Stumbling Around in Panama

Even before President Reagan imposed new sanctions Friday against the regime of Panamanian strongman Manuel A. Noriega, it was clear that the U.S. campaign to undermine that nation’s economy was working. Simply by freezing Panama’s assets in the United States and halting the transfer of U.S. dollars to Panama, the Reagan Administration had forced the closure of the nation’s banks and left the government so short of cash that it could not service its foreign debt or pay all of its soldiers and civil servants.

Although the measures taken so far have had just the economic effect that the Reagan Administration had intended, the ultimate political objective--dislodging Noriega--seems as elusive as ever. Noriega’s popular support may be declining as Panama’s 2 million citizens find themselves running out of money even to buy the necessities. The Roman Catholic Church has turned against him. Civic Crusade activists and other members of the opposition have rallied around Eric Arturo Delvalle, whom the United States still recognizes as the country’s legitimate president.

But Noriega is unmoved by any of this--hardly surprising in a man who, in five years as the commander of the Defense Forces and Panama’s de facto ruler, has never shown anything but disdain for the common good. Given Noriega’s intractability, our greatest concern is that the latest U.S. sanctions may delay his departure instead of speeding it up. Although the Administration wisely resisted pleas by Delvalle and some members of Congress for a trade embargo, the sanctions may end up driving Panama into bankruptcy before they drive Noriega from office.

By putting in escrow Panama Canal Commission revenues that are owed to Panama and withholding fees for the use of the pipeline that moves Alaskan oil to tankers in the Caribbean, the United States is denying Noriega’s regime about $150 million a year. Suspending the trade concessions previously granted Panamanian exports will cost Panama another $96 million.

These new moves ought to deplete Panama’s rapidly shrinking treasury, but they carry substantial risks, too. Drawing the canal into this dispute gives Noriega the opportunity to thunder once again that Washington can’t be trusted and sets an alarming precedent, even though the Administration insists that nothing it has done violates the 1978 canal treaty. But if the United States can strike at canal revenues, what’s to prevent Noriega from striking at the canal? And, as some well-placed Panamanian diplomats have warned, the mounting economic pressure may be seen by ordinary people as U.S. meddling and an affront to Panamanian sovereignty. Those who will suffer most are factory and office workers, who cannot even get at their own savings accounts, not the Defense Forces; many senior officers, as heavily involved in drug-smuggling as their commander, are virtually insulated from economic harm.

The Reagan Administration, committed to the strategy of squeezing Panama financially in hopes that the military will eventually revolt against Noriega, has been putting out feelers to the Defense Forces. The message is: Our quarrel isn’t with you, but with Noriega. Just in case no one accepts that thinly veiled invitation to lead an insurrection, we hope the Administration’s deep thinkers are considering other strategies to persuade this stubborn and ruthless man to surrender.