Panama and the Reconquest of Sovereignty

In Panama, whose relatively recent political emancipation from Colombia had left it with a colonial enclave of an interoceanic canal wholly controlled by the United States, the nationalist orientation of the national guard government that emerged from

the coup d'état of 8 October 1968 was another "happy surprise." In fact, in addition to the strategic position of Panama in the defense plans of Washington, the Panamanian national guard seemed less likely to defend national independence than any other military force in Latin America. That police force, most of whose members had been trained by American instructors in the Canal Zone, seemed to have very little authority in relation to the desires of the Southern Command.

In addition, at first glance the October coup d'état that overthrew President-elect Arnulfo Arias a few days before his inauguration was only one more episode in the struggle of the family clans that, in the absence of strong middle-class groups or of an organized public opinion, took the place of an official political life before 1968. Arias, who had been president twice before (1940 and 1949) had already been overthrown twice by the national police, who accused him of gaining his support from the poorest classes by promising demagogic reforms and preaching an aggressively xenophobic Panameñista nationalism.^[45] In addition, while the United States maintained an attitude of prudent neutrality, the meaning of the 1968 coup d'état did not seem to be in doubt. Nevertheless, everyone expected a government that would cooperate in a friendly way with the "protecting" power as had the government of Colonel Rem6n in 1950s. However, after many reversals, internal crises, and a period of repression of the unions and parties of the left, the junta, under the strong influence of General Omar Torrijos, the commander of the Guard, adopted an instransigent attitude toward the United States beginning in February 1969. Thus the new government rejected the American request for an extension of the lease on the air base of Rio Hato, and denounced three projected treaties relating to a future sea-level canal, the management of the present canal, and military cooperation. Finally, once the predominance of General Torrijos was assured, the new government demonstrated a very pronounced nationalism.

This policy took several forms. Some of them were symbolic, such as the expulsion of the Peace Corps in 1971, or social, such as the recognition of the labor unions in the banana plantations that belonged to American companies and the support given to them in their conflicts with the foreign employers.

Others were economic, as in the case of the nationalization of the principal gas and electric company in 1972. Social justice was also one of the objectives of the government that proclaimed that the revolution was "for the dispossessed, not for the propertied."^[46] New labor legislation protected the unions, established a minimum wage, provided for collective bargaining, and fixed the severance pay and working conditions of workers and domestics.^[47] A social housing program financed by local savings was designed to improve the living conditions of the people.

In the countryside, Torres promulgated a gradual agrarian reform that provided for the progressive and nonradical takeover of unproductive latifundia and of a great part of foreign landholdings. A cooperative sector was created alongside the state enterprises operating in the area of agricultural products for export (bananas, sugar).^[48] The government-controlled National Peasant Confederation (CNC) established under the aegis of the new regime received the political benefits of these changes.

As in the case of other military revolutions, the Torrijos regime sought neither coherence nor purity in its ideology. It flirted with Cuba and renewed diplomatic relations with Castro and a number of socialist countries. Panama supported Salvador Allende and the Peruvian military "revolution," with which the members of the national guard in power maintained close relations. General Torrijos became involved very early in direct aid to the Sandinista guerrillas with a view to overthrowing the dictatorship of Somoza. The government of the National Guard was always on the side of the anti-imperialist forces in Latin America.

However, at the same time profiting from the free market in dollars in Panama, the military regime transformed the country into a banking haven, thanks to an ultraliberal law on the deposit and circulation of funds. By guaranteeing the secrecy of these operations, exempting the movement of capital to and from foreign countries from taxation, and freeing transfers from regulation, Panama attracted banks and deposits. The number of banks tripled between 1962 and 1967, and Panama became ranked in first place in Latin America,^[49] replacing Nassau and

the Bahamas. In return for this liberal legislation, the foreign banks made low-interest long-term loans to the government. While the bourgeoisie engaged in plotting and sought a confrontation with the government—such as the case in the province of Chiriquí in 1973 where the pressure of the large landholders resulted in the resignation of a Communist governor^[50] —the international financial community supported General Torrijos. The United States tried to weaken him by making accusations of drug trafficking against his brother when it was not able to overthrow him through his colonels in December 1969,^[51] but it remained very cautious in the face of a regime and a man who had retained many bargaining chips.

In fact, the principal objective of the Panamanian government, which was seen as essential and justified its existence, was the recovery of the canal and the reassertion of sovereignty over the zone occupied by the United States. For that purpose Torrijos established a national front involving all social classes. That is why the strongman of Panama did not want to be identified with the left or the right and claimed that in the interests of the country he was "working with both hands," involving employers and workers, large landholders and peasants, in the struggle for the canal. An agreement among the classes was a consequence of the effort to achieve the national cooperation necessary to the great patriotic design. The canal was the key to the foreign policy of the regime. In 1977 at the end of long and difficult negotiations an agreement was reached with Washington for a new treaty that provided for the complete recovery of the canal in the year 2000 and the evacuation of the Canal Zone. Both sides made concessions, but the sovereignty of Panama was recognized and its material interests consolidated. Did this agreement mark the end of the Torrijos era and his program of nationalist mobilization? In any case, he gave up power in 1978 to a civilian president chosen at his direction and supported by a party that claimed to be carrying out his program, and he kept the post of commander of the Guard.

We may ask whether with Torrijos from 1969 until 1978, or even until 1981, the date of his accidental death, we still had a militarily dominated regime. Torrijos had many of the traits of a more enlightened traditional caudillo—the desire for unanimity

and for personal contact, appearances in various parts of the country, physical courage, prudence, and audacity combined with a good-natured machismo that completes the picture. He was not simply the most senior person in the highest rank or the officer who happened to be at the top of the organizational chart. Both head of the Guard and head of government, Torrijos popularized that confusion of powers and the constitution recognized it when it stipulated, "Brigadier General Omar Torrijos Herrera, commander in chief of the National Guard, is recognized as the principal leader of the revolution."^[52] Nevertheless, it was from the Guard that the lider maximo drew his power. With a disparate official party made up of businessmen and Marxist intellectuals that was only unified by Torrijos, all observers agree that after the death of the founding hero the future of the regime was once again in the hands of the officers.^[53]