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Panama owns canal, related headaches

Special to the National Catholic Reporter
Panama City

The camouflage-painted Humvees are gone, the former U.S. military bases seem like ghost towns, and the city is sprinkled with billboards that say, “The canal is ours,” and “Thank you, Omar,” a reference to the late Gen. Omar Torrijos, who signed the Panama Canal treaties with former President Jimmy Carter in 1977.

Even the beer is called Soberana -- sovereign, in Spanish. While the rest of the world counted down the millennium on Dec. 31, an electronic clock outside the Canal Authority headquarters flashed the seconds to noon, when the Panama Canal officially passed from U.S. to Panamanian hands. Crowds surged across police lines in jubilant celebration despite drenching rains.

But the perception that Panama is now free of U.S. influence takes into account only what appears on the surface. The country has been under U.S. tutelage virtually since it was sliced out of Colombia in 1903, and the legacy is here to stay, from the unexploded ordnance and toxic waste littering abandoned firing ranges to the enormous disparity in income between the richest Panamanians and the poorest.

“The unfortunate thing about Panama is that they consider us a developed country, with a high gross domestic product, but they don’t realize that Panama is the third-worst country in Latin America in distribution of wealth,” Bishop Carlos María Ariz Bolea of Colón said.

“While we have exorbitant salaries in the canal area and banking center. In the free zone (the duty-free commercial district in Colón) we have rock-bottom wages.”

The contrasts in Panama are visible. A visitor’s first glimpse of Panama City takes in the shiny skyscrapers of the banking district. But the poverty of San Miguelito, one of the city’s fastest growing areas, belies the facade, as does the hand-to-mouth existence of subsistence farmers in rural parts of the country. For years, development has centered on the transportation corridor between Panama City and Colón, as well as Colón’s duty-free zone.

For every dollar spent by the poorest 20 percent of Panama’s population, the richest 20 percent spend $30, according to the Institute of National Economic Studies. A family’s basic monthly food costs about $213, but the minimum wage is only $230 a month.

At first glance, there appear to be two Panamas, but Ariz said that is an oversimplification.

“It isn’t just a matter of capitalist Panama and poor Panama,” the bishop said. “There’s also indigenous Panama and Afro-Panama. At least these four elements are important, and they all have their own world views.”

With the U.S. dollar as the official currency (although Panama mints its own coins) and U.S. business franchises in every shopping center, the years of occupation of the Canal Zone have left their mark.

Although U.S. personnel were withdrawn from the former Canal Zone over several years, many doubted that the United States would step out of Panama forever. U.S. officials continued negotiations for a multilateral anti-drug center in Panama, but the government of former President Ernesto Pérez Balladares finally rejected the idea in 1998, and U.S. anti-drug efforts moved to bases in Ecuador and the Netherlands Antilles.

Threat along the border

One part of the 1977 treaties, however, maintains an invisible link between the countries. Added by the U.S. Congress after Panama had already held a referendum on the treaties, this Neutrality Treaty allows the United States to intervene unilaterally if the security of the canal is endangered.

In the months before control of the canal reverted to Panama, conservatives in Congress pointed to the fact that the Hong Kong-based conglomerate Hutchison Whampoa has the port concessions at either end of the waterway as a threat to the canal’s security. If the Neutrality Treaty is ever invoked, however, it is likely to be because of a threat that lies closer to home, along the border with Colombia, on the doorstep of that country’s civil war.

As a result, attention has suddenly turned to the densely forested, sparsely populated Darién province, once ignored by virtually all outsiders except a handful of adventure tourists and naturalists.

“Darién, which was once synonymous with backwardness and the ‘savage Indian,’ has become a strategic area,” said Jesús Almancia, director of the Panamanian Center of Studies and Social Action (CEASPA) in Panama City. “We’ve finally fallen within the concerns of the United States.”

An estimated 900 Colombians have taken refuge across the border in Panama, fleeing a struggle between the Revolutionary Armed Forces of Colombia (FARC) and right-wing paramilitaries for control of the area. The first group to arrive was sent home on a plane. In recent years, however, the flow has become steadier.

In late January, more than 400 displaced Colombians fled Juradó, in Colombia, for Jaqué on the Panamanian side of the border.

“The town was attacked by guerrillas and many soldiers died. Now the paramilitaries are supposedly looking for people who helped the guerrillas. So everyone has fled the paramilitary reprisals,” said Bishop Rómulo Emiliani of the Apostolic Vicariate of Darién. “It’s a classic case: They are victims of the crossfire between the guerrillas and the paramilitaries or the guerrillas and the army. They are victims of an absurd, unjust war.”

Because the Colombian conflict has not been declared a civil war, people displaced by the violence are not considered refugees and are not eligible for aid from international organizations such as the U.N. High Commissioner for Refugees. The Catholic vicariate has a ministry to the displaced, and Emiliani meets periodically with the Colombian bishops of the border zone.

The border region is difficult to control, and observers say it has long been porous. For years, FARC guerrillas crossed the border to buy provisions, paying the Panamanian campesinos more for their products than any other buyer.

In addition, because of the distance from Panama City and the difficulty of travel, “politically, socially and economically the [people in the border area] relate more to Colombia than the rest of Panama,” Almancia said.

Recent years, however, have also brought incursions by paramilitaries, who accuse Panamanians who sell provisions to FARC guerrillas of being collaborators. In late 1999, paramilitaries entered three communities near the border in the Kuna indigenous territory, burning one community, La Bonga.

Almancia questions whether the timing of the attacks was entirely coincidental. At a critical moment, less than three months before U.S. withdrawal was complete, the incursions underscored a key point: The Panamanian army was dismantled under agreements that followed the December 1989 U.S. invasion of Panama, in which Gen. Manuel Noriega was ousted.

The $1.6-billion aid package for Colombia, currently being debated in the U.S. Congress, includes several million dollars for security along the Colombian-Panamanian border. While the aid is ostensibly to fight drug trafficking, critics -- and even some Colombian military officers -- say that it is impossible to separate anti-drug efforts from counterinsurgency operations in Colombia.

While some critics ask how a country with no army can secure its border against a potential threat from Colombia, police patrols have been stepped up along the border, and there are checkpoints along the Pan-American Highway in the province of Darién. Emiliani said the government must ensure that the police are better-trained and better-equipped in order to provide security.

“We don’t want them to involve us in the war, either on the side of the guerrillas or the side of the army,” he said. “It isn’t our war. But little by little, they’ve been getting us involved. I have said publicly that in Darién there are informers, people who are paid by the guerrillas and paramilitaries, people who provide information, sell food, sell clothing, and may even sell weapons.”

Emiliani, who has received threats, is often accompanied by bodyguards as he travels around the province on pastoral visits.

Ironically, while politicians and security strategists focus on Darien because of its border location, others worry about a threat to the province from rampant development. In many ways, that threat is also a legacy of nearly a century of U.S. presence.

Stanley Heckadon Moreno, of the Smithsonian Tropical Research Institute in Panama City, called Darién “one of the great treasure-houses of biodiversity” in the Americas. “It will remain so,” he adds, “as long as development as it’s known doesn’t get there, because it’s been a very destructive type of development.”

Cutting down the rain forest

When the Pan-American Highway was extended to Yaviza in the late 1970s, it opened the province to a wave of homesteaders who migrated from other parts of the country in search of land to farm. Using traditional slash-and-burn methods, they cleared large swaths of rain forest. The highway, still a dirt and gravel road, is lined with small communities, cattle ranches and plantations of teak, a non-native tree with a high export value that is grown in reforestation projects.

The Inter-American Development Bank has approved financing for a six-year, $70.4-million project that includes paving the unpaved segment of highway. Bank president Enrique V. Iglesias has called the project “a road to the development of the region, protection of its ecology, rational exploitation of its resources and respect for its ethnic communities,” and said it is “the most participatory project undertaken to date by the bank.”

Emiliani supports the project as a way of improving the livelihood of the region’s residents. But other observers say large-scale development for tourism and agroindustry is sure to follow, with an enormous impact on the area’s campesino, Afro-Panamanian and Emberá and Wounaan indigenous communities.

And the effect on the remaining rain forest could be devastating.

Although 550,000 hectares -- almost one-third of the area of the province -- is a national park, there is gold and valuable lumber in the area, and critics say Panama’s parks are not entirely protected against exploitation of natural resources.

The Darién province is also part of the Mesoamerican Biological Corridor, a series of protected areas ranging from Mexico to Colombia, and clearing would leave “biogeographical islands,” Heckadon said. “You will have little isolated spots of forest, and a lot more species will vanish. Because they need longer territories, they’ll disappear. Some people say that’s the cost of progress. For others, it’s a tragedy.”

Unregulated development

The costs of unregulated development can already been seen around Panama City, where the bay is seriously polluted and new highways have slashed through the metropolitan park and low-income neighborhoods and cut off a fishing community’s access to the bay.

President Mireya Moscoso, who took office in September, has pledged greater spending on social programs, but the keystone of her economic program is to pay down Panama’s enormous debt and attract developers to the former U.S. properties. Investment is expected to lean heavily toward tourism. The former site of the infamous School of the Americas has already become a five-star hotel owned by the Spanish Meliá chain -- and transportation.

The World Bank has valued the infrastructure of the former U.S. military bases at $4 billion. The airport and cargo facilities at the former Howard Air Force Base alone are expected to bring an investment of at least $300 million, and development, which has largely been confined to the eastern side of the canal, is expected to spill over to the west, where many of the bases are located.

This could help relieve population pressure on the country’s two principal urban areas, Panama City and Colón, which lie at opposite ends of the canal. But it will also threaten the fragile ecosystem of the canal watershed, and force the issue of the cleanup of unexploded shells and mines that still litter former artillery ranges in what used to be the Canal Zone.

The canal treaties call for the United States to clean up the ranges “insofar as may be practicable,” a phrase that is interpreted differently by the two countries. As long as it appeared that the multilateral anti-drug center would be based in Panama, little or no cleanup effort was made, because it was expected that the ranges would continue to be military property.

Once the drug center was scrapped, however, cleanup became an important issue. Some of the areas still littered with unexploded ordnance are in zones slated for tourism development. Twenty-one Panamanians have been killed and many injured by accidental explosions on the ranges.

U.S. officials contend that adequate technology does not exist, and that cleanup would be too costly and result in deforestation of the canal’s sensitive watershed. Marco Ameglio, president of the Panamanian Congress’ Foreign Relations Commission, has said that if the United States does not comply with the treaty, Panama will sue for damages in an international forum.

Another nagging question is that of chemical weapons tested by the United States during World War II and through the 1960s and ’70s.There is evidence that the U.S. military tested or stored sarin nerve gas, the powerful neurotoxin VX gas, mustard gas and Agent Orange in Panama, but U.S. officials have not provided information about storage sites.

The canal itself poses another headache for the Panamanian government. A mainstay of the economy, the waterway pumps $500 million a year into the economy. But the locks are now too small for some large ships, and the pressure is on to build a third, larger set of locks.

Aside from the cost, estimated at $8 billion, new locks would create another environmental strain. The present gravity system sends 52 million gallons of fresh water through the locks and out to sea with every ship that passes through the canal.

36 ships a day

“When the canal started business back in 1914, two ships [a day] used the canal. Now it’s 36. So you multiply 36 times 52 million gallons, 365 days a year. It’s an astronomical quantity of water,” Heckadon says.

The drought in 1996-97, when Panama was affected by the El Niño current, nearly forced the government to ration city drinking water or reduce the draft of ships passing through the canal.

Whether or not new locks are built, the country will need to increase its water supply. The mostly likely solution is a plan to expand the canal’s 3,300-square-kilometer watershed through an additional system of lakes and dams that would flood a large tract in the central province of Coclé. For the Catholic diocese of Colón, the proposed lakes have become a major human rights issue. Government officials say about 9,000 people would be displaced, but Colón Bishop Ariz says the real number is probably twice that because many communities that would be affected do not even appear on official maps.

While the government moves ahead with development plans, and most Panamanians say they are glad their country is sovereign territory, opinion polls reflect mixed feelings about the U.S. withdrawal. Some question whether Panama will be able manage its affairs, maintain security and keep corruption under control.

Bishop Emiliani of Darién says the country needs to change its mentality. “Panama has had a rich houseguest -- very orderly, very disciplined, very efficient -- the Americans in the Canal Zone. A state within a state. So we’ve grown up with a great inferiority complex, which we must break. Panama has to understand that although it’s a small country, it can take charge of its future, and we want to demonstrate this now that we are a sovereign nation.”

National Catholic Reporter, May 5, 2000