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Panama City October 17, 1990 – Economy of Panama Depends on Operation of the Canal Print E-mail
1990, South America

AMBASSADOR WORKING TO REPLACE HOUSING

By Bob Van Leer

  (PANAMA CITY, PANAMA, OCT. 17, 1990) - Most of today was spent in meeting with U.S. Ambassador Deane Hinton, our Central American trouble shooter, and Guillermo A. Cochez, Mayor of Panama City.

  But first, after landing at the airport, we were driven on a tour of Panama City, the largest city in Panama.

  The city has a population of about 1.2 million people and the country about 2.3 million. It is a rather small country, about the size of South Carolina. This is a tropical country and the rainfall is high, 70 inches annually in Panama City, compared to over 80 in Gold Beach.

  In Colon, at the other end of the canal, annual rainfall is 129 inches. The Panama canal dominates this country. Most people live along it and most of the country's economy depends on the canal. The U.S. controlled a 10 mile wide strip along the canal until Pres. Jimmy Carter signed a treaty in Oct., 1979, turning over the strip to Panama. The canal, itself, is to be turned over to Panama in 2000 after a gradual transition period.

  The Isthmus of Panama runs mostly east and west so the Pacific Ocean is on the south and the Caribbean, leading to the Atlantic, on the north. The way the canal is laid out to go from the Pacific side to the Atlantic side you travel northwest. Our guide said it take 7-8 hours for a ship to transit the canal saving the long haul around South America. The canal cuts the country in half and the first fixed bridge was built in 1962, the $20 Million Bridge in Panama City, nicknamed because of the cost to the U.S.

Military Dictators

  From 1968 to last Dec. 20 Panama was ruled by military dictatorships. Last December the U.S. invaded Panama and arrested Gen. Manuel Noriega, the last dictator. The U.S. and Panama are trying to pick up the pieces. Noriega doesn't seem to have many friends. The few Panamanians we have talked to were all glad to see him go. And there is almost total absence of anti-American graffiti in Panama. We saw more in Venezuela.

Bullet Holes Repaired

  Most of the buildings damaged by the invasion have been torn down or repaired. Fresh repairs show over the many bullet holes in buildings. Much of the damage to the city was the burning down of a section of the city, Chorillo, composed mainly of temporary buildings built to house workers on the canal more than 75 years ago. We were told that most of these buildings had already been condemned. Nevertheless, they were home to someone and most of the housing has not yet been replaced.

Deane Hinton

  Ambassador Deane Hinton has been our trouble-shooter in Central America. He has been our ambassador in El Salvador and Costa Rica as well as Pakistan before being appointed to Panama after the U.S. invasion.

  Hinton said his job is to help Panama rebuild as a democracy and said there are two key problems. The economy is bankrupt with unemployment over 30 percent. The country can't have success without improving the economy.

  He said his biggest problem is what to do about the security system. The police force has been purged twice. The U.S. is helping by providing the best police instructors available.

  (The effort has not yet succeeded. Our guide cautioned us about going out alone, saying to stay with the group.) We were given estimates of up to 18,000 losing housing by sources other than Hinton. We were told that 3000 people had been housed in former U.S. Air Force hangars but the number is down to 2200.

  Hinton said he despaired we will ever get all these people resettled. He said $461 million in U.S. aid has been designated for a "jump start" of the economy and $30 million dispensed for housing. The U.S. is resettling 2500.

  He said the decision was made not to rebuild the slums but give people a choice. When they qualify they receive a savings passbook for $6500 earmarked for housing. As yet there is not enough housing for them to buy. He hopes to settle 80 percent eventually. Hinton said the aid program is not meant to be continuing. He has not asked for more in the new federal budget. Hinton said there is a real love-hate relationship between Panama and the U.S. He likened it to a rich uncle and nephew.

  He said Panamanians are always ready to ask the U.S. for help and we need to learn to say no to them in a graceful fashion. Hinton was disappointing in his answers as to how many civilians were killed in the U.S. invasion. He said he didn't know but figures of around 500 sounded about right to him. Hinton is a man with a reputation for getting things done so, if he wanted to know, he would have an accurate figure of the dead.

No Death Compensation

  He said no compensation was paid to families for deaths on anything related to military action. Hinton said 70 percent of Panama's gross national product is related to services and there is nothing like it anywhere else. Panama uses the U.S. dollar for currency and can't change the exchange rate without destroying the banking system.

  Hinton said proposals by the Panamanians to widen the canal to two-way traffic would cost in the $400-600 million range and analysis doesn't show cost-benefit justification. A sea level canal would be in the $50 billion plus range. Rail-truck alternatives are being considered to increase canal capacity.

Mayor of Panama

  Guillermo A. Cochez is mayor of Panama City but doesn't have a whole lot of power in spite of his 2200 employees and $18 million budget. Cochez doesn't control the police (federal), garbage service (federal), water and sewer (autonomous agencies) and fire protection. For a reason he could not explain, fire protection is controlled by the Justice Department.

  So what does he control? Cemeteries, parks, sport facilities, kindergartens, libraries and a type of justice of the peace judicial system. He also has community pride organizations which he said were very successful.

  Cochez appears sincere and has credentials of having mild torture by the Noriega regime. But no one seems to be in charge.

  Cochez criticized past U.S. actions saying, "For many years the interest of the U.S. coincided with the interest of military dictators". He said the military in Panama was fostered by the U.S.

  Tomorrow will be a day of meetings at the education ministry and at the newspaper, La Prensa. Following these we will get a briefing and tour of the Panama Canal by officials of the Panama Canal Company, the manager of the canal.