PERSPECTIVE ON PANAMA : If Bush Had Known the Truth . . . : The State Department has been painting a rosy but wrong picture of a prosperous democracy since the U.S. invasion.

President Bush’s rude awakening in Panama demonstrates that an honest assessment of the aftermath of Operation Just Cause--the 1989 invasion by U.S. forces--is long overdue.

The Administration’s reports to date--at least those being shared with the American public--are quite misleading. A State Department press release issued on Dec. 26, 1991--two years after the Panama invasion--depicts the results of Operation Just Cause as successful, without qualification. The department claims that before Operation Just Cause, Panama was a dictatorship facing a nightmare of burgeoning unemployment, social dislocation and foreign debt, but now Panama is a democracy, with a free press, competing political parties and a police force under civilian control--and with high economic growth, low unemployment, low inflation and balanced budgets. Moreover, the department claims, “a country which was once our adversary in the war on drugs has now begun helping us defeat this menace.”

The truth is more complex, and far from reassuring. Those who follow Panama closely say that it is much too early to call it an effective democracy, to speak of effective political parties or to proclaim that the police force is under civilian control. The government of Panama is divided and unpopular, and there is a sense of political vacuum and malaise. President Guillermo Endara’s public approval rating is down to about 12%, according to reputable polls.

The State Department’s favorable review of Panama’s economy is similarly off-base. Panama’s economy was badly damaged by the 1987-89 sanctions on trade and aid (the GNP declined 23% in those years). Recovery from that was relatively easy in 1990-91, but it is still not up to the 1987 level, and the distribution of gains is extremely uneven. Unemployment is certainly down from the extremely high levels of 1989 and early 1990, but unemployment and underemployment are still very high. Construction has revived, but this includes rebuilding areas destroyed by the invasion. The inflation rate is less than 2%, but that is because Panama uses the U.S. dollar; it has no independent currency.

As for the claim that Panama is now cooperating in the “drug war,” this is not the first time that the government has been credited for its cooperation with U.S. counter-narcotics efforts; Manuel Noriega received various commendations in that regard. In fact, some U.S. officials--and others--believe that the drug traffic through Panama and drug abuse in Panama have both increased since the 1989 invasion.

Although Operation Just Cause was sold to the American public as a spectacularly successful exercise of U.S. power, the fact is that--as in the case of Iraq--we have not been properly informed about either the antecedents or the consequences of the U.S. military action. Just as with Saddam Hussein, the U.S. government had very cozy relations with Manuel Noriega until he became an inconvenient embarrassment.

Now that Noriega has been removed from power and successfully prosecuted in a Florida court, Panama is largely forgotten here. But Panamanians have been warning that resentment has been building against both the Endara government and the United States. They say that Endara would not survive in office without U.S. backing, and that the previous corrupt and dependent relationship between Panama and the United States is emerging once again.

The invasion of Panama was no resounding success. Panama’s people know that, and so should ours.