Panama and the United States: The End of the Alliance

8. Treaty Implementation, 1979–1985

8 Treaty Implementation, 1979-1985 A light plane cut through the tropical rain in August 1981, carrying Panamanian strongman Omar Torrijos and a few companions over dense jungles in the central part of the country. Suddenly it plunged into the trees and exploded, killing all those aboard. Searchers took several days to find the wreckage, and mystery yet surrounds the cause of the crash. Panamanians mourned the loss of Torrijos, who for better or worse had ruled for a dozen years and had signed new canal treaties with the United States. Others would have to oversee their implementation. Most persons who supported the new canal treaties expected that Panama would enjoy an unprecedented economic boom once they were implemented and that relations between the two countries would become amicable. More top-level jobs would go to Panamanians; the railroad, ports, and 58 percent of the old Canal Zone would fall under their jurisdiction; much new business would be shifted to Panama; and transfers of funds would run far above what they had been in the past. While these expectations largely came true, their realization brought neither peace and prosperity to Panama nor friendly relations with the United States. Panama's economy wallowed in debt and stagnation for most of the 19805. The 1981 death of Omar Torrijos left a political vacuum that was filled by former intelligence chief Manuel Antonio Noriega. Relations with the United States in the 19805—which centered on treaty implementation, Central American affairs, the drug trade, and finally democratization—were uncertain and occasionally stormy. Treaty implementation was the only area of success. Other issues generated acrimony and conflict. 140 141 Treaty Implementation Treaty Enactment Though controversial, the 1979 Panama Canal Act required prompt implementation. President Carter chose the former commander of Southern Command, Lieutenant General Denis "Phil" McAuIiffe, to be administrator of the Panama CanaL McAuIiffe had served for over four years in Panama and, though not directly involved in the negotiations , was intimately familiar with them. He had supported the treaties and was willing to dedicate the remainder of his career to making them work, Torrijos nominated Fernando Manfredo to be deputy administrator. Manfredo had taken part in treaty talks since the early 1970$ and was considered one of the least judgmental and constructive members of the Panamanian team. Moreover, he had avoided making enemies in Panama, an important quality for his effectiveness there. These choices—praised by knowledgeable observers at the time—proved to be correct, and to them must go much of the credit for the successful implementation of the treaties.1 Under McAuliffe's leadership, the canal administration had two priorities : to move ships through the canal quickly and safely and to train Panamanians to take over skilled and managerial jobs* This was done without alienatingthe Zonians, most of whom decided to stay on and see how matters worked out under the treaty. McAuliffe's scrupulous respect for the treaty and Panama Canal Act made them into the "law of the land," above question and challenge. For the first several years of the new regime, shipping through the canal increased, reaching an all-time record in 1982due in part to passage of tankers carrying Alaskan North Slope oil. A 9,8 percent toll boost in 1983 raised income as well. Then traffic dropped sharply due to the world recession and the opening of a pipeline through western Panama, which took about half of the Alaskan oil destined for the East Coast. In the mid-1980s transits through the canal remained fairly stable but tonnage and tolls rose because of an increase in the capacity of wide-beam and PANAMAX vessels and shipments of Japanese automobiles to the East Coast.2 Little new growth was expected through the early 19905, however. 142 PANAMA AND THE UNITED STATES The success in maintaining shipping traffic was complemented by a program to recruit and place more Panamaniansin skilled, technical , and managerial jobs. Several million dollars a year were dedicated to apprenticeship and training programs, especially in the industrial trades. By 1990, it was estimated, canal personnel were 88 percent Panamanian, and one official projected an increase to 95 percent by 1999. The attrition rate among U,S, personnel ran about too to 150 per year, mostly due to retirements, Qualified Panamanians moved up the management ladder to head departments and divisions, a process that continued in the 19905. Thejob security of Panamanians, however, was...