Panama: Countdown to 2000

May 10, 1994

On the last day of the last month of the last year of this century, the United States is treaty-bound to turn the Panama Canal and its vast maritime-military infrastructure over to Panamanian authorities. It will be one of the final big moments of his White House career if President Clinton is re-elected in 1996. Therefore, he and his administration must have -- should have -- an intense interest in the election this past Sunday of a new Panamanian president whose five-year mandate will expire shortly before his nation assumes ownership of the canal that bisects its territory.

The election of Ernesto Perez Balladares, however, had surprisingly little to do with the canal question, much as it haunts the Panamanian psyche. Rather, it marked a rejection of the inept government headed by President Guillermo Endara that the U.S. installed after an American invading force overthrew dictator Manuel Noriega in December 1989. Drug trafficking remains rampant. The needs of the people and the country are neglected.

Mr. Perez Balladares has baggage. He was campaign manager of Noriega's Democratic Revolutionary Party when it annulled Mr. Endara's election victory five years ago -- an event marked by military thugs beating Mr. Endara and his allies with TV cameras running. Nevertheless, he has tried to dissociate himself from the imprisoned Noriega by wrapping himself in the mantle of Omar Torrijos, the populist general who negotiated the 1977 Panama Canal Treaty with President Carter.

If the Clinton administration is ready to do business with the American-educated Perez Balladares, there is much to do. The Bush-era invasion of Panama seems to have generated contradictory emotions: resentment of the gringos but a greater sense of dependency on the U.S. Recent polls indicate that most Panamanians want American troops to stay on past the year 2000. They are a source of jobs and money. But the budget-crimped Pentagon wants out. So the expectations of 1977 have been turned on their head. If an American military presence is maintained, it will come mainly at the request of Panama, not the U.S.

All this is tied to military security in the region and the commercial viability of the canal. With the Soviet bloc gone and Cuba's Castro on the ropes, there is less need for a large U.S. force in the Canal Zone. And with the U.S. Congress in no mood to add to its vast investments in Panama, the new government will have to convince private investors worldwide that it has the competence and stability to maintain and modernize the canal. With international maritime traffic patterns shifting, the canal will have to be fiercely competitive in the next century if it is to be an asset to Panama.

It took the full attention of President Carter and General Torrijos to put the Panama Canal Treaty across. By the same token, it will require close cooperation between Mr. Clinton and Mr. Perez Balladares if the transition to Panamanian ownership of the canal is to be a success.

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