SHORT TERM POLITICAL PROSPECTS IN PANAMA

Created: 12/21/1965

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SPECIAL

NATIONAL INTELLIGENCE ESTIAAATE

Short Term Political Prospects in Panama

Sobmrtlad by

Acting DIRECTOR OF CENTRAL INTELLIGENCE Cowed in by iha UNITED STATES INTELLIGENCE BOARD At indicated ovclvaf5

The following intelligence organizations participated in the preparation ol this estimate:

The Central Intelligence Agency andintelligence organization* of, Defense, ond ther

Concurring:

Dr. R. Jock Smith, (or Deputy Director of Centre! Intelligence

Mr. ThomaJ I. Hughes. The Diredor of Intelligence and Research, Deparlmenl ol Slate

lieutenant General Joseph F, Corroll, USAf, Director, Defense Intelligence Agency Dr. Louis W. Tordella, for Director of the National Security Agency

Mr. Howord C. Brown,ssistanl General Manager for Administration, Atomic Energy Commission, and Mr. William C. Sullivan, Auistont Director, Federal Bureau of Investigation, the subject being outside of their jurisdiction.

mater within tho mooning ol Ihe mission or rt

jtion affecting iju

cn in any manner lo an un

the United, tho Irons-ibited.

SHORT TERM POLITICAL PROSPECTS IN PANAMA

THE PROBLEM

To examine the political prospects in Panama aver the next six months or so. and to evaluate likely successors if President Robles were to be removed.

CONCLUSION

The Robles administration will probably survive the period of this estimate. If it does not, the likely alternativea less popular oligarchic grouping or the unpredictable, demagogic Aniulfu Arias-would almost certainly be more difficult in dealings with the US and probably no more successful than Robles inneeded reforms in Panama.

DISCUSSION I. BACKGROUND

I. Most Panamanian* feci that the US lias special obligations to Panama. Tin; Canal and the Canal Zone have longanamanianhe Panamanian economy, and US-Panamanianhelite groups, in particular, have benefited from Ihe US-Panamanian relationship. Nevertheless. they have not scrupled to nuke political capital from nationalistic resentment of US control of the Canal and Ihe Canal Zone and to blame glaring inequities in living standards on US "exploitation." The oligarchy's control of

1 Pjiuma WJpirt0iles, onlyercent of wliidi i> urnhtv Unit. It) pnpul.it tun ouUidc the Cin.il Zone itillion, with..in .innu.il rule of mdiw ofboutpercent liic in tl* tcriiiiwilf tlw Cinjl:n Pannnu Cily0 in Colon. The Panamanian population is TO percent mixed,iciivniercent white,ureviX Imliin and other. The literacy raw ii nhoulink- the per capitaelatively highmce.il)ciirt-iiicly "ii-vra ilutributjiiri of income. The country'i most important cvonomk- iitanw i)iijl iii eiportt arc refined petroleum products, bananas, snd shrimp.

the information media, the political parties, and much of the economy has enabled it to contain pressures for social and economic reforms. In recent vcan. how-ever, the resentment of the Panamanian masses has been exploited by Castroitos, Communists, ultranationalists, and the ambitious Arnulfo Arias. Twice ousted from the presidency. Arias is laying the groundworketurn to power bv arousing the masses against'tbe oligarchy.

II. PRESENT 5ITUATION

The Robles Administration

President Marco Robles assumed office innder inauspicious circumstances. As the candidate of an eight-partv coalition, he .secured onlyercent of the vote in the4 election (according to the officialefeating Arnulfo Arias by less0 votes, Rabies was able to scrapelim majority in the National Assembly byenuous coalition with parties that had opposed him in the election. Having promised toextensive economic and social reforms, he was confronted with an emptyudget deficit, serious unemployment, and other fiscal and economic difficulties. Robles also undertook to fulfill his campaign promise to obtain from theettlement of the Canal issue acceptable to Panamanians.

During his nearlyonths in office Robles has made some progress on Ihe problems he inherited. Unlike his predecessor, he has acted promptly and effectively to control threats to public order. Considering the realities ofpolitics, his appointments to public office have generally been good.esult there has been some improvement in administration over theof his predecessor. Robles has also taken steps to balance the budget and to initiate social and economic programs,asic tax reform to provide the necessary funds. His conduct in negotiations with the US has been markedeasonable attitude and apparent confidence that Panama will he able to obtain an acceptable settlement. The US has demonstrated its support for Robles diplomatically, as well as with financial and technical aid.

The oligarchy, however, had closed ranks behind Robles only to ensure its retention of power and privileges. It soon began to oppose him On specific issues. His tax reform, for example, was considerably watered down in the National Assembly. At the same time, Robles' modest attempts at reform have won for him little if any new support from the lower classes, particularly in the key urban areas. Panama City and Colon. That far, he has countered vigorously opposition criticism of his handling of the negotiations with the US.

Ihe Opposition

political parlies, by and large, arc ineffective, persanalistic,short-lived. That of Arnulfo Arias is the Panamcuista Partyis the largest and best organized Panamanian party. As itssecuredercent of Ihe votes in the official count oflection. The PP electedf theembers of the National Assembly.

(Robles" eighl-patty coalitionight of them from his own Liberalf special significance was Arias' ability to otifdraw all opponents in Panama Oty and Colon.

Arias, charging fraud and intimidation, ha* refused to accept Nobles'He maintains that Robles will be unable to resolve the problemshim and will fall,rias claims, will then call Iiiin to power. In various ways Alias has been trying to speed Robles' downfall He has been careful, however, not to engage in direct persona! criticism of the US. Nor has Arias sent his followers into lhe street, probably because ho is not yet ready to challenge the administration's security forces and is confident that tune Is on his side.

The Communist Party in Panama, called the Party of the Peoples illegal- It hasembers, includingarty activists. There isival. pro-Pelnng.for Reformist Unityhich may havehere is not only competition and conflKlthe PdP and MUR. but also considerable factional conflict within each. Neither has been able to organizeubstantial popular followuigisciplined subversiveoth exert,ignificant influence on anti-US student and nationalist groups. Despite past rebuffs, the PdPstill hopes to Induce the Panamef.fstas to enteropular front with it. The Communists' ability to seize the leadership of the mob in disorderlycreated by others svas clearly demonstrated during theH ticil*.

Securily Force*

The Cnardia S'aciOtial, Panama's only uniformed security force, numliers0 men.isciplined and fairly competent organization, loyal tu its long-time commander. Colonel Boli'sar Vallarino. Under the Rubleswhich has called it promptly into action as re-piired. the Ciwr/io lias shown its ability lo control cim) disorders- In the event of prolonged and ssidciprcadhowesrr. it ssould prolsahly need tultstantial outside jNvtstancc to maintain control. Vallarino. who has strongly supported theovernment, has substantial polttical and economic influence andclosely allied svith the oligarchy.

There isaii Department of National Investigationsnalogous to the FDI, which is responsible to the Ministry of the Presidency. It svorVs closely svith the Cua/tllu, but its investigative capabilities are limited, particularly outside of Panama City and Colon.

'TheVAN (Vnnpuril of Xntion.iltikli wus luntrrttMOuslyin tlso4 hot! hai apisnrently disseised. Some members lava jointd tlw IMP. others the MUR. Still othen remain unaffiliated.

anamanian* lisse ncurt guerrilla and terrorist tninmsj In Cuba. UseBloc, oc Cu-amuniH CMm. MM o( tlwmy VAN.by- the IMP Hmcsm. noMtxi-ruirbased on them appears to csnt

III. THE OUTLOOK

h* Hoblcs. governmentowomewhatosition than it was when it took officeonths ago. This improvement is attributableto Rubles' own demonstralion of Cuinnes* combined with reasonableness in coping with successive threats to public order. We foresee, however, no appreciable further strengthening of his position, nl least notanalsatisfactory to Panama has been successfully negotiated.ukenfng of his position is likely pendingettlement.

Already Robles has had some difficulty in controlling critical reactions to the slow pace of ihe Canal negotiations and uncertainty regarding the outcome. The lad of evident progress in negotiation! will increase tlie chancer, for anti-gowmrncn* demembration*1 January, the second anniversary of1 riots. &trcniists will certainly seel to ciphMt popular emotions on tliat occasion and i( will take prompt and effective action by the Cuardia Sationa! to control the situation. Wc bclicvr that Robles and Vallarino will act promptly and firmly, and that the situation will be effectively controlled

Wc believe that Robles will remain in power during the limited period of this estimate. Nevertheless, failing evidence of progressatisfactory canal sellleini-nl, his position is likely to weaken gradually, not only on that account, but also on account of his inability to make good his promises of economic and social improvement. The two considerations arc related, since some longer term investments in the economy are apparently being held upettlement of the Canal ivtue and consequent reawurancc regarding political stability. Moreover. Robles appears to have exhausted his political capabilities in pushing his tax reform through the Nalionai Assembly; no furtlur reform measures of any sjgniicance are likely to beleast not unless Robles' hand is greatly strengtheneduccessful outcome ol the CanalThus the extremists will continue to find opportunities for subversive agitation in the continuing diuatirf actions of the urban poor in Panama City and Colon.

Alternatives to Robles

Cee-atitutken pro>>de> that. Sf the proolrocy should become vxaM dunft* the seeocl tvtV af the itrriioViWuJ(to taa easeetabere Vice President serves Use balance ei the ternx

Nr/

If Robles were to die or to be forced to resign beforeighly unstable situation would ensue. According to the Constitution, he would be temporarily succeeded by Max Delvalle, the First Vice President. However, several strong members of the cabinet would prefer the Second Vice President, Raul Arnngo Navarro, and might contrive to push Delvalle aside. In any case, the Constiiution would requireresidential election be held within four months.4

Neither Delvalle nor Arango would have as mucholitical bate as Robles now las. nor would either have any appreciable popular support.

Neither could be expected to take any significant action with respect toanal settlement or social reform within his brief tenure of office.

Unless the oligarchical parties were able to unite in supportingle strongighly unlikely development, Arnulfo Arias would probably win the required presidential election by tooargin to be counted out. To prevent the election of Arias, certain strong members of the Cabinet, such as Jose Bazan, Minister of Covemment and Justice, Fernando Eleta, Minister of Foreign Relations, or David Samudio. Minister of Finance and Treasury, might seek the support of Vallarino inrovisional junta. Vallarino would be reluctant to engageoup, but, in these circumstances, could probably be persuaded to back them in order to keep Arias from the presidency.

unta, composed of oligarchs, would be highly unpopular. We doubt that it could move more rapidly than Robles has on needed reformor that it would be better able to show progress in (he negotiations with Ihe US. Thus it too would be faced by public unrest and probably by more of it than Robles has had to cope with. The Communists almost certainly would make new overtures to the Panamenistas, and might have some success. In that event disorders might become increasingly severe, eventuallyhaotic situation of unpredictable outcome.

Arnulfo Arias is unlikely to become President of Panama exceptopular revolution which overwhelmed the Cuardiaevelopment which we regard as highly unlikely within the period of this estimate. Wcpredict what course Arias would follow if he were to become President in such circumstances, but his regime would tend to be autocratic. His twoattempts at) were abortedesult ol his abuse of power and Fascist-like tendencies. Arias's anti-US bias is said to have mellowed, lie is One of the few prominent Panamanians who urged moderation at the time of the4 riots. However, there is little reason to believe that he would be as cooperative with Ihe US as Robles has been. The circumstances which brought him to power would limit his freedom of action.

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