Defiant Noriega Refuses to Bend Under Pressure

American economic moves to topple Panamanian strongman Manuel A. Noriega brought public life to a virtual standstill Saturday as employers and shoppers, stymied by the government’s shutdown of the banking system, began to run out of cash and workers vainly sought payment on temporarily useless payroll checks.

But Gen. Noriega defiantly refused to bend under intense pressure from the United States and from his civilian opposition to step down for the good of the country.

“This commander will only leave dead,” Noriega vowed in the small town of San Martin late Friday during a speaking tour of Panama’s provinces. “With the flag of Omar Torrijos, they will find me only on my feet, never on my knees.”

Most Revered Figure

The late Gen. Torrijos, who ruled Panama from 1968 until 1981 much as Noriega does today, is probably the most revered figure in this nation’s roster of heroes for having successfully negotiated the Panama Canal treaties with the United States.

In another speech to a pro-government rally in Colon, on the Atlantic Coast, Noriega, who is under U.S. federal indictments on drug-trafficking and money-laundering charges, mocked America, saying, “Thank you, United States, for unifying all Panamanian workers.”

But if there was a unifying quality to the critical cash pinch that has left uncounted thousands of Panamanians without the money to buy essentials from merchants who have stopped accepting checks and credit cards, it appeared to be against, rather than for, Noriega.

A 73-year-old retired sugar mill worker who said he formerly supported Noriega typified many on the streets of Panama City on Saturday as he waved his uncashable retirement check at a pharmacy cashier and said he is now ready to rebel against the general.

“We don’t have guns, but perhaps now our best weapon is our own hunger,” said the disconsolate retiree.

Shops and even grocery stores that are customarily crammed on Saturdays with weekend buyers were all but empty during the day as the result of prominent warnings on doors and show windows that their cash-short proprietors would no longer accept checks, credit cards or traveler’s checks.

“The best Noriega can do now is try to negotiate an honorable way out for himself,” said a top opposition politician who asked not to be identified. “If he doesn’t, he’s a dead duck.”

A former high government official said Noriega’s defiant vow of leaving office only feet first confirmed his worst fears that the strongman will pull the entire nation down with him before he goes.

Fearful of the economic chaos that might result if the banks do not soon gather the cash that will both permit them to reopen and allow businesses to resume credit operations, the opposition National Civic Crusade, an anti-Noriega coalition of business and professional groups, and the Bankers Assn. of Panama met throughout the day Saturday and said they would meet privately again today looking for a way to ease the cash crisis.

“The longer they (the banks) stay closed, the worse the situation is going to be,” said a leading Panamanian economist.

Limited Withdrawals

He speculated that the bankers’ group might pool its resources in order to reopen banks by Tuesday to cash retirement and salary checks and perhaps permit limited savings withdrawals of less than $500 per depositor.

“That would calm things down after a few days, but the desire to hoard cash and to transfer money abroad will still be there,” he said, adding that “it could be like what happened in the United States in 1931.”

The cash crunch here is peculiar to Panama because the national currency is the U.S. dollar and the money supply is effectively controlled from the United States. Thus, the government cannot bluff its way through a cash crisis by simply printing more bills to increase the money supply as other Latin American nations often do.

The government ordered the banks closed Friday following U.S. actions to prevent withdrawal of about $50 million in Panamanian funds from American banks. The U.S. move forced the National Bank of Panama, the nation’s central bank, to inform local banks that it could no longer meet their cash demands. With little cash on hand and a rush of withdrawals that had become feverish by Thursday, most of the dozen locally owned banks already had shut their doors before the government order.

During his speaking tour Friday, Noriega likened the U.S. action to “aggression,” saying, “It was as if a company (of troops) had invaded our territory. We denounce this aggression by an imperialist government against a weak, poor people of only 2 million.”