Y2K Anxieties in Panama

September 25, 2007

On the eve of the transfer of the Panama Canal, U.S. conservatives are invoking the specter of imminent chaos in Latin America in an effort to maintain U.S. control over the Panamanian isthmus. Spillover from the conflict in Colombia and mainland China's commercial investment in the canal area are both being touted as justifications for a continued U.S. military presence in Panama. While the transfer of the canal and military bases by December 31 as mandated by the 1977 Torrijos-Carter Treaties is virtually unstoppable, the conservative claims are positioning future administrations to seek greater U.S. control over the isthmus.

Congressional Republicans have heaped criticism on the Clinton Administration since September 1998, when negotiations for a continued U.S. military presence, which had dragged on for three years, formally collapsed. The base talks had focused on the use of Howard Air Base for what was a billed as a "counterdrug center." Panama rejected the deal because the U.S. military insisted on including missions unrelated to the drug war in the center's mandate.

Under Panama's Constitution the agreement had to be approved in a popular plebiscite. Failing to gather support even within the ruling Revolutionary Democratic Party (PRD), Panama backed out of the deal after a premature announcement in December 1997. Both grassroots and elite opponents of the agreement criticized the "counterdrug center" as thinly disguised military bases that would violate the intent of the Canal Treaties, and they prompted Panama to restrict the agreement to three years for counterdrug missions only—a position that was unacceptable to Washington. "There was a miscalculation, prevalent among the military, that the Panamanians would, in the end, accept a large U.S. military presence," said U.S. negotiator Thomas McNamara.

Panamanians are eager to assume control of the canal and bases as a matter of both national pride and material development. At issue are concerns about how to use the former canal zone in ways that ensure social equity. There is also the thorny question of the cleanup of the military bases, which the Canal Treaty requires the United States to undertake "insofar as may be practicable." The legacy of unexploded munitions and other hazards left on the bases is a concern for Panamanians across the political spectrum.

Despite these and other obstacles to a Panamanian-controlled canal, some Panamanians have hope that the new lands will provide possibilities for social change. When asked about how the territory their country is receiving should be used, Panamanian high school students speak eloquently about the need for schools and libraries, centers for tourists, and the preservation of the area's rich diversity of natural wildlife. The infrastructure of the military bases, valued by the World Bank at $4 billion, could serve to jumpstart such social programs and narrow the gap between rich and poor in Panama. But if these resources are not channeled into social investment it will simply be a way for the rich to get even richer.

Indeed, the use of canal-area lands for social development is complicated by the government's neoliberal economic policies. While newly elected President Mireya Moscoso has promised to suspend the privatization binge carried out by the previous government, she is unlikely to reverse the policy of turning most of the assets reverting to Panama from the United States over to the market. The widow of three-time President Arnulfo Arias, Moscoso triumphed in May over Martín Torrijos, son of the strongman who forged the 1977 Canal Treaties for Panama. The appointment of Ricardo Martinelli as the new government's canal minister has further deepened fears of privatization. A businessman and cattle rancher, Martinelli gained fame in the early 1990s when he attempted to privatize the country's social security and health insurance system.

The agency responsible for managing canal-area lands, the Interoceanic Region Authority (ARI), is run by Nicolás Ardito Barletta, a former vice-president of the World Bank. Now his job is to sell. "Barletta sees the country as one big cash register," says one ARI employee. "He just wants to see how much he can get out of it."

One of the ways that Panama is seeking to gain revenue is through ecotourism. Half a million tourists visit Panama every year, but the country hopes to attract ecotourists by taking advantage of the hundreds of species of tropical and migratory birds and three million acres of national parks. Tourism projects range from a mountain-top radar site that has been converted into a small hotel for bird-watchers to the $300-million effort backed largely by Korean capital to turn Fort Amador on the canal's Pacific entrance into a hotel and casino complex, complete with monorail transportation. On the Caribbean side of the isthmus, Spanish investors are putting $20 million into renovation of the abandoned buildings of the infamous School of the Americas. The school that trained human rights abusers from all over the hemisphere will soon become a five-star hotel that overlooks Gatun Lake on three sides.

One of Panama's biggest challenges in taking over canal lands will be in the conversion of three large military bases across the canal from Panama City, constituting nearly half the infrastructure of all the bases. Panama hopes to turn the largest of them, Howard Air Base, into a multimodal transportation center for air and maritime cargo. Perhaps the most ambitious base-conversion project is the so-called City of Knowledge, a complex of university and private research institutions that will inhabit the former Army headquarters on Fort Clayton.

Today, the canal itself is efficiently run by a work force that is 94% Panamanian and that guides 38 ships through the waterway each day. The larger issue, which some say is the most important decision confronting the new government, is whether and how to build a third set of canal locks. The idea has been under discussion since the 1930s as a way to accommodate wider and heavier ships and keep pace with growing maritime commerce, but its $8 billion price tag has always led decision makers to defer the task. Moscoso says she supports and will seek funds for the project, pending studies of the additional fresh-water capacity needed to support the new locks.

Moscoso's administration will also have to face the issue of the deteriorating ecology of the canal's watershed, an area that feeds the canal with fresh water. The watershed's deforestation increases sedimentation and decreases the storage capacity of the lakes that feed the canal with fresh water. While the rate of deforestation is considerably less than a few years ago, urbanization and demographic pressures continue to bring displaced peasants with few resources into the watershed. These workers are often used by loggers, further contributing to soil erosion and deforestation.

A serious hazard for both ecotourists and loggers are the thousands of unexploded mortars and grenades that litter three large former artillery ranges on the canal's west bank. Despite a Canal Treaty obligation to remove all threats to human health and safety, Washington waited until 1998 to begin the site investigations and cleanup of more than 8,000 acres of range lands contaminated with explosives, even though similar cleanups in the United States have taken up to 15 years. Some 21 Panamanians have already been killed in accidents from explosives found on the ranges. Panama argues that the United States should continue cleanup of the area even after the Canal Treaty expires on December 31.

Abandoned chemical weapons that were tested by the United States are also in dispute both in the canal area and on sites used by the United States for chemical tests during World War II, such as San José Island, now privately owned and slated for tourism development. Washington has refused to release documents on suspected burial sites of chemical weapons in Panama, and has formally declared that the United States did not abandon chemical weapons in other countries, in violation of the Chemical Weapons Convention (CWC). The CWC requires ratifying states to declare chemical weapons they have abandoned in other countries, and if the other country has also ratified the CWC, to remove and destroy the abandoned weapons. In August, Panama's National Police found a canister which had contained sarin nerve gas, prompting the Panamanian government to invite the Convention's technical secretariat in the Hague to inspect suspected chemical sites. At the same time, evidence emerged that the U.S. Army tested Agent Orange in Panama in the 1960s and 1970s, a contention long denied by the U.S. Southern Command.

The conflict over cleanup issues has become the thorniest issue in the transition process. For many Panamanians, ending the enclave status of the canal area requires that the lands not be freighted with environmental risks. The full exercise of Panama's sovereignty is thus intimately linked to U.S. fulfillment of its responsibility to clean up dangers to human health and safety. It remains to be seen whether Washington will meet that commitment.

After the May 1999 closing of Howard, where the Air Force reportedly ran 2,000 espionage flights a year, Washington negotiated temporary agreements for use of airstrips in Aruba, Cura?ao, and Manta, Ecuador. These Forward Operating Locations, or FOLs, would bring the U.S. military to 80% of the capacity it had at Howard. But Venezuelan President Hugo Chávez's refusal to give blanket permission for U.S. military overflights of Venezuelan territory has restricted the military's complete regional surveillance capacity.

Meanwhile, Puerto Rico is being turned into the hub of U.S. Army operations in Latin America and the Caribbean. U.S. Special Forces have been relocated from Panama to Puerto Rico. The Special Forces, which devote a third of their time in the region to the training of Latin American militaries, will also conduct their own training at several sites, including the island of Vieques. Combat training in Vieques, however, has been suspended since April, when errant Navy bombs killed a Puerto Rican guard. Polls indicate that a majority of Puerto Ricans want the U.S. Navy to leave Vieques.

Drug warriors are livid about the departure of U.S. troops from Panama, and blame former Panamanian President Ernesto Pérez Balladares. Drug Czar Barry McCaffrey has said that Pérez Balladares deceived the United States and that the "loss" of Howard "has put us in a scramble." His complaint however, must be taken alongside his 1995 statement, when he was chief of the Southern Command, that "there is no function currently being performed in Panama that we can not perform from somewhere else."

Other drug warriors blame the Clinton Administration. "I am deeply alarmed by the administration's disjointed and half-hearted response to the impending withdrawal of U.S. forces from Panama," said Rep. Benjamin Gilman, chairman of the House International Relations Committee, during hearings in May.

Beneath the discourse about counterdrug operations is anxiety about the war in Colombia and State Department document acknowledge that the FOLs would be used to monitor the Colombian insurgency. The Revolutionary Armed Forces of Colombia (FARC) have long been crossing over the border into Panama's thinly populated Darien province for rest and to evade military or paramilitary operations. In the last two years, however, the paramilitary groups known as the Peasant Self-Defense Units of Córdoba and Urabá (ACCU), a subdivision of the United Self-Defense Units of Colombia (AUC) have pursued FARC units, sometimes threatening and killing local residents suspected of assisting the guerrillas. The incursions have displayed the inability of Panamanian police to control the border. At the same time, however, media reports conflating the identities of guerrilla and paramilitary groups have also served to bolster Washington's focus on the FARC as the primary source of the region's security troubles.

Arguing that Panamanian police "are neither organized nor equipped to deal with incursions by Colombian insurgents into the Darien and San Blas Provinces," Southern Command chief General Charles Wilhelm said in June that the Southern Command would "intensify our engagement" with Panamanian police and has lobbied hard for increased military aid. Citing the FARC's incursions and the Neutrality Treaty, Wilhelm asserted: "It is our responsibility under the Neutrality Treaty, and we know we have the obligation to intervene, in cooperation with the Panamanians or unilaterally if the conditions dictate, so we are directing contingency plans to that end."

U.S. conservatives are also playing the China card. A week before President Moscoso's inauguration, Senate Majority Leader Trent Lott wrote a letter to Secretary of Defense William Cohen asserting that China is on the verge of taking over the canal. "We have given the farm away without a shot being fired," he said in reference to port concessions made in 1997 to Hutchison Whampoa, a Hong Kong-based shipping conglomerate. Hutchison outbid U.S.-based Bechtel Corporation for the concession in a bidding process criticized by the State Department for its lack of transparency. Hutchison, whose Latin American operations are managed from London, has invested $100 million in two ports on either side of the canal. "U.S. naval ships will be at the mercy of Chinese-controlled pilots," Lott wrote, "and could even be denied passage through the Panama Canal by the Hutchison, an arm of the [Chinese] People's Liberation Army." In fact, ships transiting the canal are piloted by Canal Commission, soon to be Canal Authority, personnel.

While the China card may be a last-ditch effort to keep the canal and military bases in U.S. hands, it is also indicative of Washington's superpower anxieties and how they are likely to play themselves out in Panama.

The effort to broker a military base agreement after the U.S formally withdraws is not unprecedented. It happened in the Philippines in May, when, eight years after the country's Senate rejected a military-base agreement with the United States, the two countries ratified a military-access agreement. U.S. Ambassador Thomas McNamara signaled a similar intention in July when he testified before the Senate about the failed base negotiations in Panama. "I strongly recommend that both countries adopt a cooling-off period of several years," he said, "before addressing again the issue of whether Panama would agree to the presence of U.S. military in the country."

Foreign Minister José Miguel Alemán has signaled that the new Panamanian government is open to a deal. "We want to maintain excellent relationships with the United States," he told the Dallas Morning News in August, "and help in any matter that the United States would consider in its national security interests." It seems that Panamanian sociologist Raúl Leis is right when he suggests that, "the ghost of military bases will always surround us."

John Lindsay-Poland coordinates the Latin America program of the Fellowship of Reconciliation in San Francisco, California.

Tags: Panama, Panama Canal, US involvement, US military, insecurity

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