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Panama's History
The history of Panama can be characterized by two main elements - an aversion to violence and a century-long, love-hate relationship with the United States that ended officially on December 31, 1999, with the U.S. handover of the Panama Canal to Panama in accordance with treaties signed in 1977 between U.S. President Jimmy Carter and Panama strongman General Omar Torrijos. Unlike its Central American neighbors, which throughout the century have lived the horror of civil and inter-country wars, Panama participated in only one war, a border dispute with Costa Rica. Links with Spain and ColombiaPanama had been part of the Spanish Empire since the discovery of America in the 1600s, and remained bound to Spain until declaring independence in 1821 when most other Latin American countries did the same. Panama immediately decided voluntarily to join a loose confederacy of nations led by the legendary Simon Bolivar that was called the Gran Colombia. It was difficult for Bolivar to maintain his dream of Latin American unity, however. This was mostly because of the enormous geographical difficulties posed by the Andes mountain range, which made traveling through his possessions a matter of months. By the time he arrived in one capital to solve a problem, it had already changed or been solved, and his attention was drawn elsewhere, finally making the situation untenable. There were also great cultural differences between confederacy members, and eventually it fell apart. Much to Panama’s credit, the only Bolivarian Congress of the confederacy was held in this city on June 22, 1826. Bolivar envisioned Panama as the center of this peaceful, progressive union. But Bolivar’s powerful generals in South America betrayed him, and the dream came to an end with Bolivar’s depression and death in 1830. Once the confederacy fell apart, Panama remained part of Colombia as a province or “department” for 82 years. Years of neglect by its distant capital, Bogota, and impoverished conditions in the department disillusioned citizens.
Relations with United States beginFor Panama the 20th century was marked by its relations with the United States. Sometimes for good, sometimes for bad, there was a strong attraction between the two countries: one large and powerful, the other small, but with enormous value to the United States —and this was not only between the two governments, but between the two peoples. Americans who came to Panama were fascinated by the tropical surroundings and fun-loving people and many stayed long after their official duties finished, often marrying black-haired beauties and making Panama their permanent home. One of the first events that began to forge Panama’s national personality as well as its unique relationship with the United States was the construction by U.S. financiers of the Panama Railroad in the 1850s. The railroad offered gold rushers a safe route across the 50-mile Isthmus of Panama. Indeed, because of Indian attacks on travellers crossing the U.S. continent, it was safer to travel from the East to the West Coast by sailing south to Panama’s Atlantic coast. Here they booked passage on a Panama Railroad car, traveling the 50-mile route across the isthmus in some two hours, and disembarked on the Pacific side to board steamers to seek their fortune in California. The arrival of American railroad men and of the thousands of travellers through the cities of Panama and Colon who stopped at the haberdashery for a new suit, found good fare at a restaurant, lodged at the local hotel, and enjoyed the night life of the admittedly muddy and insect-ridden cities, began to instill in city dwellers a cosmopolitan air. The West Indians remaining in town from the foiled French canal construction effort spoke fluent English so communication was easy. Wares began to be imported from as far as the Far East to meet the travellers’ whimsical shopping needs. Indian merchants settled in the towns to cater to them. Persian carpets and bronze goblets were available in increasingly sophisticated stores, and Chinese laundry men who had settled in Panama, arriving from San Francisco, took in travellers’ wash and allowed them to board their steamers looking impeccable for their northernward voyages to prosperity. Construction of the American railroad through Panama was the first serious connection between the two cultures. It later even played a role in Panama’s independence from Colombia in 1903, when railroad men, friendly with the cause and leaders of the independence movement managed to hold Colombian troops on the Atlantic side of the railway while independence was completed in the Pacific capital city of Panama. Here was a deep friendship in the making.
Panama’s Independence and the move to build the CanalHad it not been for U.S. President Theodore Roosevelt’s stubbornness in building an interoceanic canal to expand U.S. sea power, Panama may not have seen statehood. Roosevelt began negotiations for the Canal construction with Colombia, of which Panama was still a province at the time. However, these failed after the Colombian congress rejected the treaty as unsatisfactory. This was August 12, 1903. But Roosevelt was determined to have his canal. So immediately an overture was made to a group of Panamanian patriots who had long felt they had much to gain from independence. They were offered help in achieving independence in return for a treaty that would permit construction of a U.S. canal through their territory and $10,000,000 in hard cash to get the fledgling republic on its feet. The rebel group, mostly from the upper, educated class, accepted the offer and preparations began for a secret revolt against the motherland. To close the deal, the rights of the old French canal company were purchased for $40 million. The purchase of the French holdings in Panama was the largest real estate transaction in history until then.
A Shrewd FrenchmanA treaty would have to be drawn up for the canal construction, and for this the Panamanian rebels unwisely placed their trust in the cunning Frenchman, Philippe Buneau Varilla. Varilla had served as chief engineer for the French Canal construction effort, and had much to gain from a deal with the Americans that would help regain some of the millions lost by the bankrupt canal company as well as his own holdings in it if the United States agreed to purchase the French Canal rights. The Panamanian revolutionaries appointed Buneau Varilla as plenipotentiary minister and sent him to Washington to negotiate. Soon realizing their mistake, the Panamanian revolutionaries despatched three plenipotentiary ministers by steamer to New York. The treaty was so advantageous to both the United States and Buneau Varilla, that the latter found a way to delay the three Panamanian diplomats in the Waldorf Astoria Hotel in New York until after the Hay-Buneau Varilla Treaty was signed, stamped, and sealed on November 18, 1903. Under the treaties, the United States purchased all rights and properties of the old French canal company in Panama for $40 million, a true fortune for the day. Second, and more ominously, Buneau Varilla granted the United States a 10-mile wide, 50-mile long strip of land in Panama to be used “as if sovereign” and “in perpetuity.” According to Buneau Varilla himself, when the revolutionary leader and later first President of Panama, Manuel Amador Guerrero, heard the terms of the treaty, he looked as though he was about to faint. But as the story would be told later in Panama, the Panamanians in Washington had been by stages incredulous, indignant, and then livid with rage. One rebel leader is said to have hit Bunau Varilla across the face on the quay. In Panamanian schools, children soon learn to identify Bunau Varilla as the man who sold Panama “down the river”. The unfavorable terms of the treaty constituted a thorn in the side of relations between the United States and Panama that would not begin to be solved until 1964, when riots led to 23 Panamanian dead and several U.S. wounded. Panama’s President Roberto F. Chiari broke off diplomatic relations with the United States, and U.S. President Lyndon B. Johnson, realizing the seriousness of the matter, issued instructions for the beginning of earnest negotiations to replace the 1903 treaty. This finally came to fruition after 13 years of thorny, difficult negotiations that ended on September 7, 1977, with the signing of the Torrijos-Carter Treaties. The treaties promised full transfer of the Canal to Panama and the full withdrawal of U.S. military bases and troops from Panama within a 20-year term. In essence, it ended the clause of “perpetuity” of the 1903 treaty and permitted improved relations between the two countries. When one says “treaties” versus “treaty” that is because at the last moment the United States added a second treaty called the Neutrality Treaty that grants the United States the unilateral right to intervene in Panama if it deems the Canal is in imminent danger of being closed or otherwise seriously threatened. That was a second thorn in the side of Panamanians, but they had to accept it if they wanted the Torrijos-Carter Treaty signed, so they did.
The Building of the Panama CanalPreparing for the gargantuan construction work that would be the Panama Canal, Panama’s sleepy cities, especially Panama City, which was the capital, and Colon, the second major city, located on the Atlantic side, began to wake to the hubbub of activity as Americans, West Indians, and even Indians, Spaniards, and Greeks began to disembark at the quays along with tractors, cranes, steel, lumber and every conceivable implement one could imagine necessary both to build the largest-ever civil engineering work the world had known and also the complementary works: housing for employees, storehouses, schoolhouses for employees’ children, not to mention swimming pools, clubs, and of course, grocery stores. On March 4, 1904, with absolutely no ceremony, U.S. Lieutenant Mark Brooke received from French officials the keys to the French hospitals, marking the official transfer of the French installations to the United States and the beginning of the U.S. construction period. The construction of the Canal, accomplished between 1904 and 1914, required the removal of gargantuan amounts of dirt and rock, cost the lives of 26,000 men, including those killed during the French construction effort the century before, but resulted in one of the greatest engineering feats of all time. More than 800,000 vessels have transited the waterway from more than 88 nations since its construction, carrying everything from coal and steel, iron ore, oil, automobiles, and containerized cargo. Passengers traveling on more than 300 cruise ships per year continue to marvel at its lush surrounding vegetation that contrasts sharply with the nuts and bolts and enormous structures that make possible a rapid, trouble-free transit even after 85 years of service. After World War II and the launching of the U.S. aircraft carrier fleets in the Atlantic and Pacific, the Canal’s importance became more commercial than military, Some 16 percent of commerce destined to or from U.S. ports continues to use the waterway and 4 percent of total world commerce travels through this ocean passage.
The growth of a countryPanama, like many Latin American countries, was and perhaps still is a country not so much of political ideals as of caudillos, or charismatic leaders. The first of these was Dr. Belisario Porras, who served the first of his three terms in office in 1912. He was considered a great Liberal leader. The political traditions of Panama’s Colombian past - Liberalism against Conservatism - prevailed. Under Porras, government institutions were organized. But U.S. influence overpowered Panama, and in 1918, in violation of all constitutional order, the United States, through the Governor of the Canal Zone, installed Dr. Porras back in power for a second term over his legal contender who had won the election. Fortunately, Porras was popular among the Panamanian populace, because once again in 1920, under U.S. influence over the electoral outcome, Porras became president for a third time. His government platform included developing the provinces, which were devoid of roads. The interior of the country still remained almost under the same conditions of the Colonial days. But again Porras did good deeds, simplifying the electoral code to have general elections every four years rather than two. He also set into place an organized economic plan for the development of the entire country and for road construction. The one violent episode in that era occurred in 1921, under Porras’ administration when a border war broke out with Costa Rica, Panama’s western neighbor. It was called the War of Coto, and consisted of Costa Rica invading part of western Panama on the basis of a 1900 U.S ruling called the White Ruling. The Panamanians faced some 2,000 Costa Rican troops, mostly with weapons retrieved from President Porras’ basement in the Presidential Palace. Again the United States intervened, this time on the side of the Costa Ricans, and Panama was forced to accept a humiliating ultimatum issued by U.S. President Harding and to lose a battle which was not to be solved until 1941. President Porras' most visible work in Panama City is the Santo Tomas Hospital, considered a white elephant in its day and today the most important charity hospital in the country. So that one may gain an idea, the entire Republic of Panama in 1920 had a population of 449,098. The province of Panama had a population of 98,035. Colon Province had 45,151 inhabitants, and the southwesterly province of Los Santos 34,638. It is evident that whatever politicking went on in that era, it was small-town stuff.
Arnulfo AriasSome elderly —and not so elderly— folks, especially in the provinces, still refer to Arnulfo Arias as “Doctor Arias.” Admittedly a medical doctor by profession, the term was - and is - used more as a term of respect and admiration. Like Belisario Porras, he was president three times, though he never completed a full term in office. Although he was the second next great Panamanian caudillo, Arias’ quirky personality and political passions always seemed to stir up trouble. To gain power for his political party, Accion Popular, for example, which was trying to seize power by force by assaulting the Police Headquarters and later the Presidency, Arias was able to enter the Presidency through a window he had left open the night before, and once inside, demanded the resignation of the incumbent president. As president, despite his vociferous anti-Americanism, he liked and was well liked by U.S official representatives in Panama, albeit often only on the surface. It may have been a mixture of extremely charming diplomacy and the attraction of undeniable charismatic powers, and wining and dining the American ambassador in the exclusive Union Club. His first term was served in 1940. His term had begun in the middle of World War II, and the United States asked permission to build new military bases in Panama. He accepted, under the condition that the United States commence earnest negotiations with Panama to revoke the insulting terms of the 1903 treaty. The United States agreed, but as soon as Arias departed Panama on a pleasure trip to Cuba, U.S. officials conspired with Panamanians unhappy with Arias’ government and toppled him as soon as he returned. A government that had lasted but a year left as legacy the creation of the Social Security, today the most important social institution the country possesses. He became president the second time in 1949. Amid charges of corruption, riots broke out in Panama City, and in 1951 he was again toppled, this time by impeachment. His third term as president has to do with our next personage.
Omar TorrijosArias, like the the portraits of Omar Torrijos, the signatory of the 1977 treaty with the United States which handed over the Panama Canal to Panama on December 31,1999, still hangs in the homes of many Panamanian families, especially of humble extraction. The story of Omar Torrijos began in 1952 with the creation of the Panama National Guard, similar in style to the U.S. National Guard. Its structure and organization received much support from the United States, in reaction to the Communist threat that loomed in many parts of the world. Its first commander was José Antonio Remón Cantera, who later rose to become president, only to be assassinated, the act always remaining a mystery. Remón was the only president of Panama to meet such a fate. Torrijos meantime was slowly rising though the ranks of the Guard under the protection of Commander Bolivar Vallarino. But once Vallarino retired, leadership became muddled in the National Guard, and political aspirations, which had already been there, came to the surface. Mostly of modest or middle class extraction, the officers and troops of the Guard, in common with much of Panama, were tired of decades of domination by the aristocratic, wealthy families of Panama who had held power since independence in 1903. They believed they had better ideas for governing the country - by now of some 1.5 million inhabitants and they decided they might just give it a try. The story must take us back to Arnulfo Arias, who had just been elected to his third term in office on October 1, 1968. The guardsmen staged a military coup against him on October 11, sending Arias into exile into the Panama Canal Zone and declaring Torrijos as head of state. Thus began a military dictatorship that would last for 21 years. Torrijos was one of the colonels leading the coup, but his clever handling of both politics and people soon made him the “strongman” of Panama in 1969 until his mysterious death in a helicopter crash in 1981 in the mountains of Coclé Province. In hindsight, very good and very bad things happened during Torrijos’ dictatorship. He set out to modernize the country, both its infrastructure and institutions. He built hundreds of new schools and employed thousands of new teachers, improving education throughout the country. The Banking Center was his creation. He opened up participation in government to the lower and middle classes, a phenomenon unknown until his day. To Torrijos one must attribute the birth of the middle class, today a thriving, important segment of Panama’s society. The ugly parts of every dictatorship were also present, from heavy press censorship, to unresolved disappearances of dissidents, to the milestone disappearance and presumed killing of Catholic priest Hector Gallego, who helped peasants operate a farm co-op in Veraguas Province. That murder is still unresolved, and it seriously tainted the Torrijos regime. Despite all this, Torrijos had the clout to bring Panamanian masses to support him in the plebiscite called to approve or disapprove the treaty he had negotiated in Washington to once and for all repeal the odious Hay-Buneau Varilla Treaty of 1903. He won and the treaty was approved in Panama and in Washington. The treaties, called the Torrijos-Carter Treaties after their signatories, were signed in the headquarters of the Organization of American States in the presence of countless hemispheric leaders.
General NoriegaA sidebar on the Noriega years is called for. He became military dictator of Panama shortly after Torrijos’ death which many believe ocurred in suspicious circumstances. Manuel Antonio Noriega had an impoverished, unhappy childhood. He did receive a military education, however, through help from a benefactor. He ruled the country through puppet presidents, and fear of his secret police tactics held the population at bay. Resistance to Noriega’s regime began to crystalize when he was accused of masterminding the killing and decapitation of former Deputy Health Minister and Nicaraguan guerrilla sympathizer Hugo Spadafora, a heroic and colorful medical doctor. The killing marked the beginning of Noriega’s downfall. The claim at the beginning of this chapter that Panamanians are characterized by nonviolence is shown by the fact that forcing Noriega from power was achieved in precisely that way (with final intervention of the United States). Panamanians from all segments of society took to the streets in the hundreds of thousands, armed with nothing more than white handkerchiefs to demand his ouster. The pressure was tremendous. The Church, student organizations, and countless civic organizations came together under the Cruzada Civilista or Civic Campaign. The banking sector was frozen. The final straw was the presidential election in May 1989, in which the opponents of the political party he supported won by a landslide. Noriega voided the election. Leaders of the Crusade went to the U.S. Congress to testify until formal drug trafficking charges were lodged. The final outcome, was the U.S. invasion to capture Noriega on December 20, 1989, and Noriega was taken away by U.S. forces as a prisoner of war. Noriega, formerly in the pay of the CIA, had built the Panama Defense Force into a formidable army, used to browbeat the civilian population, but puny in the face of a massive U.S onslaught. Thousands cheered along the streets at the passing of U.S. forces, but intellectuals and nationalists continue to condemn the action to this day. If the aim was to capture one criminal, why invade an entire country? The issue continues to be debated to this day.
Return to democracyDemocracy in Panama was restored in December, 1989 when Guillermo Endara, who had won the popular elections annulled by Noriega earlier that year, took office in a U.S. military base, along with his two vice-presidents: Ricardo Arias Calderon and Guillermo Ford. The country, however, was bankrupt and war-torn, with an almost non-existent political framework following the abrupt removal of the 21-year-old military dictatorship. A tight control of government expenditures was one of the main factors that allowed a prompt economic recovery. In a matter of months, most visible signs of the U.S. military action were erased. The strengthening of democratic institutions attracted foreign and local investment, and before the mid-1990s Panama boasted one of the highest economic growth rates in Latin America. Panama City grew toward the skies as new banks, hotels and office buildings elongated the capitalís skyline. Tourism, which had long been ignored by past governments despite the countryís strong leisure potential, became fashionable, and new luxury cruise ports and lodging establishments of all sizes appeared throughout the country. A new government institution, the Inter-oceanic Region Authority (ARI) was created to administrate the lands and U.S. military facilities that gradually returned to Panamanian hands as stated in the 1977 Panama Canal Treaties. Democracy was consolidated in 1994, the year the most transparent elections in the nationís history were held. Ernesto PÈrez Balladares, of the Democratic Revolutionary Party (founded by Omar Torrijos) became Panamaís president, and began an aggressive campaign to steer the country toward globalization by privatizing a number of government entities. Balladares also launched a series of public work projects that included the refurbishment of the Pan-American Highway and the construction of the Corredor Norte and Sur expressways in the capital. Perhaps the fear of change in regards to Balladaresí economic policy can be considered one of the factors that motivated a majority of Panamanians to vote against the PRD in the 1999 elections. Such a decision made more history than immediately meets the eye. On September 1 of that year, Mireya Moscoso, the widow of legendary 20th century-leader Arnulfo Arias, became the first female elected as President of the Republic of Panama. Four months later, on December 31, on the steps of the Panama Canal Administration Building in Balboa, Moscoso led the nation in reaching its most coveted dream: the complete withdrawal of U.S. troops from the Isthmus and the control transfer of the famous waterway from U.S. to Panamanian hands. Moscoso, who led the country into the 21st century, presented the nation with a package of projects targeted at reducing poverty. She discontinued her predecessorís policy on privatization. This, however, did little to spare the country from the effects of a world-wide economic recession that inflated national unemployment rates to over 14%. Nevertheless, the nationís booming tourist industry, a strong maritime sector and a healthy banking system gave the economy a measure of stability.
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