Panama’s Domestic Strife Spilling Over Into Canal

After a daylong journey through watery locks that hoisted it over Panama’s hilly spine, the Turkish freighter Karayell made an unscheduled 27-minute stop at the Pacific exit of the Panama Canal.

To the surprise of marine traffic controllers, the ship’s Panamanian pilot announced through a walkie-talkie that the delay was “an act of solidarity with the people’s struggle for democracy” against Panama’s strongman, Gen. Manuel A. Noriega.

The pilot was suspended from his job for 10 days, and 14 others who joined a national strike that week were docked in pay for the time lost. Since then, canal employees have agreed to limit their demonstrations to off-duty hours and to not hinder shipping.

But the incident this summer underscored the canal’s vulnerability to Panamanian politics. The violence and strikes that have shaken the country in the last three months have raised some concerns about the future of the waterway.

Under two treaties signed 10 years ago today, full operational control and defense of the 50-mile canal, opened by the United States in 1914, is to pass into Panamanian hands at noon Dec. 31, 1999.

Until then, the United States has primary responsibility for the canal’s defense, and the waterway is operated by a U.S. government agency, the Panama Canal Commission, run by a board of five Americans and four Panamanians. In 1990, the commission’s post of senior operating officer, now filled by an American, will be filled by a Panamanian, and his assistant, now a Panamanian, will become an American.

The canal itself and all the territory of the former Canal Zone passed into Panama’s hands when the treaties went into effect Oct. 1, 1979.

Noriega, the military commander who controls Panama’s civilian presidents and much of its economy, has attacked local opposition leaders as American agents trying somehow to block the scheduled end to U.S. involvement in 1999.

Corruption Cited

Denying such an aim, his foes contend that the general’s corrupt rule, if extended to canal operations, would bring mismanagement and ruin.

Panamanian and U.S. officials worry also that the Panama Defense Forces, built up under Noriega’s command to assume an increasing role in the defense of the waterway, have become a source of domestic conflict that could make the canal a target of sabotage.

“We Panamanians want to show the world we are capable of taking over (operations) from the Americans,” said Rafael Severino, a machinist at the canal’s Miraflores locks. “But we cannot administer the canal if the military administers us.”

The issues have sharpened in recent weeks as hundreds of Panamanian canal employees have joined a National Civic Crusade demanding Noriega’s ouster and as combat soldiers of the 2000 Battalion, diverted from their mission to guard the canal, have shot and clubbed demonstrators in Panama City.

The Reagan Administration has reaffirmed U.S. treaty obligations. It has also endorsed the broad opposition movement’s call for free elections and civilian control of the Panama Defense Forces, the nation’s sole military and police organization.

‘Not One Step Back’

Noriega’s answer to his critics is a single slogan: “Not One Step Back!” Posted on walls, billboards, bumper stickers and railroad cars as the theme of today’s treaty anniversary, it affirms his determination to stay in power to supervise the final transfer of canal operations.

Many Panamanians harbor doubts about that process, a Gallup survey indicated last month.

Of 638 residents polled in Panama City, 35% said the canal worked better a decade ago, before Panama had any role in its administration, while 11% said it runs better today.

The same survey showed that 45% believe it is improbable that the United States will live up to its treaty obligations, compared to 51% who consider it probable.

The anti-government rioting first erupted over charges by the dismissed military chief of staff that Noriega rigged the 1984 presidential election and planned the murder of a leading opponent.

However, the general has counterattacked by making the canal an issue of patriotism in the lingering crisis.

“We have spoken about ambushes we face as we approach the year 2000,” he said in a recent

‘Traditional Oligarchy’

The pro-military Legislative Assembly has accused “groups of the traditional oligarchy” of leading the protests with the aim “to establish a political regime in Panama that would allow the United States to remain after the year 2000.”

Ricardo Arias Calderon, the Christian Democratic Party leader and one of those denounced as “traitors” by the Legislative Assembly, said all opposition groups support the “full nationalization of the canal as an irreversible fact.”

However, Dennis P. McAuliffe, the canal’s U.S. administrator, admitted that the Panamanian government’s campaign has been somewhat effective in shifting the focus of debate here by casting doubt on U.S. intentions.

The treaties were signed by President Jimmy Carter and Omar Torrijos, a populist general who brought the military to power in 1968 and dominated Panama until his death in an air crash in 1981.

Under the treaties, Panama was given a bigger share of shipping toll revenue, and it now accounts for 8% of the national income. But the canal’s operating budget remains under U.S. congressional control until 1999, when full operational control passes to Panama.

At that time also, U.S. military personnel based in Panama for canal defense, now numbering 10,000, must withdraw from the country.

Ranks Nearly Doubled

Under Noriega’s command since 1983, the Panama Defense Forces has created three new battalions for defense of the canal and Panama’s borders. Its ranks have swollen from 11,000 men to nearly 20,000, with plans for 25,000 by the end of the century.

Critics of the military say the buildup is far greater than justified for policing the canal. They note that the United States, under the treaties, has an implied right after 1999 to intervene in Panama if the canal’s neutrality is threatened.

“The canal is just a pretext to militarize Panama,” said Julio Linares, a Panamanian lawyer who has written on defense issues.

So far, the canal’s management has been largely isolated from military influence. Noriega has tried, unsuccessfully, to replace the top Panamanian canal executive, Deputy Administrator Fernando Manfredo, with a military crony.

Noriega’s charges of U.S. plotting to retain a canal role have not arisen as an issue in the commission’s board meetings. Instead, its Panamanian directors focus their complaints on conservative budget policies that they say are threatening the canal’s future by delaying needed improvements.

Seeks Widening

Worried by a loss of toll revenue to the Alaska oil pipeline and coast-to-coast U.S. rail services, the Panamanian government wants an immediate widening of the canal’s Culebra Cut to accommodate larger vessels.

In a speech last April, Manfredo acknowledged the growing competition but said the $320-million widening project is not needed until the mid-1990s.

More important to the long-term operation, he said, is a merit system to assure that Panamanians now filling skilled canal jobs do not lose them to political appointees after 1999.

A hiring program begun under the treaties has boosted Panamanian employees from 5,200 to 6,200, or 82% of the canal work force. The number of Panamanian executives is up from four to 45--one-third of the total. All are covered by U.S. Civil Service law.

“If Panama doesn’t have its own civil service system by the early 1990s, there may be a flight of skilled Panamanians out of the canal to more secure jobs,” McAuliffe said in an interview.

Critics of the government point to the old Panama Canal Railroad as an omen of what could befall the canal under Noriega’s brand of rule.

Since the railroad passed from U.S. to Panamanian control in 1979, its payroll has swollen from 142 to 430 while passenger and cargo loads have dwindled. Under a Noriega appointee, the line lost $4 million last year.

U.S. and Panamanian officials say the railroad, because it remains linked with the canal in the public mind, is largely responsible for the view that canal operations have deteriorated in the last decade.

Canal May Be Affected

But one canal executive, noting the frequent anti-government marches and demonstrations by canal workers, said he fears the waterway itself could be affected by the current unrest.

“The guys leading those demonstrations are division chiefs,” said the executive, who asked not to be quoted by name. “They have agreed not to strike because that would hurt American interests, and they feel the U.S. is on their side. But the day they sense the U.S. is not actively opposing Noriega, I have no doubt they will shut down the canal.”