Negotiations over the
fate of the bases have
sparked a heated debate
in Panama about the
trade-offs between
national sovereignty and
the economic benefits of
the U.S. presence.
On September 6, 1995,
presidents Bill Clinton and
Ernesto P6rez Balladares
told the White House press corps
that their two countries would
pursue “informal talks” on whether
to keep U.S. military bases in
Panama beyond 1999, when the
Torrijos-Carter Treaties call for
their departure.
The announcement caused not a
ripple in the United States-the
New York Times did not even men-
tion it. It incited a flurry of intense
debate in Panama, however. In a
typical exchange, Nicolis Ardito
Barletta, former Panamanian presi-
dent and chief of the agency over-
seeing the conversion of former
U.S. bases, suggested that some
military bases stay for ten years as
a “security incentive for foreign in-
vestors.” “Is it not rather nineteenth
century to use a foreign military to
protect foreign investments?”
retorted Charlotte Elton, of the
Panamanian Social Action and
Research Center. At stake in the
discussion over the bases’ future is
not only Panama’s decolonization,
but the symbolic and actual role of
the U.S. military in the region.
BY JOHN LINDSAY-POLAND
U.S. military bases in Panama
were first established during the
construction of the Panama Canal
in 1914. Although defending the
Canal has always been their pur-
ported raison d’etre, the bases have
historically served as a platform for
U.S. military intervention, not only
in Panama, but throughout the
region. U.S. Marines steamed from
Panama to fight in Mexico and
Nicaragua in the 1910s and 1920s,
and put down a renters’ strike in
Panama City in 1925. The U.S.
Southern Command, responsible
for relations with Central and
South American militaries, estab-
lished its headquarters in Panama
after World War Two. During the
civil war in El Salvador in the
1980s, radar facilities in Panama
processed infrared photos taken of
the Salvadoran countryside, which
were used by the Salvadoran Air
Force to direct bombing raids. The
bases also supplied weapons to the
Nicaraguan Contras, and provided
logistical support for the 1989 U.S.
invasion of Panama. Today, the
bases in Panama are used to train
both U.S. and Latin American mil-
itaries, to support the drug war in
the Andes and Central America,
and for “civic action” operations in
collaboration with other Latin
American armies.
The bases directly employ about
4,100 Panamanians, with another
11,000 employed through contrac-
tors for services, goods, construc-
tion, and personal expenditures by
the 7,000 U.S. troops. Workers
hired directly by the Defense
Department are covered by U.S.
labor law and minimum wages, making them privileged within
Panama’s labor sector. The U.S.
military brought about $305 mil-
lion into the Panamanian economy
in 1994 (excluding pension pay-
ments), accounting for 4.5% of the
Gross National Product. The bases
themselves are located in and
around the terminal cities of
Panama City and Col6n, where half
of Panama’s population lives and
where most of the country’s eco-
nomic activity takes place.
ny examination of current
North American and
Panamanian attitudes toward
the military bases and the canal must
consider the troubled history of the
two nations’ relationship. The fun-
damental template for that relation-
ship was the 1903 treaty which gave
the United States control over the
10-mile-wide canal area “in perpetu-
ity” and the power to police
Panama’s people. The Torrijos-
Carter Treaties, signed in 1977
6NACLA REPORT ON THE AMERICAS
John Lindsay-Poland coordinates the Fellowship of Reconciliation Task Force on Latin America and the Caribbean, and edits the quarterly Panama Update.
6 NACIA REPORT ON THE AMERICASUPDATE / PANAMA
U.S. soldiers patrol the Panama Canal.
between presidents Jimmy Carter
and Omar Torrijos, reversed that
template. Those treaties mandate the
transfer of the Panama Canal to
Panamanian control on December
31, 1999, by which time all military
bases and facilities are also to be
turned over free of charge. A proto-
col signed after the treaties were rat-
ified allows for a continued military
presence if the two countries decide
it is in their interests.
The treaties were signed after
protracted popular struggle by
Panamanian nationalists, especially
students who suffered the brunt of
the repression during the “flag
riots” in January, 1964. After stu-
dents raised the Panamanian flag in
the canal zone (consistent with a
federal order), U.S. canal-zone
workers tore it down, and U.S.
troops intervened. That conflict, in
which 21 Panamanians died,
prompted the Johnson administra-
tion to commit the United States to
a fundamental recasting of its colo-
nial powers in Panama, leading
ultimately to the 1977 Canal
Treaties.
Concurrent with these political
movements toward greater sover-
eignty were economic changes that
undercut that independence of
action. Panama’s economy, always
shaped by its location at a global
crossroads,
grew more
dependent on
foreign capi-
tal in the
1970s. An
international
banking sec-
tor and the
Col6n Free
Trade Zone
“-both heavi-
ly dependent
on foreign
capital and
trade-were
rapidly devel-
oped, while
international
loans financed the construction of
populist projects. Since 1980, the
country has been racked by the debt
crisis, a two-year U.S. blockade in
1988-89, the U.S. invasion, and a
series of structural-adjustment mea-
sures. Panama now has one of the
most unequal distributions of
income in Latin America, behind
Brazil and Chile. It also has one of
the highest foreign debts per capita
in the region.
In this context, the Pentagon’s
plan to close bases, in some cases
ahead of the 1999 deadline, induces
mass anxiety among Panamanians,
as it would in any community that
believes itself to be heavily depen-
dent on military spending. Polls
consistently show about 70% of
Panamanians favor a continued
U.S. military presence, primarily
for economic reasons.
The continuation of some U.S.
military bases beyond 1999 also fits
neatly into the external economic
policy of the governing Revo-
lutionary Democratic Party (PRD).
Economy Minister Guillermo
Chapman and other cabinet offi-
cials give priority to implementing
neoliberal economic reforms to
pave the way for Panama’s entry
into the World Trade Organization
and the North American Free Trade
Agreement (NAFTA). The forced
reform in August, 1995 of
Panama’s Labor Code, for example,
was carried out largely to attract
foreign investment, on the premise
that Panamanian capital alone can-
not pull the country out of its eco-
nomic ills, nor make productive use
of former military bases.
Other sectors of Panamanian soci-
ety are, however, staunchly opposed
to keeping the U.S. bases. “The
Panamanian Army was eliminated
from our Constitution, so how can
we reject a native army and accept
the presence of a foreign one?” asks
Radil Leis, a Panamanian sociologist
who managed singer Rub6n Blades’
presidential campaign in 1994. The
base talks helped coalesce an array
of human rights, student, religious
and labor groups into united fronts.
Father Conrado Sanjur, coordinator
of a coalition of 20 organizations
opposed to a base extension, said
that instead of discussing a contin-
ued U.S. military presence, Panama “should negotiate compensation for
victims of the 1989 invasion and the
clean-up of toxic waste on the cur-
rent U.S. bases.”
Some bases are sure to close in
any case. The report last fall that a
post-1999 presence would employ
only about a thousand local citizens
was a rude awakening for many
Panamanian pragmatists. To make
up for the inevitable economic loss,
Panamanian authorities have
demanded that the United States
begin to pay rent for use of the
properties. Ironically, former
President Guillermo Endara, him-
self sworn into office on a U.S.
base, came out emphatically
against keeping the bases beyond
1999, arguing that the United States
will never agree to pay rent.
P6rez Balladares’ own party is
divided. The old guard of the party-
including PRD president Gerardo
Gonzalez, former Assembly presi-
dent Balbina Herrera, and chair of the
Assembly’s Foreign Relations
Committee Oyd6n Ortega-publicly
oppose a new base agreement
Vol XXIX, No 5 MARCH/APRIL 1996 7UPDATE / PANAMA
because they favor Panama’s com-
plete demilitarization and they see
greater economic benefits from civil-
ian use of the bases. Nicolds Ardito
Barletta, the conversion agency chief,
claims that civilian use of the bases
should generate 150,000 jobs and
$1.5 billion in revenue
for Panama. A num-
ber of progressive
businesspeople also
want the bases to
leave to allow for new
economic and urban
development, includ-
ing tourism and mar-
itime services such as
ship repair.
Panama’s national-
ist elites have formu-
lated a number of
ideas about how to
convert the former
bases. An Inter-
American Devel-
opment Bank loan to
Panama financed the
creation of a master Over 100,000 F
plan for the bases formal signing
being transferred to
Panamanian control. Fernando
Manfredo, Jr., a former canal
administrator who was involved in
putting together the plan, advocates
developing a second “free zone”
across the canal from Panama City,
based on the multi-billion dollar
Col6n Free Zone, a warehouse facil-
ity where goods are not taxed.
Manfredo also supports using mili-
tary housing to help meet Panama’s
dire housing deficit. In fact, many
poor families have already set up
squatter communities in military
areas, some still under U.S. jurisdic-
tion. PRD opponents of the bases
spearheaded a unanimous resolu-
tion by the Legislative Assembly to
move the offices of the Organization
of American States (OAS) to the
former military bases.
A high-level contingent of two
dozen officials accompanied P6rez
Balladares to the United States,
Japan, the Philippines and Taiwan
in the fall, where the first item on
their stated agenda was grooming
potential investors for the “reverted
areas.” The “low road” of inviting
Taiwanese or other foreign compa-
nies to set up low-wage industrial
parks with 50-year renewable leases
‘anamanians hailed President Carter and Gene
)f the Panama Canal Treaties on June 16, 1977
-the probable fate of Ft. Davis,
one of two bases that reverted to
Panamanian control last September
-is met with chagrin by nationalist
groups working for U.S. military
withdrawal. “We have fought for a
century for sovereignty over our
lands, and now we are going to turn
over those lands to a foreign country
for another 70 years?” asks Olier
Avila of the Service for Peace and
Justice in Panama, a human rights
organization.
Given the country’s 30% under-
and unemployment rate, the gov-
ernment is pursuing options like
maquiladora zones because it is
under pressure to generate jobs on
the former bases. Moreover, key
government officials may personal-
ly benefit from low-wage export
zones established there. These pres-
sures could crowd out long-term
strategies that consider environ-
mental and social-justice concerns.
T he United States is also divided about keeping the military bases. The turnover of the canal on December 31, 1999 is not in debate. Through a tripartite commission with Panama and Japan, however, the United States continues to exer- cise strong influ- ence over decisions about the future construction of a
third set of locks
for the present
canal or of a sepa-
rate sea-level
canal.
Even though
Congress does not
have the authority
to negotiate mili-
tary-base agree-
ments, Senator
Jesse Helms has
agitated for a new
base agreement-
if not outright abro-
eral Torrijos at the gation of the Canal
Treaties–ever
since the treaties
were ratified in 1978. Helms’ efforts
are countered by concerns in U.S.
political circles that it is politically
dangerous to maintain bases in
Panama while many U.S. communi-
ties struggle with the effects of
domestic base closures.
Southern Command chief
General Barry McCaffrey proposed
last summer to keep 5,000 troops in
Panama. McCaffrey-who has
since been appointed drug czar by
the Clinton Administration-
argued that the bases were impor-
tant for defending the canal in case
of war and for the regional drug
war (about a thousand drug-surveil-
lance flights were staged from
Howard Air Base in 1994, and
multinational military exercises are
carried out on another air base in
Panama). The U.S. Air Force coor-
dinates a radar system from
Howard to locate unauthorized
planes flying between the coca
8 NACIA REPORT ON THE AMERICAS NACIA REPORT ON THE AMERICAS 8UPDATE / PANAMA
fields of Peru and Bolivia and labs
in Colombia.
Some Army officials at first
resisted McCaffrey’s proposal,
though they eventually backed
down. They contended that Panama
is not vital to the drug war. Indeed,
the United States suspended the
radar program for ten months in
1994 because of concern that the
U.S. government might be held
liable if data were used to shoot
down the wrong plane. Others
argue that guerrilla threats to the
canal could occur whether U.S.
forces are there or not. “If some
sapper decides to take out Culebra
Cut [the canal’s most narrow pas-
sage], there’s nothing we can do
about it,” says one Army official.
The White House also favors
using the bases in Panama to
deploy “humanitarian missions”
throughout Central and South
America. Using National Guard
units that rotate into the region for a
few weeks, the Southern Command
annually runs dozens of projects to
build roads, dig wells, and repair
school buildings.
The value of these civic opera-
tions was seriously questioned by a
General Accounting Office (GAO)
report in 1994, which cited shoddy
work, lack of long-term goals, and
use of unqualified personnel for
construction. Leaders in a Pan-
amanian town where the Southern
Command built a road told GAO
investigators that the U.S. govern-
ment was only using the road pro-
ject as a propaganda tool. Another
road project was criticized by
Panamanian environmental groups
as ecologically damaging.
Complicating the transfer
process is the issue of toxic
waste on the bases. The
experience of domestic bases
shows that military toxic contami-
nation often stalls or thwarts the
development of military facilities
for civilian use. Unlike their
domestic counterparts, overseas
bases are not governed by U.S. laws
requiring clean-up.
A provision of the canal treaties
requires the United States to
remove hazards to human health
and safety “insofar as may be prac-
ticable” before departing. The
wording leaves a wide margin for
interpretation, which the Pentagon
Complicating
the transfer process
is the issue of toxic
waste on the bases,
which may thwart
their development for
civilian use.
has shrewdly exploited. No one
doubts that unexploded mortars and
rockets are hazardous to human
safety, but to find and dig up the
munitions is expensive, and if not
done properly, it risks erosion and
silting of the canal. Other potential
contamination problems on the
bases include leaking underground
fuel tanks, PCBs from electrical
transformers, and other chemicals
that Panamanians say have left
mysteriously barren areas on other-
wise lush lands.
The Southern Command has
been reluctant to turn over informa-
tion on the toxics problem request-
ed by the Panamanian government.
Colonel Donald Holzwarth, archi-
tect of the Southern Command’s
environmental strategy, said that
releasing some environmental doc-
uments “begs a thousand ques-
tions” and is “inherently stupid.”
Yet without a clearer idea of the
environmental condition of the
facilities it is inheriting, Panama
can neither plan intelligently for the
bases’ use nor negotiate a clean-up
agreement with the United States.
A Defense Department policy
issued last October discounts any
clean-up of a property after transfer
unless it has been explicitly agreed
to beforehand.
The present negotiations between
Panama and the United States
regarding a future U.S. military
presence are hardly between equal
partners. Panama’s head of state
was, after all, removed during the
1989 invasion-the largest U.S.
military operation at that time since
the Vietnam War, and one which
killed hundreds if not thousands of
civilians. It was the current ruling
party which was ousted from power
by the action. On other issues,
P6rez Balladares, a banker educat-
ed at the University of Notre Dame
in Indiana, has already bowed to
implicit pressure to negotiate for
what he thinks the United States
wants. Within days of entering
office in 1994, the President agreed
to a U.S. request to house up to
10,000 Cuban “boat people” on a
U.S. base, a measure which became
tremendously unpopular among
Panamanians after the Cubans riot-
ed and tried to escape confinement
on the base.
Given this uneven playing field,
the coming period will test the
United States’ commitment to
decolonization. In any event, U.S.
officials want the issue resolved
expeditiously. “We don’t want a
dragged-out Philippines-style pro-
cess,” said one National Security
Council official. On the other hand,
the 1996 U.S. elections could dis-
tract administration and Con-
gressional officials from an issue
perceived as secondary. If the
bases’ future is not resolved by
November-a probable scenario-
the elections may replace Clinton
with a Republican president more
sympathetic to the notion that the
banks of the canal are a part of the
United States.
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