But by this time the once vigorous mass
movement had lost its autonomy. The earlier
alliances made by the various popular leaders
left the masses defenseless when the impact of
the world capitalist crisis on Panama’s
economy forced the state to undo the progress
of earlier years.
In January 1977 the government passed an
amendment to the 1972 Labor Code, titled
Ley 95.4′ This law took away or seriously
diminished all the important benefits and
guarantees labor had won in 1972. It
lengthened from two to five years the period
during which new workers could be arbitrari-
ly dismissed, and left them no effective legal
redress. It also required compliance with
cumbersome grievance procedures before
unions could take other action-such as a
strike or boycott-against offending
employers. Finally, it imposed a two-year
moratorium on wage increases, the formation
of new unions and the pursuit of new collec-
tive bargaining agreements, and allowed
previously negotiated wage increases to be
deferred if a business could claim economic
hardship.
Ley 95 was accompanied by a new round of
economic concessions designed to relieve the
stress of the economic crisis on the
bourgeoisie. Regressive tax breaks lessened
further the business sector’s contribution to
the national budget, and in turn required
compensating increases in revenues extracted
from the wage sector through taxes on per-
sonal income, consumption and use of public
services. Wages were even further reduced by
increases allowed in the price of essential con-
sumer goods such as beef. Finally, the govern-
ment poured lye on a smarting wound by
shifting expenditures away from social ser-
vices to already well-endowed infrastructural
projects serving the reproductive needs of
private capital.”4 The state became simply
another conduit for capital accumulation by
transnational finance and the export-oriented
bourgeoisie.
The combined ravages of unemployment,
inflation and drop in real wages, have
stripped the average working class family of
any comforts or security. In many homes
meals are becoming irregular; in some meat is
no longer eaten.
Hardship is worst among peasants and ur-
ban workers, but it has also touched the lives
of the urban middle class. These sectors- of-
fice workers, professionals, technicians and
bureaucrats-are seeing their hopes of up-
ward mobility frustrated by persistent stagna-
tion and the economy’s incapacity to absorb
the growing number of high school and col-
lege graduates entering the labor force each
year. Meanwhile, increases in the cost of im-
ported goods, such as cars, gasoline or ap-
pliances, have placed beyond reach many of
the amenities middle class families were just
beginning to enjoy. These setbacks have
heightened their long ambivalence toward the
regime. They still view the government’s pro-
gram as their best alternative, but they have
become more receptive to criticism of the
government coming from petit-bourgeois op-
position groups or oligarchic formations such
as the newly-formed National Opposition
Front (FRENO).
UNREST CONTAINED BY
ACQUIESCENT LEADERSHIP
This is not the case among workers. Grow-
ing hardship has bred popular discontent
directed straight at the government’s
regressive policies and its increasing iden-
tification with the bourgeoisie. No amount of
government or business propaganda-and
millions have been spent – has dispelled this.
Their mounting restlessness was, however,
contained for a long time by the reformist
leadership’s efforts to maintain peace within
the student and labor movements until the
treaties were signed. This much was admitted
by Angel Gomez, Secretary General of the
National Confederation of Workers and a
leading member of the Partido del Pueblo:
“We were careful not to sharpen the struggle
30SeptlOct 1979
at home because the principal objective in
our program was passage of the treaties.””‘
These economic blows have been accom-
panied by the steady erosion of what little
political influence labor still held within the
government. Political appointees sympathetic
to labor have been either coopted entirely or
replaced by officials who squarely identify
with new government policies. Union leaders
who once felt they were part of the “process”
have ceased to be consulted about policy,
cabinet appointments or the implementa-
tion of laws affecting their members’ intersts.
Sometimes they are not even informed.
Two reasons account for the acquiescent
conduct of the union leadership. The first is
that many of the popular leaders saw
themselves as part of the reformist process
identified with the state, and accepted the
legitimacy of that system. They saw the cur-
rent reversal as a temporary setback after
which the process would continue along the
same path. This perception made them
believe they could maintain enough influence
within the government to eventually recover
the benefits labor had just lost. Even today
they invest their hopes for social transforma-
tion on the expansion of the state sector,
alliances with the liberal bourgeoisie, a share
in the administration of the state and gradual
reforms. They would sooner rely on their
leverage within such a framework than on the
masses’ readiness to defend their independent
interests.
The second reason, applying primarily to
members of the Partido del Pueblo, was the
Party’s adherence to a two-stage thesis of
revolution which, in the case of Panama,
posed a dichotomy between the struggle for
sovereignty over the Canal and class struggle.
It was deemed necessary, in this view, to
subordinate workers’ demands to the
maintenance of the class alliances required to
achieve sovereignty.46
SO MUCH FOR CLASS ALLIANCES
The treaties were finally ratified in April
1978. Their final, mutilated contents
amounted to far less than what the govern-
ment had originally promised. Government
spokesmen explained that this was the best
deal Panama could get, but the masses were
clearly disappointed, especially after they
realized that the government had no intention
of fulfilling its earlier pledge to use the Canal
for social benefit. Instead, the lands slated for
recovery were already being carved up among
the various fractions of transnational finance
and the export-oriented bourgeoisie. It soon
became evident also that the onerous condi-
tions workers had endured during the
preceding three years would remain un-
changed, if not worsen, unless the workers
challenged these themselves.
This realization was confirmed by the com-
position of the cabinet formed by the new ad-
ministration that took office in October 1978,
when pursuant to the 1972 constitution Torri-
jos relinquished many of his powers. Almost
all of the posts related to economic policy-
Treasury, Commerce, Agriculture, Housing,
Trade, the lot -were taken by representatives
Workers go back to the streets to defend their interests. Banner says, “A Minister who doesn’t listen to the workers is a
Minister who falls. ”
31NACLA Report
of the bourgeoisie, displacing the petit-
bourgeois technocrats who had figured so
prominently a few months earlier. The new
president, Aristedes Royo, made. clear in his
early speeches that the government would
give the priority to the special needs of the
private sector.
OYDEN WHO?
As far as labor was concerned, the govern-
ment showed its regard by not even consulting
union leaders about who would head the
ministry most immediately affecting their in-
terests. Oyden Ortega, the new Minister of
Labor, was a virtual stranger to the union
leadership.
Union leaders responded to these successive
setbacks with fitting outrage. They complain-
ed that the government had betrayed the
masses, asking for their sacrifice and abnega-
tion only to give the fruits of these efforts to
the bourgeoisie. At a conference of the Con-
federation of Workers of the Republic of
Panama (CTRP), Secretary General Phillip
Butcher declared, “In 1972 there was more
unity between the government and workers
because the government had not yet esta-
blished good relations with the capitalist
class. So it needed support from the working
class to stay in power. The bosses are now on
good terms with the government and have im-
posed their terms on the workers.”‘ 4
Fortunately, the masses had always kept a
healthy skepticism toward the government’s
policies. Their support was quite effusive at
times, but as soon as benefits were taken
away, disaffection seeped in. By October
1978, workers had endured so many blows
and disappointments, disaffection swelled
beyond restraint. Their long acquiescence
turned to militance.
In discussions of a joint labor strategy to
repeal Ley 95 held in late 1978 this militance
came into heated conflict with the concilia-
tionist approach still persisting among many
labor leaders. The two-year moratorium on
wage increases, collective bargaining and the
formation of new unions imposed in 1977 was
set to expire in January 1979. The strategy
sessions were held to determine what could be
done to: 1) assure that these provisions would
not be renewed, as the bourgeoisie was
demanding, and 2) recover the rights won in
the 1972 Labor Code that would still be
denied by Ley 95 after January.
Some of the more militant unions urged a
concerted national campaign aimed at the
defeat of Ley 95. They argued that this was
the only way labor could marshall the
strength required to meet the private sector
head on. The reformist union leaders,
however, saw this approach as a dangerous
challenge to government policy and, afraid of
what could happen, derailed it. As an alter-
native they settled on a strategy of raising the
issue of Ley 95 case by case, incorporating
demands for the restoration of the rights
denied by this law into each union’s respective
negotiations. This of course means that the
labor movement is fragmented at a time when
the bourgeoisie and the government possess a
coherent labor policy.4 8
WORKERS GO TO THE STREETS
Despite the ambivalence and timidity of
some leaders there has been a spate of strikes
since last October. Among the major ones,
two are worth mentioning. The first was a na-
tionwide strike by public and private school
teachers, demanding higher wages and in-
creased participation in educational reforms.
The strike lasted over a month and mobilized
thousands of people who until then had re-
mained on the sidelines. Nevertheless it failed
to win its demands because of the middle class
leadership’s reluctance to form alliances with
other labor groups and students, and impart
a more political character to the strike. 4 9
The second important strike occurred in
the months of December and January and in-
volved one of the country’s most militant in-
dependent unions, the Union of Construction
Workers (SUNTRACS), in a long and bitter
struggle against an oil refining company,
Tellepsen & Co. The union demanded that
the company pay $80,000 in unlawfully
withheld wages, reinstate several workers who
had been arbitrarily fired and abide by prior
collective bargaining agreements that had
been established with government sanction.
Tellepsen & Co. refused. Its refusal con-
stituted a clear violation of the government’s
own guidelines but the government conven-
iently chose to overlook this fact and interven-
ed with troops on behalf of the company.
The government’s harsh tactics were ob-
viously intended as a warning to other unions
32SeptlOct 1979
which had threatened to go on strike this year
unless minimal demands were met. The
state’s intervention succeeded in breaking the
strike but it also reminded workers that they
could no longer expect the government to
provide protection or even serve as an impar-
tial adjudicator in labor-capital disputes. 5 0
The stretch from January of this year to
now is probably the most tumultuous period
Panama has experienced since 1967, the year
before the coup that put Torrijos in power.
Strikes, riots, protests of one kind or another
have become almost a daily occurrence, bely-
ing government efforts to project abroad an
image of stability.
The mounting restlessness has further
strained the new government’s vaunted ability
to maintain order without recourse to
violence. It became glaring last June, when
the social discontent that had been brewing
all these months burst anew.
On Monday, June 11, 1979, the bus and
taxi drivers of Panama City went on an illegal
strike to protest recent increases in the price
of gasoline. The strike, which received broad
popular support, snarled traffic throughout
the city and disrupted business and govern-
ment activities. The drivers’ bold action, in
defiance of government labor regulations, is
another sign that rank and file members are
rejecting submissive leadership.
The government reacted to the strike
violently, as it had to others this year. This
time it backfired. The strike spread within
hours after news of the government crack-
down got around. By dawn of the second day
bus and taxi drivers in the Atlantic city of
Colon, the second largest, had also gone on
strike. High school students soon joined in
solidarity and by noon over 10,000 people,
drawn from the workers and unemployed of
this hard pressed city, were out in the streets.
The strike snowballed into a generalized
protest against economic conditions and
government policies- price increases, chronic
unemployment, frozen wages, regressive
taxes, oppressive legislation, police harass-
ment and repression. Traffic stopped,
business and government offices closed, the
entire city was paralyzed. Before the day end-
ed, several important government offices lay
shattered and three protesters had been killed
by National Guardsmen.” 5
The fury and amazing spread of these
events reveals the depth of popular discon-
tent. The masses are tired of waiting for the
Militant construction workers’ strike against an oil refining company and Ley 95 in December 1978,
33NACLA Report
government to answer their grievances. The
appeal for “national unity” no longer inspires
abnegation. June’s protests, latest in a series
of mounting demonstrations, marks a resurg-
ence of the mass movement. It is regaining its
strength and initiative, though it still lacks
organization, direction and an independent
alternative.
CONCLUSION
1. Conflict Between the Empire and the Nation
The Carter-Torrijos treaties decolonize the
Canal Zone in so far as they recognize legal
Panamanian sovereignty over its territory;
neverthless, they do not resolve the historical
contradictions between Panama and the
United States.
Not only does the United States retain ef-
fective control over the administration of the
Canal, but it reserves the “right” to build a
new sea level canal in the future which would
continue, as the present one, to operate on a
“non-commercial” basis. The implication of
this reality has serious economic consequences
for all sectors of Panamanian society, to the
extent that neither the working class nor the
domestic bourgeoisie will be able to benefit
from the economic enterprises of the transit
route.
The Neutrality Treaty, in conjunction with
Article 4 of the Canal Treaty, legalizes the
U.S. military presence in Panama, subor-
dinating Panama’s National Guard to the
U.S. military. The United States further re-
tains the “right” to intervene unilaterally in
Panama any time before or after the year
2000, guaranteeing access to the waterway.
After 133 years of North American presence
(1846-1979) and 33 military interventions in
Panama, U.S. imperialism remains reluctant
to give up the prerogative of colonialist-type
military intervention. The consequences for
organizing labor are especially disturbing,
since even a strike against Canal authorities,
seen by the U.S. as obstructing access to the
waterway, may prompt such intervention.
The Panama Canal treaty provides that
on October 1, 1979, some 55% of the Canal
Zone reverts to Panama. However, as part of
the U.S. constitutional process, any properties
to which the United States may have claims
must be dispensed with by Congressional ap-
proval. Articles of Implementation to the
treaties constitute the legal instrument for
such approval before the transfer of jurisdic-
tion can occur. Adversaries of the Carter Ad-
ministration, who until the bitter end op-
posed the Carter-Torrijos treaties in Con-
gress, are now withholding approval of these
Articles, hoping to further frustrate Carter’s
electoral chances by demanding unreasonable
economic and political concessions from
Panama. As this report goes to press, the U.S.
Congress has yet to approve the Articles of
Implementation. Torrijos has promised to
lead the masses into the Canal Zone with or
without these articles. The popular masses,
on the other hand, promise to be there on Oc-
tober 1 with or without Torrijos.
2. Limits of Torrijos’ Reformist
Populist Project
After ten years, Torrijos has managed to
secure, through his populist alliances, the
modernization of the Panamanian economy.
Both the transnational bourgeoisie and some
elements within the Panamanian industrial
sector have benefitted from this process of ac-
cumulation. But the limited redistribution of
income and political participation that was
gained by the workers, peasants and middle
sectors, in return for their support of the
regime, are being lost as the economic crisis
and the imperialist treaties compel a new cor-
relation of forces.
The rural classes, especially those who
benefitted from the agrarian modernization
projects, have suffered economic reverses as
world sugar prices steadily declined and the
regime halted the incorporation of more
“asentados” to the Asentamientos Campesinos
and small rural producers to the Juntas
Agrarias.
The petit bourgeoisie, especially those pro-
fessionals and technicians who were rapidly
absorbed into the state bureaucracy, has ex-
perienced serious employment problems and
“a decline in real income.
The proletariat has been the hardest hit. As
“a result of the economic crisis workers have
had to endure high levels of unemployment,
inflation and repression, This has led to a
relative resumption of their independence
“from the Torrijos regime. Their right to col-
lective bargaining, job security and other
benefits secured by the 1972 Labor Code have
been eroded by Decree Law 95, the repressive
amendment to that Code. All this has resulted
34Sept/Oct 1979
in their disaffection from the regime. Since
1978, after workers’ organizations supported
the National Unity necessary for the approval
of the Carter-Torrijos treaties in Panama, the
workers have used the strike consistently to
regain lost benefits and union rights. For this
they have been severely repressed.
3. The Class Struggle
The economic crisis, the Canal negotiations
and their economic and political conse-
quences provide a new battleground. The
decomposition of Torrijos’ populist alliance,
whose life was briefly extended by his call for
National Unity (a unity of opposites, ex-
ploiters and exploited), now ushers in the raw
confrontation of classes.
As stipulated in the 1972 Constitution, and
under pressure from the oligarchy’s collabora-
tion with Carter’s “human rights” call for
“democratization and stabilization”, Torrijos
has relinquished some executive powers. The
emergence of President Aristides Royo and
the launching of a government party, the Par-
tido Revolucionario Democratico (PRD), in
October 1978, constitute a transitional ad-
ministration toward civilian rule. While the
PRD sponsors the project of transnational
finance capital, two other major political par-
ties have emerged as potential contenders in
the 1980 elections: Frente Amplio Popular
(FRAMPO) and Frente Nacional de Oposi-
cion (FRENO). The FRAMPO, as the first mid-
dle class party in Panama’s history, institu-
tionalizes the petit bourgeoisie’s aspirations of
leading the struggle of the majority and, tac-
tically, supports the continuation of the
populist “process” its leaders administered
under Torrijos; however, it lacks a viable
economic alternative to Panama’s dependent
capitalist development.64 The FRENO, on
the other hand, emerges aggressively to repre-
sent the old oligarchy’s interests in an
economic project favoring domestic-based
capitals. Thus, the interbourgeois contest of
forces appears in the contradiction PRD vs.
FRENO, with FRAMPO in the margins seek-
ing an administrative, mediating role. The
electoral success of either bourgeois fraction
will depend on its ability to rally the exploited
to its own sacrificial stone.
The workers and the masses, still with a low
level of class consciousness or organization
and lacking a coherent vanguard, are courted
35
by the contending fractions of the bour-
geoisie. Nevertheless, the bourgeoisie’s own
present division is a timely opportunity for the
masses to raise their banners of economic and
democratic rights.
Three tasks face the popular masses, their
organizations and the Left: First, to insist that
the resources of the Canal and Canal Zone be
recuperated for the social needs of the masses,
eliminating U.S. “rights” to interventionism;
second, to strengthen their economic
demands for improved living conditions and
respect for the democratic rights of workers,
peasantry and all other popular sectors; and
third, through the progressive and revolu-
tionary forces to demystify the false choices
presented by the bourgeois fractions creating,
in the long run, an independent, revolu-
tionary, popular alternative.
Panama- Winning the Canal but losing the country?
About the Authors:
– The contributing authors to this issue are
all Panamians currently living in New York.
They are members of the political organiza-
tion, Nueva Alternativa Popular Panamena
(NAPP), formerly called Union Nacional de
Panamenos.
WINNING THE CANAL
1. See Marco Gandasegui, Jr., Concentracion del
poder economico en Panama (Panama, 1967).
2. Octavio lanni, Laformacion del estado populista
en America Latina (Mexico: ERA), 1975,
3. Julio Mariduley, Panama: Acerca de la estructura,
la coyuntura y las perspectivas (Panama: CELA, 1978),
p. 12
4. Xabier Gorostiaga, “Las inversiones extranjeras en
Panama y su impacto en la estructura economica del
pais,” in Rafael Menjivar, ed., La inversion extranjera en
Centro America (Costa Rica: EDUCA, 1974), pp.
324-325.
5. Ibid., See Table A on “Comparative Benefits,” p.
316.
6. See “Contra Informacion,” in Revista Che
Guevara, No.3 (no date), for a discussion of military
bases in Panama and their impact on Latin America.
7. Marco Gandesegui, Jr., “Industrializacion e inve-
siones extranjeras: El caso de Panama,” Tareas, No. 27
(Dec. 1973-May 1974), pp. 23-69.
8. Simeon E. Gonzalez H., “Industrializacion y
reproduccion capitalista en Panama,” (Panama: CELA,
1977) p. 11.
9. Anonymous, Cinco Ensayos (Panama, 1962).
10. Walter LaFeber: The Panama Canal: The Crisis in
Historical Perspective (New York: Oxford University
Press, 1973), p. 155.
11. Cinco Ensayos.
12. Charles Denton, Interest Groups in Panama and
the Central American Common Market (Washington,
D.C., 1967).
13. Gandasegui, Concentracion del poder economico.
14. Carlos Ivan Zuniga, “Las elecciones presidenciales
de 1968,” Tareas, No. 28 (June-Oct. 1974), pp. 57-69.
15. Denton, Interest Groups.
16. Zuniga, “Las elecciones.”
17. Felipe Escobar, Arnulfo Arias o el credo del
Panamenismo. See also Adolfo Alberto Benedetti, Ar-
nulfo Arias, El Caudillo (Panama: Editora Humanidad,
1963), for a right-wing view of the subject.
18. Ruben Dario Souza, Formacion de la lucha anti-
imperialista en Panama y el papel de los comunistas
(Panama: Ediciones Momento), p. 25.
19. Ibid., p. 22.
20. See J. Conte Porras, La rebelion de las esfinjes,
Historia del movimiento estudiantil panameno (Panama:
Impresora Panama, 1977).
21. Omar Torrijos, La batalla de Panama (Buenos
Aires: EUDEBA, 1973), p. 29.
22. Ibid., p. 34.
23. Robert Looney, Economic Development of
Panama (1976). See Chapter 7 on monetary policy.
24. Ibid. See table 8.1.
25. Cuarta Reunion Interamericana de Ejecutivos de
Reforma Agraria: Panama, Mayo 14 a 20 de 1972
(Panama), p. 54.
26. Marco Gandesegui, Jr., “La reforma agraria en
Panama, 1968-1978,” Dialogo Social, No. 105 (oct.
1978), pp. 31-33. See also by the same author, “Estruc-
tura agraria en el desarrollo nacional,” Tareas (April-
Oct., 1972), pp. 5-22.
27. Renato Pereira, Panama: Fuerzas armadas y
political (Panama: Ediciones Nueva Universidad, 1979).
29. See Comite Interamericano para la Alianza para el
progreso (CIAP), Domestic Efforts and the Needs for Ex-
ternal Financing for the Development of Panama
(August 1973).
30. Ministerio de Planificacion y Politica Economica,
Direccion de Planificacion Economica y Social, Informe
Economico 1977 (Panama, 1977), pp. 10-11.
31. Ibid.; see p. 48 for details of Panama’s commercial
balance for 1974-76.
32. Orlando Nunez Soto and Carmen Guevara,
“Desarrollo y contradicciones en el proceso Panameno,”
Tareas, No. 41 (Jan.-March 1978), pp. 25-64.
33. Juan Jovane, “El centro financiero internacional de
Panama,” Tareas, No. 36 (August 1976).
34. Ibid., p. 51.
35. Guillermo Castro Herrara, Panama 1977
(Panama: CELA, 1978). For a more detailed study of
Panama’s public external financing see Salomon Padilla
and Hugo Vargas, Elfinanciamento publico externo en
Panama y sus implicaciones economicas (Panama:
CELA, 1978), p. 27.
36. Salomon and Padilla, Elfinanciamento. See table
24 and Informe Economico 1977, p. 8.
37. Ibid. See graph on p. 22 and p. 37.
38. Speech by Omar Torrijos, “Declaracion de Bo-
quete,” November 1974.
39. Ruben Dario Caries, Jr. Constitucion de Panama,
Articulo 29 (Caracas, 1976).
40. Analysis of the September events provided by
Nueva Alternativa Popular Panamena (formerly
UNDEP), Denuncia (September 1976).
41. Guaykucho, FER, Liga Socialista. However, the
government repressed and jailed a number of indepen-
dent labor leaders from CATI. See ALAI (Toronto),
August 31, 1979.
42. Manduley, op. cit.
43. Dialogo Social (January 1979).
44. Informe Economico 1977.
45. Dialogo Social (Nov, 1978), p. 11.
46. Carlos de Leon, “Significato de los tratados 1977,”
Dialogo Social (October 1977).
47. Dialogo Social (November 1978).
48. “Sindical,” Dialogo Social (January 1979).
49. “Sindical,” Dialogo Social (December 1978).
50. “Sindical,” Dialogo Social (february 1979).
51. For other accounts of June events, see “Organica-
ciones populares,” Dialogo Social (July 1979) and Critica
(June 13-14, 1979).
52. Interview with President Aristides Royo, “El
primero de octubre estaremos en la Zona,” in Cuardernos
del Tercer Mundo, Vol. 3, No. 31 (July 1979).
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