Created: 6/26/1970

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After twenty months in power, General Omar Torrijos' Provisional Junta Government isbring its policy goals into focus. Torrijos apparently knows the direction in which he wants toho has not yet mapped out the route oray to attain his contradictory objectives.make fundamental changes in Panamanian politics, the government has dissolved all politicalis determined toeturn of the traditional oligarchy-dominated political system.government had promised electionst has made no plans as yet and shows no inclinationpower within the foreseeable



The regime has also demonstrated its concern for economic development and economic reform. It has attemptedar greater extent than past governments to assist the poor, the middle class, and the labor unions. At the same time it has tried to attract foreign capital and to stimulate domestic private

The New Politics: Panama Style

investment. To this end. despite its sometimes revolutionary rhetoric, the government has movedand hasrontal attack on the economic position of theasic distrust between local businessand the government mains, nevertheless. Theof the private sac-tor to raise its levelerious irritant-one that threatens to bring about increased government intrusion economy.




For both political and economic reasons.Is showing increased interest in reopening canal treaty negotiations, dormanthe record of previous negotiations has been under close review, but details of the government's current negotiating objectives have not yet been disclosed. Nevertheless, top officials have already expressed irritation over the use of the Canal Zoneafe haven for politicalof the regime. They are convinced,that the country is not receiving sufficient economic benefits from the canal, and thehas indicated its interest inumber of areas and facilities within the zone returned to Panama.



Tht Old Sytiem

hen Panama gained itsfrom Colombia, until8 coup, politicsame played largely bysmall group of elite families comprising less than two percent of the population. Political parties were temporary and shifting alliances of convenience formed around various politicalThese personalistic parties generallyPanamanian nationalism and accepted the notion thai the oligarchy's near monopoly of social, economic, and political power should be defended. Political competition between factions of the oligarchy was rooted in Ihe desire tolace at the trough when the political and economic spoils wore being distributed.

Until the, the National Guard, the country's only military force, had merelythe oligarchy and rarely entered directly into politics.owever, it intervened in the wake of fraudulent elections, recounted the ballots, and declared Arnulfo Arias the winner. Two years later the Guard, tired of Arias'approach, ousted him. Then,he Guard commandant was elected presidentelatively honestfirst timeilitary man had headed the government.the Guard had clearly established itself as an independent political force, the oligarchy was able to reassert its traditional control of thesystem6

Given the very extensive patronage at the disposal of the chief executive, it was notthat presidential elections were hotlyaffairs and often marked by some degree of electoral fraud.8 election, however, was one of the most vicious In Panamanian history. President Robles, sparing no effort touccessor, sought and gained tha support of the National Guard for his choice. Nevertheless, the opposition candidate, Arnulfo Arias, piled up soote that tho Guard,ishonest ballot count would load to violence, shifted its support and allowed Arias to win.

Challenge mid Respmte

A consummate politician who had endeared himself to the masses. Arias excelled as abut was singularly unsuccessful as an office-holder. He had been president twice before, but each time had been kicked out of office.his third term and upset by the bia-"tantly political role of the Guard. Arias appeared determined to strip the military of its political power. Despite his initial efforts to allayand placate the military, the Guard placed little confidence in his assurances. Only ten days after his inauguration. Arias again found himself unemployed, and Panama was treated to its first direct military dictatorship.


The8 coup was simply anby the Guard in defense of its Interests. Officers whose positions were threatened ensured their own job security in the most direct way possible. Once in power, however, they found it necessary to justify their disregard for democratic and constitutional procedures. The bald power politics that motivated the coup was quietly swept under the rug. and an elaborate facade of rationalization was quickly constructed.

THE NEW MAMA Rationahration and Reality

It took the publicistsear to settle on the slogan "The New Panamaut almost from the beginning the coup wasevolution. The political power of the oligarchy was declared at an end, and it was alleged that public policy hencoforth would benefit all ofIn language reminiscent of other Latin American military politicians. Panama's newpledged themselves to mako honesty andthe guiding principles of government, and promised to put an end to corruption and


Despite the rhetoric, the regime's firstwas to neutralize all opposition.guarantees were suspended, known leftists were arrested, university autonomy was ignored, and schools were closed. Pro-Arias officers within the Guard were purged, some oppositionand radio stations were taken over, and e'forts were organized to root out the small and poorly organized pro-Arias guerrilla movement that had sprung up in the interior. The massive opposition that was expected never materialized, however, and power struggles within the Guard rather than the threat from Arias posed the major danger to stability.

A provisional junta government headed by two figureheads and assistedivilian cabinet had been set up, but the locus of power rested with the two principal architects of the coup-colonels Omar Torrijos and Borisubordinate, Martinez set about Ihe task of upstaging and undermining Torrijos. Hepolicy initiatives reflecting his strongtoward the oligarchs and politicians and placed his followers in key command positions. Torrijos attempted tohowdown, but by9 Martinez' growing domination of the Guard and the government had reached the point where Torrijos could no longer afford to temporize.

The ouster of Martinez and his principal supporters ended Torrijos' problemsime, but factionalism within the Guard continued. Matters again cameoad in mid-December when tho Deputy Commandant Silvera and Chief of Staff of the Guard Sanjursoized control of the government while Torrijos was in Mexicoleasure trip. Their coup was short-lived; Torrijos landed In the interior, rallied his supporters, and returned in triumph to Panama City.

Tho December coup attemptind of watershed for Torrijos. Although he hadhimself as the dominant political figure after the ouster of Martinez, he apparently had not been comfortable in the role of leader of the

he coup attempt was only aof internal Guard politics, but quashing it seemed to give his ego and hisoost. His return was one of the most exciting events in recent Panamanian history; his style and verve caught the popular imagination, and he emerged as somethingero.

If Torrijosew sense of legitimacy, he also felt an almost paranoid distrust of his fellow officers. He had alwaysery high level of personal loyalty from his subordinates, but now loyaltyear obsession. Changes were made in the Guard hierarchy and in the government, and two close friends. Demetrio Lakas and Arturo Sucre, were appointed asand member of the new civilian junta,Torrijos became more reluctant to delegate authority and more concerned to gather all of the reins of power into his own hands.

Policy Devdopmenii

Given the Inexperience of Panama'sleaders, it was not surprisingeriod of policy improvision should occur or that the regime would be more clear about what itthan what it supported. Martinez, anopponent of corruption, an avowed enemy of the oligarchy,ocalof radical reform, had set the moral and policy tone for the Provisional Government.esult of his influence, therefore, the earlyof revolution and reform became more than mere cosmetics.

Torrijos found many of Martinez' ideasHe too was fed up with the politicians, distrustful of the oligarchy, and sincerelyin helping the people. He was not anhowever, and if he heard the same clarion call to reform, he was prepared to marchlower and more hesitant step.

ompetent Guard officer and an effective military leader, Torrijos was ill-equipped by temperament and training to lead aAccustomed to an environment in which problems could be resolved by simply givingTorrijos found it difficult to adjust to the relatively complex process of policy making.unsophisticated and impatient with complicated strategies or involved argumentation, he opted for policies that would yield qujck and visible results. Thus the airport, the university, and sundry public buildings were refurbished,collection was improved, and streets were repaired.

Torrijos was initially very conscious of his' own deficiencies and prepared to leanumber of capable and reform-mindedwho had been brought into theForty-one years of age but politically an adolescent, he displayed an eagerness for new ideasillingness and capacity to learn. He alsoigh degree of impulsiveness. He tended to become enthusiastic about policyand to act upon them without reflection.

Torrijos became more confident of histo run the country after quashingoup. He became less dependent on his official advisers, but remained impulsive. Ready to listen to cronies he had known during tours of duty in Santiago and David, he was not averse to turning their uninformed and off-the-cuff advice into policy directives. To his credit, however, he was not wedded to his mistakes.ecision proved erroneous orolicy generated stiff opposition, he could be quite pragmatic and trim his sails to the prevailing winds. Nevertheless, this approach tended to give governmentagged, uneven quality.

Uncomfortable with people who are more educated or more sophisticated than he, and little interested In pomp and ceremony. Torrijos likes to rub elbows with the people and to get afeel for what is going on. Concerned also with building popular support for himself and his government, he has adopted what might be called the "Santa Claus approach" to developmentHe willillage, for example, find out

what is troubling the people, and doit.oof leakschool needs repair,noted and the job is done.oungress. Torrijos fishes in hisleaps to the rescue.ocal official hasTorrijos listens to the complaintthe

The fundamental problems are not being touched, of course, and little is really beingThe villagers, however, can point to something concrete. They can see that thecares about them and they will remember Torrijos. But this too is policy on the run.rather than planning.

Domestic Micy Coals

Although Torrijos' personal style has helped to give government policy an impressionistic flavor with false starts, shifts in emphasis, and grandiose announcements accompanied by little or no action, it is also true that he has had to confront very difficult problems andalmost irreconcilable interests. His mostproblem is to maintain business confidence whileevolutionary image.

From the beginning, the regime hadhipping boy of the oligarchy, blaming it for all of Panama's ills. Torrijos separated politics from economics, however, and made no move toseriously with the economic position of the oligarchy. Apparently expecting business as usual despite his antioligarchy pronouncements, he was vexed by the negative reaction of the business community and dismayed that domestic private investment declined.

The oligarchy had initially believed that the military interlude would be brief and that, withinor change of cast, the show would go on as before. Martinez quickly demonstrated, however, that he would not operate in thealbeit time-honored way. He could not be bought and he would not play ball. Businessalthough relieved when he was ousted,to withhold cooperation in the hope ofarger role in government. The regime's one unalterable article of faith, however, was that the traditional oligarchy-dominated system had to be destroyed. As time went on, it became clear to the business community that Torrijos had noof relinquishing power, that generalwould not be held soon, and that whatever elections were held would be carefully controlled.

If the oligarchy was to be frozen out of politics and if power was lo rest on more than the guns of the Guard, it was obvious that anpolitical system had to be devised. This, of course,askuld tax the resources of even the most skilled politicians, and it waseven more by the fact that neithernor his advisersery clear conception of what they wanted to do.

Three points became evident, however. In order for power to be institutionalized, anvehicle had to be created. Secondly, if the power of the elite was to beass or popular base of support had to be developed. Finally, if mass support was essential, organized

labor could form the nucleus from which olher mass organizations might subsequently be

Drawing upon the Mexican model, theunveiled the Now Panama Movement on the first onniversary of the October coup. This was toroadly based political organization, organizedector basis and including peasant, worker, student, and professional groups.age from Peron. Torrijos the following month announced plans toovernment-controlled national labor organization In which the participation of existing unions would be compulsory.

umber of reasons, the government did not go very far with either scheme. It did not organize the New Panama Movement, probably because more pressing matters arose and because Torrijos could not find an individual hecapable and loyal enough to be entrusted with such an imposing responsibility. Thealto backed away from the idea of an all-en-compassing government union in the face ofopposition from businessmen and from union loaders who felt that their positions would be threatened.

Despite the government's tactical retreat, these and other pronouncements frightened both the oligarchy and the business community.elements within CONEP. the Panamanian federation of private sector groups, reportedly began to plot against tho government, tothe possibility of collaboration with the exiled Arias, and to soe whether any Guardcould be persuaded to oust Torrijos.most businessmen were unwilling to stick their necks out so long as Torrijos showed some degree ol restraint, they resortedind of passivoslowing of their investment in the economy.

If businessmen were suspicious of thethe reverse was equally true.ondemnation of one-manobvious

ence tohours after colonels San-jur and Sllveralo seize power, reinforced Torrijos'of tht oligarchy. Still, Torrijos preferred to avoid an opon break with the businessand the newly appointed president. Oemetrio Lakes, took on as his major task theof abetweenand business.

Tho reason for Torrijos' forbearance was his continued desire to improve the climate forInhe government had been forced to institute an expensive public woiksin order tolowdown in the rate of private domestic investment. The regime had believed that the business community would soon accept tho new political situation and thepicture would improve, but the growth of domestic private investment remained at little more than half7 level. Governmentwere not scaled down, and the budget deficit increased substantially.

Considering tho gulf that had alreadyLakas' efforts to build bridges to thecommunity should not have been expected to bear fruit overnight. Torrijos, however, was neither preparedong courtship nor willing to give up his efforts lo gain popular support. Prolabor statements continued, taxes wereand workmen's compensation insurance, previously handled by private companies, was taken over by the government's Social Security Fund.

These last two measures in particularthe alienation of the business community. Even though the government toned down the tax measuro after Lakas interceded with Torrijos on


of Ihe business interests, ititter pill. Reaction against the take-over ofcompensation was even stronger. Thecompanies attacked the decree asto expropriation, and other businessmen became concerned that the government might move against them next.

Although Torrijos was prepared to advertise these measures as evidence of his commitment to reform, his primary motivation apparently was not reform and certainly not the alienation of the business community. Probably his main concern was for additional revenue. Because thetaps the Social Security Fund at will, any additional monies put into it would becomeavailable for government programs. The tax measure was morepromised to yield moreillion

With revenue still insufficient to support the politically and economically necessary public works program, the government has had to rely on foreign borrowing to cover budget deficits and upon foreign investment to help keep thehealthy. Torrijos, therefore, has seemed even more concerned about Panama's standing with the international financial community than about his relations with the local businessmen. This may help to explain the recent removal from theof two prominent leftists, Minister of tho Presidency Vasquez and Minister of LaborAlthough Lakas had long sought their ouster, complaining that they wore undercutting histo improve relations with the private sector, Torrijos apparently became convinced only after Lakas stressed that the presence of the two men hurt the country's image abroad and frightened Off foreign lenders and investors.

These cabinet changes do not appear toa shift toright, however. Both men were appointed to judicial posts. Escobar became president of the Electoral Tribunal and Vasquez waseat on the Supreme Court, and there is no evidence that Torrijos has lost confidence in either man or that ho will not make use of them in the future. More importantly, Torrijos' enmity toward the business community has notHe is convinced that It is trying to sabotage his efforts to keep tho economy moving, and he has reportedly given up hope of winning it over.

Constrained to revalidate his reformistand interested In cutting the oligarchyeg or two. Torrijos may be moving to set up cooperatives that would compete directly with oligarchy-owned enterprises. The government has already announced plans toillion sugar mill in Veraguas to give cane growers an alternative outlet to the two existing millsby the oligarchy even thoughugar mill cannot be justified on economic grounds. The regime reportedly is also studying theofement plant aridovernment-controlled dairy cooperative.

This approach would offer significantIt can help win popular support even if simply presented as partevelopmentdesigned lo increase production capacity, improve skills, and provide jobs. It also gives theonvenient way to put pressure on the business community either to Increase the rate of investment or to adherearticular policy. Reports relative to this latter possibility indicate that tho government might enter into



ompetition with local botlled-gasif these firms do not lower their prices.


Over the past few months US efforts toloser working relationship with the Panamanian Government have helped to dissipate some of the coolness and suspicion that hadsinco the coup inhe government, realizing its need to get along with the US. has evinced an interest in better relations. Described aslove-hate" attitude toward the US. Torrijos is deeply nationalistic and,desirousature and equalwith the US. is prone to strong andoutbursts when thwarted.

Torrijos deeply resented the failure of the US to embrace his "reformist" regimeafter ho had overthrown Arias, theelected president, and for the first year relations were "correct" rather thanftor Torrijos' visit to the US in9hange in the US policy posture, relations began to improve. Thoyerioushowever, immediately after the December coup attempt. Allegations by some of hiswithin the Guard that the US supported and was involved in the ouster attempt created an atmosphcro of distrust that has colored relations between the US and Torrijos ever since.

Relations again became strained in February when Hildebrandoop aide of deposed President Arias, returned to Panama in an effort tooup against the government.ho sought asylum in the Canal Zone. Nicosia's claims during his brief stay in Panama that he enjoyed US backing rekindled Torrijos" suspicions about US intentions, and therefusal of the US to turn the escapee over immediately to Panamanian officials resultedime in reduced cooperation between National Guard personnel and US intelligence officials and Canal Zone police.

In early June the issue of political asylum again came to the fore when tho three colonels who led the abortive December coup escapedanamanian jail and fled into the Zone. Although thoro is some evidence that Torrijos is relieved to be rid of the officers, he is stillby the continued ability of his opponents to obtain the protection afforded by the Zone. Tho government has formally demanded theof the colonels and has strenuously denied the right of Canal Zono officials to grant political asylum to Panamanian nationals.

Despite these latest complications, theis apparently eager to avoid jeopardizing relations with the US. presumably because of its interest in resuming tho canal treaty negotiations, suspendedn an obvious effort to improve relations, the governmentew ambassador to the US in May after the post had remained vacant for five months. In early June, President Lakas emphasized to the USthe government's interest in creating an atmosphere conducive to mutual cooperation. General Torrijos has also reaffirmed histo extond for another year the agreement permitting use of Rio Hato. the major US military installation outside the Canal Zone. The existing agreement expires in lato August, and although it

will probably be renewed without priorPanamanian* have also expressed an in-

sions, the US may be expected to reciprocate by terest in obtaining concessions inumber of Panamaniannegotiations. They have pressed in particu-

lar the return of the Balboa ship repairfull catalogue of requirements probably and Old France Field. The lands and facilitiesnot been formulated and Panamanian think- tho France Field area would be used toon treaty negotiations Is still subject to the Colon Free Zone, and the but preliminary information suggests that Planning Director has stated publicly that ifwants to embark on entirely new negotia- were done annual earnings from the Freerather than to recommence talks on the would double within the next fiveraft treaties dealing with lhe present Panamanians alsoubstantialossible sea-level canal, and defense the sugar quota and additional US assistanceThe Panamanians apparently ant to road-building. Obtaining these concessionsthe concessions embodied in these drafts. likely to be qulto important to Torrijosas sharing toll revenues andeduc- they would increase his prestige andin the size of the Canal Zone, but they will his ability to deal effectively with the US.oven more generous terms in any new would also provide a much-needed US failure to accede to such requests

couldard-line response, particularly if In January. Torrijos and Lakas told the US the Rio Hato agreement had been renewed with-ambassador that all commercial activities should oul obtaining compensating concessions. The gov-be turned over to Panama and that thoy wanted ernment would probably feel swindled and might the Zone to be more closely integrated eco- begin to arouse public sentiment against the US. nomically with the rest of the country. Although

they recognized US requirements for

the operation and defense of the canal, they

stressed that Panama must be treatedullTorrijos' tenure cannot be assured,

equal partner. Torrijos noted also that the present he appears toirm grasp on the leversgiving the US rights in perpetuity was power. Despite some reports ot coupHe thought, howovor,reaty strong or united opposition to tho Generalhad no terminal date would be politically not developed within the Guard. As long asif il provided for periodic consulta- does not absent himself from the country torand adjustment, and alsoomplete extonded period of time and hisino bicker among themselves. Torrijos

ood chanco of being able to move More recently, Torrijos told his canal ad- against his opponents before they can move visers that he would pushonsiderable in- against him. At present, the threat of assassin*-crease in US economic and technical assistance tion is greater than the dangeroup, and also would seek considerable equipment of all

types for th* National Guard, in view ofgovernment's most immediate problem

current problems. Panama probably will also de- has been to scare up enough monoylarification of the right of asylum beillion in short-term funds borrowedThe Panamanians have paid rather close year and to find additional credits to coverto US negotiations with Spain and can 'enti"ion loan wasexpected to insist upon an annual paymentand prospects for obtaining an addi-

base rightsillion now appear to bo good.


Although the government will proceedonce the liquidity problem subsides, more sustained efforts to undermine the economic power of the oligarchy could develop. Inbusiness concern about the high rate of government spending and the possibility oftaxes is likely toontinuingeffect on domestic private investment. Thus, relations with the business community may get worse before they got better.

Torrijos will probably push ahead In areas such as public administration, communityand land reform. As before, however, emphasis will be on highly visible projects. The government is unlikely to revive plans for agovernment-controlled labor federation despite continuing efforts to build labor support. The regime reportedly hasumber ofbanana growers in Chiriqui and Bocas del Toro provinces that they would be arrested if they did not allow their workers to be organizednion, and similar pressure may be exerted in tho future on bohalf of union organizors.

Restoration of normal political activity is not yet in sight. The government has publicly committed itself to hold elections thisonstituent assembly that would amend the constitution and pave the way for general elections. The lack of any preparations to dato suggests slippage in tho electoral timetable. Although both the procedures and results of any election would bo carefully controlled. Torrijos would have to balance the possible advantages of legitimizing tho Provisional Junta Government against the danger ofinal decision may depend on what happens over the next couple of months. Thus far. Torrijos has little to "show for hisonths in power. If he can come up with some dramaticimportant concessions from themayto push for elections and may re-examine the possibility of organizing the New PanamaIf there aro setbacks, however, or ifdovelop within the Guard, Torrijos will not want to permit any increase in political activity fcf (car of railing the level ol tension.



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