Booker T. Washington High School

Model United Nations Club

Country Briefing: Panama

 Panama is a small Central American state with a population of about 3 million people.  It is relatively well-off by Central American standards, with a per capita GNP of $3260, thanks largely to the presence of the Panama Canal.  Most of the inhabitants are mestizos, of mixed Indian and European origin, and most are Roman Catholics.  Its economy is heavily weighted towards services like banking, commerce and tourism as result of the canal.  Much of the population exists outside this service economy, as unskilled laborers.

 History: The earliest inhabitants of Panama were the Cuevas and the Cocle cultures.  They were decimated by disease and violence as a result of the Spanish invasion of the 16^th century.  Panama became an important Spanish colony because it linked the Caribbean Sea and the Pacific, and so was useful for ferrying silver from Peru’s Potosi silver mines back to Spain.  Later, it became a backwater, bypassed by the trade routes.  In 1821, as the Spanish empire in Central America broke up, it was attached to Colombia as a minor province.  It regained significance in the 1880s when the idea of a canal gained support, first in France, then in the US.  American president Theodore Roosevelt supported a Panamanian revolution against Colombia to give it independence and to negotiate a favorable canal treaty in 1903.  The Americans finally succeeded in building the Panama Canal in 1914.  For decades thereafter, the US protected the Canal with military force and, when necessary, intervened in Panamanian affairs. Various Panamanian governments deferred to American interests and to small cliques of powerful family groups.  The Catholic Church also held a great deal of influence.  Tension over the status of the Canal continued to fester, however.  In 1968, a military coup displaced civilian government and began demanding renegotiation of the Canal Treaty.  American President Jimmy Carter negotiated a new treaty in 1977, pledging gradual transfer of the Canal to Panamanian authorities.  In 1984 Manuel Noriega, a former CIA operative with ties to Caribbean drug cartels, seized power in a rigged election.  He used demagogic techniques to maintain his regime, but ultimately clashed with the US over the status of the Canal.  He was overthrown by a US military invasion in 1989.  The US trained the Panamanian police force, instituted new elections, and maintained troops in the country for ten more years.  On January 1 2000, the US turned over control of the Canal to Panama, ushering in a new era of Panamanian sovereignty.

 Diplomatic Agenda: The Canal remains an important diplomatic issue.  It has run relatively smoothly under Panamanian control, but security concerns now loom large.  Could Panama protect the Canal against a determined terrorist threat?  Panama faces indigenous no rebellions, but foreign terrorist organizations (FTOs) now have the capability to operate anywhere.  There are reports that the Colombian rebel group the FARC may now be operating in the remote jungles of southern Panama.  Some in America have suggested that the American security presence needs to be increased, though this might be an unpopular move here.  Additionally, the activities of narcotrafficantes seem to be on the increase, as more traffickers use Panama as a staging area for drug shipments, or as a point for transshipment.  The United States has requested greater intelligence access to the region, including the right to run flights of unmanned aerial vehicles (UAVs) over the country, and to establish offices for the FBI and DEA (Drug Enforcement Agency) in Panama City.  All of these measures would help, but would erode Panama’s sovereignty.  Worse, they could expose the extensive networks of corruption that bind many government officials to criminal groups.  On the economic front, Panama needs to develop a more diverse economic base for the 21^st century.  One idea is to convert former American military bases into labor-intensive manufacturing centers, making clothing or assembling radios and televisions.  All that is needed is a little foreign direct investment (FDI) from private capital or an international institution like the International Monetary Fund.  Panama would also like to see Mexico’s idea for a Central American economic development zone, known as “Puebla Panama,” come to fruition.  Finally, it is seeking free trade status with the United States, to gain greater access for its agricultural and industrial products in American markets.  Human rights have greatly improved since the 1990s, and citizens now enjoy greater democracy than ever before.  Nevertheless, Panama has been accused of ignoring conditions in sweatshops making clothes for exports.  Panama’s environmental record is not bad, partly because Panama has so little manufacturing.  However, the Canal Zone itself is heavily polluted by the massive amount of shipping flowing though each month.  This is a sensitive issue, given that this is precisely the region Panama hopes to develop into a low-cost manufacturing center.  Thus, Panama continues to be a beneficiary and a victim of the Canal.  It brings trade, economic opportunities and strategic significance, but also drug trafficking, pollution and the threat of terrorism.  It remains a fact of life for Panamanian diplomats.