Panama had been, in the eight decades leading up to 1903, a part of Columbia in spite of many attempts to secede. The US, interested in building and controlling what came to be the Panama Canal, supported Panama’s efforts with secession occurring in 1903. One of the conditions of US support was that Panama would, like Costa Rica, abolish its army.
The US then effectively granted itself a slice of land out of Panama to build the canal (completed in 1914 by its Army Corps of Engineers) and to control the canal in perpetuity.
1946 – Establishment of the military School of the Americas in the American-owned Panama Canal Zone. From 1947, the Panamanian Military start to assert a more active involvement in the Government of their country.
1949. Colombia / Panama – Pro-Nazi elements overturn democracies to create totalitarian states. No reaction from U.S.
1963 – Panama joins CONDECA – see Guatemala above.
1968 – Major Boris Martinez leads a coup against elected President Arias. Lieutenant Colonel Omar Torrijos recalled to Panama. Torrijos called the overthrown Government a “marriage between the armed forces, the oligarchy and the bad priests”. There is no excuse for a coups but nonetheless we look at the subsequent record over the following 13 years he remained in power … recognition of Unions, redistribution of land, infant mortality declined from 40% to 20%, life expectancy increased by 9 years. New hospitals, schools, houses etc. Indigenous communities granted autonomies and protection for original lands (almost a historical first). Torrijos supported the Sandinistas in Nicaragua and recognised revolutionary Cuba. And then we look at what happened next…
1981 – Torrijos killed in suspect aeroplane accident in similar circumstances to Ecuadorian President Jaime Roldos. Client Dictator Manual Noriega installed. Noriega, himself removed by an outright US invasion 8 years later, said at his trial in 1991 that he had papers that proved the complicity of the US Agencies to assassinate Torrijos (and himself). The Court refused to admit the papers as evidence.
1986 – US client Israel, itself in unprecedented receipt of US military assistance, is now complicit in arming most US-backed dictatorships in Central America, and has already supplied $500 million of weapons to Panama and to Noriega in the last decade.
Links are established between drug cartels and major Panamanian and U.S. banks doing money-laundering. Charges were not investigated as part of Bush’s “War on Drugs”.
1989 – U.S. invasion to oust previous ally Noriega. The United Nations declare it “a flagrant violation of international law”. Helicopters fire on civilian buildings, U.S. tank destroys public bus killing 26, troops shooting at ambulances. Hospitals and non-Government groups estimate more than 2,000 dead, mostly civilians. First Panamanian Publishing company, ERSA, with three Daily Papers, occupied by U.S. tanks and security forces. “La Republica” ransacked after reporting the large number of deaths. Editor held for 6 weeks by U.S. troops and then sent to Panamanian prison without trial or charge. Ransacking of Nicaraguan embassy and repeated detention of Cuban embassy officials.
Bush announces $1billion aid, of which $400 million to market U.S. products in Panama, $150 million to pay back the international banks, $65 million for private sector loans and guarantees for investors – all gifts to the rich by the U.S. tax-payer.
U.S. establish parallel government – control extending to 10 main provincial Town Halls, the Indian Community, regional Police offices.
Since the invasion, unemployment has sky-rocketed, half the population can’t meet essential food needs, crime has quadrupled. Inaugural address by U.S. favourite Endara is boycotted by nearly all Latin American ambassadors who issued statement … “Panama must be allowed to choose its Government without foreign interference”.
1991 – Endara’s Government abolishes the army and commences privatisation.
1994 – Balladares elected as President with 33% of the vote due to splintering of the opposing parties. His PRD Party are the political arm of the Military.
1999 – Mireya Moscoso elected. She pardons 4 Cuban exiles implicated in the attempted assassination of Cuban President Castro.
2003 – National strikes over social security mismanagement.
2004 – Martin Torrijos (son of Omar) is elected on a ticket of fighting the corruption of predecessors Moscoso and Balladeres. He repairs links with Cuba. Record revenues from Panama Canal.
2009 – Ricardo Martinelli elected. He was implicated in asking the US to help him wiretap his election rivals.
2012. The US-Panama Free Trade agreement comes in to force, further enabling tax evasion to the tune of $100 billion every year by US individuals and corporations. As the Panama Papers revealed in 2016, legal firm Mossack-Fonseca, based in Panama, were world leaders in the illegal use of shell companies in tax havens to launder money.
Like Costa Rica, Panama cannot defend itself without an army and is maintained in the orbit of US power. There are straight line relationships between US favourites election funding and their degree of success with the possible exception of Martin Torrijos who had the backing of the military-backed PRD Party. Panamanian democracy has been almost entirely bought. An election is not free and fair if there is no ceiling on spending.
In spite of endemic corruption associated with successive leaderships, Panama took control of its canal in 1999 as a result of a treaty signed in 1977 by then US President Jimmy Carter and then Panamanian President Omar Torrijos. Canal toll charges – $1 billion in 2004 collected under the Presidency of Omar’s son Martin – account for Panama’s exceptionally high GDP per capita compared to its near neighbours, but as we shall see in the upcoming chapter “National Prosperity”, this does not translate into benefits for the population in a US client State.