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The FIU-SOUTHCOM Academic Partnership Strategic Cultures Assessments
Florida International University’s Applied Research Center (FIU ARC), in collaboration with the United States Southern Command (USSOUTHCOM) and FIU’s Latin American and Caribbean Center (LACC), has recently formed the FIU-USSOUTHCOM Academic Partnership. The partnership entails FIU providing the highest quality research-based knowledge to further explicative understanding of the political, strategic, and cultural dimensions of state behavior and foreign policy. This goal will be accomplished by employing a strategic culture approach. The initial phase of strategic culture assessments consists of a year-long research program that focuses on developing a standard analytical framework to identify and assess the strategic culture of ten Latin American countries. FIU will facilitate professional presentations of the following ten countries over the course of one year: Venezuela, Cuba, Haiti, Brazil, Colombia, Ecuador, Nicaragua, Bolivia, Chile, and Argentina. In addition, a report of findings on the impact of Islam and Muslims within Latin America will be produced. The overarching purpose of the project is two-fold: to generate a rich and dynamic base of knowledge pertaining to the political, social, and strategic factors that influence state behavior; and to contribute to USSOUTHCOM’s Socio-Cultural Dynamics (SCD) Program. Utilizing the notion of strategic culture, USSOUTHCOM has commissioned FIU ARC to conduct country studies in order to explain how states comprehend, interpret, and implement national security policy vis-à-vis the international system. USSOUTHCOM defines strategic culture as follows: “the combination of internal and external influences and experiences – geographic, historical, cultural, economic, political and military – that shape and influence the way a country understands its relationship to the rest of the world, and how a state will behave in the international community.” FIU will identify and expound upon the strategic and cultural factors that inform the rationale behind the perceptions and behavior of select states in the present political and security climate by analyzing demography, history, regional customs, traditions, belief systems, and other cultural and historical influences that have contributed to the development of a particular country’s current security rationale and interpretation of national security. To meet the stated goals, FIU ARC will host a series of professional workshops in Miami. These workshops bring subject matter experts from all over the US and Latin America together to explore and discuss country-specific history, geography, culture, economic, political, and military climates vis-à-vis strategic culture. At the conclusion of each workshop, FIU publishes a findings report, which is presented at USSOUTHCOM.
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The following Panamanian Strategic Culture Findings Report, authored by Dr. Orlando J. Pérez, is the product of a working group held in Miami on March 21, 2011, which included seven prominent academic and private sector experts in Panamanian history, culture, geography, economics, politics, and military affairs. In addition to Dr. Pérez these experts were Drs.
Richard Millet, Peter Szok, William Furlong, Gerardo Berthin, Jennie Lincoln, and Joseph Tulchin.
The views expressed in this findings report are those of the author and do not necessarily reflect the official policy or position of the US Government, US Department of Defense, US Southern
Command, FIU-ARC, or Florida International University.
On behalf of FIU-ARC, we wish to acknowledge and thank all of the participants for their contributions, which made the Panamanian Strategic Culture workshop a tremendous success.
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Table of Contents
Executive Summary
4
The Preeminence of Geography and the Transit Route for Establishing Panama’s Strategic Culture
8
Elite Beliefs and Behavior: Building a Transactional Society
10
Militarism and United States Influence as Key Elements in Panama’s Strategic Culture
12
The Transformation of the Military and the Challenges to Security
18
Counter-Elite Movements and Strategic Culture of Panama
24
Mass Political Culture
26
Challenges and Opportunities
30
About the Author 39
4
Executive Summary
• Panama demonstrates how geography shapes the formation and development of the social
institutions of a nation. As such, the strategic culture of Panama has to be understood in
terms of the political, social, economic and cultural processes surrounding the
management of the Panama Canal. The Canal created the nation and the society of
Panama as it is today.
• For a country “at the service of the world,” Panama’s foreign relations have historically
been quite narrow. Since independence in 1903 the United States has been the focal point
of Panama’s foreign relations, both politically and economically.
• Panama is a transactional rather than a confrontational society. Panama therefore can be
characterized as the nation of the “deal,” where everything is for sale.
• Panamanian elites developed a system based on tight social and economic networks
greased by pragmatism and opportunism. The system 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 their most enduring qualities.
• While Panama today has no formal military institution, the armed forces played a
significant role in the development of the Panamanian nation-state and thus are important
in understanding the country’s strategic culture.
• 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 emergence of military-
5
led governments in the context of a dominant ideology that saw the Isthmus as a function
of its geographic position.
• Sovereignty over the Panama Canal was a central issue that bridged the gap between the
military and all sectors of the elite. The military-led governments used the negotiations
for new Canal treaties to silence opposition to its policies. With an appeal to national
pride and unity, the regime sought to silence any opposition in lieu of the “sensitive”
treaty negotiations. 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.
• After the years of economic sanctions, popular protests, failed elections and sustained
political pressures from the United States failed to remove General Noriega from power,
the United States mounted a military invasion on December 20, 1989.
• The post-invasion government dismantled the armed forces. Three factors were decisive
in demilitarizing public security. First, the invasion destroyed the operational capabilities
of the Panamanian Defense Forces. Second, the looting and ensuing anarchy dramatized
the urgent need for an organization whose task could ensure public security. Third, the
country required a new security apparatus independent of the party in power.
• The transformation of Panama’s security forces has moved forward under administrations
of different parties and ideological orientation. 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. De-militarization, thus, has been a pillar of the country’s process of
democratization and is now firmly established as a key element of the nation’s strategic
culture.
6
• Rising crime rates, homicides per 100,000 inhabitants that have doubled in the last 5
years, drug trafficking, and the continued spillover of the Colombian civil war, are all
among the key security challenges that drive Panama’s strategic culture. Few
Panamanians argue for a return to the 1980s and a strong role for the military, but many
clamor for greater security. How to provide the latter without the former is a key issue in
Panama today.
• The extent to which leftist or progressive movements have been able to challenge the
dominance of the traditional commercial elite has been rather limited. Organically weak
because of the small number of industrial proletariat, the political left has mobilized
around nationalism and the recovery of the Panama Canal. However, its electoral
prospects are limited.
• While historically isolated and politically weak, indigenous communities have recently
mobilized to defend their economic and political rights. Particularly important have been
a series of mobilizations against mining concessions in the Western part of Panama. The
success of these mobilizations might embolden indigenous communities to pursue
additional political activism, and challenge the prevailing elite-dominated strategic
culture.
• While Panama continues to be part of a handful of countries that do not have diplomatic
relations with the PRC, China’s investment and involvement in Panama in the last 10
years is impressive. A Chinese subsidiary company, Hutchinson-Whampoa, manages the
ports in Panama City and Colón. The PRC is one of the leading users of the Colón Free
Trade Zone, relying on the zone for the shipment of goods to the United States and Latin
America, as well as being the single largest supplier of goods to the zone, accounting for
more than a third of total goods sold. As of 2010, the PRC is Panama’s second largest
trading partner, accounting for 18.7% of total trade (20.5% of imports).
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• China will likely be the biggest beneficiary from Canal expansion.
• 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. Over half of Panamanians believe that personal interest is one of the key drivers
of behavior and over 80% respectively believe that individual criteria guide decisions in
public administration.
• In the end, Panama’s balance sheet of democratic assets and liabilities tilts toward the
former, particularly when compared to most of its neighbors in Central America. We
would be hard-pressed to devise a scenario where Panama’s Fuerza Pública (Public
Force) would do what the Honduras military did in June 2009. Unlike Guatemala, El
Salvador and Nicaragua, Panama did not suffer prolonged civil wars. The political
behavior of Panama’s elites promotes accommodation and compromise rather than
violence and confrontation.
• In the end, despite key challenges, there are four factors that shape Panama’s democratic
development since the U.S. invasion: (1) A process of de-militarization, made easier by
the results of the invasion, which dismantled the old military and established firm civilian
command of security forces. 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; (3) 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) Panamanian citizens 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.
8
The Preeminence of Geography and the Transit Route for Establishing
Panama’s Strategic Culture
Panama’s motto “At the Service of the World” (Pro Mundi Beneficio) reflects the key
element defining the nation’s identity, history, culture, politics, and society.1
1 The author wishes to thank the participants in the FIU-ARC sponsored workshop on the “Strategic Culture of Panama” held March 21, 2011. Particularly useful were papers prepared by Joseph Tulchin, Richard Millett, William Furlong, Peter Szok and Gerardo Berthin, as well as a presentation by Jennie Lincoln. Additionally, portions of the analysis of elite culture and militarism are taken from Pérez, Orlando J., 2011, Political Culture in Panama: Democracy after Invasion. New York: Palgrave-Macmillan. The author also wishes to thank Brian Fonseca and Bradley Porter of FIU-ARC for their valuable assistance in putting together the workshop and the finding’s report. Additionally, I wish to thank Moisés Caballero and the staff of FIU-ARC for their assistance.
One cannot
understand Panama without first understanding the nation’s role at the center of a global
commercial hub. This fact, and all that flows from it, more than anything else explains the
underlying components of Panama’s strategic culture. While Panama is certainly more than a
Canal, the interoceanic waterway has defined the country’s existence since the nineteenth
century. As such, the strategic culture of Panama has to be understood in terms of the political,
social, economic and cultural processes surrounding the management of the Panama Canal. The
struggle to build, control and manage the Canal shaped the development of the Panamanian
nation-state and defined the nation’s relations with the rest of the world.
As we enter the second decade of the twenty-first century, Panama’s role as custodian
and manager of an important global trade infrastructure will be shaped by issues such as ethnic
and social integration, governance and accountability, economic development, and security.
These issues in turn constitute important factors that influence Panama’s strategic culture, and
serve as anchors to our discussion in this report.
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.” 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).
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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).
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 trans-isthmian 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
Bogotá (Lemaitre, 1971:386, 388, and 392; Teran, 1976). The group that supported the
separation from Colombia was composed of leaders of various political orientations. 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.
In the 300 or so years as a colony, Panama did not develop the major areas of economic
activities that were common in the rest of Spanish Latin America. Most Latin American colonies
survived on agriculture, mining, fishing, and forestry. The elites in most Latin American
countries were the large landowners (the latifundistas) who controlled the economic systems, the
social systems, and the political systems of those colonies and later of each independent country.
In Panama, it was always the service and commercial sectors which controlled the economic
10
system. Over 75% of the GDP is produced by the service sectors of the country. The number of
the economically active population also indicates that the vast majority of the work force is
engaged in the service sector. Approximately 67% work in the service sector; 16.6 in agriculture,
fishing, and mining; and 16.8 in industry, manufacturing and construction. It is impossible to
separate the many impacts of the Canal on Panama.2
2 Furlong, William, 2011, “Sin el Canal, No hay Panama,” Paper prepared for the Workshop on the Strategic Culture of Panama, Florida International University, Applied Research Center, Biltmore Hotel, Miami, FL. March 21, 2011.
The Canal created the nation and the
society of Panama as it is today. The economic system would be completely different without a
Canal. According to a recent report from the Comptroller’s Office, the value of all goods and
services produced in the country is estimated at US$26 billion for 2010. Transport and
communications represent the largest percentage of GDP, followed by property and services
(15.1%), commerce (13.3%) and financial services (7.9%). Although the Canal itself brings in
only 4% of total GDP, the multiplier effect is very significant. This includes expenditures made
by employees from their income going to supermarkets, warehouses, restaurants, homes, schools
and recreation. When all is included it is estimated that the Canal brings Panama about 30% of
the entire GDP, rising to 40% once the expansion project is completed. In FY 2010 the Canal
provided US$754 million to the national treasury. It is expected to provide an average of US$902
million until 2014. Once the expanded Canal becomes operational, contributions will increase
significantly to more than $5 billion a year by 2025.
Elite Beliefs and Behavior: Building a Transactional Society
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.
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As a vital zone of transit for global commerce, the Isthmus was object to the military,
economic and political interests of Seville, Madrid, London, Bogotá, and Washington. Alfredo
Castillero Calvo points out that 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.
Historically, both liberals and conservatives saw the development and “salvation” of
Panama as a function of the construction of an interoceanic canal. The organic weakness 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, says, “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 bases 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. 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: A) a concentration of the prosperous economic groups (either in local
retail commerce, the Colón Free Trade Zone, the banking center, or the industrial sector); B) 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 C) the links that are enforced as
groups that remain outside of the top network are placed at a disadvantage in relation to their
12
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.
Panamanian elites have operated through a system based on tight social and economic
networks greased by pragmatism and opportunism. That system has 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 their most enduring qualities.
Militarism and United States Influence as Key Elements in Panama’s
Strategic Culture
While Panama today has no formal military institution, a fact that will be discussed
further later in the paper, the armed forces played a significant role in the development of the
Panamanian nation-state and thus are important in understanding the country’s strategic culture.
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 emergence of military-led governments in the
context of a dominant ideology that saw the Isthmus as a function of its geographic position. The
influence of the United States in the formation of the armed forces has been felt throughout the
20th century.
The proclaimed right of the United States to intervene in the internal affairs of Panama
goes back to the middle of the 19th 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-Biblack
Treaty. 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
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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).
The limits to the U.S. right of intervention would expand considerably with the signature
of the Hay-Buneau Varilla Treaty of 1903. The eccentric Minister of Panama in Washington, the
Frenchman Phillipe Buneau Varilla, and the 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 U.S. “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 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 Colón 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” (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. The
circumstances under which the new nation was born, however, made the local military institution
and the state they were entrusted to defend, a virtual protectorate of the United States. For the
latter, order and stability was the principal concern. 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
14
interoceanic canal. Thus, the United States came to regard the existence of a Panamanian army
as a threat to the stability of the country. As a result of U.S. pressure, the original Panamanian
Army was dissolved in 1904 and replaced by a National Police (Arias, 1977). In 1916, the then
police force was disarmed on orders from the Governor of the Canal Zone (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
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).
There are five direct manifestations of the rights granted to the United States in the 1903
Treaty and Article 1363
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
of Panama’s first Constitution. First, the elimination of the army in 1904,
at the insistence of the U.S., 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 Treaty 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 extra-territorial power. 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.
3 Article 136, a provision demanded by the U.S. Senate in exchange for ratifying the Hay-Buneau Varilla Treaty, gave the United States the right to intervene in the isthmus for the “protection” of Panamanian independence.
15
process of ISI deepened the personal and sectorial 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 coup d’état that toppled the civilian-elected government on October 11, 1968.
While the military regime’s initial pronouncements aimed to restore civilian authority, by
1970 it had abandoned that goal and initiated the institutionalization of a populist military-led
regime with the explicit support of a significant sector of the national bourgeoisie. 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.
The military-led government formed an alliance with sectors of the dominant class. These
sectors supported a national development program that sought to use the resources of the transit
economy to promote the modernization of the Panamanian state and the diversification of the
economy.
The issue of sovereignty over the Panama Canal had an important impact in helping to
bridge the gap between the military and sectors of the elite. The government used the
negotiations for new Canal treaties to silence opposition to its policies. Since the Panama Canal
opened to world commerce in 1914, the dominant commercial elite 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.
One of the major goals of the military-led 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
16
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).
It is clear that in the struggle to reform the 1903 Treaty and acquire concessions from the
United States, no Panamanian organization would side with the latter 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.
The evidence suggests that after the death of Omar Torrijos in 1981, the military
institution, under the control of Manuel A. 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.
One of Noriega’s first acts as Commander of the National Guard was to have the
Legislative Assembly approve a bill to restructure the 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.4
The functions of the PDF stated in the organic law were broad, giving it an increasing
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 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
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, 600-01).
4Law No. 20 of September 29th, 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, Panama, Republica de Panama, p. 1-8).
17
broad array of institutions under a single operational command. The PDF encompassed the
General Staff, Military Regions and Zones, Ground Forces, Panamanian Air Force, National
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.
Between 1983 and 1989, the PDF not only grew in size, 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 treaties, would occur on
December 31, 1999.
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. Steve Ropp (1992)
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. Ropp states, “He (Noriega) 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”
(229).
The Panamanian commercial elite have traditionally seen their economic and political
interests closely tied to those of the United States. Therefore, as long as the U.S. 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
18
regional policies,5
The minister of government and justice at the time, Ricardo Arias Calderón, decided in
February 1990 to replace the Defense Forces with a Public Force composed of three services: the
National Police, the National Air Service, and the National Maritime Service. The decree that
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
as well as on 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 mid-1987 elite opposition to Noriega was encouraged and
financed by the United States.
The Transformation of the Military and the Challenges to Security
After the years of economic sanctions, popular protests, failed elections, and sustained
political pressures from the United States failed to remove Noriega from power, the United
States mounted a military invasion on December 20, 1989 that toppled the military-led regime.
The invasion signaled a failure of domestic actors’ pressures to remove Noriega from power, but
also represented the limits of U.S. power to influence events in Panama without resorting to
force. Furthermore, the invasion signaled a continuation of Panama’s historical dependence on
U.S. action to resolve internal political disputes.
As far as the local military forces were concerned, the invasion precipitated a complete
re-organization. The Panamanian Defense Forces (PDF) were dissolved, its command destroyed,
and its personnel the subject of a massive re-structuring. From the ashes of the PDF emerged a
Fuerza Pública [Public Force] of 12,000 men and women. Three factors were decisive in
demilitarizing public security. First, the invasion destroyed the operational capabilities of the
Panamanian Defense Forces. Second, the looting and ensuing anarchy dramatized the urgent
need for an organization whose task could ensure public security. Third, the country required a
new security apparatus independent of the party in power.
5Andrew 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.
19
the future. Yet these services were almost completely de-militarized 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 the Legislative Assembly.6
The institutional success of demilitarization in Panama is bound to the internal changes in
the Revolutionary Democratic Party (PRD).
In July 1994 President Guillermo 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 to participate in political protests, make political
declarations or intervene in political party rivalries. However, members still retain the right to
vote in elections. The constitutional reforms were approved on August 23, 1994.
7
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.
Overall, the National Police’s organic law (Law 18 of 3 June 1997) consolidated the changes that
had already taken place within the security institution since 1990. Key aspects of the law
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 de-militarization 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 nonetheless it was
important. The PRD stopped short of totally repudiating its military past, picking out the
elements that shored up popular appeal whilst remaining within the norms of the new political
order. It accepted the new rules of the game and made no call or attempt to orchestrate
disturbances or destabilize the reforms.
6 “Decreto de Gabinete No. 38 de 10 de febrero de 1990,” Gaceta Oficial, No. 21, 479 (20 de febrero de 1990). 7 The PRD was created in the late 1970s by the military government as the regime’s political vehicle for leading the transition process.
20
emphasized the civilian nature of the institution – for instance by replacing “ranks” (rangos) with
“levels” (niveles); how and when force could be used was clearly defined; and the concept of due
obedience was eliminated. The subordination of the police to civilian authority was reiterated
throughout the law, clearly stating the prohibition on political activities, intervention and
partisanship, all punishable by sacking from the institution. Law 18 facilitated the
professionalization of the police forces in that the mission, functions and regulation of the police
force were clearly established, including a strict code of conduct and a clear career path. Law 18
did not introduce anything new, but rather served two purposes: first, unifying what had been an
ad hoc and disparate public security reform process and anchoring the process into Panamanian
law, and second, bringing to a close most of the bitter political disputes that had surrounded
public security issues since the early 1990s. The strengthening and professionalization of the
security forces (especially the national police, or 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 in order to improve their ability to
carry out their public security duties has thus been established since the mid-1990s and has not
attracted negative publicity or engendered debates. Some recent changes, however, have been
more controversial, as have the plans of the Martin Torrijos administration (2004-2009)
discussed below. On the one hand, the U.S. has encouraged the strengthening of the Panamanian
security apparatus, including augmenting the military capacity of its forces. In 2003, for instance,
General James T. Hill, Commander in Chief of the 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 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 Torrijos came to power 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
21
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 Aeronaval National Service, creating the National Border Patrol, and reorganizing the
Council on Public Security and National Defense as a separate entity. 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 Martinelli, the winner of the 2009 presidential elections,
criticized Torrijos’ reforms and sought to repeal the decree that created the National Intelligence
and Security Service (SENIS). Martinelli, nevertheless, has made additional significant changes
to Panama’s security apparatus in order to deal more effectively with rising rates of crime and
other security threats such as drug trafficking. 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 initial process of de-militarization, 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
22
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.
De-militarization, thus, has been a pillar of the country’s 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.
The Challenge of Rising Crime Rates
Central America is the sub-region with the highest level of homicides per 100,000
inhabitants in Latin America. The recently published Human Development Report for Central
America provides aggregate data for homicide rates between 2000 and 2008 that indicates a
significant increase. Table 1 illustrates the evolution of homicide rates. In the case of Panama,
the data show an increase from 10 per 100,000 persons in 2000 to 19 in 2008. In 2009, the
homicide rate increased to 23.7 per 100,000 inhabitants.8
Table 1. Central America Homicide Rates, 2000-2008
The Spillover of the Colombian Civil War
In the last five years the issue of security in the Darien region of Panama, bordering
Colombia, has escalated. In the last two decades there have been at least 20 clashes between
8United Nations Development Program (PNUD), “Observatorio de seguridad ciudadana,” Fondo para el logro de los ODM (Millenium Development Goals), October 2010.
23
Panamanian police and Colombian irregular groups, which have left nearly 20 deaths: nine
civilians – including three children, and four policemen and guerrillas. Additionally, in the most
recent cases at the beginning of 2010, in the areas of Alto Tuira and Jaqué, three members of the
FARC were killed and two others were wounded. A Panamanian police officer was also gunned
down.
The United States has pushed for the strengthening of Panama’s security apparatus as a
bulwark against the spillover of the Colombian civil war, but also to address the increasing
threats of drug trafficking, money laundering and other transnational criminal networks. The
reforms implemented by the Martinelli administration were aimed at providing greater
capabilities to the country’s security forces. The administration increased security spending in
2010 and has proposed additional increases for 2011. The 2010 increase included a pay raise of
US$100 per member of the security forces. The Minister of Security José Raúl Mulino pointed
out that some of the US$120 million had been invested in the acquisition of new technology over
the past 20 months (i.e. 2009 and 2010) and in order to stand up new units and installations.
Included in that spending was the acquisition of two new Cessna 208B Grand Caravan for the
SENAN (National Naval Air Service) and the repair and overhaul of five helicopters. The 12%
increase for FY2011 allows the acquisition of new helicopters, 19 radars and naval vessels
equipped with modern technology from Italy. The 2011 budget includes US$80 million for
capital investments and US$39 million in social services including pensions and retirement funds
for retired police and security personnel. The United States assigned US$3.8 million during 2008
and a further US$2 million in 2009 through the Mérida Initiative.
While the current Panamanian government has moved to strengthen the country’s
security forces, the exact nature and extent of those forces remains a controversial issue,
particularly their relations with the United States. Some Panamanians, particularly those who led
the struggle against General Noriega, and the small political left, argue that the reform of the
security apparatus constitutes a re-militarization of Panama’s security forces. For some
Panamanians, the security of the Canal can only be assured though the application of the
principle of neutrality, and greater intelligence capabilities, rather than military force. In the end,
increased levels of crime and pressure from the United States have reopened the debate over
militarism and security in Panama. Few Panamanians argue for a return to the 1980s and the
24
Panamanian Defense Forces, but many clamor for greater security. How to provide the latter
without the former is a key issue in Panama today.
Counter-Elite Movements and Strategic Culture of Panama
From the perspective of the upper class and a nascent middle-class sector, the Canal and
independence did not always strengthen their position but instead seemed to weaken it in relation
to perceived rivals. The building of the waterway and the role of the United States invited the
entry of economic competitors, who challenged and displaced national investors, while
disrupting the country in a number of important ways. Strikes, indigenous rebellions, and
feminist mobilization characterized the first decades of the republic, whose political life became
sharply fragmented and beyond the control of the Liberal Party.9 North Americans especially
galvanized a rising group of professionals who had emerged from a new educational system and
who were eager to take up responsibilities in the republic, but who found a host of U.S. advisors
blocking their advancement through the expanding state bureaucracy. Finally, the Canal did not
“whiten” or “civilize” the isthmus, but rather, it dramatically increased its black population, just
as the United States strengthened racist doctrines by imposing segregation in the Canal Zone.
The U.S. construction project depended heavily on Afro-Antillean laborers, thousands of whom
remained after its completion. As Peter Szok argues, “popular art arose as an African Diaspora
expression which became increasingly evident in the early 1940s, just as President Arias was
disenfranchising the Afro-Antillean population. Critical to its rise was the same process of
modernization which “democratized” cultural norms in Panama and elsewhere and which so
frightened members of the intelligentsia. Popular art emerged as a consequence of economic
changes and exploited the opportunities of the isthmus’ transformation, particularly its rapid
commercial development.”10
By the late 1920s, the impact of a world depression served to exacerbate tensions
between Panamanians and the United States. The ill effects of the depression were especially
acute in Panama City and Colón. In these cities resided the emerging middle class of Panama,
9Szok, Peter, 2011, “Popular Art, Blackness and Panamanian Strategic Culture,” Paper prepared for the Workshop on the Strategic Culture of Panama, Florida International University, Applied Research Center, Biltmore Hotel, Miami, FL. March 21, 2011. 10 Ibid.
25
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 the
nationalization of foreign-owned businesses.
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. 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, and 1968)
he was overthrown by the military. While Arnulfo Arias and his movement represented a
challenge to the dominant commercial class, Arias himself had married into the Panamanian
oligarchy, and incorporated many of its members into his political movement. In the end, his
movement came to represent sectorial interests that could easily be reconciled with the interests
of the dominant commercial elite; Panamanian political culture made this reconciliation
inevitable.
The extent to which leftist or progressive movements have been able to challenge the
dominance of the traditional commercial elite has been rather limited. Organically weak because
of the small number of the industrial proletariat, the political left has mobilized around
nationalism and the recovery of the Panama Canal. The working class gained certain rights
during the military regime as the government led by General Omar Torrijos sought to build a
multiclass alliance by providing selective benefits to the country’s industrial proletariat.
The military regime fragmented the labor movement by developing close ties between the
Revolutionary Democratic Party (PRD) and certain sectors of the movement, particularly
government employees. After the U.S. military invasion, the restoration of democracy enabled
the labor movement to mobilize more freely than during the Noriega regime. However, the
26
application of neoliberal economic policies by all post-invasion governments, including those led
by the PRD, weakened labor’s ability to organize politically as reforms to the Labor Code
reduced some of the rights unions had acquired during the 1970s. Periodically, labor unions have
had limited success in challenging government policy, but more often than not governments have
been able to carry out their policies with only minor concessions to the labor movement.
Indigenous peoples in Panama account for 10% of the population, with 285,231 people
having identified themselves as indigenous in the 2000 National Census. Panama’s seven
indigenous groups are the Ngobe, Bugle, Kuna, Embera, Wounan, Bribri and Naso. The Ngobe
account for 59.3% of the indigenous population, followed by the Kuna, accounting for 21.6%.
Panama has five indigenous regions, representing 20% of the national territory: the Ngobe-Bugle
and Campesino region, the Kuna Yalar region, the Embera-Wounan region, the Kuna de
Madugandi region and the Kuna de Wargandi region. While historically isolated and politically
weak, indigenous communities have recently mobilized to defend their economic and political
rights. Particularly important have been a series of mobilizations against mining concessions in
the Western part of Panama. Indigenous mobilization recently brought down a contentious law
that made it easier for multinational mining corporations to gain entry into the Central American
country. Law 8, a revision of Panama’s 1963 mining code, enabled foreign, state-owned
companies to directly invest in large-scale mining projects. The success of the mobilization
might embolden indigenous communities to pursue additional political activism.
Mass Political Culture
To what extent do Panamanian masses believe in democracy? This section uses data from
the AmericasBarometer surveys11
11The surveys employ a stratified multi-stage cluster sample with a minimum size of 1500, providing a margin of error at the 95% confidence interval of +/- 2.5%. 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.
to answer this question. Additionally, we look at attitudes
toward various political institutions. The survey asked: “Which of the following three statements
do you most agree with? (1) People like us do not care if there is a democratic or non-
democratic regime; (2) Democracy is preferable to any other kind of government; (3) In some
circumstances, an authoritarian government might be preferable to a democratic one.”
27
Figure 1 - Preference for democracy over Authoritarianism
Figure 1 shows a reduction in the preference for democratic government between 2004 and 2006,
but a significant rebound in 2008. In 2004, 77.7% of survey respondents preferred democracy to
any other form of government. This figure fell to 68.3% in 2006, but rebounded significantly in
2008 to 86%. Also significant is the decrease of people who express indifference between
democratic and authoritarian governments, from 19.1% in 2006 to 8.4% in 2008. These results
indicate a near universal preference for democracy among Panamanian citizens.
Additionally, the survey asked: “Do you believe that our country needs a strong-handed
government, or that its problems can be resolved with everyone participating? (1) Strong-
28
handed (2) Everyone participating.” In Figure 2, we can see a significant increase in the support
for a “heavy-handed” government between 2004 and 2006, with no appreciable change in 2008.
There are doubts about the substantive 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 highlighted the increase in
corruption among government and private sector, and in the past 4 or 5 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.
Figure 2 - Preference for Strong-Hand Government
29
The AmericasBarometer survey asked respondents how much trust they had in various
political and private institutions. We find a general decline in trust in institutions since 2004,
with the Catholic Church consistently receiving the 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.
Figure 3 - Level of Trust of Various Institutions, 2004-08
30
A key problem for democracy in post-invasion Panama is the nature of executive-
legislative relations. 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. Additionally, legislators are incapable 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 the viceroys had during the colonial period and that caudillos had during the nineteenth
and early twentieth century.
Moreover, the institutional changes made by the military regimes during the period of
1968-89 left a legacy of clientelism 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.
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, they do not play a significant role in policy-making (other than through control of
executive office), and they do not have great support among the population. When asked if they
sympathize with any party overwhelming majorities say no. Over 79% in 2006 and 68% in 2008,
an election year, expressed a negative attitude toward political parties. Furthermore, slightly over
a third of Panamanians believe that political parties represent their supporters or listen to people
like them. In turn, over 60% believe that corruption is rampant within political parties.
Challenges and Opportunities
An important challenge for Panama as it enters the second decade of the twenty-first
century is the development of a coherent and effective foreign policy. We began this paper by
31
establishing that Panama’s geographic position shaped the country’s strategic culture in profound
ways. Geography has dictated Panama’s place within the world economic order. Ironically, for a
country “at the service of the world,” Panama’s foreign relations have historically been quite
narrow. Since independence in 1903 the United States has been the focal point of Panama’s
foreign relations, both politically and economically. This fact should not be surprising since until
1999 the nation’s most important asset, the Panama Canal, was under U.S. control. However, the
years since 1999 have seen a gradual growth in the importance of relations with other countries
and regions, primarily the People’s Republic of China (PRC) and Central America.
First, Panama’s move to become part of the Sistema de Integración Centroamericana
(SICA) [Central American Integration System] is a significant shift in focus for the country that
shunned Central America as a “natural” partner12
Second, and far more important for Panama’s economic future, is its relations with the
PRC. Despite the increase in investments since 1999 and the PRC’s status as the second largest
user of the Panama Canal, Panama does not have diplomatic relations with the PRC. Panama
instead is one of a handful of countries in the world that continues to have diplomatic relations
with Taiwan. Taiwan provides substantial amounts of assistance and investment in Panama. The
relationship between Panama and Taiwan is also greased by direct assistance, or what some call
and gravitated toward South America because
of its historical ties to its southern neighbor, Colombia. While Panama continues to maintain ties
with South America, for example, as an observer nation within the Andean Pact, Central
America has become an important geopolitical focus. The country now participates actively in
the presidential summits of Central American presidents that serve as a key component of the
sub-region’s integration architecture. Ironically, however, and true to historical patterns, Panama
is not part of CAFTA-DR (the Central American and Dominican Republic Free Trade
Agreement). Instead, Panama signed a bilateral free trade agreement with the United States; a
treaty that has not been fully ratified because of opposition in the United States Congress. One of
the principal problems for further economic integration with Central America is opposition from
agricultural sectors who argue that Panama’s relatively high labor wages will place them at a
disadvantage vis-à-vis farmers from other countries in Central America.
12 Panama played a role in attempts to resolve the civil wars in El Salvador and Nicaragua during the 1980s through the so-called Contadora process (named after the Panamanian island in the Pacific). However, other than hosting several meetings, Panama’s influence was minimal.
32
“bribes,” to Panamanian public officials; for example the purchase of a presidential plane, or
expensive fully paid trips to the East Asian island. Apparently, Panama’s current policy is to
seek closer relations with the PRC. The Martinelli administration sought to distance itself from
Taiwan and pursue a policy of gradually recognizing the PRC, but apparently the latter has
rebuffed such efforts in order not to damage relations between Taiwan and the mainland.13
China’s investment and involvement in Panama in the last 10 years is impressive. For
example, Chinese subsidiary companies manage the ports of Panama City and Colón. When
Hutchinson-Wampoa purchased the ports there was great consternation in the United States that
this meant China would control the Panama Canal. The fact is that the ports, while important for
the overall maritime industry and economy of Panama, are not part of the Panama Canal. The
latter has been managed efficiently, independently and transparently by an independent agency
that employs strict business principles and neutrality in the treatment of international users. In
fact, the very existence of the Canal as a credible and reliable international waterway depends on
not being controlled by any extra-territorial power.
However, the PRC’s increasing level of investment and use of the Canal are indications that in
the long-run Panama will follow the lead of other Central American countries and normalize
relations with the mainland.
14
13 According to U.S. envoy Barbara Stephenson, incoming Panamanian President Ricardo Martinelli had told her that he wanted his homeland to benefit from China's economic rise. However, a 2010 meeting between the Panamanian and Chinese Foreign Ministers resulted in Beijing rebuffing Panama City’s wish for fear of cooling cross-straits relations, according to Stephenson. (Read more: http://globalspin.blogs.time.com/2011/05/13/poor-panama-chinas-not-interested/#ixzz1Q1etwf90). 14 For example, Canal toll revenue for FY2010 (Oct.1-Sept.30) reached US$1.466 billion, which represent a US$28 million increase from the US$1.438 billion collected in FY2009.
However, China’s role in Panama’s
economy goes beyond the ports. For example, the PRC is one of the leading users of the Colón
Free Trade Zone, relying on the zone for shipment of goods to the United States and Latin
America, as well as being the single largest supplier of goods to the zone, accounting for more
than a third of total goods sold. As of 2010, the PRC is Panama’s second largest trading partner,
accounting for 18.7% of total trade (20.5% of imports); Japan is number one and the United
States number four. In the next several years, opportunities for Chinese investment in Panama
will increase significantly as the current government pursues a strategic development plan
centered on large infrastructure projects.
33
The most significant such project will continue to be the expansion of the Canal. As of
August 31, 2010, the Panama Canal Authority (ACP) had awarded contracts totaling US$3.95
billion, of the US$5.5 billion total cost of the project. While so far Japan is the largest investor in
the expansion project, China has expressed some interest in investing as well. Regardless of the
amount of direct Chinese investment, the fact remains that China will likely be the biggest
beneficiary from Canal expansion. One effect of the project will be to make transport costs of
finished goods from China to the East Coast of the United States much cheaper – perhaps by 30
percent. When the project is completed, the canal will be navigable by tankers with capacity of a
million barrels of crude oil. That, in turn, will open new routes whereby oil and mineral
resources from West Africa can be taken directly to China. The same dynamic could also bolster
China’s influence in the Caribbean, expected to develop as a storage hub for oil before it heads
west through the Canal and on to China. By 2014, the year in which the project is scheduled to
be finished, the Canal will be able to take ships capable of holding 12,600 containers –more than
double the capacity of the “Panamax” ships that represent the Canal's present size limit.
Another critical challenge stems from the need to manage a booming economy. Despite
exceptional recent economic growth (averaging 9% per year) and a positive outlook due to the
Canal expansion project, Panama’s economy may be overheating as indicated by rising inflation
and a deteriorating trade balance. Several factors are fueling this overheating: dollar
depreciation, rising oil prices, and a housing boom. As a dollarized economy, Panama shares the
woes of the depreciating U.S. dollar. Depreciation has accelerated a rise in food prices linked to
a rise in the cost of food imports. Rising global prices for petroleum are adding to inflationary
and current account pressures as well. Finally, canal expansion and the local housing boom are
requiring more imports of raw materials and construction equipment, contributing to the
deterioration of the trade balance. The boom, fed in part by expatriate demand for housing in the
Canal Zone and government-subsidized housing throughout Panama, adds to inflationary
pressures.
Additionally, despite the country’s strong economic growth, poverty levels remain high.
Nationwide, according to 2008 data from the Economic Commission for Latin America and the
Caribbean (ECLAC), 28.6% of the population is poor and 11.7% is extremely poor. The
incidence of poverty is particularly high in rural areas, where about 45.8% of the population is
34
poor and about 23.6% of rural people live in extreme poverty. Among the indigenous population,
poverty rates are even higher. Across the country, more than 80.5% of Panama’s indigenous
peoples live below the poverty line, and about 51.9% are extremely poor. Indigenous peoples are
also the most rapidly growing segment of the population, with an average growth rate that is
more than double that of the country average. In recent years there has been an increase in rural
people’s migration to urban areas. Rural-urban migration, coupled with low demand for
unskilled laborers in the country’s service-based economy, has led to an increase in urban
poverty.
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. Although the situation
improved following the restoration of democracy in 1989, there is nearly unanimous consensus
that corrupt practices are still a major problem in Panama. According to Gerardo Berthin, the
drivers of corruption in Panama are related to the high levels of inequality. Panama continues to
be one of Latin America’s most unequal countries. Panama’s Gini Index of Per Capita
Household Income is 55, which is much higher than any country in Asia and double in average
than the figures found in developed countries. Only 9 countries in the world have a higher
coefficient (Namibia 74, Comoros 64, Botswana 61, Belize 60, Haiti 59, Angola 59, Colombia
58, South Africa 58, and Bolivia 57). Another factor is a legacy of clientelism that continues to
shape citizens’ relations with the State. Over half of Panamanians believe that personal interest is
one of the key drivers of behavior and over 80% respectively believe that individual criteria
guide decisions in public administration. Finally, Berthin points to a lack of political will and
insufficient or non-existent checks and balances within government institutions.15
The management of the Panama Canal constitutes a significant challenge moving
forward. Despite the skepticism at the time the waterway was transferred to Panama in 1999, the
country has shown that it can manage the Canal in an efficient, transparent and profitable
manner. The Autoridad del Canal de Panama (ACP) has performed exceptionally well managing
15Berthin, Gerardo, 2011, “Corruption as an Element of Strategic Culture: The Case of Panama,” Paper prepared for the Panama Strategic Culture Workshop, Florida International University, Applied Research Center, Biltmore Hotel, Miami, FL. March 21, 2011
35
this most important national asset. The ACP has provided more than US$ 2 billion to the national
treasury, and has managed to come up with internal and external financing for a $5.3 billion
project to expand Canal capacity. The key challenge moving forward has to do with developing
mechanisms to expand the benefits of the transit zone to the rest of the country, particularly
incorporating the rural and indigenous communities to the nation’s economic development and
growth.
An additional major challenge is the increasing levels of criminal activity, particularly
tied to drug trafficking and money laundering. Panama is a major transit country for illicit drugs
from South America to the U.S. Moreover, the country’s service-based economy, with a large
banking sector and trading center (Colón Free Zone, CFZ), makes Panama vulnerable to money
laundering. The State Department’s March 2010 International Narcotics Control Strategy Report
(INCSR) maintains that there were increased narcotics trafficking by Colombian, Mexican, and
other drug trafficking organizations through Panama. According to the report, the increased
trafficking and the presence of illegally armed Colombian groups in the Darién region
contributed to the rising crime, violence, and gang presence throughout the country.
In the end, however, four key factors help explain Panamanian success in building the
institutional foundations of democracy: (1) A process of de-militarization, made easier by the
results of the invasion, which dismantled the old military and established firm civilian command
of security forces. 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; (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
36
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) Panamanian citizens 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’état
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. Unlike Guatemala, El Salvador and
Nicaragua, Panama did not suffer prolonged civil wars. The political behavior of Panama’s elites
promotes accommodation and compromise rather than violence and confrontation. For example,
in July 2010, 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 rhetoric from the government and
opposition groups, the application of the most controversial parts of the law were suspended and
eventually repealed after several weeks of dialogue. 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 assets and liabilities tilts toward the former, particularly when
compared to most of Central America.
37
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About the Author
Orlando J. Pérez received his M.A. and Ph.D. in political science from the University of
Pittsburgh. He is a professor of political science at Central Michigan University where teaches
courses in comparative politics, Latin American politics, and U.S.-Latin American relations. His
conference presentations and publications have focused on democratization, elite theory,
authoritarianism, public opinion, U.S.-Panama relations, and civil-military relations. He is a
recipient of a grant from the United States Institute of Peace for his project studying the
transformation of civil-military relations in post-authoritarian Central America. He has carried
out field research in several countries of the region, including Panama, Nicaragua, El Salvador,
Guatemala, Honduras, and Venezuela. His current research focuses on civil-military relations in
Latin America, crime and security issues in Central America, as well as survey research on
democratic political culture. With Angela Haddad, Department of Sociology, he is working on a
comparative project examining critical thinking and global literacy skills in Cuba, Panama and
the United States.
He is also currently involved as Co-Coordinator for Central America (with Ricardo
Cordova Macias of FUNDAUNGO-El Salvador) for the Project on Security in North America,
Central America and the Caribbean funded by the Ford Foundation and Woodrow Wilson
Center.
His work has appeared in the Journal of Interamerican Studies and World Affairs,
Hemisphere, South Eastern Latin Americanist, Political Science Quarterly, and Journal of
Political and Military Sociology, among a number of chapters in edited volumes. He is the editor
of Post-Invasion Panama: The Challenges of Democratization in the New World Order. He
recently published: Political Culture in Panama: Democracy after Invasion (New York, NY:
Palgrave-MacMillan, 2011).
As a consultant, he has worked on public opinion surveys, democratization, civil-military
relations, and corruption issues for USAID and the UN Development Program. Additionally, he
is a member of the Scientific Support Group for the Latin American Public Opinion Project
(LAPOP) at Vanderbilt University. Dr. Perez is serving as president of the Midwest Association
for Latin American Studies.
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FLORIDA INTERNATIONAL UNIVERSITY APPLIED RESEARCH CENTER (ARC)
Dr. John Proni
ARC Executive Director
Dr. Norman Munroe ARC Director of Research
Jerry F. Miller, Colonel, USAF (Ret.)
ARC Associate Director
STRATEGIC CULTURE STUDY FACILITATORS
Brian Fonseca ([email protected]) Bradley S. Porter ([email protected])
Moisés Caballero ([email protected])
GRADUATE RESEARCH ASSISTANTS
Pamela Pamelá
COMPLETED STRATEGIC CULTURE FINDINGS REPORTS
Findings Report 1-Venezuela (June 2009) Findings Report 9 - Argentina (April 2010)
Findings Report 2 - Cuba (July 2009) Findings Report 10 -Chile (April 2010)
Findings Report 3 - Haiti (August 2009) Findings Report 11 - Guatemala (June 2010)
Findings Report 4 - Colombia (September 2009) Findings Report 12 – Peru (August 2010)
Findings Report 5 - Brazil (October 2009) Findings Report 13 - El Salvador (September 2010)
Findings Report 6 - Ecuador (November 2009) Findings Report 14 - Dom Rep (October 2010)
Findings Report 7 - Nicaragua (December 2009) Findings Report 15 – Paraguay (November 2010)
Findings Report 8 - Bolivia (March 2010) Findings Report 16 – Honduras (January 2011)
FORTHCOMING STRATEGIC CULTURE FINDINGS REPORTS
Findings Report 18 – Costa Rica (July 2011)
Findings Report 19 – Jamaica (August 2011)
Findings Report 20 – Uruguay (August 2011)