Envío Digital
Central American University - UCA  
  Number 166 | Mayo 1995



Will the US Go in 2000?

On the Panamanian horizon there appears with ever more force the decision about a de-naationalizing insertion of the country into the global economy. Closer on the horizon is the possibility that the U.S. will not leave the Canal in the year 2000.

Ricardo G. Montenegro

When Ernesto Pérez Balladares was inaugurated as President of Panama in September 1994, Panamanians were full of hope that the new government would be able to make good on its electoral promises. Seven months later, we have enough to begin to analyze his administration.

Why "The Bull" Won

During the first months of the electoral campaign that brought "el Toro" Balladares to power, a certain air of apathy prevailed in the country, thanks to the US backed Endara government in office at that time. The Panamanian people who in principle had looked kindly on the re establishment of "democracy" by US military intervention had quickly become disillusioned and discontent with the discovery that Endara's administration aimed its greatest efforts at complying with the letter and spirit of demands made by the international financial institutions and consolidating political space for the economic groups it represented. It showed not even minimal interest in responding to the needs of the population at large.

That contradiction between the government and social movements added to the gradual dissolving of the governmental alliance and continuing accusations of corruption within the Endara government to become the three hubs regulating the Panamanian political panorama in a period of clear and unabashed US dominion over the country.

In the 1994 elections, Panamanians had three alternatives to choose from:
* The traditional political parties linked to the government that emerged after the invasion and adversaries of the Democratic Revolutionary Party (PRD).

* The PRD, which campaigned with a discourse from the Torrijos era and, logically, from its Noriega linked past.

* Diverse parties and alliances that declared themselves independent and were soon discarded as alternatives.

Panamanians, staggering under the weight of the adjustment measures, ruefully recalled the 1970s Torrijos carried out the most social investment in the history of the country, although to do so he contracted a foreign debt that is still burdening the country. With no political alternative pointing the way to a different road, it was not surprising that Balladares, who demonstrated the strength, ability and will to resolve the overarching social problems, ended up victor in the May 8 elections.

Conscious of the fact that he won with only 33% of the votes, the new President knew it would be no easy task to govern. Because of this, and against the will of his own party's base, he opted for a national policy of conciliation. It consisted of incorporating into his government figures from rival political parties and representatives of big national capital who had been Torrijos allies but opponents of the Noriega regime. The appointment of economist Guillermo Chapman as Minister of Planning and Economic Policy was the most significant indication of this. Chapman has no stated party affiliation, but is one of Panama's most ardent defenders of neoliberalism.

After only a few months with the new government in office, important decisions have already been made. The first ones for political pardons and the purchase of a helicopter valued at more than $5 million for the President's private use sparked adverse reactions throughout the country.

Then, in his desire to integrate Panama into NAFTA, Pérez Balladares has been implementing a series of measures whose main objective is to create the conditions necessary for Panama's entrance into the treaty.

The "Lite" PRD

The goal of the government document "Public Policies for Integral Development: Social Development with Economic Efficiency" better known as the "Economic Plan" or the "Chapman Plan" is to make the Panamanian economy more internationally competitive. The adjustments it proposes to bring that about seek to strengthen the areas in which Panama is competitive business and services to the detriment of industrial and agricultural activity.

The plan lays out the need to introduce substantial modifications to the existing legal framework in order to make these various reforms viable. That has not been hard to do, as the government has a legislative majority. In addition, the inclination of parties like Solidaridad and Papá Egoro to support the government initiatives soon became clear, to the point that they are now considered "lite" PRD parties, though they have denied that on more than one occasion.

NAFTA or Not?

The government initiative includes privatizing the National Telecommunications Institute, the Water and Sewerage Institute and the Institute of Hydraulic Resources and Electrification, as well as restructuring the Interoceanic Region Authority the entity that oversees the canal zones that will pass into Panamanian hands in the year 2000 and the Port Authority. It also includes reforming the Fiscal Incentives Law and the Labor Code.

To assure that the country keeps getting the green light from the international financing agencies, the government has continued to make the payments on its foreign debt a priority, allocating more than 20% of the country's budget calculated at $4.04 billion for 1995 for debt servicing.

The news of Panama's eventual entrance into NAFTA has been received with skepticism in Panama. Everything indicates that the government will have to cave in to US demands to reduce the tariffs and taxes on products such as milk and corn, which would mean that small and medium national producers would lose their place in the market to big US companies.

US officials feel that Panama lacks sufficient merit to form part of the NAFTA group, despite Pérez Balladares' "good faith" gestures to the United States offering military bases as temporary facilities for the Cuban raft people, giving asylum to Haitian General Raoul Cedrás and actively collaborating in the fight against drug trafficking, in addition to feverishly promoting the restructuring of the national economy. This could mean reshifting the country's vision to a regional level, to Central American integration.

Great Popularity

The current government's economic policies have created concern and uncertainty among various national productive sectors. From the beginning, industrialists have maintained a critical stance. Though lacking the resources of the large industrialists, corn farmers have also made their voices heard.

The workers, led by the Construction Workers Union, have stated that they will begin a series of work stoppages if the reforms to the Labor Code are approved. A commission made up of government representatives, employers and workers, which is supposed to reach consensus on these reforms, has made few advances since the positions of the three groups are radically different.

Other grassroots movements, which have played key roles in national policies at certain historical junctures, are today on the sidelines of the political scene, with a few exceptions notably the Colón Unemployed Movement and women scholars. Most of the population doesn't understand much about economic policies and thus cannot really measure the impact the policies will have on society as a whole.

In a survey recently published in a Panamanian newspaper, 57% of those interviewed said they didn't know anything about the economic plan. This could explain why, despite all the measures carried out by the government in the last seven months, its popularity level is at 74%, while President Pérez Balladares enjoys an 80% personal popularity level.

The Canal, Year 2000

According to the provisions of the 1977 Torrijos Carter treaties, on December 31, 1999, at 12 midnight, not one US military operative is still to be on Panamanian soil. By the beginning of the 1990s, many Panamanians began to have serious doubts about this. They superficially argue that "if the gringos go, the dollars go," or declare that the national economy will go into a tailspin without the annual $300 million the bases bring in for the country. What is certain is that, each day, it is becoming more common to hear Panamanians speak out against the departure of the US military troops. According to the Dichter & Neira polling firm, 70% of those surveyed are in agreement with US bases staying in our country beyond the year 2000.

Anytime President Clinton or the head of the Southern Command is questioned about this, their answer has been the same: we will fulfill the treaty point by point. However, some weeks past, it was revealed that the US Congress is considering the possibility of negotiating the presence of US bases in Panama beyond the year 2000.

Another Country, Another World

The Pérez government is determined to promote a dynamic that will begin to reorder the mode of production in Panamanian society so it can respond to international market demands. Although this modernization process begins with the economy, it includes all levels of society. The vertical implementation of this new model of society would seem to be inevitable, in that the political opposition parties and the representatives of civil society have showed themselves incapable of confronting the PRD's zeal to enter into the world of globalization.

The most intriguing aspect about this movement, strongly marked by economic elements, is the emergence of new social subjects: the small and medium agricultural producers. Together with other traditional groups unions and business they are threatened by neoliberal policies and by the looming globalization. The short term demands of other groups impede their identifying with this larger struggle which, to be effective, must become more broad based.


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