January 11, 2000

In This Issue: The US, Panama and Colombia

"Why are you leaving? We want the Americans to stay" two Panamanian fishermen told me in our combination of broken English and broken Spanish. We were sitting, beneath a colonial fortress's redoubt, by the harbor's edge in Portobello, the down-at-the heels colonial port on Panama's Caribbean coast that was the terminus of the old "Camino Real." And this sentiment was echoed time and again by Panamanians high, middle and lowly. "Why have we left Panama to occupy Kosovo, leaving one country open to the corruptive onslaught of Latin Drug Lord, in order to protect Albanian drug lords from `The Serbs?'" I wondered, repeatedly.

Times and tempers have clearly changed since Jimmy Carter narrow-mindedly obsessed with the immediate issues and afraid of sabotage and riots, decided to give all the USA's property back to Panama for free, but inaugurated a policy of retreat and retrenchment that neglected the option of a wider relationship. Circumstances changed over the last 23 years, but the policy remained static, though most Panamanians have recovered from the shock of the 1989 US invasion, which led to the ouster and arrest of General Manuel Noriega. Policy makers, for their own party interests, failed to elevate the bilateral relationship from the issue of the Canal Zone to the issue of the two countries as wholes. That can change, but it will take a better mind in the White House to achieve that.

"How am I doing?" a cabbie replied to Miami Herald reporter, Glenn Garvin in that paper's Dec. 12, 1999 edition (page C-1, "Adios, Panama"). "'Nobody's coming to Panama.' He paused, then practically spat it: `Everybody's leaving with the Americans. And our politicians wanted sovereignty!'"

"We don't want the Americans to leave, we just wanted the relationship restructured," is the message I heard from people who are very apprehensive about their national future. Poll after poll show 75 to 90% of Panamanians want an American military presence to help keep their future on course. Our departure has precipitated a recession (we injected some $600 million per year into the economy, much through our 18,000 well-paid civilian employees on the military bases; they earned from $12-15,000 per year in a country with a per capita GDP of $7,200 and are all now out of work). This has given their new government new headaches atop the effects of widespread corruption perpetrated under the recently departed populist regime of Ernesto Balladares.

Thanks to my old friend Fritz Peterson, The Washington Times and others, I visited Panama for six days in mid-December to observe the official ceremony marking the hand-over of ownership of the Panama Canal and the US's military bases to the Panamanian government, which officially occurred at Noon on December 31^st. Aware of the lively debate continued by conservatives in Washington, I found circumstances on the ground to be much more complex. US ownership of the canal has ended, but the relationships between the two countries and two governments continue, and there are some tough years ahead for both parties in this 97-year old partnership.

The best way to characterize the mood in Panama is one of apprehension among virtually all major segments of society, from the oligarchs and "nomenklatura" to the bureaucracy, to the ordinary people. American conservatives fret about Beijing's growing presence in Panama, but the Panamanians worry not just about that, but about the old-style Marxist Colombian guerrillas of FARC (Fuerza Armada Revolucionario de Colombia), about drug lords and their money launderers, and about the oligarchs, themselves. But let me stress that those of the old "fourteen families" of the old oligarchy are also concerned because they have just taken back the reins of government from a populist crowd which is reputed to have looted some #1.2-1.5 Billion while in office. President Ernesto Balladares alone saw his net-worth rise from $35 million to $450 million during his five years in office, which ended Sept. 1, 1999). In fact, Balladares supporters are packed into the bureaucracy, which operates on a spoils systm, having no Civil Service Commission, and that, I think, is the bigger problem: the bureaucratic "apparat" can confound reforms proposed by the new Moscoso administration, and in Panama, the apparat and oligarchy-nomenklatura have divergent interests and politics.

China v. Taiwan:

Let me address the question of Beijing and the Hutchison-Whampoa (H-W) operations in Panama. H-W does indeed operate container ports at both ends of the canal, but I looked, and they are really little more than freight depots --in and of themselves. A Taiwan company, Evergreen, also has a container facility at Cristobal, on the Caribbean (also thought of locally as the "Atlantic") end, and American Stevedores also operates a facility at Cristobal. Beijing's trade accounts for about 9% of the 92 million tons transiting the canal into the Atlantic (123 million tons go the other way, in an average of 14,000 ship-transits per year in both directions --about 40 ships per day). Taiwan's traffic accounts for about 3% of eastbound shipments. Still, as Beijing builds its commercial presence, it opens possibilities for covert operations, as well as influence building by fair means and corrupt ones. Panama and some 30 other countries continue to grant diplomatic recognition to Taipei, not Beijing, and the mainanders intend to change that in time.

Here are two contradictions that I observed; Panama, which agitated to get its flag flown over the canal zone for so many years, does not allow H-W (or other Chinese operations aside from its embassy) to fly Beijing's flag over its facilities. At the same time, Beijing evidently gave President Balladares the nickle-plated SKS assault rifles for the ceremonial Presidential Guard --those are Soviet-Chinese rifles, not American ones, which I spotted at the ceremony at the Miraflores Locks on Dec. 14.

As to threats to American security, though American conservatives may be off the mark about H-W, their concerns about China's intentions in the Americas are not at all misplaced. H-W does not control the movement of US warships through the canal, as some mistakenly believe -the Panama Canal Authority controls that under the continuing treaties and agreements. The choke point represented by the canal might be subject to sabotage, but James Bond scenarios are unlikely. I doubt that China would smuggle intermediate range ballistic missiles to the H-W facilities in Panama when they can lob sub-launched missiles or ICBMs. China agreed to buy two Typhoon class "boomers" from Russia back in September and has just announced that it will begin construction of its first aircraft carrier this year, so it will build up its naval and airforces for a West Pacific showdown. Panama becomes a focal point for covert operations and intrigue, as well as for the smuggling of illegal aliens, drugs and other contraband. W can add the Chinese Tong Mafias to the Colombian cartels as a matter of concern in Panama.

But Panama is a natural point for Information Warfare as it is a central connecting point for the hemispheric and Americas-South Pacific fiber optic cable networks. A couple of "civilian clerks" with laptops could send viruses, Trojan horses and all manner of nuisances all through the telecommunications and internet systems from dingy cubicles in Cristobal or Balboa, So, too, could Taiwanese operatives as both sides brag about their Info-War capabilities. H-W understands fiber optics and the internet, and has just signed a partnership deal for its Hong Kong network with the American company Global Crossing (NASDAQ: GLBX), so this is of interest. That the new Panamanian government seeks to sell the remaining 49% of its ownership in its national telecommunications company, "INTEL" for $800 mil, just who purchases that interest will also be of interest and possible concern.

Several Panamanians told me that the Chinese are feared or hated, and that Beiing's people have a reputation for being cheap. Everybody knows Beijing is smuggling illegal aliens through Panama into the US and other destinations --President Balladares was paid $75 million for 2500 visas in one widely known deal. The Taiwanese are seen as not so bad, but are not particularly loved.

More Immediate Concerns:

The Panamanians have genuine reason to fear the Colombian Marxist guerrillas of FARC and the smaller ELN (Ejercito Liberacion National) army. FARC has a brigade of 600 or more guerrillas, which operates with impunity inside Panama's border province of Darien. Colombian "right wing" paramilitaries also mount frequent incursions into the impoverished and swampy borderland. Panama eliminated its army in 1990 as a consequence of the US invasion, "Operation Just Cause" and has an inadequate Border Police force for the job of preventing incursions, and the Clinton Administration knows that. Still, when the new government of President Mireya Moscoso sought to open new negotiations aimed at inviting the US to continue to operate garrisons in Panama, they were told that the Administration had already decided to evacuate permanently. Sources in the new Moscoso government told Miami Herald's Glenn Garvin reported in his Dec. 12^th article that they thought the US would reopen base arrangement discussions, which were not offered by the corrupted Balladares regime:

"`We waited and waited, they didn't bring it up,' recounted one of Moscoso's aides. `Finally, we said something. And the answer was, `We've already left. And we're not interested in coming back.' I said, "what if FARC [Marxist guerrillas in neighboring Colombia] comes across the border?' And they said, `That's your problem.' Let me tell you we were in shock."

Panama might try to invoke "The Neutrality Act of 1979" (which allows either side to declare an emergency and provide for America to step back in to restore order), and America might refuse to respond? That was the message in October. But shortly after that discussion, on November 1^st, a team of FARC guerrillas infiltrated all the way into the former US Army Albrook Airfield in the Panama City vicinity, and hijacked two tourist helicopters. The Marxists flew the choppers back into Colombia only after flying across the Isthmus to pick up passengers in Colon --the temerity of impunity. That event demonstrated FARC's reach and determination, while demonstrating to Panama that it was effectively defenseless. Then, on Dec. 11, a 600-man FARC brigade overran a small Colombian Marine base on the Pacific Coast just 12 miles from the Panama border, killing about 40 marines and precipitating a small flood of 300-plus refugees into Darien Province.

Thus, at the last minute, on the day of the Miraflores ceremony --a wistful photo-opportunity and forlorn as any one I've ever seen-- Mr. Clinton had to say something reassuring about America's continued interest in Panama's security. But does Mr. Clinton's foreign policy team mean it? Panamanians have greater doubts about America's willingness to honor their call for aid under the continuing security arrangements in the Neutrality Treaty than our Washington conservatives and military leaders have about Panamanian unwillingness. Still, Colombia's worsening problems underscore that Panama's security problems are part of a "hot corner" that is going to require much greater attention by Washington in coming years: the Colombian Marxists and the drug lords. Then there is Venezuela's bizarre President Ernesto Chavez, a self-proclaimed Maoist who also aspires to re-assemble Simon Bolivar's "Gran Colombia" out of his country, part of Guyana, plus all of Colombia, Panama and Ecuador.

After years of over-emphasis on leading edge human rights concerns, FARC (an old-fashioned Marxist rebellion) has frightened the neighbors. On January 10, Mr. Clinton approved a $1.2 Billion increase to a $400 million, two-year aid package to increase Colombia's military capabilities. Washington is suddenly alarmed and sees that Bogota needs much more help in waging its defensive war against FARC, ELN and the drug lords --in our view the drug war and Marxist insurrection have commingled into a single, larger security problem.

Aside from those concerns, the civil service apparat remains corruptible and there are drug lords and their money launderers throughout the country and region. The country is in need of cash to finance its social safety net and other programs, where the national infrastructure has not been adequately improved.

As bases have been handed over (and America has given back assets valued as high as $32 Billion in this deal, encompassing 366,000 acres), there has been considerable looting of properties as bases were handed over to the Panamanian government; windows, plumbing fixtures and doors torn out, etc. The last Marines in Panama's garrison, leaving their base, witnessed Panamanians making off with the bedding and linens. I observed trees already growing through the roofs of buildings abandoned a few years ago, while a few miles away, Panamanians lived in glaring poverty in the urban slums of Cristobal.

At the same time, on January 4^th, The Dallas Morning News reported that Americans responsible for selling off equipment from the bases were wasting millions of taxpayer dollars by writing down the values of items to less than $1000 so they could be disposed for free. It reported real security concerns when radars and their manuals, used in the Drug War, were nearly abandoned, causing me to wonder just how big a security coup could Beijing and Moscow score with other abandoned papers and hardware?

The Future:

When President Carter decided to give the Canal and the Canal Zone back to Panama, it is clear that though buildings were well maintained right up to the end, both sides neglected to modernize the national infrastructure. That has now begun, but is years behind schedule.

The US armed forces have withdrawn but the Smithsonian Institute has remained. Locally, the academic intelligentsia (many aligned with the old regime) seem to have thought no further than to turn Panama into an eco-Disney World for environmentally minded tourists. Listening to a presentation at the "City of Knowledge" which has established itself in the headquarters compound at Fort Clayton, it was clear that Panama's working class would be doomed to porter and chamber maid jobs while high-minded environmental activists would impede other commercial and industrial development in the countryside. Oddly, since Panama is a banking center as well as a shipping entrepot, you would think that Panama would have developed itself as a medical center for the region, but instead, that role has been ceded to Cuba. Was anybody really thinking on either side, these last 23 years since Jimmy Carter's craven give-away?

Panama has been left wide-open and vulnerable by a partner of 97-years' standing, evidently to placate or gratify America's ideological critics in the Latin Americas. We have also seen Mr. Clinton's team practice this form of pandering against our core interests with the issue of pardoning Puerto Rican terrorists, closing down the Vieques Island gunnery range, and the Elian Gonzalez refugee-custody dispute, as well. What's next?

Panamanians offered me a range of estimates as to how quickly the country will fall apart and require American intervention: Ray Bishop, leader of 18,000 newly-unemployed civilian workers at the American bases, thought collapse could come as early as March; others think 9-15 months. But they fear general collapse and political-economic problems ashore, not a disaster at the canal. And ashore, though the country has a per capita GDP of about $7,200, there is the glaring poverty of rural subsistence people whose lives were barely touched by the canal or the prosperity generated by Panama's dollar-zone banking sector. Still, those people want the American presence, too.

The canal is the one thing Panamanians think will not fall apart immediately, as the Canal Authority's 9,000 employees are well-trained and managed, though nepotism and cronyism could corrupt the Authority a few years on. For now though, a plan for expansion begun in the Bush Administration, but sidetracked in 1997 by the Balladares regime, has been shelved, though the canal is just beginning a new 5-year program for repairs valued at $600 million.

The Canal Authority does not have a very effective inspector general function and it is not clear how corruption and cronyism can be contained, though the canal-user shipping companies have the power to prevent price gouging or egregious stupidity. Several people mentioned the well-known case of Authority Commissioner Alberto Zubieta's ability to arrange the award of a $48,000 per day dredging contract to his construction company, CUSA. Congress has already heard testimony regarding this clear conflict of interest.

The populists of the Balladares-Noriega party and the drug lords certainly do not want the US to re-establish a military presence in Panama, nor does FARC. But there are regional security issues the next administration will have to address and a revival of a smaller garrison in Panama should be given serious consideration. Mr. Clinton has transferred an equivalent number of troops to long-term missions in Bosnia and Kosovo, reflecting his vision of redirecting American power away from our vital interests, towards marginal ones of questionable legality and legitimacy. And now, we have the prospect of garrisoning the Golan Heights with as many as 5,000 troops (the Bush Administration had offered a whole Army division of as many as 18,000 for that potentially helpful occupation).

In an ironic reflection of Mr. Clinton's priorities, The Miami Herald's Mr. Garvin also reported that many of the 2,000 Kuna Indians who, for $5.70 per hour ran the kitchens in Panama, have applied for mess hall jobs in Kosovo and Bosnia, willing to brave those harsh Balkan winters to provide for their families back home. That is a sad reflection.

© Copyright 2000 by Benjamin C. Works -- SIRIUS ?WWW.SIRI-US.COM

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