Created: 5/4/1967

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moots ot Stoic

Dr. R. J. Smith, for tho Deputy Director, Control Intelligence

Mr.he Director of Intelligence ond fteeoorch. Deportment


Vice Adm.owrance, for tho Diroctor, Defense Inteltigenco Agency Mr. Oliver ft. Kirby, for the Director, Natfanal Security Agency


Dr. Charles H. ReicSordr, for the Assistant General Manager, Atomic Energyand Mr. Williamrogor, for the Assistant Director, Federal Bureau of Investigation, tho subject being outside of their lurisdtcflan.








Putin ol the Elite

Amulfo Arias, aod His



Case A: Treaties Subrmrred to the Assembly by7

Case B: Negotiations Completed Before8 but Treaties not

Submitted for Ratification

Case Ci Negotiations Not Completed Before the Election oi May



To consider the prospect for political stability and for (he Canal treaties between now and the scheduled inaugurationewin


tension and political turbulence are likely as thecampaign and ihe issue of new Canal treaties impinge onnone too stable in the first place.

small Dumber of elite families, long in political andcontrol, may be hard pressed in the elections ofne of their own in the presidency and to retain dominanceNational Assembly. The challenge will come from Arnulfoanti-elite Panamenista Party is the country's only massThe danger of serious disorders will probably becomegreater than at present, and could become much greater.

therereat many important politicalPanama, the riming of the completion of the treaty negotiationsa crucial factor in determining the extent of political unrest asthe chances for ratification and implementation of the treaties.

view of such uncertainties on the political scene, therebe major problems in getting the Canal treatiesand then held to by the government succeeding that ofBobles. Unless the treaties are ratified before Octoberis small chance of getting satisfactory treaties completeda new administration takes office in


The comingonths looks lo be. atelicate period ia Panama's political affairs und in its relations with the US- The political campaign for the electionew president and National Assembly in3 will become fully active later this year. And the issue of new Canal treaties with the US is likely torm during this same period. Tbe mterreUtiooship of these two factors, aa well as their combined Impactolitical situation none too Stable in tbe first place, is fraughtide range of implications.1

The terms of the Canal treaties as they are finally worked out wiD, of course, bo fundamental to the way the Panamanians react But the timing can also be of great Importance in the Interaction of tbe treaties and Panamanian political developments. So after sketching some brief background on theof the treaty negotiations and on the way the pohncal campaign Li shaping up. we shall consider the different implications of three tuning possibilities.elow.)


Underway nearly twoalf years, tbe present negotiations aim at supplanting tbe basic treaty made3 at tbe time tbe US established Panama as an independent country. Panamanians years ago came to regard the old treaty as exploitative and ckbasing. Three separate documents urc now under negotiation:ew treaty governing Ihe administration,f the present Canal;reaty that would provide tbe basis Tor eventual constructionea level canal; endreaty on been rights and status of forces. It is the plan of the negotiators on both sides that for purposes of approval and ratification tbe three treaties he completed at the same time and consideredingle package. In view of the nature and number of tbe issues Involved, there are obvious difficulties in reaching agreements which can be passed by both the Panamanian National Assembly and the US Senate.

The rw-guti.itions have been difficult nnd protracted, because of theof the Issues involved and tlie Importance of these issues, especially to the Panamanians. Almost all Panamanians, rich and poor alike,trongly emotional attitude toward the Canal They feel that tbe US lias specialto Panama which it has failed to honor: they think they should have more fobsot more money from tbe operation of thethey rightly regard as their country's greatest asset (It generates some two-fifths of

' For tbe US, there could bebeyond Panama itself; other couutrke, puOcu-lar'y Id the hemisphere. wt& be interested Cn whether or not new anaegrmenta can be nude between the US and Panama ta tidy, dvOUed fashion, and soae piovtaUuna of thesetrestle* may come to be used as standards for other International oegoaarloni. Moreover, the question ul corripfiiialion to Panama raises the question of an increase In Canalmatter of greet era monk- Importance not only tnbut totln American countries, especially Qillr, Peru, and Ecuador.

Panama's gross national product and two-thirds of its foreignhey want explicit recognition of their sovereignty everywhere In their own country. Theyew arrangement as to US use of military bases on their territory. Finally, tbey believe thai (he present Canal,ew sea level canal ifacross their territory, should sooner or later belong to them.

he US has been forthcoming on many of tbe points at issue; its offers represent for Panama substantial improvements over tbe existing tteatyAt the sane time, negotiators of each side have recognized tbat theof the other are draimscribed by practical limitations, and progress in tbe negotiations has been encouraging Ln recent months. Although major points of disagreement persist, there is hope that these can be worked out fairlyperhaps In time for the treaties to be presented to tbe Panamanian National Assembly for nitllicntion bybe Panamanian negotiators at present are confident thai ihey can secure ratification of tho treaties, provided the itegotiations are completed early this suinnier. Yet the attitudes of many Panamanians and of the Panamanian press make it almost certain that, however generous the treaty provisions seem from the US point of view, there will be major difficulties In obtaining ratification by tbe National Assembly. Thesewill increase as the political campaign gains momentum.


Parties of the Elite

& The small number of elite families who have long controlled political affairs (and most of tbe economy as well) are likely to have more trouble than usual electing one of their own as president inbey continue to control almost all the officially recognized political parties, but these elite parties are small, personalistic, lacking in ideological content, and without strongon the part of their members. They win elections hy ooalllion. President Robles was the candidate nf an eight-party coalition. They also use government patronage and pressure, powerful private interest groups, ni]>erbly complicated electoral and balloting procedures, fbelr control of tho Electoral Tribunal, and their control of the Cuardiaonly uniformed security force. One problem for candidates of the elite is that they do not do well among the youngera considerable additional number has become eligible since Robles manipulated and squeakedisputed victory

obles has displayed political courage He has tried to instill Integrity in the government and to effect fhumcial reform and economic development. Yet be has not obtained much popular support. The economy has made strong gains fo GNP and personal consumption during his administration, but urban unemployment is still high. The masses in Panama City and Colon remain sharply conscious of the differences between their lot and that of theand the differences between their lot and that of Americans living in the Canal Zone Robles still lias considerable political leverage by virtue of his Influence in selecting (be governing coab'tion's presidential candidate (Robles cannot

succeeds time goes on, however, he will lose leverage In theln ihe National Assembly, and within elite party circles wheretoandidate has already begun.

number of would-be presidential candidates among the elite isdown to perhaps four or 5ve serious contestants. All or almost all themay finally agree to swingingle one of these, especially ifthink tbat Arnulfo Arias' chances of election are good.egreewould be least likely in the event that General Bolivar Vallartno,of the Guardia Nacional, insisted on running and obtained tbeseveralajor split among tho elite parties would bo highlyfor (he big, anti-elite Panamenlsta Party.

Arnuifo Arias and His Panamenistas

Arias heads the onlyass movement tn thetbe official returns4 gave himercent of the total votes cast(The largest of the elite parties individually had aboutoosely organized, tho Panamenistas aro more ofolitical party. Their strength is among tlwtthe young, especially in the town* and ciUes. Tbey have no welltheyetter shake for themselves and they are against theadmire Arnulfo's oratory and forceful manner, and tbey look up to himonly important politician in Panama who has held firm th his oppositionoligarchy. He generally has the use of several newspapers and radioowned by bis family and friends to keep up contact with tbe faithful

Arnulfo himself, nowean old, is an unpredictable and opportunistic person who unrpiros cither great loyalty or great hate. He has occatlonally made speeches and taken actions contrary to US interests, and from timo to time hasean ire of reoperation between Panamcnbtas and Communists. Nevertheless we believe that be is not sympathetic to Communist ideas, and tbat be recognizes the practical necessity of reasonably good relations between bis country and the US. Educatedhysician (beraduate of Harvard Medicale has beenanamanian politics for more thanears. He has twice been president and twice been removed fromother reasons, for using autlioritarian measures and trying to change tbeto expand bis powers. Many influential Panamanians fear that if be regained power lie would use It ta disrupt their patterns of control and to settle old political and personal vendettas.

Out of office. Arnulfo bas shown considerable caution, restraint and tactical skill. In office be has proved himself difficult and authoritarian. He isy many asrania live manom pulsion to dominate. It seems important to him to demonstrate the qualities of virility; be is vain and enjoys the role of demagogue. While heumber of devoted aides, be runs the

'The PenameAMM, however, have only shout one-fourth of the maU ui the National Assembly.

Panamctiista movement essentiallyne-man snow and has designated no successor to his leadership.

in his claim that he was robbed of the presidency in theof the election resultsmulfo has refused to recognize Robleslegal head of government. He has maintained that since the Roblesis not legal, neither are its actions. And he has made this pointand repeatedly about tbe Canal treaty negotiations with the US.he has not been strongly critical of the US or the offers it might bethe course of the negotiations, he haseginning positionthe government. He is not so much opposed to the treaties perto the Rabies regime. Conceivably some kind of deal might be madewould not attack the treaties; this might happen, for example, if heconvinced that the presidential elections8 would be free and fair.


mentioned earlier the uhportaoce that timing with regard towould have on the likely future course of developments.will consider the outlook in three different cases: (a) if the treatyare completed this summer and the treaties submitted to theAssembly by September; (b) if the negotiations are completed,Robles government chooses not to submit them for ratification beforeand (c) if the negotiations are not completed before the election.

Case A: Treaties Submitted to the Assembly by7

In spite of the major issues still outstanding, the Robles government hopes that the treaty negotiations can be completed in June or not long thereafter. It plans topecial session of the National Assembly to considerand to call it before the regular annual Assembly session which convenes the beginning of October. The administration's chances of keeping tbe Assembly under control would be significantly betterpecial than in the regular session, both because the rules of procedure would make obstructionist tactics more difficult and because election campaigning would not have reached its highest pitch by the time the special Assembly met Robles and his lieutenants have begun to plan for systematic means of lining up support in the Assembly and informing the public about the treaties, especially their most favorable aspects.

It is nonetheless difficult to predict what the outcome inpecial session would be. Robles' supporters claim that tbey can swing more than two-thirds of the members on issues of vital importance.* Yet Robles has not

' The Panamanianot yet certain how many votes vrtil be required to secure ratification. Panama's Coastftution specifies thatimple majority is required for tbe ratification of treaties, but some argue that the procedural rale* of the National Asserohlywo-thirds vote.

had strong Assembly support on any measuresong time, and al IheIho last regular session in January the Assembly overrodeIo pass several minor bills of highly nationalistic content.however, that he decided not toight on tbe Utterto reserve bis strength for Assembly action an tbe treaties. Inhis visit to tbe Inter-American Summit Meeting, be managed to get aconfidence from his coalition parties for his government's handling of Wo DM MBnoflMHH DM bring

strong pressure to bear oo most of the deputies, but working against this willesire of many of them to enhance their own political fortunes. And in Panama the nationalistic, anti-Yankee stance is tbe Dme-tested vote-getter.

Arnulfo would probably open up with propaganda charges againstfeatures of the treaties seemed moststill insisting that tbe whole business was illegal. He might call upon tbe Panameflistas for mass demonstrations at the National Assembly building, or be might "permit" these to occur spoisraneoasly. In either event, Panama's small Communist groups, whose strength is concentrated al the University, would almost certainly become involved and would probably seek to encourage any tendencies to disorders orajiamenista demonstrations ot* major sire would put additional pressure on assemblymen to vote against ratification- Such tactics succeeded once before:7 the National Assembly, responding to the presencerotesting mob ell around the building,enewal of Ihe wartime base agreement with the US. The chance of these tactics succeeding again might depend un whether an Incident occurred or was provoked which raised anti-US feelingigh pitch. Without such an incident, Ceneral Vallarinos Cuardia Nacional probably control demonstrations so that theeliberate and vote in relative peace.1

There are cogent reasons, on tbe other band, why Arnulfo might choose to avoid sohallenge to the government at soate. He has recently been acting with considerable discretion, and apparently regards his ability to get votes as good- At the present stage, the Guardia Nacional looks strong and unified; certainly it would be prepared for trouble in connection with tho special session of the Assembly. Arnulfo' might see considerable

'The CommunUt parties me small and illegal. The party whldi Inoiw toward Moscow has no mareembers, of wham perhaps half are activists. The pro-Peking group has lees. most of them students. Thr Importance of the Common la ti Is in their abilityntensify andisturbance* already begun; tbey do not have Ihe ability, whkh tbe PsMuwrsiMas probably do have, to tuns such disturbancesopular <atag afamst

the gTVCTMMOt.

'The Caerdie, Panama's only uajfmanj security service,eraonnel strength of. Ilisciplined and fairly competentraining and eijuipment has improved appreciably over Ihe past year. The nobles govern ment has usually called the Cuardia into action as promptly as required, and It has dealt effectively with civil disturbances. In the event of prolonged and widespread disorders, however, the Cuardia probably could not main tain control without US assistance.

advantage to himself in deferring his major challenge at least until thecampaign was in full swing.

Ratification of the treaties wouldolitical coup for Robles and would markedly improve the chancesandidate of the elite to win tbe elections. Attempts by Amulfo to upset tbe results by force would almost certainly be put down. If the treaties should be submitted to the Assembly and rejected entirely or in major part, however, they would have to be renegotiatedater date and under different circumstances. The Robles coalition would begin the campaignerious defeat and this setback would probably tend to accentuate frictions and the possibility of violence. Anti-US sentiment would probably increase as Panamanians accused tbe US of having attempted to foist unacceptable treaties on them. Since the prospect of negotiating new treaties would not be good for months to come. Insistent demands would ra-obably be made on the US for more generous dealings under the present treaty in tbe meantime.

If Amulfo should be ejected innd permitted to take office the following October, he would probably find one means or another to call into question any treaties that had been ratified. Hc would want to put his own imprint upon the results of negotiations be had previously denounced as illegal. He might demand additional concessions from the US. And, to any event, it is likely that the aftermath of the elections, especially if they were close, would be troubled. Thus we wouldense period from May to October next year, with some chance that Panama would not hold to all the provisions of tho Canal treaties even though they had been duly approved and ratified.

Case B: Negotiations Completed Be/ore8 but Treaties notfor Ratification

If the treaties should not be presented for ratification by Septemberhey would become the de facto campaign platform of the elite party coalition. In the unlikely event that the elite candidate won an honest popular election on this platform, the treaties would doubtless pass the Assembly after3 with considerable political and even popular support But the situation, it seems to us, would increase tbe opportunities for Aroulfo and others to make effective political attack, and would, at the same time, maximize the chancespirt in the elite.

Amulfo could probably manage to use the regular National Assembly session which convenes in7ounding board for criticism of tbe Robles administration. Opposition campaign meetings, as well as demonstrations undertaken by the Panamenistas on the one hand and theon the other, would tend toeightened anti-US content. There would be danger of sizable disorders to Panama City and Colon, and perhaps of riots spilling over into the Canal Zone. In this situation, chances would go up that Amulfo might win an election victory so large tbat it would be difficult to steal except by tbe most transparent devices. The elite might

thus be raced wiih the choice of permitting him to win and take office inr using die Guardia and risking large-scale violence to keep him out or throw him out once be took office.

short, we do not think the prospects which emerge in this Caseat all favorable, either in terms of Panamanian political affairs orof the likelihood of obtaining durable approval of the treaties.

Case Ct Negotiations Not Completed Before ftVo Election of8

By the time of the elections, it would be nearly threealf years since the negotiationsof the tenure of Robles' administration. The government would be attacked for incompetence and lack of diligence. Robles might choose to defend bis record by breaking off the negotiations andtbe US for allegedly having delayed them unnecessarily. On the other hand, he might try to explain that they were extremely complicated and that his government had proceeded with caution to avoid jeopardizing the Interests of Panama. In either case, some of tbe elite, and some of the politicians running for seats in tba Assembly or otherwise actively engaged In tbe campaign, would probably assail the US for recalcitrance. The anti-US content of the political campaign would probably be high, and some among the elite might encourage anti-US demonstrations or incidents.

The elite coalition would nevertheless beairly strong position to respond to attacks by Amulfo. He could accuse it of trying to sell out the country's interests, but not of having done so. Indeed, it could counter by claiming that Its determination to protect Panamanian interests made quick agreement to US proposals out of the question. Arnulfo, for his part, could go back tohe and only he could negotiate fair and enduring treaties with tbe US. While there would be danger of serious disorders, we believe it would be less than In Case B.

In the event that the elections shouldew elite government to power, future treaty negotiations would be complicated by such anti-US positions as members of the elite might have taken during tbe campaign. The delay itself might lead the Panamanians to seek larger concessions hem the US,ew Set of negotiators Is not likely to be mare reasonable than Robles' group has been. There would, even so, be mitigating factors. The domestic pressures would be somewhat lowerovernment whichull term ahead before the next elections. And in this case no government, whether Arnulfo's or the elite's would have campaigned against specificof treaties already agreed upon which the US would be negotiating once more with Panama.


sum. there are bound to beecuring new Canalat the same time, maintaining political stability in Panama. Thewill almost certainly become more volatile as the presidential campaign

swings into full activity, and tbe danger of serious disorders will probably increase. Prospects, both for stability and for the treaties, wiD, of course, vary withall of them predictable. With respect to the tuning of completion of treaty negotiations, we would note that the disadvantages inbove are more apparent and the advantages less apparent than those in the alternative cases.


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