Next Step : Panama Reprise? : Manuel Noriega’s old party seems poised for victory in upcoming elections.

Four years and three months after U.S. troops invaded Panama and captured Gen. Manuel Antonio Noriega, the country appears poised to restore Noriega’s old political party to power in the first free elections in decades.

The startling turn of events reflects general disenchantment with the U.S.-backed government of President Guillermo Endara, whose administration has been racked with corruption scandals and anger over economic policies that have deepened poverty and unemployment for many Panamanians.

Ernesto Perez Balladares of the Democratic Revolutionary Party, or PRD, Noriega’s onetime political arm, leads most polls by a wide margin. He is followed by the government’s former comptroller, 73-year-old Ruben Dario Carles.

The wild card in the elections, which are scheduled for May 8, is actor and salsa star Ruben Blades. The singer returned to Panama last year from his home in Santa Monica and founded a party called Papa Egoro, or Mother Earth in the indigenous Embera language.

Blades, 45, prides himself on an unorthodox presidential campaign that represents a clean break from Panama’s shaky past of rule by military dictators or pro-U.S. oligarchs.

“Ours is an anti-party,” he said in an interview at his apartment overlooking the Panama Bay. “More than a simple change of parties, we are trying to present a change of attitude . . . a change in political behavior.”

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After a promising start, however, Blades’ candidacy has been hurt by desertions from the party and his own failure to campaign effectively. He had fallen to third place in a poll released early this month.

The elections will be Panama’s first conducted without military controls in more than 25 years and are expected to be the cleanest in its history. A large number of international observers will monitor the voting.

Panama has long been a focus of strategic importance to the United States because of the U.S.-built Panama Canal, which connects the Atlantic and Pacific oceans, and as the headquarters site of the U.S. Army Southern Command, which oversees U.S. military operations south of the Rio Grande.

Noriega was the de facto ruler of Panama through most of the 1980s, despite the presence of a series of civilian figurehead presidents from the PRD. After years on the CIA payroll, the Panamanian strongman fell out of favor with Washington in 1987.

As anti-Noriega demonstrations led by business leaders and others began to spread in Panama City, the U.S. government indicted Noriega on drug charges and slapped stringent economic sanctions on the isthmus nation.

Finally, with Noriega refusing to step aside, then-President George Bush ordered the Dec. 19, 1989, invasion of Panama. Hundreds of Panamanians and about two dozen U.S. troops were killed, and Noriega was eventually captured, transported to the United States and tried and convicted for drug crimes. He is serving a 40-year prison term in Florida.

In a ceremony at a U.S. military base, the Americans installed Endara, who had won the 1989 presidential elections, which were promptly annulled by Noriega. Endara and his coalition of three conservative parties, however, soon proved to be a disappointment to many Panamanians who had high hopes of better lives under a well-run, truly democratic government.

Endara’s administration has been caught up in one scandal after another, while money-laundering and drug running--the ills once blamed on Noriega--continue to flourish. The government’s free-market policies have triggered impressive economic growth, but unemployment and crime soar while wages languish.

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Perez Balladares and the PRD have been effective at capitalizing on the public discontent, analysts say. Universally known by his nickname, the Bull, because of his hulking build, Perez Balladares is careful to distance himself from Noriega and to pledge that the military domination of the past will not return.

Instead, he and the party are reviving their traditional ties to the policies and rhetoric of Gen. Omar Torrijos, the military strongman who preceded Noriega and who was admired by many Panamanians for his attention to the poor and lower classes.

Torrijos, who died in a still-mysterious plane crash in 1981, exploited class differences to retain the support of Panama’s largely dark-skinned masses, who resent a white elite that ruled in the 1950s and ‘60s. Some Panamanians see the current Endara government as representative of that elite.

Despite the fact that he is a multimillionaire businessman, Perez Balladares invokes themes of social equality in stump speeches and campaign appearances.

“We are committed to democracy, to real democracy, where not just one social class benefits,” he told workers gathered in a sweltering grocery warehouse earlier this month.

“An elitist democracy, one that only responds to the privileged social class, is by definition a lack of democracy, and one that contains the seed of its own destruction.”

Yet here at this warehouse, as in many of his appearances, Perez Balladares was questioned about members of the party who represent throwbacks to the most repressive elements of the Noriega regime. He told the crowd that the PRD has been purged and made more democratic.

It is this kind of doubt that dogs Perez Balladares and the PRD, and is handily exploited by their opponents. Newspapers controlled by anti-PRD forces routinely publish photographs of Perez Balladares with Noriega and run cartoons that suggest he will govern with an iron fist.

Perhaps to combat those ghosts, Perez Balladares has become a tireless campaigner who easily might handle a dozen appointments one day, fly off in his private jet to meet Mexico’s presidential candidate the next day, and return to Panama in time for a six-city car tour of the countryside.

The polls show his strategy is working. In the last eight months, he has climbed steadily from single-digit support to hold a nearly 2-1 lead over his closest opponent.

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Last year, many observers in Panama believed that it would be the salsero Blades--not Perez Balladares--who would capture the wave of discontent.

But Blades’ failure to make many public appearances, while the other candidates launched expensive, highly publicized campaigns, has eroded early support. Blades has also been largely ignored or attacked by a Panamanian press controlled by the traditional political parties and their allies.

“People know Ruben Blades is against the government, but they don’t know how or why,” political analyst Marco Gandasegui said. “Papa Egoro has not gotten its message across. . . . The figure of Ruben Blades commands a great deal of affection, but there is no (party) organization that can channel that affection in a concrete, effective way.”

Blades has promised to intensify his campaign, blaming inexperience and a lack of money for many of his problems.

“What we are trying to do is not easy,” Blades said. “We have the huge problem of not only confronting the Panamanian public’s disappointment (with its political leaders) but also of trying to work outside the traditional political apparatus.”

A number of disillusioned party members have deserted, accusing Blades of remaining inaccessible while surrounding himself with a small group of intellectuals. Blades chalked the desertions up to the party’s growing pains.