THE PANAMANIAN 'REVOLUTION'-THE THIRD ANNIVERSARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100100112-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 19, 2016
• Document Release Date: July 12, 2005
• Sequence Number: 112
• Publication Date: October 7, 1971
• Content Type: IM

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DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
The Panamanian "Revolution" The Third Anniversary
C'/ H, "cc / /M- 'il Z 7/
Secret
7 Ocgier 1971
No. 2071/71
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WARNING
This document contains information affecting the national
clefeuse of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its tia, ;fission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP 1
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DDN'NOIIADIN(1 AND
DRt; I.ANYI PICA MIN
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
7 October 1971
INTELLIGENCE MEMORANDUM
The Panamanian "Revolution"--The Third Anniversary
Introduction
On Monday 11 October a huge crowd will gather
in the Fifth of May Plaza only a short distance from
the Canal Zone to pledge its loyalty to General Tor-
rijos on the third anniversary of his accession to
power. The outpouring of affection will be genuine
because, on balance, Torrijos is a popular figure.
The gathering itself, however, is the result of
months of careful government planning. The single
objective: to demonstrate to critics at home and
to the world at large that dictatorship though it
may be, the Provisional Junta Government enjoys wide
public support.
Accomplishments on the domestic front over the
past year have been unimpressive, even disappointing,
and government speakers may hold forth the promise
of administrative reorganization in order to increase
government responsiveness to local problems. There
also may be some hint of elections, perhaps at the
local level. Dramatic announcements, heralding
either bold revolutionary schemes or a quick return
to constitutional government, are not in prospect.
The most significant development in the govern-
ment's three-year history, and the one thing upon
which the regime has been pinning its greatest hopes,
was the resumption on 29 June of treaty talks with
the US. Torrijos, apparently pleased with the prog-
ress to date and optimistic about the possibility of
an agreement, will assure the people that Panamanian
Note: This memorandum was prepared by the Office of
Current Intelligence and coordinated within CIA.
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interests are being defended but will avoid detailed
substantive comments. Indeed, the regime's greatest
concern at this point is the possibility of anti-US
demonstrations. The government is taking such steps
as it can to avoid incidents, but demonstrations re-
main a very real possibility.
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? Each October, on the anniversary of its
seizure of power:, the Provisional Junta Government
has come before the people to make an accounting
of its stewardship. The usual drill, of course,
calls or speeches and a parade. There is much
praise for the fine job the government has done in
the preceding year and pledges of even greater ef-
forts in the year ahead.
2. The premier performance of the anniversary
pageant on 11 October 1969 opened to rave reviews
in the government-controlled press, but the show
was somewhat anticlimactic when compared to the ad-
vance publicity. General Torrijos in a short and
poo:?ly delivered speech attempted to be all things
to all men. Posing as a nationalist, perhaps even
a revolutionary, he announced the confiscation of
200,000 hectares of land belonging to the US-owned
Boston-Panama Company. His portrayal of the great
democrat came when he solemnly reiterated his prom-
ise to hold popular elections in 1970. The real
show-stopper, however, was their announcement of the
New Panama Movement, the political arm of the "rev-
olution," which was to be organized on a sector basis
and would include representatives of youth, labor,
and professional groups.
3. The Junta Government was still in the
process of consolidating its power, however, and
the lack of follow-through was not surprising.
There were no further confiscations of US property,
there was no further talk of elections in 1970, and
nothing more was heard about the New Panama Move-
ment. Indeed, a coup attempt against Torrijos in
December 1969 forced postponement of all projects
not directly related to the government's political
survival.
4. By the 1970 celebrations, Torrijos had
secured his political flanks and was once again
firmly in control. He had redoubled his efforts
to win popular support and tirelessly toured the
countryside attempting to convince the peasants
that his government represented their interests
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rather than those of the oligarchy. In an effort
to attract organized support he had even concluded
a modus operandi with the Communist Party. Although
government policies were, in the main, rather mod-
erate, Torrijos' rhetoric had an understandably dis-
quieting effect on the country's economic elite. As
October rolled around, speculation was rife that
Torrijos would declare himself prime minister and
would turn Panama into a socialist state. In fact,
however, government concern over the state of the
economy and government interest in the resumption
of canal negotiations with the US militated against
any bold social experiments. Torrijos contented
himself with a short, noncontroversial address over
national radio and television. He spoke of govern-
ment success in promoting social and economic prog-
ress, but he stressed that attainment of such ob-
jectives did not require importing foreign doctrines.
5. Although the anniversary observances are
geared to public relations, the very process of pre-
paring them forces the government to make an inven-
tory of its accomplishments and to take stock of its
failures. The months preceding the anniversary have,
therefore, tended to become.a time of reflection and
introspection for the government. The themes selected
and the size and type of celebration planned reveal
something of the government's political interests and
concerns. Indeed, even public speculation about "dra-
matic shifts in policy" and "spectacular announcements"
serves to expose the fears of the political outs and
functions as a barometer of popular confidence.
6. In the beginning, at least, a government in
power as a result of a military coup, particularly
one that arrives on the scene bereft of a program
and uncluttered by much in the way of ideological
baggage, can be excused if its pronouncements are
vague, if its policies are tentative and experimental,
and if at times it confuses expediency with principle.
After three years, however, such a government can be
expected to have clarified its goals and objectives,
to have ordered its priorities, and to have made some
headway in implementing a program. Certainly a gov-
ernment that has consistently advertised itself as
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"revolutionary" and that has heaped scorn on its
predecessors should be able to point to some dra-
matic gains. Yet in July when the government first
began to consider plans for the October 1971 anni-
versary celebration a sense or accomplishment was
notably absent, and, indeed, one of Torrijos' major
concerns was the apparent drift of government policy.
7. Torrijos' program of action, though it
had never been very clearly articulated, consisted
of six basic elements: consolidating power, popu-
larizing the regime, institutionalizing and legit-
imizing the government, restoring a self-sustaining
economic growth rate of 8 percent, promoting eco-
nomic and social reform, and negotiating a new canal
treaty with the US. Aside from the fact that treaty
negotiations began on 29 June, the regime has little
more to show for its effo-cts in October 1971 than it
did in October 1970.
Domestic Developments
8. The broad outlines of this six-point program
were perceptible by the time of the first anniversary.
Indeed, the government had been concentrating heavily
on the first two points, a concentration that continued
through 1970. Torrijo: had found it necessary to de-
vote considerable Lime and attention.to National Guard
politics, and on at least two occasions he would have
been toppled had he been less adroit. At the same time
Torrijos was using the time-honored techniques of sup-
pression and intimidation to keep political opponents
outside the Guard from becoming a threat. With rather
less fuss than might have been expected, the political
power of the oligarchy, entrenched for over 70 years,
had been effectively displaced.
9. Having deposed Arnolfo Arias, one of the few
men in Panamanian politics with a mass,following,
Torrijos had some convincing to do in order to justify
the coup. Over time, his assiduous efforts to Panama
City and around the country to. demonstrate his concern
for the poor earned him grudging support. The poor
began to feel that the Torrijos regime was less remote
than previous governments and even that it was on
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their side. Though on balance willing to credit
the government and the National Guard with good
intentions, the middle class tended to be a little
more uncertain. Their attitude might be summed up
by the oft-repeated observation that "while the
government might be crooked, it was perhaps only
half as crooked as past governments." Only the
upper class looked at the Junta and found no re-
deeming qualities whatsoever.
10. After two and a half years of prose-
lytizing, and at a time when ,.orrijos began to
feel that he had made some headway, he found him-
self facing his first serious domestic crisis.
On 9 June, a popular young Roman Catholic priest,
Father Gallego, was abducted. The priest had been
working among and organizing the peasants in Vera-
guas, Panama's poorest province. His activities
had apparently not only antagonized the local
power structure--which included some of Torrijos'
relatives--but also had earned him the enmity of
officials who were far less successfully attempt-
ing to win the support of the peasants. He has
not reappeared, and although the government stead-
fastly denied any involvement, local. reports in-
dicated, and it became widely believed, that the
National Guard was responsible for the abduction.
The Church did not attack the government as force-
fully as it might have, but it kept the issue
alive. As a result, at a time when Torrijos was
trying to reinforce his leftist, populist image,
he found himzelf on the wrong side of an important
popular issue.
11. Torrijos' attempt to popularize the
regime not only received a setback as a result of
the Gallego case, but also because of the limited
progress made toward h:s other three domestic
goals. Torrijos had long realized the necessity
of building broad civilian support to supplant
his dependence on the Guard. His trial balloon
in 1969 regarding the formation of a national
labor organization composed of all unions and his
plan for the New Panama Movement were attempts to
expand and institutionalize the government's base
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of support. Torrijos' promise of an elected con-
stituent assembly--a first step toward democratic
constitutional government--was clear recognition of
the need to legitimize his regime. Circumstances,
however, caused him to back away. Both labor and
business leaders were frightened by the spectre of
a single national government union, Torrijos became
concerned about his ability to control a political
party, and security considerations forced F,.Dstpone-
ment of election plans.
12. Torrijos began to question whether he had
not approached the whole process backwards. If he
wanted history to judge his coup as more than just
a naked seizure of power and the Junta Government
as more than a mere housekeeping operation, he must
reshape the entire fabric of Panamanian society.
The government' could not simply declare the oligarchy-
dominated party system obsolete; it had to push ahead
with a positive social development program--fostering
agrarian reform, communi-1117 ('.evelopment, cooperatives,
and a new labor: code. ')n ;we the people saw that prog-
ress was possible, a new enthusiasm would develop;
once they saw that the government could be trusted,
political apathy would disappear. Only then could a
new alliance of students, peasants, workers, and
technocrats be forged, and only then could the govern-
ment torn its amorphous popular appeal into an organ-
ized and dependable base of support.
13. Whai=veL Lne merits of this analysis when
viewed from a theoretical or academic point of view,
Torrijos was to discover significant practical dif-
ficulties. In the first place, the transformation
of Panamanian society was, under the best of circum-
stances, a long-term proposition, and Torrijos' po-
litical needs, if not his political horizon, were
geared to the short run. In any case, it was not
the best of circu:nstances. Not only was governmental
capacity lacking,-not only was the administrative
infrastructure--particularly at the local level--
unequal th the task, but most important of all, Tor-
rijos' social reform objectives conflicted with his
economic and foreign policy objectives.
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14. The political uncertainty of the 7.968-69
period had diminished the confidence of the private
sector and reduced the growth of private investment.
Eager to keep the economy booming and the unemploy-
ment rate down, the government responded by sharply
increasing public sector spending. This government
spending, and the concomitant reliance on short-term
borrowing from commercial banks, gave rise to some
liquidity difficulties and placed a heavy debt serv-
ice burden on the regime. Anxious to stimulate
business concidence and thus private domestic invest-
ment, and finding it necessary to negotiate additional
loans and to renegotiate existing loans, Torrijos was
forced to explain away and at times actually to mod-
erate his nationalistic and "revolutionary" rhetoric.
The government hastened to reassure domestic business
interests that its pursuit of social and economic
reform did not mean that it was against private enter-
prise. Many businessmen remained skeptical and Tor-
rijos, attempting to convince both left and right of
his good will, found himself moving fast and going
nowhere.
15. By April 1971, Torrijos' dissatisfaction
with this state of affairs led him to another examina-
tion of his policy approach. Facing the prospect of
continuing financial difficulties and a tough battle
with the US over a new treaty, Torrijos became con-
vinced that it was time once again to lean to the
left. If reform were impossible, then perhaps rhet-
oric.would suffice; if a new Panama were not in
prospect, then may~)e reviving the New Panama Movement
would be enough. lorrijos, therefore, undertook a
major reorganization of government personnel, which
immediately gave the regime a more leftist, more
nationalistic, and more populist image. Two prom-
inent leftists, Vasquez and Escobar, were brought
back into the government as Minister of Government
and Rector of the National University respectively,
and other "progressives" were moved into important
government jobs as the regime signaled a renewed in-
tention to organize the students, to :.ourt labor,
and to mobilize the campesinos.
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16. If Torrijos had hoped to impart greater
dynamism to a sluggish bureaucracy and to rally a
more positive and sympathetic response from the
popular sectors, he was destined to great disap-
pointment. Indeed, by July his domestic program
was in total disarray, and his annoyance and im-
patience had reached its limit. He had been
running scared as a result of the public outcry
on the Gallego affair and, although the moment of
greatest peril had passed, the incident was not
closed in the eyes of the Church or the general
populace.
'17. It was at this stage that Torrijos in-
stituted a thoroughgoing review of all government
programs. In extensive meetings with the cabinet,
with the planning office, and with local officials,
Torrijos made clear his complete dissatisfaction
with the accomplishir,,.,nts of the revolutionary gcv-
ernment. He complaine6 about the over-all lack
of government coordination and, noting that his
economic planners were unable to provide him with
practical slort-term development guidance, crit-
icized their preoccupation with long-term programs.
As a corrective, Torrijos ordered an intensifica-
tion of the government's development efforts and
the institution of what he termed a federal system--
that is, the decentralization of administrative
functions and the reallocation of decision-making
from the national to the provincial or local level.
11 October 1971
18. It was at this point also that he began
to make plans for the observance of the third anni-
versary of the Junta Government. With so little to
crow about it is perhaps 'surprising that Torrijos
should desire to turn the anniversary celebrations
into a massive extravaganza or to mount an all-out
effort to attract a large gathering. Yet it was
precisely because of this perceived government
weakness that Torrijos felt it necessary to demon-
strate that he retained the support, the loyalty,
and the affection of his people? By an offer of
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free beer Torrijos could attract a good-sized crowd
in Panama City, but in the wake of the Gallego case
and the agitation by the Church his real interest
was in attracting thousands of campesinos from all
over the country. The junta government had always
made a special pitch to the peasant; so had the
Church and so had Father Gal Lego . Tc:rr?i j os , was
determined, therefore, to show that he and not the
Church was in control of the rural masses.
19. Torrijos' interest in a massive demonstra-
tion--a sort of plebiscite by voice vote expressing
the people's faith in the government--is meant for
US as well as domestic consumption. Conscious of,
even sensitive about, charges that his government is
a personal dictatorship, Torrijos wanted to use the
occasion to show that the revolutionary regime is a
popular rather than an unrepresentative government.
He also hopes to-show Panamanian solidarity in sup-
port of the government's position on treaty negotia-
tions.
20. The 11 October mobilization is to serve
yet a third purpose. It will test the government's
ability to mount and to control huge demonstrations.
Having long toyed with the idea of permitting polit-
ical action and having long been disposed to use
public pressure as a means of exerting leverage on
the US on the canal issue, Torrijos is interested
in a practical exercise under more or less controlled
conditions that would clarify the problems and poten-
tialities of such a'course of action. Certainly the
efforts to date have already revealed some of the
problems of local organization, the transportation
bottleneck, and the huge expense involved. With a
planned crowd of 100,000 gathering only blocks from
the Canal Zor,e, Monday will provide an acid test of
the Guard's capabilities in crowd control and a test
of the political reliability of the various partici-
pating groups.
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22. Unless serious violence erupts, the
demonstration itself will serve Torrijos' polit-
ical purposes. But, having gathered together a
mammoth audience, Torrijos will have to come forth
with a suitably impressive speech. As in the
past, he will undoubtedly accentuate the positive
and highlight the accomplishments of his govern-
ment. It is also likely that he will resurrect
many of the themes enunciated in 1969. He may
make some reference to elections. He may announce
plans for a constituent assembly, presumably as
a first step toward the establishment of a demo-
cratic constitutional government but more imme-
di.ately.as a convenient vehicle for ratification
of a canal treaty. He may again explore the
possibility of an official po"itical party. He
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will probably discuss the need for changes in the
government structure to promote local development
efforts, and he may clarify his views on "federalism."
The canal treaty is most important to Torrijos, and
he will find it hard to resist the usual nationalistic
rhetoric on the treaty issue--assuring the populace
that the government will protect legitimate Panamanian
interests. However, he will avoid substantive com-
ments on the actual negotiations or stirring up anti-
US sentiment on this occasion.
23. In recent months Torrijos has leaned in
the direction of permitting increased political ac-
tivity. His experiences have not been uniformly
good, however, and any firm plans will await an
assessment of the events of 11 October. If all. goes
well, the government will permit an acceleration of
political organizational activity; an unpleasant
experience would severely retard any such plans.
24. Halting steps have already been taken by
the government to develop its student, labor, and
campesino constituencies. The government's agrarian
reform program is winning friends, but a national
organization of campesinos is still far in the dis-
tance. The government has persuaded the major labor
unions to participate in a National Labor Council, a
loose labor coordinating body, but the idea of a
single government-controlled labor organization has
not yet been revived.
25. Significant efforts have been devoted to
the students. Student organizations at the univer-
sity and secondary levels, which were put out of
business at the time of the 1968 coup, have re-
cently been permitted to function, and the govern-
ment is sponsoring a national youth movement. Tor-
rijos' objective, of course, is to break the students
out of their traditional antigovernment mold and
turn them into a reliable supporting element of the
revolution. In this goal, the government has the
complete support of the Communist Party. Thus far,
however, government successes have been limited.
A large segment of the student population remains
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politically apathetic, and many student activists
are more interested in narrow university matters
than in the broad national issues raised by Tor-
rijos. The depth of feeling on the treaty issue
would make it possible for Torrijos to mobilize
considerable student support on this matter, but
his ability to keep this support under tight gov-
ernment control is open to question.
The Canal Talks
26. Whether circumstances allow the govern-
ment to proceed with all deliberate speed or force
it to drag its feet on its domestic program, over
the next six months the only critical issue will
be the canal negotiations. Over the short run
there are no possible domestic successes that would
offset or even cushion the failure to achieve a
new treaty. On the other hand the successful con-
clusion of negotiations would bring in its wake
incomparable political and economic payoffs fo
the government. This is not to say that Torrilos
will forgo a tough bargaining stance or that he
will accept any and all treaty provisions. In a
sense it would be more accurate to suggest that
the requirements of national dignity and self re-
spect are more important than any of the economic
benefits.
27. For the first time since the negotiations
began, the Panamanians have evinced optimism and
they are apparently persuaded that an acceptable
treaty is attainable. However, all problems have
nc-i: been resolved. Agreement in many areas has
ba.en confined to broad principles, and the all-
important job of inking in the details remains.
Torrijos indeed may believe that refusal to com-
promise in the coming weeks will gain additional
concessions for Panama because the US wants to
deal with the problem before it can become an
issue in the 1972 campaign. He understands, how-
ever, that failure to reach agreement this year
will delay the treaty at least until 1973. By No-
vember, therefore, he will have to decide whether
the pot is already sweet enough or whether delay
or confrontation would yield more.
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