Panama
The first humans entered Panama at least 10,000 years ago. They were descendants of migrants who had crossed a land bridge from Asia to North America. Some of these first people remained in Panama, while others continued to South America. After the beginning of agriculture and stone toolmaking, Panama's native population grew and developed an impressive culture. The early indigenous people are best known for their beautiful gold jewelry, beads, and multicolored pottery, left behind in huacas, or burial mounds. In addition to farming, they hunted and fished for food, and traded goods among villages. Most lived in thatched-roof huts, similar to those in which many of their descendants live today.
Spanish Colony
In 1501 Spanish explorer Rodrigo de Bastidas, sailing west from Venezuela, was the first European to reach the Isthmus of Panama. A year later explorer Christopher Columbus visited the isthmus. In 1508 the king of Spain, Ferdinand V, awarded settlement rights in Panama to explorer Diego de Nicuesa, and within a few years colonies were established along the Atlantic coast. Panama became important to the Spanish Empire in 1513 when explorer Vasco Núñez de Balboa led an expedition across the isthmus from the Atlantic and became the first European to see the Pacific Ocean from the Americas. He named it the South Sea and claimed it, and all the territories it touched, for Spain. In 1519 Pedrarias Dávila, the Spanish governor of the area, founded Panama City on the Pacific coast. Many of the region's native peoples were killed by Spanish colonists or by diseases brought by the Europeans, while others fled to remote areas.
Panama quickly became a crossroads and marketplace of Spain's empire in the Americas. From Panama, soldier Francisco Pizarro sailed south to conquer the great empire of the Inca in Peru in the 1530s. The silver and gold of the Inca, spices, and other commodities were shipped from South America to Panama City, carried across the isthmus, and loaded onto fleets of treasure ships bound for Spain. The route to the Caribbean harbor of Portobelo became known as the Camino Real, or Royal Road. The riches stored in Panama made it a frequent target of pirate attacks, while its importance in trade led to development of a wealthy merchant class. Panama also became a major shipment point in the slave trade, sending most African captives on to other colonies. But slaves who remained in Panama formed the beginning of its black population.
Because of its close trade ties with Peru, Panama was originally part of the Viceroyalty of Peru, the Spanish government unit for most of its South American colonies. After 1718, however, Panama was put under the newly-created Viceroyalty of New Granada, which covered present-day Colombia, Venezuela, and Ecuador. The viceregal capital in Bogotá was distant, and its authority was weak. As a result, Panama largely governed itself. The treasure fleet, meanwhile, sailed less frequently and then stopped altogether as other routes were used, so that Panama no longer enjoyed the riches of the empire.
Colombian Rule
In the early 1800s Spain's American empire broke apart as the movement for Latin American independence swept through the colonies. Panama declared independence from Spain in 1821 and decided to become part of the newly independent Republic of Colombia. For the next 82 years the Panamanians lived in uneasy isolation from the central government, often making their own laws, frequently staging revolts, and occasionally declaring their independence. They grew apart culturally and materially from the rest of Colombia, becoming less religious, more liberal in politics, and more open to outside influences than Colombians.
By the mid-1800s events from beyond the region began to affect Panama. The dominant maritime power of the age, Great Britain, and the rising power in the hemisphere, the United States, began to compete for the rights to control transit across Central America. The preferred route for a canal was in either Panama or Nicaragua. American businessmen took the lead in 1848 when they gained rights to build a railroad across Panama, which was completed in 1855. The discovery of gold in California brought a flood of prospectors seeking quick access, and for years the Panama Railroad was the most profitable in the world. Businesses to serve travelers flourished, providing a boom for Panamanian merchants.
With the railroad came U.S. intervention. Rebellions against Colombian rule and violence between local factions occurred frequently. In addition, an increase in the number of U.S. citizens and businesses created tensions with Panamanians. During this period the United States frequently sent its Marines to Panama to preserve law and order and to protect U.S. lives and property. Although still a province of Colombia, Panama was on its way to becoming a U.S. protectorate.
Independence and the Canal
In the late 1870s, French diplomat Ferdinand de Lesseps, who had built the Suez Canal in Egypt, called a conference in Paris to design and raise money for a Central American canal. Deciding on a sea-level canal in Panama, he began to raise money privately, and started work in 1882. But the project was dogged by equipment delays, tropical diseases, financial problems, and poor planning. The canal design turned out to be impossible to build with the technology available at the time. The enterprise went bankrupt in 1888 and was replaced with a holding company to protect the interests of investors. The project, however, had brought Panama a more diverse population, including many Caribbean blacks who came to work on it.
During the 1890s some U.S. leaders urged their government to take over the effort to build a Central American canal. The United States had for some time wanted a shorter sea route between the Atlantic and Pacific for trade and military purposes. It also stood to benefit from a canal more than any other country. Several land surveys were conducted, and some construction even began in Nicaragua. In 1902, however, a complex set of developments led the U.S. president and Congress to favor buying and rehabilitating the French route in Panama.
The United States negotiated a treaty with Colombia for rights to build the canal, but the Colombian senate refused to ratify it. Representatives of French and U.S. investors, the railroad, and the U.S. government then conspired with Panamanians to declare the isthmus independent from Colombia. President Theodore Roosevelt, who wanted to make the Panama Canal the centerpiece of his administration, made sure the conspiracy succeeded. When the Panamanians rebelled, U.S. troops prevented Colombian forces from moving in to suppress the revolt. The Republic of Panama became independent on November 3, 1903.
Two weeks later a treaty was signed giving the United States the rights to build a canal on terms that made Panama a virtual U.S. protectorate. The United States received a perpetual lease for a section of central Panama 16 km (10 mi) wide, stretching from ocean to ocean, for the canal. Within this zone, the United States would exercise complete control, as if it owned the land. It also was granted the right to military intervention in Panama to maintain order, and the right to take over more Panamanian land if necessary. In exchange, the United States guaranteed Panama's independence and paid $10 million, plus an annual payment of $250,000. On Panama's side, the treaty was negotiated and signed not by Panamanians but by Philippe Bunau-Varilla, a French citizen who represented the French canal company. The treaty terms were resented by Panamanian nationalists and became a source of continuing controversy in Panama's history.
From 1903 on, Panama had two governments, one for the republic and another for the canal zone. The republic was subordinate to the government of the U.S. zone in every way-financially, militarily, and administratively. Panama adopted a constitution and elected its first president, Manuel Amador Guerrero, in 1904. But in fact, the chief engineer of the canal construction works and then the governors of the canal zone oversaw affairs in Panama. They made sure that nothing impeded the maintenance, security, and operation of the canal.
Panama's independence was strictly limited: With no military, it was vulnerable to intervention by U.S. troops from the canal zone. It had limited resources and had to borrow money from banks, using the canal annuity as guarantee. Virtually all the country's trade and immigration came through the zone and was therefore subject to U.S. control. Panama depended on the zone for water, jobs, revenues, imports, transportation, and even security. Panama's relationship was both unequal and subservient to the United States. See also Panama Canal; Panama Canal Zone.
Construction of the canal, from 1904 to 1914, brought more than 150,000 people to Panama. These immigrants changed the country's ethnic and cultural composition. They included a large number of black West Indian laborers, some European workers, and some Americans.
During Panama's early years, President Belisario Porras led efforts to build the nation, constructing roads, hospitals, schools, and other facilities. Porras, leader of the Liberal Party, achieved a working relationship with the U.S. authorities and dominated the country's government until the late 1920s. However, resentment of U.S. domination grew among some Panamanians.
The Arias Years
In 1931 a secret nationalist organization, Acción Comunal (Common Action), carried out a coup and held new elections for president. A group of reformers, headed by Harmodio Arias Madrid, took control of the government and sought to make it more effective. In contrast to the elite families that had always ruled Panama, Arias and his family came from a modest rural background, and their success marked the rise of middle-class Panamanians into government leadership. Under Arias's presidency (1932-1936) and those of his successors, the police force became stronger, the economy began to diversify, the university was established, and Panama took on a new sense of national pride. In 1936 the United States and Panama negotiated treaty changes that ended the U.S. right to intervene in Panama's affairs and its right to appropriate more land. The treaty also increased the annual payments the United States made to Panama.
Arias's younger brother, Arnulfo Arias Madrid, became president in 1940 and intensified policies to strengthen the nation and oppose U.S. power. He fostered a greater sense of nationalism among Panamanians, stating that Panama was more than a canal and had a national destiny beyond serving the United States. Arias insisted that the United States negotiate as an equal with Panama for new treaty concessions and resisted U.S. efforts to establish new military bases in Panama during World War II (1939-1945). Arias was sympathetic to some European fascist governments of that time. He also introduced a new constitution that gave him a longer term in office and revoked the citizenship of non-Hispanic immigrants.
Arias's initial term in power was brief, however. Under his presidency, the National Police were given more weapons and a bigger role in politics. Ironically, the police deposed him in a coup in 1941, and in later years would overthrow him twice more and rig elections to defeat him. By the mid-1940s, the commander of the police had the power to choose and depose presidents as he wished.
Increasing Unrest
The culmination of increased police involvement in politics came in 1952. Police commander José Antonio Remón, after years of deciding who would hold the presidency, became convinced he could do a better job than the civilians. He ran for office and was elected honestly. Remón continued many of the policies of the Acción Comunal reformers. He pushed to diversify the economy, developing industry and agriculture to reduce Panama's dependence on the canal. He further strengthened the police, making it more like a military force and renaming it the National Guard. New treaties were negotiated to give Panama more benefits from the canal. Remón also built a strong coalition of political parties. He was assassinated in 1955.
Relations with the United States deteriorated in the late 1950s. Panamanians grew increasingly frustrated over U.S. control of the canal zone and their country's lagging development. They were inspired by the successful revolution in Cuba and events in 1956 in Egypt, where the government seized and nationalized the Suez Canal. Anti-American demonstrations increased, during which U.S. flags were torn down, U.S. agencies were stoned, and Panamanians clashed with canal zone troops. These protests led to a more serious confrontation in 1964 known as the flag riots, in which violence broke out over attempts to fly the Panamanian flag in the canal zone as a symbolic gesture. More than 20 people were killed, most of them Panamanians, and the United States and Panama temporarily broke off relations. The confrontation persuaded the United States to begin negotiations to replace the unpopular 1903 treaty, but the effort took 13 years to complete.
Public order declined during the mid-1960s, as the economy stagnated and government seemed incapable of administering the nation. Public frustration with the situation helped Arnulfo Arias win the 1968 election. When he threatened to dismiss some leading officers of the National Guard, they overthrew him after ten days in office. Two officers, Boris Martínez and Omar Torrijos Herrera, led the coup and formed a ruling council, or junta. By early 1969 Torrijos assumed full control of government and announced a revolutionary program.
The Torrijos Regime
The Torrijos era brought Panama a mixture of military rule, social and economic reforms, and a more vigorous, left-wing foreign policy. Torrijos suspended the constitution and eventually replaced it with one that gave him full powers as head of state for six years. Disbanding the National Assembly, he governed by decree, outlawed political parties, and used the National Guard to repress opposition. However, he won popularity for his social and economic policies and, more importantly, for confronting the United States over control of the canal. He also established ties with Cuban leader Fidel Castro and the rebel Sandinistas, who were fighting the dictator of Nicaragua.
Under Torrijos, the government intervened more strongly in the economy, introducing land reform and prolabor policies, and encouraging international banking to establish a base in Panama. Openly attacking the wealthy upper class of Panama, Torrijos recruited middle- and lower-middle-class citizens to staff the upper ranks of government. Because foreign banks were eager to lend money and Panama's international banking industry was growing, Panama was able to borrow a great deal of money during the 1970s. Torrijos used it to create state-run industries and utilities; to expand social services, building schools, clinics, and housing; and to aid farmers. These measures, while popular, contributed to a large national debt, and economic growth slowed.
The hallmark of the Torrijos years was the negotiation of new treaties with the United States to replace the controversial 1903 canal agreement. The new treaties, signed by Torrijos and U.S. president Jimmy Carter in 1977, provided that the canal would be turned over to Panama on December 31, 1999. More than 60 percent of the canal zone was to be turned over to Panamanian control in 1979 under the treaty, but it allowed the United States to retain some military bases until 2000. The treaty also provided that more money from canal tolls would go to Panama. The agreements provoked opposition in both countries; some Panamanians objected that the treaties did not go far enough, while many Americans felt the canal was U.S. property that was being given away. However, both nations ratified the treaties, which took effect in 1979.
Once the treaties were signed, Torrijos stepped down as head of government and began to reinstate civilian rule in Panama. He formed the Democratic Revolutionary Party (PRD), which provided backing for his civilian figurehead president. But Torrijos retained control of the National Guard and remained the dominant figure in Panama's politics until he died in a plane crash in 1981.
Noriega Dictatorship
In the years after Torrijos's death, civilian and National Guard leaders maneuvered for power. In 1983 a winner emerged: Manuel Antonio Noriega, former head of the intelligence service, became head of the National Guard and took power. Although he did not hold a political office, as commander of the military he controlled the government. Astute and ruthless, Noriega built up the size of the military, which he renamed the Panama Defense Forces, and greatly increased its power over the nation's political life and its economy.
The Noriega years witnessed widespread corruption, repression of political opposition, and a troubled economy. Noriega made little pretense of following the constitution and rigged elections. Noriega was accused of ordering the torture and murder of a popular figure, Hugo Spadaforas, in 1985, but when Panama's president promised to investigate, Noriega replaced him with another civilian. Noriega used the military to imprison, torture, and sometimes kill his opponents. Noriega also was linked to the international narcotics trade. He was accused of helping to smuggle drugs and to launder money for Colombian drug cartels.
Relations with the United States deteriorated. Noriega had been a longtime informant for the U.S. Central Intelligence Agency, and helped U.S. officials to supply arms to conservative forces in Nicaragua. But by the late 1980s, Noriega's dictatorship and his alleged links to the international drug trade caused the United States to withdraw its support for his government. At the same time, street demonstrations began to occur regularly in Panama City.
U.S. Invasion
The U.S. government gradually increased pressure on Noriega, trying to make him give up power. The United States imposed a trade embargo, vetoed international loans to Panama, and finally withheld its annual canal payments. In 1988 a U.S. court in Miami, Florida, indicted Noriega on drug-related charges. Panamanian president Eric Delvalle tried to dismiss Noriega but instead was removed from office. A presidential election was held in 1989, but Noriega nullified the results when the vote count showed that the opposition candidate, Guillermo Endara, was winning. Tensions rose between Noriega's forces and U.S. troops based in Panama.
Finally, President George Bush decided to invade Panama, with the stated goals of arresting Noriega to face drug charges, of restoring democracy, and of protecting American lives. On December 20, 1989, U.S. troops invaded in the largest U.S. military operation since the Vietnam War (1959-1975). More than 27,000 troops took part, including 13,000 already stationed in Panama. With an overwhelming force of tanks, aircraft, and high-technology weapons, the U.S. forces defeated Panamanian troops within days and eventually captured Noriega, who was taken to the United States for trial.
The Panama invasion proved traumatic and controversial. It violated both international law and U.S. government policy against intervening in another nation's internal affairs. Yet it was welcomed by many Panamanians as the only way to rid the country of a dictator that the United States had supported for many years. Noriega's headquarters in Panama City was destroyed, but the surrounding poor neighborhood of El Chorillo caught fire and burned to the ground, leaving thousands homeless. Several hundred Panamanians, many of them civilians, died in the fighting. It was the low point in 86 years of rocky relations between Panama and the United States.
Panama in the 1990s
On the day of the invasion, U.S. forces swore a caretaker government into office. The new president was Guillermo Endara, the leading Arnulfista Party candidate in the election that had been annulled by Noriega. Behind the scenes, U.S. advisers wielded real power, arresting police officers and reestablishing order. A large U.S. aid program, amounting to nearly $1 billion, was assembled to help Panama recover from the invasion and years of economic sanctions. However, Endara never achieved much authority as president. The economy made a strong recovery, and the conversion of Panama's military into a civilian police force restored public confidence and safety.
The 1994 presidential election brought a surprising victory to Ernesto Pérez Balladares, the candidate of Noriega's former party. Pérez Balladares, a U.S.-trained banker, received a third of the popular vote. The new president embraced a program of economic reforms, including measures to reduce the size of government, sell public enterprises, create more jobs, and reduce some labor protections. He also sought to attract foreign investment, end protectionism so Panama could carry on more global trade, and renegotiate the large national debt.
Meanwhile, Panama created the Interoceanic Regional Authority to administer lands and buildings turned over by the United States. Designed to be nonpolitical and efficient, the agency is seen as an indicator of Panama's ability to manage a major facility like the canal. In the mid-1990s, a new authority was being formed to actually take over duties of managing the canal in 1999. Since 1990 a Panamanian citizen served as chief administrator of the canal, and some 97 percent of the canal labor force was Panamanian. Both countries strove to achieve a smooth, trouble-free transition.
Pérez Balladares pushed hard to attract foreign, especially Asian, investment to develop the lands and military bases being turned over to Panama. His greatest challenges were to maintain public order and confidence, create new jobs while privatizing the economy, reduce corruption in his government, and maintain friendly relations with the United States.
Panama's next general elections are scheduled for May 1999, and the new president and Legislative Assembly will take office on September 1. Four months later, Panama is scheduled to complete the takeover of the canal, military bases, and all adjacent facilities, giving it control of all its territory for the first time in the nation's history.