Panama Us Relations Regarding the Panama Canal

Panama and the USA: 161 Years of History Christopher Pearce Seattle University June 6, 2011 Abstract The historical relationship between the United States and Panama is steeped in oppression from the United States. In 1850 the U. S. took the isthmus from Colombia by talking the Panamanian people into seceding from Colombia. With help from the United States the people on the isthmus seceded from Colombia, only to be controlled and occupied by them for the next one hundred and fifty years. Shortly after arriving to run the canal after its completion in 1914 the Panamanian people, and imported West Indians from Barbados started revolting.

For the next one hundred years Panamanians and West Indians slowly gained their independence from the North Americans occupying their country. Eventually the United States relinquished control of the Panama Canal to Panama due to an increased possibility of further violence. Now Panama controls The Canal and is expanding it in hopes to maintain their relevance in the world market. INTRODUCTION The focus of this study is on the historical relationship between United States and the Republic of Panama in regards to the Panama Canal.

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This study explores the ramifications of the checkered history between the USA and Panama and how the two countries are addressing their intertwined past. The Republic of Panama has been vital to the United States and the global community since 1914 when the Panama Canal opened (Sullivan, 2011). As a result of building the Panama Canal the Republic of Panama has had to face many changes in culture, politics, and lifestyle. Many of these changes have imposed much hardship on the people of Panama, but have also awarded many benefits (Kovaleski, 2000).

The hardships include a difficult beginning during the First World War where the canal had to be closed for a year, many deaths of workers during the construction of the Panama Canal, General Noriega’s term in power where he seized control of the government, and many more (e. g. , Conniff, 1990; Jackson, 2011; Major, 1990; Sullivan, 2011). The benefits include protection of the Panama Canal by the United States military, investment from the United States and other countries into the operations of the Panama Canal, guaranteed economic stability, and an improved quality of life for many Panamanian citizens (Sullivan, 2011).

From 1914 to December 31, 1999 the United States held control of the Panama Canal and its operations (e. g. , Conniff, 1990; Major, 1990). Unfortunately the history of the Panama and the United States is checkered with many local law enforcement, and corruption issues that have deteriorated relations between the two countries (Sullivan, 2011). Banking secrecy, narcotic trafficking, and a murder of a guerrilla fighter named Hugo Spadafora led the United States to reduce assistance to Panama by fifty percent (Sullivan, 2011). These conflicts kept U.

S. – Panamanian relations tense during the 1980s (Conniff, 1990). These incidents, combined with the General Noriega incident, led the United States to withdraw many resources from the country. The General Noriega incident occurred after a pair of brother Presidents lost control of their country after some bad decisions they made during World War 2 (e. g. , Conniff, 1990; Major, 1990). He seized control of the government, injected his puppet president into office and operated the country with an oppressive fist from 1981 through 1989 (e. g. Conniff, 1990; Major, 1990). In 1989 the United States thought it would be wise to “take out” the general – further involving themselves in Panamanian politics (Major, 1990). Fortunately these incidents did not foreshadow the future of Panamanian – U. S. relations. The Republic of Panama is kind of a “comeback kid” in the global community. The beginnings were very unstable and tenuous, but now Panama has a blossoming economy that is very robust. A new set of locks is being constructed and the future of Panama looks very bright (Sullivan, 1990).

Panama is working with the United States, Spain, and a host of other countries to ensure a steady and efficient flow of traffic between the Atlantic and Pacific oceans. Parameters and research methods For this study I will be researching Panamanian history in the context of the Panama Canal. The involvement of the United States in the Panama Canal has been extensive, and has existed since 1850. For this reason the literature regarding the history of Panama itself will give accurate documentation of the U. S. ’s involvement in the Panama canal.

I will give the reader a basic historical account of the major events in Panama from 1850 until 2011. This will include as many relevant mainstream media sources as possible to get an overview of what has and is happening in Panama. To contrast this information I will conduct an interview with a reporter from The Panama News – an underground publication that claims to be telling the true story of Panama and its people. Furthermore I will explore perspectives from United States congressional reporters who research, write, and present various information from all around the world, in this case two congressional reports about Panama.

Lastly, I will also focus on the current relationship between the United States and Panama and how that relationship will continue after the current expansion. LITERATURE REVIEW The parameters of this study of the historical nature of the relationship between the Republic of Panama and the United States will consist of Panamanian history from 1840 until 2011. The details surrounding the extreme circumstances under which Panama and the United States met and eventually allied with each other set the tone for over a century’s worth of growth, conflict, and maturation.

The citizens of Panama and the United States government agree on the historical account of the Panama Canal through 1980, but divisions arise after the turn of the decade in regards to a series of situations that escalated due to a corrupt general – Noriega (e. g. , Conniff, 1990; Major, 1990). Other Central American countries, including Noriega’s puppet president, denounced U. S. intervention in conspiring to oust Noriega in 1989, but they were not listened to and the U. S. decided to take-out the militaristic general in one fell swoop (Conniff, 1990).

Much controversy remained surrounding the actions of the U. S. , but significant evidence positively supports the American-led coup and its aftermath (Sullivan, 2011). Right before the United States relinquished control of the Panama Canal to Panama, articles such as Panama’s Long Goodbye (Falcoff, 1999), and some journals written by U. S. citizens, criticized the ability of Panama to run the canal including Panama Owns Canal – Related Headaches (Fraser, 2000). Some wrote that Panama would not have the ability to secure and operate the canal without U.

S. assistance (Falcoff, 1999). An article in The Washington Post titled; Panamanians Split on Legacy U. S. Stay (Kovaleski, 2000) illustrates the split between Panamanians in the turnover of the canal. Kovaleski gives an objective perspective by presenting both sides of the split on the U. S. legacy. Regardless of the sources the literature presents a consensus – the overall presence of the United States turned out to be prosperous for Panama, but great gaps in prosperity exist and continue to create a divide among different groups residing in Panama (e. . , Conniff, 1990; Falcoff, 1999; Fraser, 2000; Jackson, 2011, Leis, 2004; Major; 1990). They are still a nation seeking their nationality, they are still a people finding their place in the world, and they are progressing consistently in the fight against poverty, homelessness, and indigence. I used two books that contain the history of Panama from 1903 through 1979 and 1990 titled Panama Canal Zone (Major, 1990), and Panama since 1903 (Conniff, 1990), to establish a solid historical account of early Panamanian history.

Both cover the beginnings of Panama, the Panama Canal, and United States interest in the isthmus. The latter book contains more specific information regarding the internal politics of the occurrences between the U. S. , Panama and their dealings with each other. The information provided takes a closer look at the different groups within Panama that were vying for political and social equality or control, such as the Panamanian elite through money and influence, the West Indians that were on the silver pay scale, and the U. S. citizens that controlled The Canal Zone for so many years.

Since my parameters for the study comprise of the entire Panamanian history since 1850, these two books are the backbone of my historical account of the relationship between Panama and the United States. While this all gives a solid background for the study of Panamanian history I had to utilize many current articles, listed in the introduction, and one interview, with journalist Eric Jackson, to give ample perspective on the true nature of the U. S. – Panamanian relationship. Although the current relationship is cordial between the U. S. nd Panamanian governments there are many nuances of which to be aware. According to Eric Jackson (2011), lead journalist at The Panama News there are some hard feelings from some Panamanians regarding the invasion to oust General Noriega from his militarily acquired presidency. The proposed Free Trade Agreement between Panama and the United States does have some Panamanians in an uproar (Jackson, 2011). Jackson (2011) noted that the agricultural industry could suffer from such an agreement, but the current president continues to try to finish FTA negotiations.

However according to Hornbeck (2011) from the U. S. perspective this seems like a way to help reduce the cost of living for Panamanian citizens. The subsequent reduction in food costs means lower costs of living due to food imports from the USA and the availability for Panama to invite corporate interests to set up manufacturing plants – much like Mexico after the North American Free Trade Agreement (Jackson, 2011). According to Jackson (2011) there is a significant level of corruption in the current President Martinelli’s administration.

This information is not easily attained because Martinelli uses some rather heavy-handed techniques to cover up the truth. This is not noted anywhere in any articles from The Panama Guide newspaper, or in Panama: Political and Economic Conditions and U. S. Relations (Sullivan, 2011) which gives a solid account for most of the current and relevant occurrences in Panama. The report by Sullivan (2011) tackles the current business relationship between the United States and panama regarding monetary support for counternarcotic operations in Central America.

Sullivan (2011) also includes in his report the money given to panama to run The Canal, a brief history of The Canal, and yet another account of the invasion spurred by Manuel Noriega in 1989. Literature Review: Conclusion The historical accounts of Panama from Major (1990), Conniff (1990), and Sullivan (2011) all agree. I found no inconsistencies between the histories; although the accounts are told from a different perspective with a different objective in mind. Eric Jackson, from The Panama News, is the only source from which I can draw different stories than told by American or mainstream Panamanian news in regards to the U.

S. – Panamanian relationship. Although his perspective is different from mainstream sources he still agrees that the overall relationship between the two countries is courteous. The literature reveals that Panamanians are not one sided, either liking or disliking the United States, its legacy in Panama, or its citizens. Great divides are present between the rich and poor, those who think positively or negatively about the current President, and those who think positively or negatively about the United States.

Panama is still trying to establish their national identity (Jackson, 2011) after such a brief time running their own country. Many Panamanians still feel like they want more of a presence of the U. S. armed forces, while others detest the “Satanic” (Kovaleski, 2000, A29) legacy. The story historical nature of Panama and the United States can only be told in conjunction with the Panama Canal. It is at the heart of the country, and it is at the heart of hardship, conflict, and a revolution that set an ambitious people on the path to independence in the 21st century.

Who knows what could have been if the United States never approached the isthmus to build a canal. Maybe Nicaragua would have had hundreds of years of contentious history with the United States. Maybe a canal would have never been built and Central America would not have had to deal with the U. S. meddling in its affairs. Nevertheless this is not the case and Panama is on a course with greatness with regards to their relatively progressive culture and strong work ethic. DATA COLLECTION AND ANALYSIS The process that I used to collect data consisted of several methods.

First, I conducted one interview with a journalist Eric Jackson at The Panama News. Second, I read and reviewed two congressional research papers and juxtaposed the accounts of these two papers against a long list of Panamanian news articles from The Panama News, the interview with the Panamanian journalist Eric Jackson, and various articles published in the United States regarding Panama and the Panama Canal. The observation part of my process compared and contrasted the interview with the documents that I acquired during my research.

The congressional research provides information to the White House regarding various topics; in this case the topics are Panama: Political and Economic Conditions and U. S. Relations (Sullivan, 2011), and The Proposed U. S. – Panama Free Trade Agreement (Hornbeck, 2011). The collection of the articles from U. S. and Panamanian news sources, the interview of the journalist Eric Jackson, and the two congressional reports provide background to piece together an objective perspective based on my observation of the events of Panama from 1990, until the present.

Eric Jackson is a journalist for The Panama News who covers contrasting perspectives on the events surrounding politics in Panama. He is an excellent source of information because he does not represent the mainstream news and information being publicized by U. S. researchers or journalists. The Panama News started publication in 1994 by Eric’s old little league coach. Eric kept The Panama News running after the original owner could no longer continue running the business. Currently The Panama News has about 60,000 readers: Caribbean blacks that live in the USA with roots in Panama, people who went to Panama due to the U.

S. military, many rich Panamanians that are educated in English, and “Zonians,” which is a term for the people who lived and occupied the area around the Panama Canal before its turnover to the Republic of Panama. Eric notes that his newspaper is very liberal and tends to report on the perspectives of the people of Panama, as opposed to more conservative newspapers that tend to represent the upper class and North American perspectives. According to Eric Jackson, the journalism of The Panama News exists during a time of great peril.

Martinelli, the current President, dislikes any news that could refute the perspective he wishes to project to the Panamanian people. Jackson said that Martinelli attacks journalists who do not present his side of the story by filing false criminal charges against them. Jackson, being a journalist that prefers to tell what he believes is the real story of Panama, makes an excellent source from which to draw an alternative perspective. The interview was conducted electronically and consisted of thirteen questions that Jackson answered at his convenience, and lasted about three days (See appendix A for interview questions).

The information provided to me by Eric told a much different story about Panama than is otherwise portrayed to the rest of the world by mainstream Panamanian and North American news sources. The stories told by The Panama News and Eric Jackson tells of a corrupt and near-lawless system designed to paint a picture of order and progress. Findings The history of Panama and the United States started as early as 1850 when the United States took unilateral control of the Panama Canal area (Major, 1990). A short five years after this proclamation the U. S. made its way down to panama via the U. S. owned Panamanian railroad (Major, 1990). The Panamanian railroad is the tool that allowed the U. S. to build the Panama Canal because of the ability to ship supplies to and from Panama and the U. S. At this time Panama was not its own sovereign nation, it was a part of Colombia. The United States and Colombia then began discussions to make a treaty called the Hay-Herran treaty (Major, 1990). This treaty would grant the U. S. extensive rights to build and operate a canal through Panama. Hay-Herran was approved and ratified through the U. S. Senate, but not the Colombian Senate (Major, 1990).

Colombia thought they would try their hand in negotiating terms that would be more suitable for them, but resulted in a U. S. -incited Panamanian secession from Colombia (Major, 1990). The United States thought it would be prudent to station warships outside of Panama City, the Western entrance and exit to the proposed canal, and the city of Colon, the Eastern entrance and exit (Major, 1990). This strategic move allowed Panamanians to secede from Colombia with minimal conflict or casualties. Teddy Roosevelt was later quoted saying “I took the Isthmus…we stole it fair and square (Major, 1990). For the United States this was a major victory in securing waters in the Atlantic and Pacific to reduce shipping costs, improving Naval warship mobility between the two great oceans, and undertaking the biggest engineering feat the world has seen. For the Panamanian people it meant trading one oppressive entity for another, with the thought of independence almost unfathomable (Major, 1990). As of 1904 Panama had only one function for the U. S. : efficient working of the waterway (Major, 1990). 1914 saw the opening of the original Panama Canal (Major, 1990). U. S. hips were exempted from tolls and the Canal operated independently from the U. S. mainland (Major, 1990). At this time the United States had control of the Panama Canal and the Canal Zone. This is when the shipments of black laborers from the West Indies were stopped. Since The Canal was complete there would not be a need for any more workers from the Barbados region. The employees working in, on, and around the Panama Canal had two designated pay grades: gold and silver. Those paid in gold had a higher status, while those paid in silver had a much lower status.

The people getting paid in gold were North Americans, and the people getting paid in silver were the West Indian blacks imported as laborers by the United States (Major, 1990). Where are the Panamanian citizens in this equation? Nowhere mostly. The fact is Panamanians did not have the abilities that the West Indians had physically, nor the technical skills to operate The Canal like the North Americans had. This disparity in income and quality of life was the source of significant strife amongst the three groups for many years to come.

The tensions between the groups became even more strained when U. S. representatives recognized the legitimacy and practicality of awarding adequate incomes to Panama’s elite (Conniff, 1990). This did not have good consequences however, because shortly after the opening of The Canal, 1920, the first strike broke out amongst West Indian silver-workers. The strike failed, but would set the tone for a long fight to claim, and attain equality for Panamanian workers (Conniff, 1990). Meanwhile, there were numerous groups and subgroups of people unwilling to blend with the rest (Conniff, 1990).

The West Indians were a diverse group of migrants, but were lumped into a single group by the locals called Chombos (Conniff, 1990). They formed their own churches, schools, sports clubs, and labor unions. The 1920’s saw increasing protests from silver-workers in The Panama Zone and banana workers in the Bocas. In 1927 the protestors helped convince the National Assembly, the legislative body in Panama, to reject a treaty on the Canal Zone proposed by the United States (Conniff, 1990). The beginning of the 1930’s saw the rise of two brothers intended on changing all of the injustices experienced at the hands of the United States.

The famed Arias brothers staged a coup in 1931, and succeeded (Conniff, 1990). According to Conniff (1990), Arnulfo Arias emerged as the hero of the coup, and his cohort Ricardo Alfaro became the interim administrator. Although the coup worked, not much happened for workers rights in its wake. In 1934 the United States proposed a third set of locks for the exclusive disposal of the U. S. Navy so that it could operate on the Atlantic and Pacific Oceans in a short time compared to traveling around the horn south of Chile, or having to wait for other ships making their way through The Canal (Major, 1990).

In March 1936, due to the protests of the Panamanian people, the U. S. surrendered the right to take land outside of The Zone on demand (Major, 1990). The U. S. was also required to consult Panama in the event of an international crisis where they may need to utilize the land (Major, 1990). Also during the 1930’s, the Arias brothers were busy reforming their country into something a little bit more palatable to the average Panamanian citizen. Arnulfo was the president from 1930 -1935, and his brother Harmondio succeeded him (Conniff, 1990). Harmondio was able to negotiate an end to the U.

S. ’s protectorate status over Panama, a stipend for retired silver-workers, and created a National University in 1935. Since there cannot be reelections in Panama, Arnulfo won the next candidacy – though through some rather violent and corrupt means (Conniff, 1990). Arnulfo then suspended the constitution, held a plebiscite, and promulgated a new charter on January 2, 1941 (Conniff, 1990). Arnulfo gave women the right to vote and hold public office, but tens of thousands of immigrants and children lost rights they had in the previous legislation (Conniff, 1990).

He also limited foreign ownership of retail commerce, and required that certain establishments employ native Panamanians. Arnulfo and the Panamanian people linked all their demands to The Canal; they wanted better job opportunities, reinforcement of commercial concessions, a share in the toll revenues, and increased annuity. During this time in history there was a major conflict occurring worldwide with the Germans, United States, Japan, and a sizeable portion of Europe and Asia. Somehow Arias thought it would be a good idea to befriend Axis diplomats and declined to join the Society of Friends of the USA (Conniff, 1990).

This led to Arias being ousted from power and imprisoned. He then fled the country during World War II. Meanwhile stateside, Congress decided to fund a two-ocean navy (Major, 1990). This, combined with the construction of the new Midway class carriers that could not pass through the third set of locks, brought questions of Panama’s necessity to the forefront (Major, 1990). Furthermore, in 1945 the nuclear strikes on Japan destroyed the standing of the canal as a national asset of the first rank due to a two ocean navy and the U. S. ’s new found ability to strike anywhere in the world with a push of a button (Major, 1990). U. S. itizens working in, on, and around the Panama Canal had been purchasing goods at the commissaries this entire time (Major, 1990). This was another major point of contention with the Panamanians because they grew such fresh food. Unfortunately for them the U. S. has the ability to provide food much cheaper for American citizens, which negated any hopes of them purchasing locally grown food (Major, 1990). This added hit to the local economy, and the fact that the quality of life of Panamanians is markedly lower than U. S. citizens, led to an uprising that would not stop until Panama had it in writing that they owned and operated all of Panama.

In an attempt to ease tensions, the U. S. decided to replace gold and silver with “U. S. ” and “local” rates (Major, 1990). This did not have the desired effect because it still segregated U. S. workers and the few Panamanians making U. S. rates, from everyone else making the local rates. In 1956 the Suez Canal came under the cognizance of Egypt – spurring a strong militant uprising in Panama (Major, 1990). Just three years after Panamanians rioted, stormed The Canal Zone, and raised a Panamanian flag. Following this incident Panama demanded they gain full jurisdiction over The Zone (Major, 1990).

In response to Panama’s cry for independence, North American students erected an American flag within The Zone – riots followed leaving twenty-two dead, three of which were North Americans (Major, 1990). Shortly after this incident an agreement was formed between the U. S. and Panama that stated that the Canal’s operation and jurisdiction were to be shared until 1999 – when Panama would take over (Major, 1990). Furthermore, Panama would get a twenty-five million dollar annuity from tolls (Major, 1990). Putting an all-stop to these plans, Martin Torrijos, Panama’s current president at the time, demanded a more fair deal.

He met with the U. N. Security Council in Panama City to debate a Panamanian resolution calling for a treaty that can fill Panama’s legitimate aspirations (Major, 1990). Panama was able to sway world opinion favorably, and the talks continued to free Panama from the grip of the United States (Major, 1990). Another consideration to pull out of Panama revolved around the fact that Panamanians were becoming increasingly violent, and they are not above destroying The Canal to attain their freedom (Major, 1990). This came at a time after the Vietnam conflict – the U. S. id not want to get into another messy guerilla fight. Finally, in September of 1977, a breakthrough, Jimmy Carter agreed to full Panamanian sovereignty over The Zone, including operations and management after December 31st, 1999 (Conniff, 1990). In the interim, Panama would receive 53 million dollars a year from tolls, and a ten million dollar annuity for services (Major, 1990). In 1978 the Senate approved, with a condition called the Byrd-Baker proviso stating “the U. S. can take any measures it chose – even against Panama – to keep The Canal open” (Major, 1990, p. 66). Jimmy Carter then renegotiated with Panama to keep U. S. forces in the canal area after 1999 (Major, 1999). Finally in September 27th, 1979 the settlement was agreed to by Panama and the United States and The Canal Zone ceased to exist. The only other major historical aspect of the relationship between the United States and Panama not in modern times is the Manuel Noriega incident in the 1980s. Shortly after the Panama Canal Act signed in 1979, General Noriega gained control of the Panamanian Defense Force (Conniff, 1990).

He started making important decisions within Panama behind a facade of civilian governments, drug-money laundering, and ordered assassinations of local officials including the famed Hugo Spadafora – a popular critic of the regime. In 1981 Noriega imposed a peace on the country that collapsed in 1987 (Conniff, 1990). As protests to Noriega arose, the U. S. became increasingly interested in the situation. It was now apparent that Noriega was ruling oppressively with an iron fist – bad for the steady and uninterrupted operations of the Panama Canal. The U. S. as in an awkward position because they were tasked with collaborating with the Panamanian representatives who were speaking up concerning Noriega’s abuses and attempts to overthrow the country’s government (Conniff, 1990). Shortly thereafter the U. S. seized Panamanian assets, refused to supply dollar notes, and closed the banking system (Conniff, 1990). George H. W. Bush entered the oval office shortly after the U. S. decided to put pressure on Noriega. Bush and Noriega were allies and worked closely together in military operations to combat drug smuggling in Central America.

Noriega, thinking that his position would now be stable with his old ally in office, thought that the actions conducted by the U. S. would be reversed (Conniff, 1990). He was wrong and he shortly realized that Bush no longer had his best interests in mind (Conniff, 1990). After a U. S. sanctioned coup failed, the White House ordered plans for a military takeover with approximately 14,000 troops (Conniff, 1990). “It was the first uninvited intervention since Panama’s independence and the largest U. S. military operation since Vietnam” (Conniff, 1990, p. 42). Guillermo Endara, 1989-1994, and Perez Balladares, 1989-1999, were Panamanian Presidents who had the momentous task of restoring functioning political institutions after twenty-one years of military-controlled government. Endara replaced Noriega’s Panama Defense Force with a new civilian defense force (Sullivan, 2011). From 1994-1999 Perez Balladares was president and focused much of his time working on economic reform programs, privatization of state-owned enterprises, institutions for fiscal reform, and labor code reform (Sullivan, 2011).

The first Panamanian female president Moscosco, elected in 1999, presided during the turnover of The Canal. During her presidency she vowed to end government corruption and reduce poverty (Sullivan, 2011). Unfortunately Moscosco was not able to run the economy very well and lost credibility in regards to ending corruption due to many high profile corruption scandals all throughout her presidency (Sullivan, 2011). Martin Torrijos then became president in 2004. He also vowed to end poverty, unemployment, and underdevelopment (Sullivan, 2011).

The next major step in U. S. – Panamanian relations began with Torrijos. Torrijos was responsible for proposing the new canal expansion project currently underway in Panama (Sullivan, 2011). He also proposed a Free Trade Agreement with the United States (Hornbeck, 2011). Torrijos took a tougher stance on crime and implemented many anti corruption reforms, thereby giving the United States more comfort knowing that their long-time business partners were cleaning up their act (Sullivan, 2011).

Unlike their North American counterparts, Panama’s economy did not shrink after the 2009 housing bubble collapse (Sullivan, 2011). Instead their growth slowed significantly in 2009, but in 2010 their economy rebounded with a seven percent growth rate in 2010 (Sullivan, 2011). In 2009 current president Ricardo Martinelli took office (Sullivan, 2011). His heavy-handed approach to governing has earned him much criticism, but his actions reduced poverty rates from 37 percent to 26. 4 percent (Sullivan, 2011).

The political relationship as it stands between the United States and Panama is one of extensive counternarcotic cooperation, assistance to help Panama assure security of the Canal, and a proposed bilateral Free Trade Agreement (Hornbeck, 2011). The U. S. will give $20. 6 million in bilateral assistance for the year of 2011, and $2. 6 million for the year 2012 (Sullivan, 2011). This assistance does not include assistance provided to Central American countries to combat drug trafficking, gangs, and organized crime (Sullivan, 2011). In 2007 the U. S. and Panama signed a bilateral Free Trade Agreement (Hornbeck, 2011).

Two stipulations required to continue the FTA is that the United States wants Panama to reduce the number of workers required to start a union from 40 to 20, and wants Panama to relinquish its status as a tax haven (Hornbeck, 2011). Currently Panama is working with the U. S. to find a mutually acceptable solution to both of these issues (Hornbeck, 2011). Although the current relationship between the U. S. and Panamanian governments remains one of cooperation, the effects of the U. S. ’s imposition on Panama and The Canal Zone will be felt for generations.

According to Eric Jackson (2011) not all Panamanians are happy about the canal expansion project. He claims that some people believe this will send Panama into a debt from which they may not be able to recover (Jackson, 2011). When the expansion project is combined with the Free Trade Agreement, Jackson (2011) thinks that this will ruin the agriculture industry in Panama – much like the North American Free Trade Agreement destroyed Mexico’s agricultural industry. Jackson (2011) said that relations between Panama’s rich and the United States are very favorable – Panama has a history of the wealthy accepting high incomes from the United States.

This still creates divides within the country, particularly between Panama’s working poor and poor, including the West Indians brought here against their will, currently living in ghettos of Colon and Panama City (Jackson, 2011). On the surface the relationship between the U. S. and Panama is cordial, but with a few negative perceptions from various Panamanians throughout the country. Although many Panamanians were angry about the invasion to take Noriega out of power, and saw it is an imperialist action for which the United States has a reputation, U.

S citizens are still not disliked (Jackson, 2011). Aside from a few U. S. citizens that flee to Panama to escape debts or taxes, the Panamanian’s approval for the average American is still relatively high (Jackson, 2011). Within Panama there are still problems with having a solid rule of law, whereas in the United States, according to Jackson (2011), “you live in a society that’s too damned litigious and which uses extreme applications of the criminal law way too often. ” He continues with “think about a society [Panama] that runs on bribery in which the rule of law hardly applies. Their respective cultures put the two countries at philosophical odds, but the work Panama appears to be putting into addressing U. S. concerns suggests their business relationship will continue well into the future. Analysis This small country, located on an isthmus of such great importance for various reasons, has been a story of hardship, regress, political and military strife, progress, and the ability to overcome all odds to forge their place in the world. Coming out of the imposed shadow of the United States has been a long struggle for Panama since the U. S. occupation of Panama and The Canal Zone in the early 1900’s.

Through a serious of growing pains, protests, integrations, fragmentations, and times of solidarity – Panama have been victorious. Panamanians have shown the courage, strength and ability to slowly take control of their country. They were able to prove to the United States and the rest of the world that not only can they operate the Panama Canal, but they can do so just as well as the United States. There are many successes Panama claims; however lawlessness still presides in portions of Panama that are difficult to control, such as the Colombian-Panamanian border, and the Panamanian political world.

Panama is still struggling to find and realize their true nationality – something that can only be possible if poverty and underdevelopment are addressed. According to Jackson (2011) the current president Martinelli, is not doing a very good job running the canal. He also refers to Martinelli’s unscrupulous behavior regarding journalists in the country (Jackson, 2011). Martinelli has been throwing criminal charges at journalists who do not to promote his side of whichever story that concerns him (Jackson, 2011).

Also, according to Jackson (2011) Martinelli has decreased canal efficiency by abolishing the apprenticeship program, evicting boat clubs, and monkey rehabilitation and recreation assets. Additionally, “Martinelli began canal hiring utilizing the patronage/ nepotism system” (Jackson, 2011). It is rumored that Martinelli took this action as a means of controlling information (Jackson, 2011). Martinelli has redefined what an accident is in the Panama Canal leading to much lower reports of incidents (Jackson, 2011). His redefinition resulted in a perceived dramatic decline in accidents – which the U. S. overnment heralded as a great success. Although the United States and Panama have had a long and contentious relationship, the wealthy classes have benefitted. Many wealthy citizens in Panama are now second or third generation businesspeople who have amassed wealth by contributing significantly to the Panamanian Gross Domestic Product. These businesses include companies solely operating because of the Panama Canal. Although The Canal and its related service industry is very lucrative, I believe that Panama should not pursue the Free Trade Agreement, and they should invest more in diversifying their sources of income.

Panama has invested immensely into the operation and related services of the Panama Canal. This reduces their diversity of the sources of income for Panama thereby making them less sustainable. The United States does not stand to gain a significant amount of money from the Free Trade Agreement when compared to other trade agreements they currently have with other countries, but in lieu of the current economic crisis I doubt that the United States would turn down a chance to ship their goods just to leave the opportunity open for Panama to export agricultural goods. CONCLUSION

The current state in Panama is relatively good. Crime is relatively low if one does not associate with narcotic traffickers. President Martinelli has decreased the poverty rate and vowed to continue the Canal expansion project while reducing corruption. Counternarcotic operations continue to secure the border between Panama and Colombia providing a buffer between Colon and Panama City and the Colombian border – where crime can be very high. It is arguable that the Free Trade Agreement will help Panama – something that is hotly contested between Martinelli and critics of the FTA.

It could have serious consequences for the agriculture of Panama. Although there are negative sentiments over recent U. S. immigrants evading taxes and debts, the Panamanian people, for the most part, are still widely accepting of the gringos from the north. Many social divides exist, but are being worked on at a much better pace than the United States ability to do the same in their own country. The ugly of Panama resides in its inherent corruption due to the constitution that is still in place after the Arias administration that developed a new charter (Jackson, 2011).

The rule of law is not as strict in Panama therefore corruption and bribery are normal ways of conducting business (Jackson, 2011). As for the Panama Canal, time will tell if its first expansion since the United States left will be successful. If successful, Panama will be well on its way to prosperity. Overall the United States and Panama are cordial, but with many impediments due to the long and tumultuous past. Most people born before the turnover of the Panama Canal to Panama have strong opinions in opposition to the U. S legacy.

However, the current generation has a more optimistic attitude towards the United States. The newer generations are spawning industrious and motivated youth that will undoubtedly take Panama into a prosperous future. They are the key to mend the painful history between Panama and the U. S. Fortunately Panamanians have a booming economy, and educated and motivated workforce, and a new set of locks for the canal to be completed in 2014 to propel them into the 21st century. Indeed the future is looking bright for Panama. Appendix A (Eric Jackson Interview, May 10th – 13th 2011) 1.

How do you feel the relationship between the Panamanian people and the United States stands now? 2. How do the different ethnic groups in Panama feel about Just Cause and the release of the Panama Canal operations to the USA? 3. What do you mean it (The Panama Canal) is not well run? Is it a corruption thing? Is it the management of the people who operate it? Is it the skill level of the people who operate it? 4. How do the various groups in Panama feel about how the USA handled the Just Cause operation and the entirety of the Noriega situation? 5. How has the USA influenced current internal social disparities? . Does the USA have an overall positive or negative influence over the day to day lives of the canal, people, and government? 7. Do you think the canal expansion project will affect Panama and its people in the years to come? 8. Can you please explain how the Free Trade Agreement will affect agriculture in Panama? What are all the positives and negatives of such an agreement? 9. Is Martinelli the only official that has prohibited free journalism in Panama? 10. Does the aid that the United States gives Panama actually make it to the various public health and assistance programs? 11.

What is public opinion regarding the Panama Canal, the United States, and the current Martinelli administration? 12. Is there still a lot of tension between the groups beneath the surface? 13. Please tell me a brief story of Panama and the United States since operation Just Cause up until now including which highlights you think are most important in regards to US – Panamanian relations, the culture and political groups, or anything else that is significant. References Conniff, M. (1990) “Panama since 1903”, “Latin America since 1930: Mexico, Central America and the Caribbean”, Eds.

Leslie Bethell, Cambridge University Press, Cambridge Histories Online, Cambridge University Press. Retrieved 14 April 2011, DOI:10. 1017/CHOL9780521245180. 015 Falcoff, M. (1999) “Panama’s Long Goodbye. ” The American Spectator. American Enterprise Institute for Public Policy Research. http://www. aei. org/article/10816. Retrieved May 3, 2011. Fraser, J. (2000) “Panama owns canal, related headaches: Concerns include U. S. military debris spillover from Colombia’s civil war. ” National Catholic Reporter, 8-9. Hornbeck, J. F. (2011) “The Proposed U. S. – Panama Free Trade Agreement. ” Congressional Research Service. ww. fas. org/sgp/crs/row/RL32540. pdf. Retrieved May 3, 2011. Jackson, E. (2010) Behind the smiles: Problems in US-Panamanian relations, but their scope and depth is debatable. The Panama News. http://www. thepanamanews. com/pn/v_16/issue_06/news_06. html. Retrieved April, 11, 2011. Kovaleski, S. F. (2000). Panamanians split on legacy of U. S. stay, fierce patriotism coupled with worry about the future. The Washington Post. http://www. latinamericanstudies. org/panama/legacy. htm. Retrieved May 11, 2011. Leis, R. (2004). About invasions and memory lapses. The Panama News. http://www. thepanamanews. om/pn/v_09/issue_24/opinion_02. html. Retrieved May 13, 2011. Leis, R. (2004) The dangers of national security. The Panama News. http://www. thepanamanews. com/pn/v_10/issue_23/opinion_10. html. Retrieved May 13, 2011. Major, J. (1990) “The Panama Canal Zone, 1904‚1979”, “Latin America since 1930: Mexico, Central America and the Caribbean”, Eds. Leslie Bethell. Cambridge University Press, 1990, Cambridge Histories Online, Cambridge University Press. Retrieved14 April 2011, DOI:10. 1017/CHOL9780521245180. 016 McMillan, R. , Berkman, H. , Sosa, J. (2011) Panama Canal expansion no “disaster. Latin Business Chronicle. http://www. latinbusinesschronicle. com/app/article. aspx? id=4762. Retrieved May 13, 2011. Miller, S. (2009). An opportunity to enhance regional security. Center for American Progress. http://www. americanprogress. org/issues/2009/07/panama. html. Retrieved May 2, 2011. Morton, R. (1999) Insight on the News. Washington: Apr 5-Apr 12, 1999. Vol. 15, Iss. 13; pg. 29, 2 pgs. http://proquest. umi. com/pqdweb? did=40034445&Fmt=3&clientId=19912&RQT=309&VName=PQD. Retrieved April 11, 2011. Reagan, B. (2009). The Panama Canal’s Ultimate Upgrade. Popular Mechanics.

Http://www. popularmechanics. com/science/4212183. Retrieved April 11, 2011. Sullivan, M. P. (2011) “Panama: Political and Economic Conditions and U. S. Relations. Congressional Research Service. www. fas. org/sgp/crs/row/RL30981. pdf. May 3, 2011. Tenner, E. (2011). Digging across Panama. Humanities, 32(1), 28-32. Retrieved from EBSCOhost. Retrieved April 14, 2011 Watkins Jr. , D. W. , & Moser, D. A. (2006). Economic-Based Optimization of Panama Canal System Operations. Journal of Water Resources Planning & Management, 132(6), 503-512. doi:10. 1061/(ASCE)0733-9496(2006)132:6(503)

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