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Panama looks beyond the canal

The trouble with doing something well on a grand stage is that the world remembers you only for that. Humphrey Bogart in Sabrina played an East Coast patrician, born to wealth and privilege – which he was, in real life – and nobody really believed it. So it is with Panama. No matter what the country does well – which is a lot – people don’t notice. The canal’s the thing. Panama is trying to tell the world that there’s a whole lot more there.
Panama is a functioning independent country, fully equipped with history, folklore, a healthy mixture of races, tribes and traditions, biodiversity, trendy shopping malls, wooden saloons, ethnic music and dances, and a working, stable society. Panama is a constitutional democracy with regular elections and a parliament. They are building Latin America’s tallest building. They have a drive in fruit shake hut. Hikers can walk for a week in rainforests and never cross a road. A walk down the pedestrian street Avenida de Central is an explosion of colors, sounds and good cheer. Their Indian minorities still fish and live in the old manner, protected by the government.
The city, especially the old city, has cantinas, which are saloons with wooden swinging doors, naïve art murals on the walls and beers the size of footballs for 65 cents. It’s possible to swagger into a saloon, order drinks for the house, and get out for five bucks.

Throughout recorded memory, Panama has been an international place. They never developed much of a closed, xenophobic mentality. Living in this tiny country are Chinese, Hindus, Jews, Arabs and Afro-Caribbeans, all of whom get along pretty well.
Panama is on the dollar system, and has been since 1904. This is one of the reasons it was able to bounce back from the fallout from the economic sanctions placed around Noriega during the dictatorships. Luis Navarro, General Director of Bank Boston, says, “There is no life without dollarization in Panama. Dollarization — and free flows of capital, which is as important or more — (constitute) the backbone of this economy. That’s what provides us with a lesser degree of volatility. This has been proven, for a century.”
Panama is, to many people, a land of opportunity. And not just impoverished immigrants, but people who would make it wherever they went. Minister of Foreign Affairs Jose Miguel Aleman notes that, “We have some big players here. From the US, AES, Citibank, Stevedoring Services of America, The Kansas City Railroad.” Braswell Shipyards set up here because “we wanted to stay in the ship repair business.”
It would be difficult to find another country with a closer and healthier relationship with the United States. Their bright students go to school here, our clever engineers worked on the canal there, and in fact many Americans retire there. There are now approximately 6,000 Americans living in Panama, and the number is growing. Senator John McCain, the son of an admiral, was born in the Canal Zone.

Panama: note the canal travels north to south.

Many “Zonians” fell in love themselves, and haven’t left. Tom Cool (real name) retired from the US military and stayed to write science fiction novels. Charley Shipley, another retired soldier, is general manager of Panama Jones tours. John Mann, now a tour guide, is a Panamanian character of the first magnitude. Legend has it that he came here 30 years ago, on a donkey. A sizable English speaking community has remained, mostly Americans, and they integrate enthusiastically. The president of Panama’s Chamber of Commerce, Industry and Agriculture, Manuel Jose Paredes, greeted this writer with a loud cheer, saying, “I’m a diehard Redskins fan.”
Being American here affects the companies in unexpected ways. The time-honored bribe that starts negotiations happens far less here than in other countries. It is also understood that Americans have regulations against it. New Jersey’s Robert Dicianni, General Director of Alicon Insurance, has never even been approached. “Whether it goes on here or not, and it may, they know enough not to approach us and ask.”
The land is spectacular. There are 944 reported species of birds, more than the U.S. and Canada together. There are 1,500 day-species of butterflies, 1,200 varieties of orchids, and 225 species of mammals. The Gamboa resort has several small museums devoted to the care and study of Panama’s flora & fauna. The butterfly hut – everybody’s favorite – is kept by Senor Frander, a Costa Rican scientist who looks after his little friends, in a manner slightly reminiscent of The Birdman of Alcatraz. Panama has learned that green spaces sell. The idea that an area has to be kept pristine for hard headed engineering projects came from the original construction mandate of the canal, and it’s not considered “radical.” Panama will be one of the few “developing” countries that leads, rather than follows grudgingly, this movement. The Smithsonian Tropical Research Institute makes its home there. So does Dr. David Roubik, the famous (in wildlife circles, anyway) killer bee authority. Panama City is also the only major city on earth with a tropical rainforest within the city limits.

Panama is a little country, almost like a family, and people seem to care about their fellow citizens in uncommon ways. Death squads and that sort of official thuggery never caught on here, although Noriega certainly tried his best. Eric Jackson, publisher of the Panama News, makes the point that during the 22 years of Panamanian dictatorships, perhaps 180 people “disappeared,” which he likens to “a slow afternoon” in some of the other places.
In other tropical ex-“colonies”, the old construction remains pretty much where it was and slowly crumbles until the streets are indistinguishable from the sidewalks. In Panama they seem to be getting painted and renovated within weeks of their vacancy. The causeway, just outside Panama City, toward the soon-to-be-finished Amador Resort, has renovated BOQ buildings, which seem to have been painted yesterday. Swimming pools and bowling alleys are still functioning, the barracks are condos. An old military jail is now an ice cream parlor. The old city, despite some infrastructure problems, is being modeled after old San Juan in Puerto Rico, and condos are already selling at DC prices. Precautions are also being taken to keep a lot of the current – which is to say, poor – residents around, which will give them a kinder and gentler gentrification.
THE CANAL
In 1977 General Omar Torrijos signed a handover deal with Jimmy Carter, amid great controversy. S.A. Hayakawa, then senator from California, railed, “we stole it fair and square.” But others, notably John Wayne, who used to come here for deep sea fishing, supported it, and it was ratified and signed. This set in motion the long transition that culminated on January 1, 1999. Since then, even hostile sources have been grudgingly complimentary on the performance.
In a scenario that recalled The Tailor of Panama, which was filmed here, (see story, page 5) there was a flap because a Hong Kong-based port facilities operator, Hutchinson Whampoa Ltd. was operating here. Some American politicians got the idea that this firm was going to take it over, using Chinese pilots, leaving our shipping at the mercy of the People’s Republic. This was never an issue with the canal, and Secretary of State Powell recently stated publicly that it was a non-issue. Elliott Braswell Jr, president of Braswell Shipyards spoke for many when he tagged the whole affair as, “really unnecessary. It did the country a disservice.”
Before the handover, the Americans spent as much as $750 million a year to keep it running. But the ships themselves passing through contributed little to the local economy, much like, in the words of one prominent businessman, “Cross country truck drivers passing through Iowa.” Now the Canal’s fees are going into the treasury. Like other countries – Norway’s petroleum fund comes to mind – the sudden profits from the canal are being kept in sort of a national escrow fund, and released into approved social projects.
HISTORY
The most important figure in Panama’s colonial history was Vasco Nunez de Balboa, who has become to Panama what Raffles is to Singapore. He became the first European to view the Pacific Ocean, and in the grand presumptuousness of the day (1513) he claimed the entire ocean and all the lands that it touched for the King of Spain. This included, although he didn’t know it, China, Japan, Indonesia, Hawaii, and the entire west coast of North and South America.

Balboa’s immeasurable gains – had he been able to convince the other Pacific dwellers to honor them – didn’t help his standing at court. In 1519, losing a power struggle with the horrible Spanish governor, Pedro Avilas de Avila (Pedrarias), he also lost his head.
Pedrarias was as cruel as Tamerlane and as devious as a Mafia don, but he wasn’t incompetent. His favorite pastime, roasting Indians alive, didn’t prevent him from building old Panama city (Casco Antiqua) up into an important commercial settlement, financed largely by taking a transshipment cut from gold shipments from Peru. It was a tradition that lives on. Mule trains carried the gold along the path they had cut, El Camino Real (The King’s Highway) right up until Teddy Roosevelt.
During the American gold rush, the 49’ers were nervous about hostile Indians in what was then the dangerous area of Kansas and Iowa, so somebody hit upon the idea of taking a ship from New York, crossing Central America at its narrowest point, and resuming the sea journey to San Francisco. The Americans, in 1850-55, built a railroad to ship them. This came, like a lot of 19th century construction projects, at an appalling cost. The number of workers killed by disease got so heavy that a thriving international trade developed in cadavers for medical schools. In one of history’s ironies, the train is now being reinstalled, financed by the Kansas City Railway. It should make its maiden run in the Spring of 2001.

The idea for a canal came quickly after that, and the government of France received permission to build one. They sent in their biggest architectural gun, the creator of the Suez Canal, Ferdinand Lesseps. He was backed by private money – a lot of it – and moral support was given by no less a Frenchman than Victor Hugo, who urged him to “astonish the world by the great deeds that can be won without a war!”
But Panama, like Kansas, was quite a different place in the 19th century. Malaria and yellow fever killed more people than Crazy Horse ever could. Phillipe Buneau-Varilla, in charge of excavation, estimated that barely 20% of the workforce lived long enough to actually work. After more than a decade of true hell, at a financial cost of one billion francs more than the entire cost of the Suez Canal, the French pulled out, battered and bloody. For years the expression, “Quel Panama” was used for years in France to describe a hopeless mess.
Teddy Roosevelt, too often caricaturized as machismo incarnate, was actually a very bright, complicated individual. Along with his fabled physical prowess, he read two books a day, and he really understood how to politick. He also had a grand, if imperialistic, vision about America’s future. He wanted a super power, based upon naval supremacy. A sea link between the oceans was “The vital – the indispensable – path to a global destiny.” There was no room here for a French company to be running it.

The old quarter, Panama city

Panama was then a province of Colombia, which had a suspicious and lead-footed government, not the kind to get along with the “vehement” Teddy. When Buneau-Varilla, who was now representing the French assets, came to the U.S. to cut a deal for his company and the Panamanian secessionists, Roosevelt opted for the “big stick.” If Panama would secede from Colombia, and negotiate favorable terms for a long-term canal contract, the U.S. would send warships to block the Colombian navy from reprisal. Panama would become independent. And that’s what happened. The fruit of these high-level machinations became the greatest shipping lane in the history of the world.
Building the canal was a heroic and massive piece of modern engineering, at the cost of, ultimately, 25,000 lives. The treaties, all of them favorable to the United States, also brought cash payments and smooth security to the region. Thus began an original way of life that was to last almost a century.
Panama was never an American colony. It had sovereignty of everything outside the Canal Zone, and went through a succession of governing styles. From 1968 to 1989 Generals Omar Torrijos and Manuel Noriega ran a military dictatorship. Torrijos was the gentleman of the two, a friend of Graham Greene and the little guy. He instituted a new labor code and lowered illiteracy and infant mortality. He nationalized utilities and created state companies, all of which are just now recovering from the experience. He also tried to be a friend to the big guys, creating the International Financial Center and expanding the Colon Free Zone. His strategy was in some ways similar to what is in place today: maximize and exploit every aspect of the location, concentrating on service. He negotiated the canal treaty with Jimmy Carter, and got a good deal. He even set up a buffalo range. But he also, in a fit of unthinking nationalism, removed English from the school curriculum. Panama’s more recent governments have been bringing it back but, few political blunders have resonated for such a long time afterwards. Few leaders have blown it so badly.
Except, of course, his successor.
Manuel Noriega came to power after Torrijos died in a plane crash that has never been fully explained. He was a CIA stooge and drug trafficker, and brought those sensibilities in to deal with his enemies. One of his murders, that of Hugo Spadafora, former deputy minister of health, caught Panama’s attention, starting demonstrations and even riots. Then it came out that while doing dirty tricks for the CIA he was also acting as a double agent for people like Castro. His Washington handlers, who had been propping him up since the 70’s, started getting tired of him. In 1989, a troubling election, which he lost, sent him into thug mode. Not bright enough to realize the power of images, his paramilitary goons attacked vice presidential candidate Guillermo Ford (see interview, page five) and the resulting photos sparked an international outcry. President George Bush, a former CIA director, invaded the country to shake him loose, and General Noriega will be a guest of the Florida penal system for the next 40 years.
Civilian rule returned, and with a vengeance. The army was abolished (see interview with Vice President Bazan, below) and an embryonic form of Panama’s current mixture of compassion for the poor and sweet terms for investors and business followed. Privatization, especially under the reign of President Balladares (1994-1999) went took place in almost every sector. The banks, cynically dismissed as “washing machines” during the dictatorships, established rigid controls and cracked down on money laundering (see “Banks”, page three) and corruption. The elections were honest and lively, featuring a wonderful presidential bid by salsa singer/attorney Reuben Blades in 1994. One of the things his opponents attacked him for was the “fact” that salsa wasn’t really a Panamanian art form. President Mireya Moscoso, elected in 1999, is an enthusiastic supporter of the global economy, international investment, transparency, while remaining committed to helping alleviate poverty. All governments fall short of the expectations they unleash, but Panama seems to have a real shot at success.