitución Política de la República de Panamá de 1972, incluye las reformas y el acto constitucional de 1983 (Panamá: Gebsa de Panamá, Edición Completa, tomado de la Gaceta Oficial No. 19826 del 6 de junio de 1983, 1989), pp. 27–28 (hereafter cited as Constitución). 6. Constitución, 27. 7. Qualifications for Magistrate of the Supreme Court are specified in Title VII, Chapter I, Article 201. A magistrate must be Panamanian by birth; have reached 35 years of age; enjoy full civil and political rights; hold a university degree, graduating in law; and have completed 10 years of practice as a lawyer or have been a Professor of Law at a university (Constitución, 46–47). 8. Article 127 specifies additional functions of the Electoral Tribunal. The Tribunal has sole power over: recording data on civil status (births, deaths, etc.); issuing of identity cards; implementing, overseeing, and interpreting the Electoral Law, and applying the law to controversies that arise in its implementation; setting punishment of offenses and crimes violating the right to vote, according to the law; organizing, directing and overseeing compilation of the Electoral Registry and resolving controversies, protests, and accusations pertaining thereto; and nominating, as specified by law, the members of electoral bodies, in which legalized parties are guaranteed representation. 9. Constitución, 28. 10. Constitución, 28. 11. “La impugnación es una palabra que pasó a la historia,” La Estrella de Panamá, 11 May 1994, p. A2. 12. The 1994 party platform states, “The PRD proposes a government committed to the effective democratization of Panama; for this it considers fundamental the strengthening of the country’s judicial institutions, specifically in the areas related to political, citizen and individual rights” (Partido Revolucionario Democratico, 1994: 5). 13. Mrs. Moscoso is the widow of Arnulfo Arias, one of the most important figures in twentieth-century Panamanian politics.

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NOTES

14. This project is based on the construction of nine locks, one on the Atlantic side and the other on the Pacific side of the Canal, to allow Post-Panamax size ships, which cannot currently pass through the interoceanic waterway, to be able to navigate through. The approximate cost of this operation, according to the Panama Canal Authority (ACP), would be US$5.25 billion, equivalent to 35 percent to 50 percent of Panama’s GDP. 15. Data is from the AmericasBarometer 2006 and 2008 surveys. Additional information about the surveys is presented in chapters 7 and 8, as well as at www. americasbarometer.org.

6

Reconciliation and Social Dialogue in Post-Invasion Panama

1. For an analysis of the importance of elite reassessment of democracy see (Przeworski 1988). 2. For an evaluation of the role of “cognitive predispositions,” see (Jervis 1976). 3. In cases such as Chile, Venezuela, and Argentina, experiences with dictatorships have promoted a reevaluation on the part of political elites of the advantages of democracy over dictatorship. In the case of Chile, while many praise the economic model introduced by the Pinochet government, few would support a return to the military in power. 4. Distributional coalitions are exclusive and seek to limit the diversity of incomes and values of their membership. They reduce efficiency and aggregate income. Distributional coalitions slow down a society’s capacity to adopt new technologies and to reallocate resources in response to changing conditions, and thereby reduce the rate of economic growth (Olson 1982, 74). 5. Interview with Ernesto Pérez Balladares, Panama City, November 11, 1992. 6. Interview with Romulo Escorbar Bethancourt, Panama City, January 28, 1993. 7. Bethancourt emphasized that Noriega did not pursue the caminatas (walk abouts among the people) that characterized so much of the Torrijos regime. 8. Interview with Tomas Altamirano Duque, Panama City, January 27, 1993. 9. Interview with Nicolas Ardito Barletta, Panama City, December 4, 1992. 10. Interview with Ricardo de la Espriella, Panama City, December 1, 1992. 11. It is worth noting that he also blamed the civilian opposition and the United States of sabotaging the negotiations by having “too many preconditions.” 12. Ricardo de la Espriella served as director of the National Bank and vice-president of Panama during the period in which General Omar Torrijos controlled the government. He became president upon the resignation of President Aristides Royo in 1982. De la Espriella indicated to the author he had supported the policies of the Torrijos regime. 13. President de la Espriella indicated to me the reason he was overthrown were his efforts to bring about free elections.

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14. The interviews with the military officers were conducted simultaneously in Panama City on November 17, 1992. 15. Most of the criticism heaped upon the Endara regime centered on the charge the government was reverting to the corrupt practices of the pre-1968 governments. The criticism stemmed primarily from the fact that many of the officials and supporters of the Endara administration had served in those governments. 16. Guillermo Quijano is the scion of a prominent family within the Liberal Party. His father, Guillermo Elías Quijano, was president of the party in the 1960s and 70s. 17. Interview with Guillermo Quijano, Panama City, November 27, 1992. 18. Interview conducted in Panama City, March 5, 1993. 19. Interview conducted in Panama City, March 18, 1993. 20. Interview conducted in Panama City, December 3, 1992. 21. Interview conducted in Panama City, October 28, 1992. 22. Interview conducted in Panama City, May 6, 1993. 23. Interview conducted in Panama City, January 23, 1993. 24. COCINA was founded in the early 1980s as a “popular” organization opposed to the repressive policies of the military regime and to neoliberal economic policies that the government was implementing at the time. The organization vigorously opposed the election of Nicolas Ardito Barletta in 1984, opposing the views of many in the business community who supported Barletta and his military backers. By 1987, COCINA had been coopted by the National Civic Crusade, led by many of the same businessmen who now opposed the regime. The nature of the movement’s leadership would be a point of contention between various factions of the “civilian” opposition movement. 25. Ironically, the U.S. invasion which Arosemena Jáen so vigorously opposed may have given Panama the opportunity to do exactly that. 26. The National Civic Crusade was founded in 1987 by more than 100 civic groups, many with business ties. The NCC became the main domestic opposition group to the Noriega regime. It received considerable amount of financial and logistical support from the United States. 27. See, “The Bodies in Panama.” New York Times, February 20, 2001, 2001, sec. A. Available at http://query.nytimes.com/gst/fullpage.html?res=9C03 E3D71F30F933A15751C0A9679C8B63&pa r tner=rssny t&emc=rss (accessed June 24, 2009); International Center for Transitional Justice. “Panama.” ICTJ. Available at http://www.ictj.org/en/where/region2/595. html (accessed June 24, 2009); Jackson, Eric. “Review of Panama Truth Commission Report.” NY Transfer News, May 27, 2002. Available at http:// www.blythe.org/nytransfersubs/Covert_ Actions/Review_of_Panama_ Truth_Commission_Report (accessed June 24, 2009); Jacobson, Philip. “States Line Up to Jail Noriega.” The First Post, February 15, 2006. Available at http://www.thefirstpost.co.uk/1611,features,states-line-up-tojail-noriega (accessed June 24, 2009); “Panama: Truth Commission Delivers its Final Report on Victims of the 1968–1988 Military Regime.”

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28.

29. 30. 31. 32. 33.

34.

35. 36.

37. 38. 39.

NOTES NotiCen: Central American & Caribbean Affairs, May 2, 2002. Available at http://www.allbusiness.com/central-america/196555–1.html (accessed June 24, 2009); U.S. Department of State. “Boletines de Prensa 2007: Informe Anual Sobre Prácticas de Derechos Humanos en Panamá.” US Embassy in Panama. Available at http://spanish.panama.usembassy.gov/ pr030107.html (accessed June 24, 2009); Vivanco, José M. “Carta a La Presidenta Mireya Moscoso.” Human Rights Watch, 2002. Available at http://www.hrw.org/spanish/cartas/2002/moscoso.html (accessed June 24, 2009). The political context of 1993 was propitious for such a dialogue because: (1) Opponents of the extant Endara administration sought to neutralize the neoliberal policies implemented by the government; and (2) The government was concerned with establishing ground rules for the forthcoming 1994 elections, which they knew would be difficult and could, as it did happen, result in the return to power of the PRD. For its part, the PRD’s interests lay in creating the assurances that the elections would be fair, and that in the event they managed to win, they would be allowed to take office. See, http://www.undp.org.pa/dialogos-panama/procesos-historicos. Land areas adjacent to the Canal formerly controlled by the United States. Interview with Raúl Leis, Panama City, Panama, September 25, 2004. Interview with Ernesto Pérez Balladares, Panama City, Panama, September 10, 2004. While outright manipulation of the elections was not very likely given the post-invasion reforms, there were voices in Panama that advocated severely curtailing the PRD. The presidential candidates were Mireya Moscoso (Democratic Alliance), Rubén Dario Carles (Alliance for Change ‘94), Samuel Lewis Galindo (Alliance for National Concertation), José Salvador Muñoz (Doctrinarian Party of Panama), Ernesto Pérez Balladares (United People’s Alliance) and Eduardo Vallarino (Christian Democratic Party). Interview with Ernesto Pérez Balladares, September 10, 2004, Panama City, Panama. In preparation for the meeting, UNDP conducted a series of meetings with government and civil society leaders with a view to identifying their expectations for the dialogue. The results of these meetings was a sense that political actors were prepared to engage in serious dialogue on important social and political issues. Report of the Third National Human Unity and Development Meeting, Bambito III, UNDP (United Nations Development Program). For detailed information regarding the model for negotiation, see Solórzano 1997, 42. Ligia Elizondo, “Coronado III: un peldaño geométrico más,” Panama, La Prensa, Sunday October 6, 1996, 42, quoted in Solórzano 1997.

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7 Mass Democratic Culture in Panama: The Meaning of Democracy 1. The surveys employ a stratified multi-stage cluster sample with a minimum size of 1,500, providing a margin of error at the 95 percent confidence interval of +/- 2.5 percent. Additional information about the AmericasBarometer can be obtained at www.americasbarometer.org. The author wishes to thank Mitchell A. Seligson, director of the AmericasBarometer, for his generosity in permitting the use of the data. 2. A multinomial analysis, where the “normative” concept is the reference category, was performed in order to measure which factors are most determinative of the conceptions of democracy. The results indicate statistically significant differences in the education and wealth variables between people with normative and utilitarian concepts. We also find that people with “empty” views differ significantly from people with normative values in terms of the size of the area where they live. 3. The error bars indicate that the differences between the categories of education are statistically significant, with the exception of the negative conceptions. This denotes that the differences between the levels of education are due to a real difference in public attitudes and not to random error of the sample.

8 Supporting Stable Democracy: System Support and Political Tolerance 1. This finding is replicated in other countries. 2. For greater analysis of the effects of corruption and crime on democratic values in Panama, see (Pérez 2008) 3. The items measure trust in the courts, institutions, on whether the system protects basic rights, pride to live under the Panamanian political system, and extent to which the system deserves support. These items have been found to be reliable in measuring broad support for the political system, rather than the extant government. 4. See Stouffer 1955; Seligson and Caspi 1983; Seligson and Caspi 1983b; Seligson and Caspi 1982; Sullivan, Pierson, and Marcus1982; Gibson 1993; Gibson, 1992a; Gibson 1992b; Gibson, 1988; Gibson 1989; Gibson and Bingham 1985. 5. For a more thorough discussion of this topic, see the section on political tolerance in (Seligson 2002, 45–46). 6. In the case of Panama, the data show an increase from 10 homicides per 100,000 persons in 2000 to 19 in 2008. The evidence suggests that crime undermines political legitimacy and reduces support for democratic values (see Pérez 2003).

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NOTES

9 Conclusions and Implications: Can Democracy Emerge after an Invasion? 1. Many opponents argue that just like a “leopard cannot change its spots,” the PRD still encompasses militaristic or authoritarian tendencies. While some in the PRD may not have fully embraced democracy, and, to a certain extent, those who do have done so for instrumental rationality, the fact remains that the party leadership has contested every single election since the invasion accepting their loses without conflict or violence.

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References

Primary Documents Consulted Panamanian Government Documents República de Panamá, Directorio Bancario, Comisión Bancaria Nacional, 1984 and 1990. ———, Directorio de Establecimientos, Contraloria General de la República, 1990 Need date (1990) ———, Gaceta Oficial, 1990, “Decreto de Gabinete No. 38 de 10 de febrero de 1990,” No. 21, 479 (20 de febrero de 1990). ———, Memorias de la Secretaria de Agricultura y Educación, 1940 and 1942. ———, Memorias de la Secretaria de Agricultura y Obras Publica, 1930, 1932, 1934, 1936. ———, Memorias de la Secretaria de Fomento e Industrias, 1918, 1920, 1922, 1924. ———, Memorias de la Secretaria de Fomento y Obras Publicas, 1926, 1928. ———, Memorias de la Secretaria de Gobierno y Justicia, 1918, 1920, 1922, 1924, 1926, 1930, 1932, 1934, 1936, 1938, 1940, and 1942. ———, Memorias de la Secretaria de Hacienda y Tesorero, 1920, 1924, 1926, 1928, 1930, 1932, 1940, 1942. ———, Memorias de la Secretaria de Instrucción Publica, 1930 and 1932, 1934, 1936. ———, Memorias de la Secretaria de Relaciones Exteriores, 1918, 1920, 1922, 1924, 1926, 1928, 1934, 1936, 1938, 1940, and 1942. ———, Memorias del Ministerio de Agricultura, Comercio e Industrias, 1954, 1955, 1956, 1962, 1964, 1966, 1967, 1968. ———, Memorias del Ministerio de Comercio e Industrias, 1970–1988. ———, Memorias del Ministerio de Educación, 1946–1948, 1954, 1955 and 1956. ———, Memorias del Ministerio de Educación, 1963, 1964, 1967, 1968. ———, Memorias del Ministerio de Gobierno y Justicia, 1946–1948, 1951, 1954, 1955, and 1956, 1968–1988. ———, Memorias del Ministerio de Hacienda y Tesoro, 1946–1948, 1954, 1955, 1956, 1963, 1964, 1967 and 1968–1988. Pérez

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REFERENCES

República de Panamá, Memorias del Ministerio de Obras Publicas, 1963, 1964, 1967 and 1968. ———, Memorias del Ministerio de Planificación y Política Económica, 1968–1989 ———, Memorias del Ministerio de la Presidencia, 1969–1976, 1980–1988. ———, Memorias del Ministerio de Relaciones Exteriores, 1946–1948, 1954, 1955, 1956, 1962, 1964, 1966, 1967, 1968–1988. ———, Memorias del Ministerio de Salubridad y Obras Publicas, 1946. ———, Memorias del Ministerio de Trabajo, Previsión Social y Salud Publica, 1948, 1954, 1955 and 1956, 1962, 1964, 1966–1968. ———. 1953. Law 44 of December 23, 1953, by which the National Guard is created and Law 79 of 1941 is repealed. Gaceta Oficial, No. 12.255, December 24, 1953. ———. 1983. Law 20 of September 29, 1983, by which the Panamanian Defense Forces are organized. Gaceta Oficial, No. 19.909, September 30, 1983. Ministerio de Planificación y Política Económica, 1978, Estrategia para el desarrollo nacional, 1970–1980. Panamá: República de Panamá.

United States Government Documents Agreement in implementation of article IV of the Panama Canal Treaty (with annexes and agreed minutes). Signed at Washington on 7 September 1977. http://untreaty.un.org/unts/60001_120000/9/26/00017274.pdf. U. S. Congress, Senate. Committee on Foreign Relations. Subcommittee on Western Hemisphere Affairs. The Situation in Panama. 99th, 2d Session (Hearings, March 10–April 21, 1986.) Washington: GPO, 1986. ———, Commitee on Foreign Relations, Hearings Before the Subcommittee on Terrorism, Narcotics, and International Communications. 100th Cong. 2nd sess., 1988, pts 2 and 3. ———, Subcommittee on Terrorism, Narcotics, and International Communications. Report of Drugs, Law Enforcement and Foreign Policy. Washington, D.C.: USGPO, 1989. U.S. National Security Council, Memorandum, Walter W. Rustow to President Lyndon B. Johnson, undated, Declassified Documents Research System (DDRS), No. 1991–527. U.S. Department of State, Telegram, Ambassador Charles Adair to Secretary of State Dean Rusk, March, 1968, DDRS, 1981–372A. U.S. Department of State, Telegram, Ambassador Charles Adair to Secretary of State Dean Rusk, March, 1968, DDRS, 1981–372B. U.S. Department of State, Telegram, Secretary of State Dean Rusk to Ambassador Charles Adair, March, 1968, DDRS, 1981–371C.

Newspapers and Journals Consulted Acción Comunal Central American Report Critica

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El Día El Ejecutivo El Heraldo El Mundo El Panamá America El Tiempo Gaceta Oficial Informe Diario La Calle La Estrella de Panamá La Hora La Nación La Prensa The New York Times Revista Análisis Revista El Ejecutivo Revista Industria Semana Voz Universitaria The Washington Post Industria

Interviews Conducted The interviews mentioned here represent a fraction of the more than 100 interviews conducted for this study between 1992 and 2006. These are individuals whose direct quotes are used in chapters 3, 4 and 6. Ernesto Pérez Balladares, former president of Panama and leader of the PRD, Panama City, Panama. November 11, 1992 and September 10, 2004. Nicolas Ardito Barletta, former president of Panama, Panama City, Panama. December 4, 1992. Miguel Antonio Bernal, Political activist and university professor, Panama City, Panama. October 7, 1992. Guillermo Sanchez Borbón, journalist and opponent of Noriega regime, Panama City, Panama. December 3, 1992. Jorge Ritter, minister of foreign affairs, 1988–89, supporter of Omar Torrijos and Manuel A. Noriega, Panama City, Panama. January 12, 1993. Roberto Brenes, Businessman and leader of the National Civic Crusade (NCC), Panama City, Panama. December 7, 1992. Aurelio Barría, Businessman and leader of the NCC, Panama City, Panama. April 19, 1993. Roberto Arosemena Jaén, Political activist and intellectual, Panama City, Panama. January 23, 1993. Fernando Boyd, Businessman and leader of the NCC, Panama City, Panama. November 27, 1992.

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REFERENCES

Romulo Escobar Bethancourt, Friend and collaborator of Noriega, Panama City, Panama. January 28, 1993 Gilberto Mallol, Leader of the NCC. Panama City, Panama. December 9, 1992 Mario Rognoni, Legislator and friend & supporter of Noriega, Panama City, Panama. May 6, 1993. Tomas Altamirano Duque, former vice-president of Panama, legislator and PRD leader, Panama City, Panama. January 27, 1993. Ricardo de la Espriella, former president of Panama. Panama City, Panama. December 1, 1992. Guillermo Quijano, Businessman, leader of the NCC, and former minister of housing. Panama City, Panama. November 27, 1992. Colonel (r) Daniel Delgado Diamante, former PDF member and minister of government and justice under president Martin Torrijos, Panama City, Panama. November 17, 1992 Colonel (r) Carlos Arosemena King, former PDF member, Panama City, Panama. November 17, 1992 Major (r) Luis Delgado, former PDF member, Panama City, Panama. November 17, 1992 Aura Emerita Guerra de Villalaz, Supreme Court Justice, Panama City, Panama. March 5, 1993. Carlos Lucas López, Supreme Court President, Panama City, Panama. March 18, 1993. Eric Santamaría, legislator and leader of the Christian Democratic party, Panama City, Panama. December 3, 1992. José A. Sosa, legislator, leader of the Christian Democratic party and attorney general, Panama City, Panama. October 28, 1992. Raúl Leis, Sociologist, political activist and university professor, Panama City, Panama, September 25, 2004.

Books and Articles Aberbach, Joel D., Robert D. Putnam, and Bert A. Rockman. 1981. Bureaucrats and politicians in western democracies. Cambridge, MA: Harvard University Press. Abramson, Paul R. 1980. Comments on Sullivan, Piereson, and Marcus. American Political Science Review 74:780–81. Adames Mayorga, Enoch. 1990. Política social e invasión: las opciones del estado panameño. Panamá: Instituto de Estudios Nacionales, IDEN Alfaro, Ricardo J. 1974. Esbozos biograficos. Panama: Instituto Nacional de Cultura. Alford, R., and H. Scoble. 1968. Community leadership, education, and political behavior. American Sociological Review 33:259–271. Almond, Gabriel. 1960. Introduction. in The politics of the developing areas, edited by G. Almond and James Coleman. Princeton: Princeton University Press. Almond, Gabriel, and Sidney Verba. 1963. The civic culture. Boston: Little Brown. Almond, Gabriel, and Sidney Verba. 1980. The civic culture revisited. Boston: Little Brown.

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Index

Abrams, Elliot 73 Acción Comunal 28, 39–40, 179 Adair, Charles 47, 176 ADO 69–70 ADOC 76–7, 85 Afghanistan 1, 153 Agency for International Development 77 Agrarian Reform Commission 52 Agustín Arángo, José 15, 18, 162 Air and Maritime National Services 91, 97 Alemán, Alfredo 26 Alemán, José Miguel 106 Alemán, Roberto 166 Alianza Ciudadana Pro Justicia 146 Alianza Democrática 69, 76, 85 alliance 7–8, 10, 13, 28, 32, 35–7, 45, 49, 56, 59–60, 62, 84, 89, 172 multi-class alliance see alliance Altamirano Duque, Tomas G. 55 Alternative Conceptions of Democracy 135–7 Amador Guerrero, Manuel 15, 17, 162 AmericasBarometer 2, 9, 131, 133–5, 138, 144, 150, 170, 173 amnesty 120 ancien regime 13, 32, 44, 61, 155, 162 Andean Regional Initiative 97 Annual Conference of Business Executives 57, 164 anti-drug center 95 APEDE 56, 76

Pérez

Ardito Barletta, Nicolas 70, 73, 167 Arias, Arnulfo 26–30, 32, 38, 40, 42–3, 46–50, 60–1, 69–70, 79, 81, 84, 121, 163, 167, 169, 179–80 Arias, Jaime 51 Arias Calderón, Ricardo 16, 79, 84–5, 91, 118, 168, 179 Arias government see Arias, Arnulfo Arias Madrid, Harmodio 28, 39–40, 165, 189 Arias regime see Arias, Arnulfo Arias-Roosevelt Treaty 21, 40, 162 Arias’s supporters see Arias, Arnulfo armed forces 10, 25, 36, 38–40, 42, 49, 58–9, 64, 72, 74–5, 81, 90, 93–4, 167 prohibiting see armed forces armed institution see armed forces Armitage, Richard 82 army see armed forces Arnulfista Party 80, 89, 103–4, 106, 110, 119, 125, 127, 157 Arnulfo Arias’s Panameñista party see Arnulfista Party Arnulfo’s inheritance see Arias, Arnulfo Arosemena, Carlos 27 Arosemena, Florencio Harmodio 27–8, 39 Arosemena, Justo 27, 180 Arosemena, Leopoldo 27 Arosemena, Pablo 17, 24, 27

194

INDEX

Arosemena, Roberto 166 Arosemena family 26 Arosemena Jaén, Roberto 79, 118, 168, 171, 177 Asociación de Miembros de la Fuerza Pública (AMIFUP) 93 asymmetrical power relations 9 Auoridad Regional Interoceanica (ARI) 128 Authentic Liberal Party 85 Authentic Panameñista Party PPA 69 authoritarian see authoritarianism authoritarian regimes 36–7, 74, 138, 156, 189 authoritarian system see authoritarianism authoritarianism 2, 5–6, 11, 112, 138, 140, 148–9, 179, 183–5, 189–90 autonomy 5, 40, 65, 74, 99–100 Autoridad del Canal de Panamá (ACP) 170 Axis Powers in World War II 30, 131 Bambito meetings 123–7, 172 Banco Nacional de Panamá (BNP) 80 banking center, international 19, 21, 43, 51, 53, 69, 91, 165 Barletta, Nicolas Ardito 53, 69–73, 78, 114–15, 167, 170–1, 177 Barletta’s resignation see Barletta, Nicolas Ardito Barría, Aurelio 77, 79, 81, 168, 177 behavior 1, 6, 13, 35, 50, 61, 87, 99, 111–12, 116, 131, 155–6 ethical 129 political 112, 158, 178, 186 beliefs 6, 16, 35, 61, 87, 111–12, 116, 129, 143, 188 foreign policy 183 fundamental normative 112 political 112 Bernal, Miguel Antonio 58, 71, 167, 177 Blades, Rubén 104–5, 125

Pérez

Blandón, Jose 82 Blandon Plan see Blandón, Jose BNP (Banco Nacional de Panama) 80 bourgeoisie 15, 26–32, 36, 42–3, 50, 56–7, 62, 69–70, 163, 165 Boyd, Alfredo A. 26 Boyd, Aquilino 85 Boyd, Augusto Samuel 26 Boyd, Federico A. 15, 26 Boyd, Fernado 76 Boyd, Fernando 79, 81, 168, 177 Brenes, Roberto 76–7, 79, 81, 168, 177 Britton, Floyd 122 bureaucratic-authoritarian regimes 36, 186 business 9–10, 20, 32, 50, 53, 56, 62, 71, 73, 75–6, 78–9, 130, 157–8, 171 business community see business business groups see business business sectors see business businessmen 56, 59–60, 70–1, 76, 165, 168, 171, 177–8 Cambio Democrático (CD) 89, 105–7 canal defense contingency plans 66 canal defenses 94 canal economy 25 canal market 57, 162 canal negotiations 56, 68 canal protection 94 canal treaties 15, 24, 38, 40, 45, 56–8, 62, 66, 169 canal users 127 canal workers 21, 163 Canal Zone 15–16, 21, 23, 25, 28, 31, 38–41, 45–6, 57–9, 65, 162–3, 165 controlled 45 Canal Zone Police 39 Capitalism 132, 134, 187–8

INDEX Carles, Rubén Darío 79, 105, 165, 172 Carter, Jimmy 161 Casey, William 73 Castillero Calvo, Alfredo 14, 16, 18, 180 Catholic Church 85, 123, 125, 144 Central American Defense Council 48 Central Intelligence Agency (CIA) 73, 79 Chamber of Commerce 56, 76–7 Chávez, Hugo 106 Chiari, Roberto F. 18–19, 42, 164 Chiari, Rodolfo 18, 55, 162 Christian Democratic Party 32, 69, 84, 107, 126, 172, 178 civilian authorities 64–5, 73, 91–2, 95–6, 115, 158 Civilian Democratic Opposition Alliance 85 class 31 emerging industrial 21, 33, 42 class warfare 56 classes, lower 18, 43, 48 Clayton-Bulwer Treaty 24 clientelism 17, 109 Coalición Liberal Nacionalista (COLINA) 85 Cochez, Guillermo 120 COCINA (Coordinadora Civica Nacional) 71–2, 78–9, 85, 118, 171 Colombia 2, 10, 15, 17, 24, 38–9, 87, 136, 179, 183–4, 187, 190–1 Colombian military 97 Colón Free Trade Zone 19, 53, 165 Comisión Bancaria Nacional 165, 175 commercial elite 8, 10, 13, 16, 20–1, 23–4, 26, 28–9, 33, 44, 51, 61–2, 74–5, 79–80, 155–6, 162–3 commercial interests 7, 19 foreign 15 Communist Party 30–1 Compañia Azucarera La Estrella and Compañia Ganadera 18, 55

Pérez

195

Compromiso Etico Electoral Santa Maria 102, 123 CONATO 71, 74, 78, 167 CONEP 56, 71, 76 conflict 42, 80–1, 93, 112, 130, 140, 174, 184, 187–8 ameliorate 130 ethnic 189 low-intensity 67 confrontations 7, 45, 56, 114, 158 ideological 17 violent 45 congress 26–7, 67, 73, 79, 83, 108, 145, 158, 176 Conservative Party 15–17, 24 Constitution 17, 24–5, 29, 31, 43, 49, 59, 61–5, 69, 93–4, 96, 98–100, 104, 108–9, 164, 169 constitutional reforms see Constitution Construction Chamber, (CAPAC) 50 Contraloria General 175 Coordinadora Civica Nacional see COCINA Coronado meetings 127–30, 172, 182 corruption 28, 42, 71, 77, 89, 104, 106, 109, 116, 118, 134, 139–40, 145–7, 157, 167, 173 crime 97, 100, 140, 145–7, 169, 173, 187 increasing 140 criminal investigations 91–2 crisis 2, 5, 32, 42, 44, 76, 82–4, 111–12, 119, 156–7, 181, 184 Cruzada Civilista Nacional (CCN) see National Civic Crusade (NCC) Cuba 6, 74, 154 culture 2–4, 14, 16, 130, 157, 178, 186 civic see culture Davis, Arthur 79 debt 10, 62, 68–9

196

INDEX

defense 17, 66, 82, 93, 121 budget 65 regional 90 Delgado Diamante, Daniel 38, 178, 181 Delvalle, Eric Arturo 72–4, 78, 83 demilitarization 10, 89–93, 95–9, 101, 103, 109, 113, 119, 157, 159, 169 democracy 1–9, 11, 33, 61, 92–3, 111–19, 124, 130–42, 143, 147–51, 153, 155–9, 170, 173–4, 179–81, 183–91 breakdown of 5, 149 classic theory of 132 constitutional 132 developing 110 direct 132 economic 132 institutional 6, 123 liberal 8 participatory 114 pluralist 132 proletarian 132 representative 132–3 Western 178 democratic governance 3, 7, 111, 117, 127, 129, 131–3, 139, 141, 149, 153–6, 158–9, 161, 187 Democratic Opposition Alliance 69 democratic regime 1–2, 4–7, 62, 87, 89, 103, 109, 135, 143, 147, 154, 184 Democratic Revolutionary Party 89, 104, 158 democratic stability 137, 144, 150, 188–9 democratic success 153 democratic system 5, 85, 113, 118, 129, 132, 137, 143, 157 democratic theory 2, 181, 188 democratic transitions 98, 123, 179, 181, 183

Pérez

democratic values 2–3, 6, 11, 141, 143, 147, 155, 173 democratization 1–2, 6, 11, 58, 66, 98, 149, 153–5, 159, 169, 183, 189–90 DENI 91 dependence, economic 15, 25, 36, 180, 185, 188–9 dialogue, process of 11, 13, 56, 58, 103, 123–6, 128–30, 158–9, 172 Díaz Herrera, Roberto 75, 77–8, 168 dictatorship 49–50, 77, 121, 170, 179, 185, 187 civilian 104 dominant class 14–18, 20, 26, 33, 42, 45, 49–50 drug trafficking 9, 65, 72, 74, 82–3, 90, 95–7, 113, 146, 176, 183 Duque, Carlos 85, 114 Duque family 43 economic crisis 7, 10, 58, 62–3, 69, 72, 137, 166, 189 economic development 4, 16, 38, 49, 129, 155, 191 economic interests 17, 43–4, 57, 155 economic policies 10, 26, 51–2, 55, 62, 71–2, 78, 119, 137, 164, 171 economic reforms 45–6, 72, 124, 187 economic sanctions 7–8, 79–80, 82, 84 economy 10, 14, 16, 19, 21, 42, 50, 61, 67, 76, 79, 87, 155–6 informal 146 service 10, 25, 42, 44, 53, 62, 87, 146 education 28, 52, 124, 136–7, 141, 147, 173, 178 El Panamá América 48, 56, 177 El Salvador 48, 80, 136–7, 158, 187, 189 elections 5–6, 25, 42–3, 49–50, 60–4, 69–70, 77–8, 80–2, 84–6,

INDEX 89–91, 93–5, 97–110, 113–20, 123–5, 132–4, 166–7 competitive see elections first post-invasion see elections Electoral Code 99, 168 electoral fraud 3 organized 28 Electoral Tribunal 8, 10, 54, 70, 84, 86, 89–90, 98–103, 105, 107, 109, 113, 123, 125, 145, 158 elite agreement 49 elite attitudes 6, 9 elite competition 189 elite convergence 7 elite democratic theory 5 elite integration 183 elite interests see elites elite networks see elites elite settlements 156, 180 elite theory see elites elites 1–5, 7, 9–10, 13–16, 18–20, 25, 27–33, 35–6, 40–1, 56–7, 61–2, 74–5, 110–12, 155–8, 181–5, 187–9 Endara, Guillermo 81, 85, 94, 105–6, 114, 116, 118–20, 125, 166, 171–2 Endara administration see Endara, Guillermo Endara government see Endara, Guillermo Escalona, Arnulfo 60, 81, 85 Escobar Bethancourt, Romulo 59, 113, 120, 165, 168, 177 Espriella 26, 51, 63–4, 114–15, 164, 170, 178 executive-legislative relations 108, 157 external debt 68 Fábrega, Jorge 166 FENASEP 74 Filos-Hines Treaty 41 First Provisional Government Junta 18

Pérez

197

Ford, Guillermo 51, 79, 85, 118, 165 foreign affairs 54–5, 59, 106, 119, 163, 167, 176–7, 179, 183, 188 foreign interests 14, 16, 20–1 FRAMPO 60 FRENO (Frente para el NO) 60, 118 Frente Amplio Popular 60 Fuerza Pública 10, 90 government 4, 8–10, 29–32, 41–3, 45–8, 51, 53–7, 68–9, 71–6, 91–4, 103–4, 113–19, 126–32, 138–42, 158–9, 163–73 authoritarian 49, 138–9 democratic system of see government inclusionary military 37, 61 local 31, 97, 128 military-led see government strong-handed 139, 151 groups civic 171 domestic opposition 171 economic 19, 40, 131 middle-class 28 professional 70, 79 Hay, John 23–4 Hay-Buneau-Varilla Treaty 21, 23–4, 162, 164 Hay-Pauncefonte Treaty 24 Herrera, Balbina 105 Hill, General James T. 96 human rights 121–2, 134, 146, 161 ideological consensus see ideology ideological differences see ideology ideology 10, 13, 16–17, 27, 32–3, 35–6, 39, 44, 60–1, 110, 147, 155, 164, 181, 183, 185 IMF (International Monetary Fund) 53, 68–71, 73 import substitution industrialization (ISI) 21, 44, 62

198

INDEX

Inclusionary Military Regime 49 Institutional Protection Service 91 Institutional Truth Commission 121–2, 171 institutionalization 4, 8, 11, 40, 62, 89, 95, 99, 109, 158 institutions 2, 40–1, 58–9, 65, 89–90, 94, 96, 98–9, 128, 133, 143–5, 158–9, 173 judicial 123, 169 Inter-American Commission on Human Rights 146 International Monetary Fund see IMF invasion, military 1–2, 5, 7–8, 10, 35, 60, 62–3, 70–1, 87, 90, 93–5, 111–16, 120–2, 153, 155–9, 174 investments 31, 68 domestic 73 foreign 21, 69 private 10, 53, 62, 68–9 ISI (import substitution industrialization) 21, 44, 62 Isthmus of Panama 10, 13–16, 21–3, 25–6, 29, 37–8, 44–5, 155–6 justice 18, 23, 41, 50, 54–5, 91, 97, 121–2, 134, 146, 178 Justice and Peace Commission 102–3, 123 Kosack, Michael 83 labor 8, 10, 16, 21, 43, 53, 55–6, 62, 68, 71, 73, 83, 113 black 184 mobilization 190 movement 53, 70, 74, 78, 80, 159, 180 labor-business relations 130 Labor Code 53, 73, 159, 165, 167 Labor Foundation 125, 130 Labor Party 60, 69, 168 Lakas, Demetrio 54, 187

Pérez

Latin America 2–4, 6, 11, 14, 17, 33, 35, 58, 68, 90, 95, 104, 106, 153–4, 179–85, 189–90 Latin American Public Opinion Project (LAPOP) 9, 187 law 9, 43, 49, 56, 65, 71, 92–3, 96, 100–1, 108, 120, 134, 159, 165–6, 169, 176 anti-corruption 146 electoral 100, 102, 169 general amnesty 120 international 122 new export incentives 53 leaders 5, 15, 17, 24, 28–9, 31, 39, 41–2, 50, 75–6, 78–9, 84, 123–4, 132, 164–5, 177–8 civilian 86, 93, 116 community 120 economic 122 elected 6 social 11 leadership see leaders leftist 30, 106 Legislative Assembly 64, 91, 128 Legislative Commission 52, 55 legislators see legislature legislature 26, 64, 89, 94, 101, 106, 108–9, 114, 117, 120, 146, 157, 159, 178 legitimacy 4, 6, 44, 71, 81, 99, 131, 143–4, 146, 173, 179, 182 Lewis Galindo, Samuel 51, 172 Liberal Auténtico 104 liberal governments 30, 39, 51–2, 163 Liberal Party 17, 30, 32, 44, 60, 69, 80, 116, 164, 167–8, 171 Liberal Republican Nationalist Movement (MOLIRENA) 69, 85 Liberal Republicano (LIBRE) 69, 80, 107 liberals 15–17, 29–31, 47, 60–1, 133, 164

INDEX

199

Linares, Enrique 163, 184 Linares, Julio E. 17 López, Carlos Lucas 117, 178

109, 113–14, 116–20, 122, 156, 171–2 Moscoso, Mireya 84, 104–5, 121, 169

Maisto, John 77–8 Mallarino-Bidlack Treaty 22, 24 Mallol, Gilberto 76, 79, 81, 168, 177 Manfredo, Fernando 166 Martínelli, Ricardo 97, 105–6, 110 mass attitudes 1–2, 6, 9, 11, 87, 155, 158, 183, 185, 189 democratic culture 131, 133, 135, 137, 139, 141, 173 protests 4, 81 uprisings 41 merchants 14, 18, 31, 33, 157, 163 foreign 15 local 162, 165 local mestizo 20 retail 21 middle classes 26, 28, 33, 39, 42–3, 48, 53, 71, 79, 116, 154 militarism see military military 3, 7–8, 10, 35–8, 40–1, 58–9, 62, 64, 73–4, 86–7, 90, 92–3, 115, 117, 156–7, 164–5 academies 90 bases 41, 46, 58, 128 coup 10, 28, 30, 33, 36, 39–40, 43, 47–50, 59, 62, 80, 83, 86, 118, 120, 155 dictatorships 48, 121 dominance 114 exercises 66–7 government 8, 10, 50–1, 58, 62, 76, 116–18, 156, 162, 185 institution 36, 38, 47, 61, 67, 74, 87, 90, 115, 156 interventions 1, 31, 36–7, 95, 153–4, 183, 191 officers 97, 115, 171 military regime 26, 35–7, 49–50, 53–4, 58, 70–1, 77, 90, 95, 103,

National Assembly 19, 41, 46–7, 57, 70, 72, 94, 97, 108–9, 114, 117, 120 National Civic Crusade (NCC) 8, 71, 75–85, 116, 118, 171, 177–8 National Council of Legislation 59–60, 166 National Council of Private Enterprise 51, 54, 71 National Defense Council 91 National Democratic Union 69 National Endowment for Democracy (NED) 77–8 National Guard 8, 10, 32–3, 38–9, 43–4, 46–50, 57, 60–5, 74–5, 114–15, 117, 163, 166, 176, 188 National Patriotic Coalition 43, 164 National Police 28, 38–43, 91–4, 96–7, 119, 163 Organic Law 97 national security see security national strike 56, 71, 74, 76 negotiations 8, 45, 57, 80–2, 84, 86, 95, 113, 126, 170, 172 democratic transition 81 neoliberal policies 10, 51, 62, 78, 83, 164, 171–2, 180 Neutrality Treaty 169 Nicaragua 77, 80, 136, 154, 158, 184 Noriega, General Manuel Antonio 10, 18, 37, 62, 64, 66, 71–5, 77–87, 98, 101, 106, 113–17, 120–1, 168–71, 177–8, 186

Pérez

opposition civilian 8, 10, 37, 62, 71, 75, 86, 170 coalition 61, 69–70, 81 elite 75 moderate 80

200

INDEX

PALA (Partido Laborista) 60, 69, 107 Panama economy 13, 21, 33, 44, 62, 67–8 elites 7–8, 10, 13, 16, 19–20, 25, 32, 61–2, 79, 87, 113, 119, 155–6, 162–3 independence of 23, 162, 165 invaded 80, 87 militarism 37, 61, 161, 183 oligarchy 20, 29 politics 2, 7, 18, 26, 29–30, 32, 44, 64, 81, 102–3, 117–18, 155, 162, 169, 188 Panama Canal 7–8, 10–11, 15, 21, 23, 25, 28, 31, 57–8, 65–8, 93–4, 106, 127–9, 155, 157–8, 166–7 Panama Canal Authority 127–8, 145, 170 Panama Canal Commission 166–7 Panama Canal Treaty 39, 66, 166–7, 176 Panama Railroad Company 20 Panama Truth Commission 121, 171 Panamanian Association of Business Executives 54–5, 76, 164 Panamanian Canal Company 27 Panamanian Committee for Human Rights 121 Panamanian sovereignty 10, 21, 57–8 Panameñista Party 84–5 Papá Egoró Party 107, 125 Paredes, Rubén Darío 63–4, 75 participation 3–4, 32, 51, 56, 84, 134, 139, 181 political 8 popular 131 Partido Demócrata Cristiano see PDC Partido Laborista (PALA) 60, 69, 107 Partido Liberal (PL) 69, 107 Partido Liberal Auténtico (PLA) 107 Partido Liberal Nacional (PLN) 60, 107 Partido Liberal Republicano 107 Partido Nacionalista Popular 64 Partido Panameñista Auténtico 60, 69

Pérez

Partido Panameñista Revolutionario 69 Partido Popular 107 Partido Renovación Civilista (PRC) 107 Partido Republicano 60, 69 Partido Solidaridad 106–7 parties 27, 29, 59–61, 72, 84–5, 90–1, 95–7, 99, 103–5, 107–9, 121, 123, 127, 157–8, 168, 188–9 dominant 89 reform-minded 80 PDC (Partido Demócrata Cristiano) 32, 60, 69–70, 105, 107 PDF (Panamanian Defense Forces) 10, 38, 60, 64–7, 69–70, 72–4, 79–84, 86, 90–2, 94–6, 98, 113–14, 159, 166–7, 176 Pérez Balladares, Ernesto 19, 55, 89–90, 94, 103–5, 113, 120, 124–6, 146, 167, 170, 172, 177 Pérez Balladares administration see Pérez Balladares, Ernesto personalism 17, 117–18 Perú 37, 104, 136 Perurena, Irene 80 Plan Colombia 97 Plan Torrijos 75 police 31, 38, 40–3, 65, 83, 91–2, 94, 96, 120, 122, 144, 146 political actors 2, 4–5, 18, 98, 127, 158, 172 political culture 2–4, 6, 8–11, 14, 16, 18, 20, 22, 24, 26, 28–30, 32, 35–6, 130–2, 154–9, 189–90 political leaders 5, 17, 33, 63, 116, 123–5, 130, 132–3, 135, 156, 158 political learning 11, 110–13, 115, 119, 130, 156 political opposition 63, 80, 126, 165–6 political parties 6, 17, 26–7, 29, 33, 64, 76, 80–2, 84, 89–90, 99, 109–10, 123–5, 129, 157–9, 185–6

INDEX political system 7, 30, 41, 48, 61, 89, 119, 133, 138, 140–1, 143–5, 147–51, 156–8, 173 political tolerance 147–50, 155, 180, 182, 184–6, 189 politics 10, 14, 17, 26–7, 35–6, 42, 44, 79, 81, 87, 115–18, 155–6, 164, 178, 182–4, 189–90 dominant elites control 32 military-dominated 8 Popular Nationalist Party 64 popular sectors 8, 10, 16, 31–2, 36, 56, 76, 156 populist military regime 62, 87 Porras, Belisario 29–30 power economic 15, 20, 49, 162 extraterritorial 1–2, 5, 7, 25, 35, 44, 61, 112, 153 political 6, 18–19, 31, 60, 95, 184 pragmatism 10, 16–17, 20, 56, 87, 155 PRD (Partido Revolucionario Democrático) 59–60, 63, 69, 71–2, 85, 89–90, 94–6, 98–9, 103–7, 113–15, 119, 124–5, 157–8, 169, 172, 174 presidency 18–19, 27–9, 42–3, 46, 48–9, 51–2, 54–6, 62–5, 69–77, 91, 102–4, 108, 113, 117–22, 163–4, 170–1 presidential elections 2, 40–3, 46, 76, 89, 97, 106, 157, 164 protests 62, 71, 76, 92, 94, 156, 159, 168–9 Public Force 10, 65, 90–1, 93–4, 158 public-opinion surveys 2, 9, 11, 133, 139, 145, 154, 161, 170, 173 Quirós Guardia, Alberto 56, 79, 165 reconciliation, national 113, 115, 117, 119–21, 123, 125, 127, 129 referendum 94, 99, 102–4, 106, 118 treaty ratification 166

Pérez

201

reforms agrarian 68 educational 78, 130 electoral 10 fiscal 45 Remón Canteras, Jóse Antonio 40, 42–4, 62 Remón-Eisenhower Treaty 45, 162, 165 Revolutionary Armed Forces of Colombia (FARC) 97 Revolutionary Panameñista Party 69, 168 rights basic 145, 173 civil 81, 116 collective bargaining 93 constitutional 75 electoral 101 legal 24 political 100–1, 169 socioeconomic 133 sovereign 22–3 Ritter, Jorge 168, 177 Robles, Marcos 46, 163 Rognoni, Mario 117, 168, 178 Royo, Aristides 51–2 rules, authoritarian 180, 186–7, 190 ruling class 13, 185 Rusk, Dean 176 Samudio, David 45–7, 50, 60 Sanchez Borbón, Guillermo 59, 167, 177, 184 Santamaría, Eric 178 Second Isthmian Battalion 38–9 security 9, 38–9, 65, 91, 94, 97, 157 forces 91, 93, 95–7, 157–8 regional 43 Security Service (SENIS) 91, 97 Shultz, George 70, 79, 83, 189 Sieiro, Ramon 85, 168 Sindicato de Industriales de Panamá (SIP) 56, 76

202

INDEX

Sindicato General de Trabajadores (SGT) 31 social actors 124, 129–30 social change 181, 186, 190 social classes 10, 74, 190 Social Democratic Party 60–1 social dialogue 11, 110–11, 113, 115, 117, 119, 121–3, 125, 127, 129, 158, 170 socialism 132, 185, 188 Socialist Party 30–1 societies advanced industrial 183 confrontational 16 post-conflict 122 post-military 90 pragmatic 17 Southern Command (SOUTHCOM) 79, 96 sovereignty 24–5, 40, 57–8, 115, 118, 133, 164 Spadafora, Hugo 72–5, 122, 168 stable democracy 3, 6, 11, 87, 116, 145, 147–51, 173 state 2, 5–7, 13, 23, 31, 38, 40–1, 47, 57, 60, 67, 73, 75, 78, 86, 176 state bureaucracy 27, 53 Strategic Military Council 83 Student Federation of Panama 41–2 Supreme Court 100–1, 146, 169 Technical Judicial Police 91 Tercer Partido Nacionalista 60 tertiary sectors 15, 26, 61–2 Torrijos, death of see Torrijos, General Omar Torrijos, General Omar 10, 37, 47, 50–1, 58, 62–3, 69, 72, 75, 87, 114–15, 121–2, 165–6, 177, 190 Torrijos, Moises 47 Torrijos-Carter Treaties 8, 54, 58–9, 66, 68, 75, 113, 162

Pérez

Torrijos Espino, Martín 104–5, 146 Torrijos government 49, 57, 68, 72–3, 96–7, 113, 167, 170 transit route 8, 10, 13–16, 20–2, 32, 35, 50, 57, 91, 155, 180 transition process 6, 49, 80, 92, 99, 180, 185–8, 190 Transparency International (TI) 146 Troncoso, Roberto 121 troops 38, 44, 67, 87, 94, 97 foreign 94 mobilizing 67 Unión Democrática Independiente (UDI) 107 Unión Nacional Democrática 69 Unión Patriótica 107 United Nations Development Program, (UNDP) 103, 123, 125–7, 129, 172, 187 United States 7–11, 13, 21–5, 27–33, 37–41, 45–7, 56–9, 61–2, 70–3, 78–80, 82–4, 86–7, 94–7, 113–16, 153–6, 161–3 United States and Noriega see United States United States Army 191 United States Embassy 47, 172 Universidad de Panamá 118, 179, 186 urban commercial elite 7–8, 20, 26–7, 31–2, 44, 156 Vallarino, Bolivar 47–8, 50 Vallarino, Eduardo 76, 104–5, 172 values 2–3, 6–7, 13, 87, 99, 109, 111, 133, 135, 149–50, 155–6, 170, 173 Venezuela 3–4, 6, 77, 106, 136, 170, 184 violence 25, 33, 102, 112, 124, 146, 149, 153, 158–9, 174

INDEX vote 60–1, 69–70, 78, 86, 93–4, 100–1, 104–6, 120, 133, 147–8, 163, 166–7, 169 West Indian in Panama 184 workers 30–1, 60, 71, 74, 79, 162, 165 radicalized 30 rural 59

Pérez

203

World Bank 4, 53, 68–9, 146, 191 world commerce 15, 21, 23, 26, 57 World War II 38, 41–2, 44, 112, 153–4 zonians 45 Zuñiga, Carlos Ivan 41