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It is no secret that Venezuelan President Hugo Chavez is mobilizing politically and militarily to create an anti-U.S. climate in Latin America.   Chavez has now turned his attention to the upcoming elections in Panama; a small but strategically placed country connecting Central and South America. Panama is vital to U. S. economic and military interests. As stated in the August 14th edition of the Americas Report, "the United States is the largest user of the Panama Canal and 15-20% of U.S. trade including 40% of grain exports and 670,000 barrels of oil a day come through the canal." [i]   At present, the favored winner of the Panamanian presidential elections in May, 2009 is Balbina Herrera of the Democratic Revolutionary Party (PRD).   What we know of Herrera bodes poorly for the U.S.   Her behavior, which bears a striking resemblance to that of Chavez, combined with past ties to Noriega, casts a potentially dark shadow on the future of the United States- Panamanian relationship.

Herrera represents the left wing of the PRD.   She is clearly comfortable with dictatorial rule, remaining loyal to her party through two modern dictators; Omar Torrijos and Manuel Noriega. Herrera used to refer to herself as a "Torrejista de Verdad" or true Torrejista.   Yet, she perhaps owes more of her political success to Manuel Noriega. [ii]   Noriega, himself, claims to have hidden in her house during the 1989 U.S. invasion.   As a professional politician educated in Cuba, she has served as head of the National Assembly and as Housing Administrator in the current government of Martin Torrijos, the moderate son of the late dictator Omar Torrijos. As mayor of San Miguelito, during the Noriega years, she became known for threatening to kill protesters on sight using the catch phrase, "protesters seen, and protesters dead." [iii]  

The name "Manuel Noriega" conjures dark memories for most Panamanians.  One of his political opponents was savagely tortured and beheaded.   Noriega’s rule was characterized by violence, corruption, and poverty for those not in the military elite.   Most Panamanians would rather forget him.   Some might like to see him returned to stand trial for crimes against humanity. He has been tried and convicted in Panama for murder, embezzlement, and corruption in absentia.   Political science professor, Miguel Antonio Bernal, believes that there are small pockets among Panama’s political elite who remain sympathetic, if not loyal, and who hope to learn something of Noriega’s fabled hidden fortunes.   According to him, "If Noriega returns to Panama, it’s certain the great number of ‘Noriegists’ that are in the government disguised as ministers, lawmakers, judges, and prosecutors will want to do everything possible to ensure that Noriega doesn’t go to jail,". [iv]   Whether Noriega returns to Panama or not, former friend, Balbina Herrera, has secured her parties nomination despite allegations that she has received money from Hugo Chavez for her campaign.   

Like Hugo Chavez, Herrera won her parties’ primary by drawing an overwhelming number of votes from poor communities.   She told Reuters that, "We are reaching levels of growth of 10 percent, but we need to generate wealth, as well as employment, so we can redistribute it." [v]   Chavez was able to consolidate and build power with the same promises long before he began to deliver results in the form of his now questionable poverty programs.   Thus far, Herrera has distanced herself from Chavez and most likely will continue do so.  Herrera wants to appear as a moderate towards the U.S. given the benefit of Panamanian/U.S. economic relations. Since she needs the support of Panama’s business class, she has vowed to choose a young businessman for her running mate.  As a career politician, Herrera has never participated in the business community and must now create a semblance of economic credibility.

[More]During the primary it was easy for Herrera’s camp to dismiss insinuations of a Chavez connection.   It was obvious that her competition would try to tie her to Venezuela’s leader.   Now, evidence of a money trail is emerging.  Opponents of Chavez in Venezuela are reporting that Chavez is selling oil to Panamanian businessmen well below market price, who in turn, sell it in Panama for huge profits. 

These profits, in turn, have found their way to finance the Herrera campaign. The source of these reports, Mega TV, promises that more details are to come. [vi]   Those who write off concerns of Balbina Herrera’s Chavez like behavior should be reminded that the state of Panama’s democratic institutions are most likely not strong enough to withstand a leader determined to follow the Chavez model.   USAID describes Panamanian democracy as follows:

Panama’s constitution grants strong executive powers to the central government, and gives considerable immunity to legislators, judges, and high-ranking executive branch officials. There are no clear or accessible points of entry for citizens or civil society organizations to influence decision making. Concepts of conflict of interest and transparency are virtually absent from political discourse and practices. Corruption is prevalent and public opinion surveys place corruption as a primary concern, second only to unemployment. In the meantime, press gag laws remain in effect while leadership of the judiciary reform movement falls to a nascent civil society. [vii]

Though a multi-party system, executive power has only been shared among two parties since 1990.   Power is brokered by political elites of which Herrera has been a part for the duration of Panama’s struggle for democracy.   In a best case scenario, electoral realities might keep Herrera moderate and pragmatic for a time.   Due to the popularity of her opponent for the presidency, Ricardo Martinelli, Herrera may be forced to forge some kind of alliance with him in order to win the election. Yet, Herrera has two major advantages.   The PRD party membership makes up almost exactly 20% of the 3.3 million population.   Further, the PRD holds 47 of 78 seats in the unicameral National Assembly.   Martinelli, of the Democratic Change party, rivals her in the polls but comes from a very small party with only 3 seats in the National Assembly.   His differences with important potential allies in the Panamenista Party make an alliance unlikely.   With 47 of 78 seats in the National Parliament, election cycle alliances will not hold much sway over a Herrera administration.

There are three issues of concern that tie Panama to U. S. national security. The first and most vital is the Panama Canal which is now under the control of the Chinese shipping company, Hutchinson Whampoa.  With their close ties to the Chinese military, Hutchinson Whampoa has fifty year leases which give them control over both ends of the Canal.   A strategic Chinese advantage at a global choke point is ominous and in times of conflict could put the U.S. at a serious military disadvantage.   For example:

Admiral Moore, a former chairman of the Joint Chiefs of Staff, claims that in case of military conflict in the Pacific, a large number of logistic ships need uninterrupted access to the canal to support deployed forces.    If the use of the canal were denied, those ships would need to travel an extra 9,000 miles around South America and would not be able to sustain combat effectiveness in the Pacific.   "It is not ‘managing traffic’ under normal circumstances with which I am concerned," said Moore, "it is the ability of a potential enemy to disrupt traffic so as to block military supply, which in times of conflict is 80 to 90 percent dependent upon sea lift capability for there to be any sustained forward effort. [viii]

The strategic importance of the Panama Canal is a clear indication of the seriousness of Panama’s coming May 3rd 2009 election.   In the almost ten years that Hugo Chavez has been in power he has actively forged strong economic and military alliances with China, Russia and Iran.   Even without the flamboyant anti-American rhetoric of Chavez, a Chavista-like leader in Panama could further strengthen the Chinese, Russian, and Iranian influence in a region vital to our economic and military interests.

Secondly, Panama has become fertile ground for drug trafficking, money laundering and gang activity both on land and at sea and could potentially provide a haven for terrorist groups.   If this doesn’t seem urgent, reconsider the implications of Chavez’s fast growing military and economic relationship with Iran.   With Iranian ties comes the same terrorist trade craft and networks that Iran uses in Syria, Lebanon, and Iraq to provide terrorists with training and equipment to wage war on Israel and on American soldiers.   Now consider these executives of terror working together in a synergistic relationship with the FARC and a host of other associates that Chavez is financing throughout the hemisphere.

Finally, the Panamanian/U.S. economic relationship is significant and should be nurtured.   According to current information:

Between 2003 and 2007, U.S. exports of merchandise to Panama grew 102 percent from $1.8 billion in 2003 to $3.7 billion in 2007, outperforming overall U.S. merchandise export growth, which was 60 percent for the same period. The market access and trade disciplines provided by the Agreement offer an opportunity to further expand U.S. exports to a region that is already seeing high export growth rates. In 2007, U.S. – Panama total trade amounted to $4.1 billion with the United States registering a sizable trade surplus of $3.4 billion. U.S. exports in 2007 were $3.7 billion, up 38 percent from the previous year. [ix]

U.S. business leaders with strong ties to Panama should be apprehensive about dealing with someone whose political rhetoric obligates her to fulfill anti-capitalist campaign promises.   Furthermore, US/Panamanian relations have been strained by the delayed ratification of the bilateral Trade Promotion Agreement that President Bush negotiated with Panama which was signed last year.  The agreement stands to greatly improve relations by encouraging greater transparency, accountability, property rights, and customs enforcement.   While the possibility of ratification has been put off until the next U.S. administration, Panama, in the meantime, will likely strengthen ties with Canada, Mexico, and Guatemala.   

Thus far, Herrera has been politically expedient in her quest to gain power.   In order to ally fears, she has distanced herself from Chavez and Noriega.   She is reassuring the business class with her promises of a business-friendly vice-presidential nominee while at the same time promising wealth redistribution to the poor.   With all necessary parties satisfied, the way to the Presidency is opening.   Yet, on what basis should we try to predict how Herrera will behave in office?   Any politician is better judged by past behavior and ideological tendencies than campaign season rhetoric.   The former betrays what a candidate truly wants.   An ideological twin of Chavez and the political child of an aggressor like Noriega will not be friendly to free market principles or to the United States.   Balbina Herrera will join Venezuela’s strategic alliance with China, Russia, and Iran against the United States while continuing to give lip service to the pro-business, U.S. friendly electorate in Panama.


Nicholas Hanlon is an intern at the Center for Security Policy in Washington, D.C. He is a graduate of Georgia State University and has a BA in Political Science with a concentration in International Affairs and a Minor in French.



[i] The Americas Report China’s Control of the Panama Canal Revisited  Yojiro Konno with Nancy Menges Vol. Nº 4 – Issue 33–August 14, 2008  

[iv], Panama braces for Noriega release Associated Press, 08/14/2007
[v], Early Panama election favorite has anti-U.S. past   Andrew Beatty, 0527/2008
[vii] USAID Budget Panama 06/16/20005
[viii] The Americas Report China’s Control of the Panama Canal Revisited  Yojiro Konno with Nancy Menges Vol. Nº 4 – Issue 33–August 14, 2008
[ix] expanded economic opportunities U.S.-Panama Trade Promotion Agreement


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