PANAMA: THE OPPOSITION RETURNS TO POWER
Ernesto "Toro" Perez Balladares, the candidate of the Democratic Revolutionary Party (PRD), and a disciple of the party's founder, General Omar Torrijos, received 33% of the vote in Panama's May 8 presidential election–enough to win, but not a clear mandate to govern.
By George Priestley
On May 8, 1994, over one million Panamanians–70% of the electorate–went to the polls, and elected Ernesto "Toro" Pérez Balladares president. Unlike the elections of 1984 and 1989, this election was not polarized between those in support of General Manuel Antonio Noriega and his Panamanian Defense Force (PDF) and those against. The 1994 elections had 16 political parties, seven presidential candidates, and four major coalitions. Emerging from this field was Pérez Balladares, the candidate of the Democratic Revolutionary Party (PRD), and a disciple of the party's founder, General Omar Torrijos. Pérez Balladares received 33.3% of the vote–enough to win the presidency, but not enough to give him a clear mandate to govern. He has thus been obliged to craft what he has called "a government of national unity and reconciliation." Perez Balladares' success will depend on how well he can maintain the social-democratic, populist and nationalist orientation of his party–once the party of Noriega–while confronting the logic and power of neoliberalism in Panama. It will be interesting to see whether the new president can now broaden his government’s appeal without alienating the progressive wing of his political party.
The PRD was created by General Omar Torrijos in 1978 as an instrument of social reconstruction and democratic transition. In the 1980s, however, the party became an instrument for Noriega's personal rule. Given its association with military rule, the PRD will now have to rebuild and reimagine itself in order to reclaim its social-democratic aspirations. During the campaign, Pérez Ballaclares successfuly distanced the party from the legacy of Noriega. He campaigned, for instance, on the platform that the party would cooperate with the United States in solving outstanding problems. When asked in a 1993 interview what his policy towards the United States would be, he said: "We have been partners, and we will be partners in the future. We have a partnership that works 90% of the time in the interest of both countries; only the remaining 10% might be different. That 10% is the conflictive part of the relationship, which should be based on mutual respect and dignity, not on size or military might." Pérez Balladares also asserted that a PRD government would tap the best talents notwithstanding party affiliation, and that a PRD government would be willing to use state resources to forge a government of unity and reconciliation.
The PRD not only distanced itself from the Noriega years but silenced the most radical Torrijistas, offering many of them advisory rather than policy-making roles in the party. While Pérez Balladares staked out a claim as Torrijos' successor and promised a return to the good old days of the 1970s, he was aware of the many economic and political constraints that would prevent a replay of the Torrijos era. He never disavowed neoliberal economic policies or challenged U.S. interests in Panama.
The climb from the depths of the post-invasion days to this May's victory was a long one for the PRD. Party militants attribute the party's success to numerous factors: Endara's mistakes; the faith and hard work of a small core of militants during the post-invasion period; the willingness to work closely with popular groups opposed to Endara's policies; and the restructuring of the party and its program.
The PRD's campaign strategy to de-link itself from Noriega was made easier by the Clinton Administration's relatively low profile in Panama. This low profile was a dramatic departure from the 1990-1992 period when Ambassador Deane Hinton appeared frequently in the daily papers offering advice or defending the Endara government. By contrast, in the past year, Washington began faulting Endara for not doing all he could to curb drug trafficking and money laundering in Panama. Another departure from past U.S. policy was signalled by the appointment last year of Robert Pastor as the new ambassador to Panama. Pastor, a close associate of Jimmy Carter, had written favorably about the policies of the Torrijos regime, thus giving credibility to Pérez Balladares' claims that the PRD was a viable alternative to the Endara coalition.
Upon winning the elections, Pérez Balladares went outside of his party to make two key appointments that would satisfy Washington, as well as Panamanian and international business circles. He appointed Gabriel Lewis Galindo, a former ambassador to Washington and prominent businessman, to head the foreign ministry, and Guillermo Chapman, a Christian Democrat and neoliberal economist, to be the next minister of economic planning. These appointments seem to indicate some continuity of established free-market policies, and a search for accommodation and negotiation with the United States over issues related to narcotics, military bases, and the canal.
The election took place in a climate marked by the growing ineffectiveness and unpopularity of the government of President Guillermo Endara–a government elected with strong U.S. support, in the wake of the U.S. invasion of December 20, 1989. Panama was beset by many long-standing problems that the Endara government either ignored or was incapable of solving: intractable economic problems, including unemployment and poverty, which were made worse by the U.S. sanctions and invasion; out-of-control urban crime; drug trafficking; an ineffective police force; an uncertain connection to the world economy; and a less than coherent canal policy.
The anti-Noriega coalition turned out to be better at opposing Noriega than at governing. Out of office for over 20 years, the coalition was unprepared or unwilling to creatively attack any of the country's fundamental problems, and was rarely able to go beyond the economic policies proposed by the international lending agencies. Guillermo "Billy" Ford, Endara's second vice-president and minister of planning and economic policy, had called the Endara government "100% private enterprise." Under Ford's direction, the Endara Administration began what amounted to shock therapy in the implementation of neoliberal policies. The Ford Plan set out to rid the country of the military/populist economic and social reforms of the 1970s, streamline government operations by dismissing thousands of public-sector workers, privatize state-run enterprises, strengthen the export sector, and remove all barriers to imports. Most controversial of all, the plan proposed a flexible labor code, which would abolish many protections won over years of trade-union struggle. The Endara government proved unable, however, to privatize major state-owned firms, reform the labor code, or downsize the public sector.
The Panama Canal, the centerpiece of the economy, was glaringly absent from the Ford Plan. This was not absent-mindedness, but the initial step toward creating a new economic and political enclave to replace the U.S.-dominated Canal Zone. The policy became clearer in 1992 and 1993 when the government appointed the Interoceanic Regional Authority, and introduced legislation to amend the 1972 Panamanian Constitution by adding a new section in the basic charter which would remove canal administration and finance from the day-to-day business of the national government. Supporters of the bill believe that it is necessary to insulate canal business from the vicissitudes of politics. Opponents see it as the creation of a new enclave for the rich and powerful, and in any case contrary to the national expectation of guaranteeing the "greatest collective use to all of the reverted areas."
Unemployment and poverty continued to rise over the Endara years despite impressive macroeconomic growth. The nation's economy grew at rates above 5% during 1990-1993. Nevertheless, unemployment remained close to 15%, and the portion of the population living below the poverty line rose from 44% just before the U.S. invasion to 54% as the election approached, Public-sector workers were among those most affected by the U.S. sanctions, the invasion, and the Endara government's neoliberal policies, motivating them to lead the political struggle against the Administration. Not only were 2,500 public-sector employees dismissed by Decree I of December 26, 1989, but thousands more lost their jobs in December, 1990, when Endara accused them of joining a failed coup staged by Colonel Eduardo Herrera Hassan. Labor unions also had to make a number of concessions, among them salary reductions, and a change in the retirement age from 55 to 60 for women and from 60 to 65 for men.
Another major problem that the Endara Administration proved incapable of resolving was the ineffectiveness of the newly formed "Public Force"–a hybrid military/police force organized around thousands of former Noriega officers. Certainly one consequence of the disappearance of Noriega's PDF and the unreadiness of the new Public Force was the dramatic rise in urban crime. Government statistics show that nationwide 22,837 crimes were committed in 1992, compared to 21,929 in 1991, and 19,668 in 1990.
Corruption and drug trafficking, present during the Noriega years, grew worse after the invasion. An October, 1992 Gallup/Consultora Internacional Poll found that 91% of Panamanians believed that widespread corruption existed in various governmental agencies–including customs, the Technical Judicial Police (PTJ), and the comptroller's office–and in the tribunals of justice. With the demise of the PDF, the war on drugs became less centralizcd, provoking inter-agency rivalry among the customs office, immigration authorities, PTJ, and the Attorney General's Office. With so many hands in the pot, not only did more opportunities for corruption emerge, but control over drugs and money laundering became less effective.
Panama's political-economic crisis has been a prolonged one, dating from the decline of the Torrijos populist-nationalist project in the late 1970s. It intensified in the 1980s when Noriega and the PDF derailed the transition to democracy and polarized the country, and reached new heights at the end of the 1980s when the United States imposed economic sanctions and then invaded the country. The Endara government failed to overcome the crisis, but, to its credit, it did manage to hold free and fair elections on May 8.
In the end, the neoliberal conundrum–the seeming collapse of all alternatives to a total dependence on the corporate forces of the global economy–proved to be the undoing of the Endara government. It remains the principal challenge for Balladares and his incoming administration.
ABOUT THE AUTHOR George Priestley teaches in the departments of Political Science and Latin Airierican Studies at Queens College, CUNY, and is a member of the NACLA Editorial Board. He acknowledges support from tho PSC-CUNY Research Foundation.
