George Bush
George Bush; drawing by David Levine

“CALL TO THE CITIZENRY” was the headline over the box on the front page of La Estrella de Panamá, one of Panama’s five daily newspapers, on March 4. The statement urged Panamanians

to show the necessary wisdom in the face of the recent deeds that have caused alarm throughout society. Certain understandable passions were stirred up immediately after the events of December 20, but the moment has come for ALL Panamanians to put aside their differences and undertake the Reconstruction and Reconciliation that are imperative if the country is truly to set out on the democratic paths of peace and social justice….

Two days earlier, a man in a black Nissan had pulled up in front of a bar named “My Place” and hurled a grenade through its window. According to an eyewitness, the man had shouted “Viva Noriega” as he did so. The bar was a favorite hangout of US soldiers and it was packed on the night of the attack. Sixteen Americans and fourteen Panamanians were wounded; one of the Americans later died.

A few days later, a caller to the local Reuters office said the attack had been carried out by the Movement of December 20. M-20, as it is commonly known, is a shadowy group, presumably made up of former members of Manuel Noriega’s Dignity Battalions. No one knew how many people belonged to the organization or who controlled it, but, one way or another, M-20 had Panama City on edge. Hotels, restaurants, and banks were receiving bomb threats, and on the walls of downtown buildings graffiti were appearing with such slogans as “Assassin Bush” and “Yankee Go Home.”

Visitors to Panama City are now strongly urged by local residents to avoid the downtown area, a grim district of sagging tenements and malodorous streets. One hears warnings like this throughout Latin America, but in Panama they are all the more persuasive since Noriega, during his last months in power, had distributed tens of thousands of AK-47s to his supporters, and many of the weapons are still unaccounted for.

During the invasion, moreover, soldiers loyal to the general opened the nation’s prisons, freeing hundreds of criminals. Most are still at large, and the capital has been suffering from an unprecedented crime wave. Since the invasion the police in this country of 2.3 million people have recorded an average of thirty murders per month—six times the pre-invasion rate. Armed robbers have been breaking into houses by day and holding up expensive restaurants at night. One evening, a friend suggested dinner at a Swiss restaurant, assuring me it would be safe. “It was held up recently, so the robbers won’t be back for a while,” she explained.

Much of the current violence in Panama is connected to drugs. Noriega is gone, but Panama continues to serve as a transshipment point for US-bound cocaine. Traditionally, Colombian traffickers have dominated the trade, but now the Panamanians, with their newly acquired weapons, are fighting for their share. Execution-style killings have become increasingly common in Panama City; bodies appear daily on the streets of the city.

In response, the police have mounted a series of raids in the city’s poorest neighborhoods. During one raid in early March, a battalion of American soldiers in full battle dress cordoned off a squalid, drug-infested patch of down-town Panama City. Hundreds of Panamanian police invaded the neighborhood’s housing projects and carried out room-to-room searches for drugs and weapons. Suspects were handcuffed, forced into waiting buses, and transported to an outdoor holding pen. In all, more than seven hundred people were arrested. Unfortunately, word of the raid had leaked out well in advance, and the dealers who were most wanted had all managed to escape. The drug trade continued.

One night during my stay in Panama, I heard on a local TV channel that the country was expecting an outbreak of dengue fever, a horribly debilitating disease spread by mosquitoes. Noriega had let the country’s insect-spraying programs lapse, and Panama’s mosquito population was now growing rapidly. To make matters worse, Panama’s sanitation workers were on strike, and the streets of Panama City—fetid in the best of times—were piled high with trash, hillocks of garbage turning moldy in the tropical sun. It was certainly not a good time to get sick, for the nation’s health-care system was in a state of collapse, with hospitals low on everything from gauze pads to stomach pumps.

Politically, too, Panama seemed to be coming apart. One morning several hundred people who’d been left homeless by the invasion blocked traffic on the Bridge of the Americas, the only bridge across the Panama Canal. Land-hungry squatters, called precaristas—the precarious ones—invaded a number of vacant estates on the outskirts of town. In Colón, Panama’s second largest city, a group calling itself the Permanent Committee of Hunger, Desperation, and Hope held a noisy demonstration demanding jobs and housing. And, in the countryside, authorities were reporting the first signs of pro-Noriega guerrilla activity.


For US officials, all this is deeply distressing. Most Panamianians considered Noriega a brutal and corrupt dictator and according to several polls more than 90 percent of them approved of the invasion of December 20 which led to his downfall. But these resulting good feelings could quickly evaporate, and the United States has been making extensive efforts to shore up Panama’s new government. “Operation Just Cause” has been followed by “Operation Promote Liberty,” America’s largest effort at “nation building” since the Vietnam War. Dozens of US specialists have arrived, including accountants, city planners, postal workers, veterinarians, firemen, agronomists, pharmacists, even insurance underwriters. Legal experts are helping to rebuild the nation’s judicial system; economists are helping to draw up a national budget and engineers to repair roadways and bridges.

No task, though, has received as much attention as establishing the new Public Force (PF), the successor to Noriega’s Panamanian Defense Forces (PDF). A bloated institution dedicated to smuggling, drug trafficking, and shaking down the Panamanian people, the PDF had a hand in virtually every activity of Panamanian society. Its members directly or indirectly controlled the immigration service, passport office, ports, prisons, airports, hotels, banks, gambling casinos, and much else. The invasion removed not only Noriega but also the PDF. In its place, the Endara government is trying to establish a smaller, and more professional, civilian force. US military officers are working in police headquarters and hundreds of US military police have been assigned to Panama’s police precincts to keep an eye on the new patrolmen.

Major problems have emerged, however. Virtually all the members of the new force worked previously in the old one, and, to the dismay of many Panamanians, they are back at their familiar posts. Bumper stickers have appeared on cars proclaiming “Police Yes, Army No.” Radio talk shows are full of angry complaints about the new force, and newspaper editorials regularly attack the government for its indecisiveness. Even the National Civic Crusade, the broad coalition that led the opposition to Noriega, has expressed alarm about the PDF’s possible return.

Panama, President Endara recently said, is undergoing the “worst crisis in its history”—worse, even, than under Noriega. Is the old cycle of violence starting anew?


The animated crowd that had gathered outside the Legislative Assembly building watched as a stream of black cars passed through its gates. It was March 1, the Assembly’s opening day, and, for the first time in many years, the legislature was serving as something more than a rubber stamp for the military. Inside, the hall was packed with Cabinet ministers, legislators, and other citizens who had resisted the political grotesqueries of the Noriega era. After a series of windy speeches, a side door opened and there, suddenly, was President Endara. As he stepped to the podium, the crowd rose to its feet and cheered. Although the president had been in office more than two months, the circumstances of his swearing-in—on a US military base in the midst of the invasion—had denied Panama a public inauguration, and this occasion was as close to one as the country would get. In his address, Endara extolled the return of democracy to Panama, warmly thanking President Bush. Mostly, though, he concentrated on the crisis at hand. Children were hungry, housing was scarce, roads were rutted, schools were crumbling. He called for the creation of a new, more just Panama. “We will be truly free when each Panamanian has an equal opportunity to develop himself fully as a human being,” Endara said. “That is the aspiration of the people that elected us, and that is the goal of my government.”

Again, the audience rose; but, unexpectedly, the president raised his hand and signaled for the crowd to be silent. He went on to announce that he was embarking on a fast to show his sympathy with Panama’s poor. He would be moving his office into the metropolitan cathedral and would remain there for the length of the fast. When Endara finished, the applause resumed, but it was much more tentative this time as people tried to absorb the prospect of their portly president trying to act like Mahatma Gandhi.

When I visited the cathedral that night, I found the president in the right transept, his 250 pounds squeezed into a wicker rocking chair. About thirty people milled about, but the president appeared to have nothing else to do, and he invited me to take a seat. With a cherubic smile, Endara explained why he had undertaken his unusual course of action. “I saw that Lent was coming, and as a religious person I know that Lent is a time for fasting—for thinking of your brothers,” he said, speaking slowly in English. Given the country’s desperate plight, he went on, he felt it wasn’t right to stay in the presidential palace. “I have an excellent bed there—very soft,” he said. “I have an excellent cook—and I confess I like to eat. But as the president of Panama I cannot continue along these lines. I have to do something to show solidarity with the pain and suffering of my people.”


It would be wrong, Endara said, to speculate that his fast was directed at Washington. President Bush had proposed sending Panama $500 million in aid, but Congress was dawdling, and, until it acted, Endara’s government was effectively broke. Nevertheless, the president said, “I don’t want this interpreted as a hunger strike against the United States.” President Bush, he added, “has been very generous with Panama.” But what about the report in that morning’s papers that Congress was thinking of cutting the President’s request? “What report?” Endara asked.

The conversation turned to the new police force. That morning, the Civic Crusade had taken out a full-page newspaper advertisement criticizing the government’s handling of the PF. The ad had caused a stir. The Civic Crusade, made up of two hundred business, civic, and professional groups, had organized the large, noisy street demonstrations that, beginning in 1987, did much to isolate Noriega. The crusaders had been relentlessly attacked by the PDF, suffering beatings, tear-gassings, and shootings. Now, for the first time, it was publicly criticizing the government. What was the president’s reaction? Endara looked blank. “What ad?” he asked. He hadn’t read that part of the paper, either. When I handed him a copy, Endara glanced at it quickly. “They haven’t discussed this with me,” he said, sounding unconcerned.

At this point, the president was joined by Ana Mae Díaz, his twenty-four-year-old fiancée, who had met him last September in the midst of another of his fasts, this one directed at the Noriega government. Endara had lost thirty pounds during that two-week ordeal, and some Panamanians were now joking that the real purpose of his latest fast was to lose weight in time for his wedding. As the fast wore on, La Prensa, Panama’s largest paper, ran a series of cartoons mocking the president. In one, Endara was shown holding hands with his fiancée while around them Panama was collapsing under the weight of strikes, assaults, and murders. Endara, citing his fiancée’s tender sensibilities, sent an appeal to La Prensa asking the editors to stop making fun of him. The paper ran the appeal on the front page.

A year ago, Guillermo Endara was virtually unknown in Panamanian politics. A successful corporate lawyer, he had worked for years as the behind-the-scenes secretary for Dr. Arnulfo Arias Madrid, the three-time president of Panama. Espousing a Perón-like mix of nationalism, fascism, and populism, Arias, a Harvard-trained physician, had dominated the country’s politics for decades. Arias had been president on the fateful day in October 1968 when Lieutenant Colonel Omar Torrijos seized power on behalf of Panama’s National Guard, initiating a twenty-one-year period of military rule. Torrijos, a mestizo like most Panamanians, immediately struck at the tiny white oligarchy that had ruled the country since its founding in 1903. He established a minimum wage, redistributed land, and built low-income housing. He also outlawed political parties, cracked down on the press, and threw his opponents into jail. Even worse, he helped launch the career of Manuel Noriega. When Torrijos died in a mysterious plane crash in 1981, Noriega took his place.

Noriega continued Torrijos’s autocratic ways but without the populism that had won Torrijos considerable support. Under Noriega the National Guard, renamed the Panamanian Defense Forces, quickly squandered whatever good will Torrijos had won for it. Noriega also lost the backing of the United States. Washington was willing to accept Noriega’s political usurpations, including the stealing of an election in 1984, but once his drug-trafficking involvement became widely known, American tolerance came to an end. In the winter of 1987–1988, Washington hit Panama with a series of stiff sanctions designed to force the general from power. Instead, they only stiffened his resistance, and he clamped down on the opposition even harder.

The opposition kept growing, however, and, as the May 1989 election approached, it decided to challenge Noriega. Although Arnulfo Arias had died the previous year, Arnulfismo remained a potent force, and the highly fractious opposition decided to place an Arnulfista at the head of its ticket. There were several leading contenders, but none could gain an edge, and in the end they threw their support to a compromise candidate: Guillermo Endara. Suddenly, this obscure, self-effacing lawyer found himself leading the movement to unseat Noriega, and doing so with considerable success. The opposition was on its way to a decisive victory when Noriega interrupted the vote counting and declared his own candidate the winner. The opposition’s demonstrations resumed, but so did the repression, and the stage was thus set for the December 20 invasion.

Hours before that action got underway, US officials had summoned Endara to a US military base in Panama City and asked him to assume the presidency. Endara’s decision to go along has caused the leaders of some Latin American countries, such as Peru, to question his legitimacy. The Panamanians themselves, however, have few such qualms. The opposition’s clear victory in the May election has provided Endara with all the credentials he needs. What many people question, however, is his ability to lead. Panamanians have long been drawn to strong-willed leaders—Arias and Torrijos are prominent examples. The decision of the easygoing Endara to retreat into the cathedral at a time when the country so desperately needed leadership only heightened people’s doubts.

The vacuum at the top has to some extent been filled by the country’s two vice-presidents, Ricardo Arias Calderón and Guillermo “Billy” Ford. During my stay, Ford, in particular, seemed to be everywhere. Gruff, engaging, with large wire-rimmed glasses and a craggy face, Ford is familiar to most Americans from his appearance last year on the cover of Time magazine, his shirt covered with blood as he fended off attacks by the Dignity Battalions. (The blood was actually that of his bodyguard, shot to death at his side.) In addition to his duties as vice-president, Ford heads the combined ministry of planning and economic policy. To judge from his animated public appearances, he seems to be trying, by sheer promotional enthusiasm, to resuscitate Panama’s moribund economy.

I caught up with Ford at Expocomer ’90, a loud, garish annual trade show attended by companies from around the world. The exposition this year was intended to show that Panama was back on its feet. In the cavernous convention hall, there were flashing video screens, rock music, dozens of sleek hostesses, and acres of high-tech displays; at the Reebok exhibit, nimble teenagers demonstrated the lambada. One night a reception was held at the US Pavilion for the thirty-nine American companies on hand. Billy Ford was the guest of honor, and he completely dominated the scene. With a crowd in tow, he moved from booth to booth, slapping backs and sampling wares. Within ten minutes he drank a McDonald’s milkshake, had a Citibank decal affixed to his lapel, and bantered with a four-foot-high motorized tube of Colgate toothpaste.

For all his political energy, though, Ford lacks a sizable political base. His party, the National Liberal Republican Movement, known by its acronym Molirena, is a small splinter group made up mostly of bankers and industrialists. It has no real ideology beyond an unswerving belief in the free-enterprise system. “Our local tycoons” is how one sociologist describes them. Not exactly the best image to have in a country where the per capita income barely exceeds $2,000.


If Billy Ford is the most volatile of Panama’s three leading politicians, and Guillermo Endara the most genial, Ricardo Arias Calderón is by far the most cerebral. (The three are sometimes referred to as “the one who talks, the one who eats, and the one who thinks.”) With a doctorate in philosophy from the University of Paris, Arias Calderón seems a particularly cultivated and reflective man in the let’s-make-a-deal atmosphere of Panama. Austere, humorless, and stiff in public, Arias Calderón makes up for his lack of charisma with energy, cunning, and intensity. As the minister of government and justice, he controls not only the criminal justice system but also the new police force. His work day normally begins before five in the morning; according to an aide, he hasn’t taken a day off since the invasion. A devout Catholic, Arias Calderón is also a shrewd politician with an almost reckless sense of personal courage. Noriega called him la monja loca—the crazy nun.

Politically, Arias Calderón’s greatest asset is his party. The Christian Democrats have emerged as Panama’s dominant political force. They control almost half of the seats in the Legislative Assembly, many key cabinet posts, and an extensive network of mayors. The party includes many lawyers, businessmen, teachers, students, and other middle-class members drawn to the Christian Democratic credo—clean, Catholic, and capitalist. Among nonmembers, the Christian Democrats inspire a mixture of awe and suspicion. Dedicated and industrious, party members have many skills to offer Panama as it seeks to rebuild. But they often seem sectarian, obstinate, and relentlessly ambitious. Arias Calderón himself has made little secret of his desire to be president. Many believe that, de facto, he already is.

I interviewed the vice-president one weekend at his large, elegant house in the capital’s well-to-do Altos del Golf section. The living room opened onto a spacious garden, where an American soldier kept guard. Though it was already four o’clock in the afternoon, Arias Calderón was just sitting down to lunch. Tall and lean, with thinning hair combed back neatly from his forehead, Arias Calderón has a presidential, even regal, air. Where, I asked, would he place himself on the American political spectrum? “I come from a Catholic background, which is a significant part of my own life and a significant inspirational source of democratic Christian ideology,” he said in flawless but highly formal English. “So, on some issues, like abortion, my views make me close to some Republicans. But on social and economic issues, I would tend to be much more concerned than some Republicans are with providing basic social guarantees to the poorer segments of society.”

In conversation, Arias Calderón mixes references to traditional American values—free enterprise, pluralism, pragmatism—with rarefied appeals to moral duty. It’s an unusual blend, reflecting an unusual background. Arias Calderón, who comes from an old aristocratic family, spent his formative years in the United States, first at the Culver Military Academy in Indiana, then at Yale, where he studied economics and English literature. He expected to go to law school but, while at Yale, he underwent a deep spiritual crisis. He entered a Dominican monastery in southern France and immersed himself in reading the Catholic theologians. He became a disciple of Jacques Maritain, the French Catholic philosopher who described how Christian values could be applied to affairs of state. Arias Calderón later returned to the United States, eventually becoming a dean at Florida International University in Miami, but today the seminarian in him is still evident. When I asked Arias Calderón what public figure he most admires, he cited Pope John Paul II, admiring his “quite progressive” position on social issues and “quite firm” position on moral issues.

More than anyone else, Calderón is responsible for setting up the new Public Force. “We’re undertaking a demilitarization the likes of which no Latin American country has undertaken in the last quarter century,” he says. All members of the new force are attending training programs designed to teach them the fundamentals of police work. The automatic rifles and rubber truncheons used by the PDF have been replaced by revolvers and handcuffs. Elite units like the Battalion 2000—guilty of some of the worst abuses under Noriega—have been disbanded. In addition, the PF will soon have a new look, exchanging its army-green fatigues for a new tan uniform modeled after that used by the Arizona state police.

Nevertheless, many Panamanians are unimpressed. The uniforms may be different, they say, but otherwise the new force looks suspiciously like the old one. Not only have most PF members—including more than a thousand officers—previously served in the PDF, but the same military ranks and hierarchies have been retained. And, with 13,000 members, the PF is nearly as large as the force it has replaced, raising fears of another military coup.

La Prensa has relentlessly criticized the government for its policies toward the PF. “The existence of a large National Police,” one editorial said, “vertically organized, with military structure, ranks, rosters, and personnel, awakens deep fears that conditions are being recreated for the birth of militarism in Panama.” Everything about the Public Force, “including its very name,” the paper said, had to be the subject of a “full national debate”; otherwise, the Panamanian people would come to regard the PF as its “most dangerous enemy.”

Coming from La Prensa, such criticism was all the more telling. A long-time critic of Noriega, the paper served as the principal voice of the opposition until it was closed down in 1988. Arias Calderón himself had served on the paper’s founding board of directors. Now La Prensa was criticizing his government with the same zest it had once reserved for Noriega.

During my stay, I heard Panamanians longingly refer to the experience of Costa Rica. There, in 1948, President José “Pepe” Figueres, exasperated by the political meddling of the Costa Rican army, issued an order to dissolve it. He recruited a wholly new force and trained it in law enforcement. Costa Rica has been without an army ever since, and, not coincidentally, it is Central America’s only stable democracy. Why couldn’t Panama adopt a similar policy?

When asked about this, Arias Calderón said that the invasion had created circumstances very different from those facing Costa Rica forty years earlier. While the US had planned the operation down to the last detail, he said, it had made no provisions for what would follow. When the regime suddenly collapsed, thousands of looters poured into the streets. “We lived through five days of sheer anarchy,” Arias Calderón recalled. In the circumstances, he said, disbanding the PDF “would have been the most dangerous and irresponsible of all decisions.” As many as 17,000 soldiers would have been out on the street, providing a possible nucleus for urban guerrilla warfare. “They would have felt that they had no hope in a democratic Panama and that their best bet was to radicalize what was happening.”

Instead, the new government decided to take a different approach. It formally called on all members of the PDF to rejoin the service and redefine their loyalties to the president, the constitution, and democracy. Originally, it was thought that only a small proportion of the force would take up the offer; in fact most soldiers handed in their arms. Suddenly the government found itself with the old PDF virtually intact. It immediately began investigating the top officers of the force, firing those found guilty of corruption and human rights abuses. By the time of my visit to Panama, dozens had been let go, and Arias Calderón ticked off the figures. Of the five colonels active on December 19, none remained; of seventeen lieutenant colonels, only three remained; of seventy majors, fewer than forty remained. “I honestly believe that the officers who remain in the Public Force are committed to what we’re doing,” he said. “I think we’ve crossed the Rubicon.”

“I understand the distrust people have for the Public Force,” he went on. “My entire family went through the twenty-one years of repression,” he said. “My wife was beaten. One of my sons was twice in jail. I was beaten. We were thrown out of the country. Our phones were constantly being tapped. There was constant harassment.” Despite it all, he said, the “new Panama” had to be for “all Panamanians.”

Arias Calderón’s conciliatory policy toward the PDF has raised suspicions about his real intentions. “Arias Calderón is ambitious, both for himself and his party,” a US military adviser told me. “His alliance with the military serves both purposes.” With 13,000 members, along with the families dependent on them, the PF can deliver a great many votes. Any politician who gains its favor can expect to go far at election time. Yet such an arrangement could clearly backfire. As one political observer puts it, “Arias Calderón is risking political hari-kari with the PF.”

Jacques Maritain writes in his book Man and the State that a democratic ruler who attempts to rise above the passions of the day might incur “the disfavor of the people.” A truly “great ruler,” he adds, will find a way to “convert that disfavor into a renewed and more profound trust.” Whether Arias Calderón will go down in Panamanian history as a great ruler, or be reviled as the man who brought the military back to power, may well depend on what is happening in Panama’s police precincts and training schools.


At a police station in a middle-class section of Panama City, about fifty policemen sit outside under a metal awning, listening to the exhortations of an energetic young instructor. The subject of the day’s lesson is scrawled on the blackboard behind him: Corrupción de la Policía. “When we speak of corruption, we’re not necessarily speaking of millions of dollars,” the teacher says. “Accepting a twenty-five-cent cup of coffee is also corruption. It’s not the quantity that matters but the motive.” He adds, “Those of us who enter an institution like this must always remember, we are servants of the public.”

The class was part of a twenty-hour “quick fix” course designed to introduce PF members to the fundamentals of police work. The course was planned by a group of American police officers brought down to Panama as part of Operation Promote Liberty. One of those officers was present at the lecture I attended. Juanantonio Ramos told me that he had come from Fort Sam Houston in Texas, where he worked as a civilian administrator. Between 1976 and 1982, he had served as the police chief of Elmendorf, Texas, outside San Antonio. Now, standing under the broiling sun, Ramos told me that the training courses were beginning to take hold. “Most PF members are aware that the system has to change,” he said. “And they want it to change.”

There was a problem, though. Those who had served as officers in the PDF, he observed, had the old system “embedded in their minds,” and it was rubbing off on the rest. “The older ones run the show, and they’re not letting the younger ones pick up the new training,” Ramos said. “Every time an old officer comes by, the young ones return to the old ways.”

I got a similar impression when I visited the San Felipe police station in central Panama City. Surrounded by slums plagued by muggers and hoodlums, the station offered an excellent place to see how well the PF was adjusting to its new duties. The station, like the neighborhood itself, was grimy and cheerless, a recent coat of green paint doing little to disguise the drabness of the place. On the wall was a large poster with a snorting bull’s head and the insignia “108 MP, Ft. Bragg, NC.” Here, as in all of the capital’s precincts, a team of US military police had taken up residence. To state it baldly, their mission was to make sure the Panamanian police stayed in line. In charge the day I visited was US Staff Sergeant April Hanley. Relaxed and friendly, with short blonde hair and a face darkened by the tropical sun, Hanley chipped red polish from her fingernails as she talked about her work.

“It was tough in the beginning,” she said. “There were a lot of problems of trust.” The Panamanians, having just been routed by the Americans, now found them working in their police stations. Most of the Americans spoke no Spanish and knew little about Panamanian law. Nevertheless, they had charged right ahead, completely changing the way things were done. “We took all of their stuff and threw it away,” Hanley recalled, smiling at the audacity of it all. The Panamanians were most unhappy about losing their truncheons. “For years those rubber hoses were the Panamanian soldier’s chief source of security,” she explained. “We confiscated them and destroyed them. Within days, new ones began appearing. We confiscated those, too.” Finally, they gave up. “We still catch quite a few,” she said, “but generally they’ve gotten used to working without them.”

In other ways, too, Hanley said, the PF was making progress. At first the Panamanians were content to let the Americans do all the work; now the Panamanians were handling most incidents themselves. And they were doing it by the book. PDF members, for instance, had been accustomed to drawing their weapons at the slightest provocation; now the police did so only in emergencies. The Panamanians were even tending to their paperwork, filling out the time-consuming crime reports that are needed to support prosecutions in the courts.

Hanley attributed the turnaround to Sergeant Fernandez, a six-foot-three, two-hundred-pound MP who was in overall command of the precinct. Fernandez had a loud mouth and was using it liberally, berating the Panamanians for the slightest infraction. On the matter of the truncheons, for instance, “he told them that if he caught anybody with a rubber hose, he’d be out on the street looking for a job,” Hanley said. They got the message.

What would happen, I asked, when Fernandez and the rest of the MPs left, as they were expected to do in the not too distant future? Hanley paused. “I think they’ll go on for six months like they are now, then start reverting to the old PDF ways,” she said. “It’s a fear of mine. I don’t think they’ll get the rubber hoses out again, but there’s plenty they can do with the handcuffs, flashlights, holsters, and other implements they’ve been issued.” Hanley was particularly worried about corruption. “All soldiers think a lot about money,” she said. Because the government was so poor, the Panamanians hadn’t been paid for four months. As a result, she said, the temptation to look for other sources of income would be hard to resist.

Hanley’s fears are shared by many of the Americans involved in monitoring the PF. In fact, I found few US officials who were optimistic about the way things are going. Even Deane Hinton, the US ambassador, is worried. An expert on Central American armies, Hinton served as ambassador to El Salvador in the early 1980s, at a time when the US was trying—mostly unsuccessfully—to control the murderous security forces there. In January, at the age of sixty-six, he was called out of retirement to oversee the transition in Panama. Based on what he’s seen so far, Hinton says, the Panamanians “have real reason to worry. I don’t think you’ll find very many people who think you can take somebody who’s been in an institution like the PDF and convert him…. You’ve got to turn thought processes in a new direction. This is working extraordinarily well in some cases—and hardly at all in others.”

The man in charge of the new police force is Colonel Eduardo Herrera Hassan. A twenty-three-year veteran of the Panamanian military, Herrera Hassan fell out with Noriega in 1985 and was shipped out to become ambassador to Israel. He later became involved in a US plot to overthrow Noriega. It failed, and he was dismissed from the force. Herrera Hassan was working as a businessman in Miami when he was asked to take over the new police force.

When we spoke, the general’s most revealing comments were on the subject of rank—a matter of controversy in Panama today. Under both Torrijos and Noriega, officers used their rank to gain wealth and power. President Endara has publicly advocated doing away with military ranks and replacing them with a civilian hierarchy. Herrera Hassan disagrees. “Where there are arms, there must be discipline,” he asserted, adding that discipline could be enforced only by maintaining the traditional ranks. Just as the Foreign Ministry has its hierarchy of ambassador, deputy ambassador, and first secretary, he said, so must the police force have its colonels, majors, and lieutenants.

Herrera Hassan’s appointment as police chief disturbed a great many Panamanians. Roberto Eisenmann, the publisher of La Prensa, wrote a column denouncing the move. “Herrera Hassan’s claim to fame is that he wasn’t corrupt,” Eisenmann says. “He spent most of his career out of the country. But he’s a soldier. He has no ability to create a police force.” He adds: “We want to see a civilian police chief with entirely new policemen.”

For the moment, at least, the PF seems unlikely to cause much trouble. It is too weak and unpopular to seek political power. If, however, the current crisis deepens and popular discontent grows; if groups like the M-20 are more successful in their attacks; if Panama grows increasingly unstable, then the military—joined perhaps by some recently dismissed officers—might decide to act. Everything, it seems, depends on the government’s ability to get the depressed Panamanian economy moving again.


In late February, twenty-seven American businessmen arrived in Panama for a week-long look at local investment opportunities. Their visit was sponsored by the Overseas Private Investment Corporation (OPIC), a quasi-public agency that insures US investments abroad. Before leaving the US, the businessmen had received a one-hour briefing at the National Security Council. President Bush himself had sat in for twenty minutes, telling the investors how important their mission was. In Panama, the Americans were received as if they were visiting heads of state. President Endara talked to the group for an hour, and the minister of commerce met with it three or four times. Guillermo Ford accompanied the group everywhere.

The attention paid off. On the day before the group was scheduled to leave, OPIC called an early morning press conference at the Marriott Hotel. Its president, Fred Zeder, began by praising the visit, calling it “the most successful in the history of OPIC.” He then introduced Billy Ford, who announced that the Radisson Hotel chain of Miami had decided to build a resort hotel on Panama’s Pacific coast. It would have 450 rooms, a “gourmet” restaurant, two bars, an ornate swimming pool, and state-of-the-art beach facilities. The project would cost $40 million and create four hundred jobs. “Please thank President Bush,” the vice-president said.

Panama today is open for business. Since the invasion, executives, traders, financiers, and industrialists have streamed into the country, all looking to strike a deal. Panama certainly has a lot to offer, especially when compared to other investment-hungry countries. The national currency is the dollar (called the balboa), so it is easy to take profits out of the country. Panama City is home to more than one hundred banks, gleaming glass-and-steel towers offering every imaginable financial service. Panama’s telecommunications facilities, meanwhile, are the most advanced in Latin America, with a fax machine in virtually every office and an express mail service on every corner. “In Warsaw, it takes six hours to make an international call,” one OPIC official marveled. “Here, it takes minutes.”

Most attractive of all, though, is Panama’s business climate. This is a land ruled by merchants, marketers, and moneylenders. Panama’s strategic location—connecting the Atlantic and the Pacific, North and South America—has made it a commercial crossroads since the days of the conquistadors. The Colón free trade zone is the second largest in the world, after Hong Kong. During the Noriega years, the Medellín cartel came to Panama to launder money, Nicaragua and Cuba came to evade US sanctions, and mainland Chinese came to buy fake Panamanian passports (at $10,000 apiece). The opposition to Noriega was centered not in any political party but in the Rotary, Lions, and Kiwanis clubs.

The Endara government is itself made up largely of businessmen. “They are gung-ho advocates of the private sector and the marketplace,” a US official in Panama told me. During previous assignments in Argentina and Brazil, the official says, he was forever having to defend the austerity policies of the IMF and the World Bank; in Panama, such arguments have not been necessary. The government is drafting plans to revive Panama’s banking industry, relax its labor laws, expand the free trade zone, and attract foreign investors. It wants to sell off unprofitable state-run enterprises and radically cut public spending. All in all, officials talk about making Panama the Singapore of Latin America.

But the country has a long way to go before that happens. Since 1987, Panama’s economy has shrunk 25 percent—a contraction of truly calamitous proportions. Two years of US sanctions, starting in late 1987, kept hundreds of millions of dollars out of the economy; the invasion and subsequent looting caused more than one billion in property damage. Nearly half the stores closed by the looting remain shut; many will never reopen. Today, Panama has an unemployment rate of between 30 and 35 percent. In chronically depressed Colón, the rate is as high as 60 percent. This is the real challenge facing the Endara government: to create a good many jobs and to do so quickly.

The government sees banking as one possible source of jobs. Before 1987, Panama’s banks, with $40 billion in deposits, employed 10,000 people. The ensuing economic turmoil sent deposits plunging to $10 billion, and many banks were forced to suspend operations. Now that stability has returned, the government is hoping depositors will return as well. Unfortunately, recent events in Panama have shattered international confidence in the country’s banks. What’s more, the US is demanding that Panama loosen its bank secrecy laws in order to deter drug traffickers from laundering their money there. Secrecy has long been a prime attraction of Panama’s banks, and the Endara government has protested that the proposed changes will drive even legitimate depositors away. US officials are adamant, however, and Panama will probably have to give in. One way or another, a full recovery of Panama’s banks seems out of the question.

Similarly, the expected bonanza from foreign investment seems unlikely to materialize. For all the advantages Panama can offer, the pool of available dollars is very small and the competition for them very brisk, especially now that Eastern Europe is in the running. What’s more, those foreign dollars that do arrive generally have limited impact on employment. Even so grand a project as the Radisson Hotel will create only a few hundred jobs.

In the short run, moreover, the government’s economic strategy will probably increase unemployment. Most of the state-run companies up for sale—two sugar mills, a cement factory, and the nation’s ports, among others—have bloated work forces, and whoever buys them will want to dismiss some of the workers. Air Panama, which is losing $3 million a year, might be liquidated altogether, throwing three hundred people out of work. The government is also preparing an assault on its own bureaucracy, flabby from years of padding by General Noriega. The payroll could be reduced by 20 percent—eliminating 30,000 jobs.

As a result of such policies, the government has been accused of wanting to return to the days of the oligarchy, when Panama was ruled by a tiny white elite. Certainly the government’s top officials are men of means. They are also mostly white. By contrast, 70 percent of the Panamanian population is mestizo, 15 percent is black, and 6 percent is Indian. Most earn just enough to get by. For all their defects the regimes of Torrijos and Noriega tried to appeal directly to poorer Panamanians. Now some politicians associated with Noriega have accused the Endara government of wanting to turn the clock back to 1968, when a small rich group ruled the country.

The charge is unfair. Government officials might look like oligarchs, but they don’t behave like them. When employees from Air Panama—fearful of losing their jobs—held a vigil outside the Presidential Palace, President Endara sent them coffee and made a point of talking with them. Similarly, during his stay in the cathedral, he invited striking sanitation workers in for a chat and eventually negotiated a settlement. Arias Calderón says he favors the notion of a “social market economy,” in which the government helps to correct the disparities created by the market-place. “Forty to forty-five percent of our population lives at the poverty level or below,” he says. “So we must develop a system capable of providing a living for all.”

One way of providing a living for Panama’s poor would be to launch an extensive public works program. As several economists pointed out to me, this would not only put many people to work but also inject large sums of money into the economy. Certainly Panama has no lack of worthy public projects. There are roads to repave, ports to maintain, land to be reforested, schools to be repaired. Panama currently has a deficit of 200,000 housing units and 35,000 unemployed construction workers. Why not put the latter to work building the former? The mere sight of concrete mixers and soaring cranes—emblems of economic activity—would give Panamanians a badly needed psychological boost.

No such projects are in the works, however. Since taking office the government has initiated only one, extremely modest, jobs program, providing a few months work for several thousand people. Anything more ambitious has been firmly ruled out. Money is one obvious obstacle. A full-blown employment program could cost up to $100 million a year—a huge sum for a government that can barely meet its own payroll. Yet money is only part of the explanation. Panama will soon receive more than $400 million in US aid, and some of that money could certainly be used to underwrite a public works program. But the Endara government opposes the idea. “The government should provide only the basic services—law, order, and justice,” says Rubén Carles, Panama’s comptroller-general and a top policy-maker. “The private sector takes care of investment.”

Certainly in the long run, the private sector holds the key to the success of Panama’s economy. Over the next two or three years, however, some form of public investment would seem necessary to “jump start” the economy, as Panamanians like to put it. Even in mature economies, like Japan’s, the government intervenes forcefully in the economy; this would seem all the more urgent in a country like Panama, where one in every three adults is unemployed. Nevertheless, the Endara government seems determined to leave virtually everything to the private sector. This has left the government with an image of passivity, and many Panamanians are worried.

“If we sit here doing nothing, waiting for American dollars to arrive, then we might see more violence in Panama,” warns Fernando Manfredo, who is about to retire as the administrator of the Panama Canal. A long-time associate of Omar Torrijos, Manfredo served as deputy administrator of the canal for ten years before taking the top canal job on January 1. However, Manfredo’s close ties to Torrijos and his military regime have caused resentment among current officials, and in March the government announced his resignation. Today, Manfredo, mindful of the many Panamanians who once supported Torrijos, says that the government can succeed “only if it wins the broad support of the masses.” And that, he adds, will require a more aggressive economic policy. “The government has to be the motor, the driving force,” Manfredo says. “It can’t wait for things to happen spontaneously.”

The growing sense of impatience in Panama is apparent to anyone who visits the Albrook airplane hangar, a huge facility on the edge of Panama City. Since the invasion the hangar has served as a shelter for three thousand people left homeless by the fighting. The floor of the facility is covered with rows of tiny wooden cubicles, making it look like a giant beehive. To accommodate the refugees, the US Agency for International Development has set up a field of Port-o-sans, a long row of sinks, a well-stocked medical clinic, and an army-style canteen serving two meals a day.

The refugees are lucky; another ten thousand who were left homeless by the invasion have had to fend for themselves. Nevertheless conditions here are bleak. Families of six or seven are squeezed into rooms no larger than nine square meters. With no locks on the doors, privacy is nonexistent and thievery rampant. Many of the refugees have no jobs and spend their days lounging torpidly about the hangar, waiting for new housing. AID has promised each family $6,500 toward the purchase of new quarters, but the money has been slow in coming, and, to most, seems entirely inadequate. The refugees are growing bitter; indeed Albrook seems a time bomb waiting to explode.

“I lost everything I had during the invasion,” a woman living there heatedly told me. “My house, my furniture, my clothing, my children’s schoolbooks—everything is gone. And for all this they’re offering me $6,500. It’s not enough.” We were talking in a small kitchen that AID had built for those families who wanted to prepare their own meals. The presence of an American reporter attracted a small crowd, mostly female. To my surprise, none of the women blamed the United States for Panama’s troubles. Like most Panamanians, they felt grateful for the invasion. Rather, the women held their own government responsible and denounced it with fury. “We’re the ones who suffered the most from the invasion,” a woman shouted angrily, “but President Endara hasn’t come here to visit us.” Where, they all demanded, was President Endara?

In the cathedral, of course. He stayed there for twelve days in all and lost seventeen pounds.


Nicolás Ardito-Barletta, president of Panama in 1984 and 1985, currently runs a blue-chip consulting firm in Panama City. An economist by training, Barletta studied under George Shultz at the University of Chicago and worked as a vice-president at the World Bank. During our conversation, he spent the better part of an hour energetically proposing ways to stimulate the Panamanian economy. At one point, however, John Dinges’s recent book Our Man in Panama came up, and Barletta’s face darkened. The book contains an extensive discussion of the 1984 election, which Noriega and his military stole on behalf of Barletta. According to Dinges, Barletta personally attended some of the sessions in which the vote tampering took place. He heatedly denied this, and, to prove the point, pulled out a sheaf of yellowing paper—polling results from the 1984 election. Yes, said Barletta, he had concluded from the results that some of the tallies had been falsified, but not enough, he had felt, to have altered the final outcome.

It was not hard to understand Barletta’s consternation. Our Man in Panama is being widely read in Panama today, and its clear-eyed account of the Noriega years will undoubtedly affect the way Panamanians perceive that period. The same is true of Frederick Kempe’s Divorcing the Dictator. Kempe, a correspondent for The Wall Street Journal, concentrates mostly on the career of Manuel Noriega and on the ways in which the United States helped to shape it; his book is as much about Washington as it is about Panama. Dinges, a foreign editor at National Public Radio, has more to say about the local scene, describing the hothouse of Panamanian politics and the emergence of Noriega within it. Both writers, though, have done a fine job of reporting, and Panamanian readers will no doubt benefit from their findings.

One can only hope that American readers do the same. For our behavior in Panama has hardly been admirable. Having helped to create Noriega in the first place, we then turned on him with blind fury, imposing sanctions so stiff as to bring on a recession. When sanctions failed to budge Noriega, we sent 24,000 troops after him. They got the job done, but at the cost of about four hundred deaths, thousands of people left homeless, and immense destruction of property.

Today the US is taking steps to atone for its past misbehavior. Foremost among them is the effort to root out the Panamanian military. For most Panamanians, the ultimate success of the invasion depends on whether the country can be rid of the PDF, and Americans are doing their best to bring this about. In two weeks of interviews I did not meet a single US official who believes that Panama needs an army. And strict limits have been placed on US military aid to Panama. In 1990, it will come to less than $10 million. “There’s no provision here at all for the kinds of things that the PDF had—only a very limited number of M-16s,” Ambassador Hinton observes. Yet despite all the good intentions and all the elaborate precautions, the PDF seems poised for a comeback. How can this be?

Some clues are offered in the two new books on Panama. America’s tortured relationship with Noriega might seem past history, but in fact it contains the seeds of our current problems in Panama. In Divorcing the Dictator, for instance, Kempe shows that much of Noriega’s military training came from the US. In 1967, Noriega attended classes in intelligence at the US School of the Americas in Panama. He was an avid student, Kempe writes, taking “every available course in order to broaden his knowledge and give himself an edge over other young Panamanian officers.” At Fort Bragg, Noriega immersed himself in courses on psychological operations, “learning the art of media manipulation to conquer adversaries and control people.” Kempe concludes:

As with so many other Latin American military officers, the American training was more successful in teaching him the technical skills of how to control the Panamanian population than in transmitting democratic ideas or procedures.

The message remained unchanged throughout Noriega’s rise to power. Particularly revealing was a visit Noriega made to Washington in 1983 at the invitation of the government. Noriega had just taken command of Panama’s National Guard, and the visit was seen as a means of cultivating him. On the plane ride up, Dinges relates, Noriega was accompanied by two high-ranking US military officials; champagne and canapés were served throughout the flight. In Washington, the government put up Noriega and his aides at the Watergate Hotel. After a round of meetings at the State Department and National Security Council, Noriega spent a full day at the CIA, including a four-hour lunch with William Casey, and another day at the Pentagon, meeting with Caspar Weinberger and other high-ranking Defense Department officials. Dinges observes:

Noriega and his entourage were in their element at the Pentagon, military men talking to military men. And Pentagon officials greeted Noriega’s rise to power with great satisfaction. One of his first actions as commandant had been to set in motion an elaborate plan to restructure the National Guard into a more professional fighting force, renaming it the Panama Defense Forces. The restructuring had been urged on Panama for years. It was seen in Washington as an absolute necessity if Panama was to fulfill its treaty obligations to defend the Panama Canal.

All the key elements of the US–Noriega relationship are here: the Pentagon’s delight at Noriega’s rise; its view of the Panamanian Defense Forces as a “professional” fighting force; the spectacle of men in uniform speaking easily with one another. From both Dinges and Kempe, one clearly sees that Noriega was less an aberration of US military policy toward Central America than its byproduct.

Today, the same US military is supervising the training of the Public Force. So it should come as no surprise that some of the same problems are emerging. “The US military is doing its best,” one concerned US military adviser told me. “They are trying to be sensitive to the needs of Panama. But because they’re military, they’re not doing a very good job.” Soldiers are taught to kill and maim a foreign enemy; policemen must know how to solve crimes, control tensions, and interact with the community. To ask one to train the other is like asking a football coach to teach baseball. Complicating matters is the fact that many members of the Public Force have already received US military training. “What the Panamanian people are seeing,” the adviser says, “is a disgraced military person who is supposed to become a policeman, being trained by a soldier who previously trained him to become a military man but who now wants him to be a policeman.” Taught by soldiers, the policemen are acting like them. “Military begets military,” says another American official.

By the summer, the US military is expected to turn over its training assignment to the US Justice Department and its International Criminal Investigative Training Assistance Program (ICITAP). Headed by an FBI agent, ICITAP will instruct the PF in such matters as criminal investigation, forensic analysis, and the use of firearms. ICITAP will also help to set up a police academy capable of taking in new recruits and turning them into police officers. With ICITAP in charge, US officials hope, civilians will beget civilians.

Yet that outcome is far from assured. Since its founding five years ago, ICITAP has been teaching police forces in such countries as El Salvador, Guatemala, and Honduras. In all of those places, the security forces have been guilty of horrible excesses, and ICITAP has done nothing to curb them. The problem is not so much ICITAP as what it’s had to work with. With policemen who are themselves guilty of abuses, lectures on taking fingerprints and preserving evidence seem beside the point. The same applies to Panama. As long as the old PDF remains largely intact, no amount of training is likely to turn it into a Costa Rican–style police force.

“The decisions of the next sixty days will determine what happens here for the next one hundred years,” La Prensa’s Roberto Eisenmann told me in March. Panama could be in for a long century.

April 19, 1990

This Issue

May 17, 1990