PANAMA: THE TORRIJOIS REGIME AND THE CANAL ISSUE

Created: 2/4/1970

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Panama: The Torrijos Regime and the Canal Issue

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OF CENTRALto by Mm

V UNITED STATES INTELLIGENCE BOARD

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panama: the torrijos regime and the canal issue

CONCLUSIONS

Torrijos now is Wrtual dictator of Panama. He hashis wayet of policies that would strengthen hispower and has displayed both cunning and ruthlessness in thehas also shown an apparently sincere interest In helping thehonest and effective government, and in national development.his period in power he hasillingness to listen tocomplicated problems, but also atendency to act inbiliary and impetuous manner.

estimate that Torrijos will retain power for at least theor two, though we expect periods of political tension andIf he succeeds inass political party tohis base of support in the Guardia National, he could retainof the government for many years. His main opposition willcome from the social and economic elites who havethe country.

willonflict between his pragmatic and hismotives in reopening negotiations on the Canal issue: onhand he seeks immediate benefits and concessions topolitical and economic position; on the other hand, he seeks athat would affordubstantial voice inaffairs. The key issue will be whether his idea of Panama'ssuch an arrangement is compatible with US requirementsthe operation of the Canal and guaranteeing itsRecognition of his vulnerability to political attack forenough for Panama, especially on the sensitive issues ofand perpetuity, will probably lead hhn either to push for addi-

tionat US concessions as the negotiations proceed, or to prolongfor some years while seeking immediate benefits outside of the treaty framework.

would probably meet any rebuff by theunwillingness to meet some keyraising anti-USin Panama. His reaction would be influenced not only by histhe political requirements for protecting his position, but also byhostility which is part of his ambivalent attitude toward thehe felt his political fortunes were at stake, he would probablylarge-scale anti-US demonstrations.

manipulating the process, Torrijos could probablyratification of reasonably favorable treaties. Tldsstrengthen his hand at least Initially, though hisundoubtedly try to rally support through charges of athe US. If and when Panama returnedystem of relativelythe charge that the treaties had been imposed on thepeople by the US in cooperation with an unconstitutionalregime would be raised by some if not all candidates.

is possible through successful completion of newtreaties for the US to gain relief from broadly basedon our position, whether or not thereeturn toAnd future Panamanian governments would beabrogate such agreements or treaties unilaterally no matter whatof ratification. But in any case the Canal issue would remainof Panamanian politics and nationalistic sentiment in thecontinue to grow. We believe, therefore, that sooner orpressures would again emerge for the US to maketo Panama, particularly on the issues of sovereigntysize of the US presence in the country.

I. THE TORRUOS REGIME

Character and

ince the overthrow of President Aria* by the Ctwrdia National in

enctal Omar Torrijos has emerged at virtual dictator of Panama. Hispower was considerably enhanced last December by his dramatica coup by subordinateorrijos has the power to choose tho

and control the policies of the Provisional Junta Government; the Custrdio asnow exercises little direct influence on his conduct of

i. Torrijos has spent much of his firstonths in command feeling hisa style of ruleet of policies that would ensure his positionstrongman as well as justify the Cuatdia's seizure of power.good reason, he has been concerned with preserving not only his officehis life, and he has demonstrated both ruthlcssness and cunning in thehas at the same time exhibited an apparently sincere interest innational welfare and the well-being of its predominantly poorhe is convinced were neglected by the self-serving politicians andhave traditionally ruled the country. In addition to his sympathies forhe identifies with those in the middle class who, like himself, are self-made.

ut Torrijos is by no means an ideologist or even an intellectual, Heractical, professional Ouardia officertrong instinct for selfompassion for the plight of the poor, and an almost naively patriotic na-Hceialisoi* He has risen to his present position moreombination ofcompetence and calculated maneuvering than by bis leadership qualities. He lacks the sophisticated understanding of national problems that increasingly is stressed in the education of senior military officers in the larger South American countries. During hit period in power he hasillingness to listen to advice on complicated problems, but also atendency to act In an arbitrary and impetuous manner.

st Torrijos' frequent visits to Panamanian villages Illustrate an instinctive and practical populism. He listens to the problems of the cemprMnot and iswhenever possible lo their requestsater well or school or improved road; in any case ho leases them with some evidence of his personal concern

'Colonels Silver* and Sanfur, respectively deputy commander and chief of staff, pulledeemingly successful coup onecember. Put Tontjos, who was stalling Mexico, boldly returned tbe next day and quickly rallied the Guard* to bis standard

xan Cwnla. Panama's only securityeUce forcealocgsnail coast guard sod air sections.rrfM is equipped

snd trained to perform limitedmotion*.

ing for ratification of any future Canal treaty.

Ihe Politics of Control

Inn Its first anniversary, the self-styled "revolutionary"announced the formation of the "New Panaman effect apolitical vehicle designed to institutionalize Torrijos' civilian base ofIt was apparently styled after the government party in Mexico in that it is designed to incorporate peasant, labor, student, and professionalhe next month he floated plans toompulsory, government-controlled labor federation. These initiatives apparently got sidetracked by the December coup and, in the case of the labor federation, by strong expressions of resistance from existing labor groups and from conservative commercial and political interests.

Nonetheless, we expect that these or similar programs will be revived over the next several months, as the regime moves to keep its commitment to

arrange for some form of representative government. Torrijos has announced his intention to work toward the gradual return of elected government. But he has also stated that it wouldecade to effect the changes in Panama's

breakthrough toward national development. Wo believe that he intends to control affairs, directly or indirecdy, for much Or all of that period, Thus, if and when he decides the time is ripeeturn to elected government, he will arrange either for his own election as president or for thatrusted supporter.

he foregoing is not to say that the stability or even the survival of the Torrijos regime is assured, or that he will not at somehe becomes

'Some peasant* have also benefited from an agrarian reform decree that was theof Colonel Boris Martinez, Tornjca' eaily rival for power, whom he forciblyTomjos has not pushed die measure vigorously, he has used it to

transfer legal titles to several hundred longtime squatters.

'The platform of Use party I* quite general, being Against oligarchical domination,boss&iii, electoral fraud, and governmentfor tho welfare of the working man and tbe best Interests of the nalioo, It specifically tolls for Panamanian sovereignty over all iu territory, however.

Over the past year tbe regime has increased tbe lev-el of gc^emrrveotal efficiency and honesty from Panama's previous- low standards, mostly byin young professionals and businessmen who are relatively capable, though inexperienced in government. Most ol them are highly- critical of the pestof the government by tbe economic and social elites. Several of Torrifos appointees were members of the Communist Party as youths, and one or two still have links to the Party. But there Is no evidence that the small, tneflcctive Communist Party is influential with Torrijos orubversive threat to the regime. He apparently chose the leftists by the same standards heapplies to all appointments: they eithersonal acquaintances or were recotnroended to him by his confidants as technically qualified for their jiosts and in sympathy with the regime.

Immediate problems in the Cuardta aside, the key domestic factorthe stability of the regime will probably be the course of its relations with the major commercial interests aod the oligarchy. Torrijos has at least temporarily stripped the ecorsomic and social elites ofpower, but they retain suiBdcnt economic leverage to cause him grave trouble. Most formerly influential Panamanians are contemptuous of Torrijos and the Cuonfia end. at the same time, fearful of losing their considerable wealth and social porition. The members of the oligarchy and tbe business community are by no means united in outlook, and some have sought an accommodation with the regime or are waiting to see how the regime affects their specific interests. If they should unite against him, they could bring sharp economic and politicalthrough such movesajor flight of capital or extensive layoffs of workers. Also, some of the oligarchs who foci particularly threatened might seek to remove him from the scene through avsassinaUonlot involvingmilitary and civilian elements.

So far Torrijos has not moved frontally against big business and oligarch!-cal interests. The regime does seek to reduce their overall influence and totheir contributionhrough taxca) to programs for development and social reform. Yet tbe regime fears the effect on the economyrolonged de-cline In private mvestment Such investment was downnd the government compensated through public works financed in part throughborrowing.esult the economy largely recovered from the slowdown of the previous year. The government can probably continue to rely on public works and foreign credits to stoke economic growth for the short term, though probably not without strain on both its budget and the balance of payments. In time it will have either to coax the businessmen Into more vigorousor to move toward more statist policies that curtail the tadepcndciico of the private sector.

All things considered, we estimate that Torrijos will retain power In Panama at least over the next year or two. though we expect periods of political tension and perhaps turmoil. The regime will probably seek to avoid aexplosive direct confrontation with the economic and social elites. It will

attempt rather lo box them in by moving forward with plans to consolidate its political position, and by seeking foreign financial support for its programs and diplomatic confirmation of its legitimacy, li Torrijosurvives the next two yean and makes reasonable progress inopular base of support, his reign may Indeedecade.

circumstances of Torrijos' removal from the scene wouldthe characteruccessor government and bow much of tbeof his regime would survive. If he were removed before makingintrong politicalover the next yearodds wouldeturnivilian president representingand economic elites. Tbe old style Panamanian politicians andbeen pretty well discredited, however, and new leaders and groupsemerge.

II. THE CANAL ISSUE

Over the past several months Torrijos has shown strong interest in resuming negotiations with the US on the Canal issue. One important motive is to strengthen his domestic position, particularly to box in the oligarchy byUS arjproval of his regune. The regime's resarioos with the US9 were best characterized as "correct" rather thannd some Panamanians believe that the US supported Of at least ccudoned thecoup,

Torrijos and his advisors probably also calculate that renewal of talks would bring an early economic and financialcmonstiation of warming relations with the US would enhance Panama's crr^tw-orthiriess withlenders and its attractiveness to foreign invrstors. Torrijos apparently hopes that, along with other early concessions, the US would agree to cede or lease certain underutilized facilities in the Canal Zone (eg. OH France Field which he would use to enlarge the Colon Freee seeks thesenot only for their economic benefit, but also to show the Panamanians that he can deal effectively with the US. Finally, Torri|os probably hopes to persuade the US to rnodify substantially those conditions of3 Treaty which deny Panama's sovereignty over the Zone and thereby offend nearly all his countrymen.

Torrijos has told US official* that ihe best way lo proceed on the Canal Issue is to "start fromave the leaders of the two countriesolitical agreexnent on the relationships to be worked out in the new treaties, and then turn the matter of details over to the technicians. He probably has not yet fixed in bis own mind the terms ofolitical agreement, but he almost certainly willreaty package which he believes* can be presented to his countrymen as being more favorable for Panama than7 draft treaties. Though theseistinct imprevcrnent for Panama over existing arrangoments, they were nonetheless thoroughly discredited there by criticism from all sides, prompted only in part by political maneuvering for8 election.

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For this reason, future negotiations will almost certainly be complicated by any efforts to improve the terms of7 draft treaties from the US point of view, especially on the sensitive perpetuityven though Tomfos might not initially consider such changes objectionable in themselves, he would at some point recognize that they would open him up to charges of selling out to the US on points long sought by Panamanians and seemingly won

In fact weerious dilemma for Torrijos between his interestragmatist in securing an early improvement in the situationumber of additional benefits and rights, and his feelingsanamanian patriot that somehow the US must go the whole way and grant his country complete and effective sovereignty over the Zone. While Torrijos may enter tbe period of negotiations intending to be the consummate pragmatist, as Ihe negotiationshe is likely to put increasing stress on his role as patriot and nationalist

Torrijos has indicated that he wants to redefine the Panamanianwith the US to one of "partnership" The key issue will be whether his idea of Panama's rights under such an arrangement is compatible with US reuuire-ments for controlling the operation of the Canal and guaranteeing its military protection. He now appears to be primarily mterested in increased economic benefits from Canal operationshow of Panamanian participation inCanal affairshe application of Panamanian law toactivities In thend he has stated privately to American officials that he recognizes that the US is to continue to operate and defend the Canal. But he has also stated that7 draft treaties did not sufficienUy rocognize Panama's rights, and he is likely to become more demanding on the termsatisfactory partnership as he faces the problem of arranging Panamanianof any new treaties.0

Torrijos has stated that he would submit now treatieslebiscite. He might instead when the time comes prefer to submit thempecial assembly, elected or otherwise. Whatever the case, he would probably be able to effect ratification through manipulation of the process and muzzling of dissent. Yet some form of opposition would emerge whatever Torriyos' intentions andboth because the Canal Issue is so central to the political life of Panama and because various anti-Torrijos elements would see It as an opportunity to break his hold on power. There would without question be chargesellout to the US on the Canal issue, and these could conceivably unite Panamanians of diverse classes and political persuasions against the regime- An awareness of this vul-

'Under the exiitmg Treaty, US rights in the Zone are held in perpetuity. Under7 drafts, Panama was to gain control of the existing Canal no laternd of any future sea-level canalean after its opening.

1 Under the existing Treaty, the US is authorized to act in the Canal Zone a> it wouldere thender7 drafts. Panama would be recognized as "sovereign"educed Canal Zooe, but the administration of the Zooe and the operation of the Canal would be governedoard of five Americans and four Panamanians. Also the US would retain sole responsibility for tbe defense of the Canal.

nerability will probably cause Toerljus to put pressure on the US for additional concessions to Panama as the negotiations proceed

Torrijos has stated to US officials that he wants to proceed with full-scale negotiations for new treaties at this time, and not just settle for patchworkrowing awareness of the aforementioned problems,ealization from the early stages of negotiations of how complicated tbe issues are, however, might cause him to seek to prolong the negotiations for several years. In this case he probably would push even harder for certain specific and immediate concessions that would strengthen his hand both pohtjealfy and economically (again Old France Field,e might seek to tic these concessions directly or indirectly to the renewal of the Rio Halo agreement, which provides the US militaryraining base outside the Zone and which Is due to expire in

Torrijos' approach to negotiations, and especially to any real or imagined rebuff, will be Influenced by his ambivalent attitudes toward the US, whichatent hostility. In general, ho recognizes that the large and visible US presence in his countryact of life and not without benefits. But he. as do many Panamanians, resents what he considers US insensitivity to Panama's needs and feelings, and its excessive influence on individual Panamanians, including in the past on most Cuorrfio officersore personal level, he undoubtedly respects US power and authority and Is interesled in workingoreparmership. Yet he probably foels vulnerable to charges that he himself worked very closely with the US military in the years before8 coup, still resents the US delay in rccognl/ing and supporting his regime, and remains bitter over what he believes was support of his enemies by some US officials during the9 coup

What would Torrijos do If he met with some US rebuff on the Canalelay in the start of negotiations, an unwillingness to meet some keyefusal to ratify treaties once negotiated? His reaction probably would be influenced mostly by his view of the political requirements of the moment, but also by his underlying hostility toward the US. He would probably first use threats and then apply pressure to gain US compliance, or to force some concessions to save face for his regime. He would do this if for no other reason than to rally popular support to his side and keep his political enemies fromgreat advantage of the situation, lie might open an anti-US campaign in tin-press, attempt to discredit some US officials In Panama, harass the Canal Zone Company and Government, or nationalize some US private companies. Especially If the rebuffharp oneS Senate refusal to ratify after he had arranged for Panamaniane might break diplomatic relations. Wc believe he would hesitate In the first instance to foment or permit large-scale anti-US cknsonstrations for fear that the Ctrardio might not be able to control them and that his political enemies could manipulate them against his Interests. But if he thought his political fortunes were at stake he probably would take

that risk.

Tho successful negotiation and ratification of new treaties wouldstrengthen Torrijos' hand at least initially, especially if one resultoost to the economy from US ccmcessiom or instruction activity. Theopposition would continue to agitate the Canal issue hoping to stir upsentiment on such sensitive questions as sovereignty and perpetuity. And if and when Panama relumedystem of relatively free elections, the charge that the treaties had been imposed on the Panamanlau people by the US in cooperation with an unconstitutional military regime would be raised by some if not all candidates.

Just bow much impact such attacks on any future treaties would have with the Panamanian population would dependariety of circumstance; It is possible through successful completion of reasonably favorable newor treaties for the US to gain relief from broadly based Panamanian attacks on our position, whether or not thereeturn to freely-electedAnd future Panamanian governments would bo unlikely to abrogate such agreements or treaties unilaterally no matter what the form of ratification. But in any case the Canal issue would remain the pivot of Panamanian politics and nationalistic sentiment in the country would continue to grow. Wc believe,that sooner or later strong pressures would again emerge for the US to make additional concessions to Panama, particularly on the issues of sovereignty and the sire of the US presence in the country.

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