Panamanian history which has been shaped by the recurrent theme of transisthmian commerce, looked now at the possibility of a canal to replace the difficult overland route. In the 1520s and 1530s, the Spanish crown had ordered surveys of the isthmus to determine the feasibility of such a canal, but the idea was soon abandoned.
From 1880 as engineering challenges caused by frequent landslides, slippage of equipment and mud. In the end the company failed in a spectacular collapse which caused the downfall and incarceration of many of its financial backers in France. A new company was formed in 1894 to recuperate some of the losses of the original canal company.
U.S. in Panama
U.S. President Theodore Roosevelt convinced U.S. Congress to take on the abandoned works in 1902, while Colombia was in the midst of the Thousand Days' War. During the war there were at least three attempts by Panamanian Liberals to seize control of Panama and potentially achieve full autonomy, including one led by Liberal guerrillas like Belisario Porrasand Victoriano Lorenzo, each of whom was suppressed by a collaboration of Conservative Colombian and U.S. forces under the Mallarino–Bidlack Treaty. By the middle of 1903, the Colombian government in Bogotá had balked at the prospect of a U.S. controlled canal under the terms that the Roosevelt administration was offering. The U.S. was unwilling to alter its terms and quickly changed tactics. According to the terms of the treaty, the U.S. was to pay the stockholders of the French company that had tried to build the canal across Panama the sum of $40,000,000.
The Colombian Senate's rejection of the treaty confronted these French investors with the prospect of losing everything. At this point, the French company's chief lobbyist (and a major stockholder), Philippe Bunau-Varilla went into action. Justly confident that the Roosevelt administration would support his initiative, from a suite in the Waldorf-Astoria hotel in New York, Bunau-Varilla arranged for the Panama City fire department to stage a revolution against Colombia. The United States Navy gunboat USS Nashville was dispatched to local waters around the city of Colón, where a force of 474 Colombian soldiers had landed and was preparing to cross the isthmus and crush the rebellion. Nashville's commanding officer, Commander John Hubbard, sent a small party ashore and, with the support of the American superintendent of the Panama Railroad, kept the Colombians from taking the train to Panama City. On November 3, 1903, after 57 years of policing Bogotá's interests, the United States had sided with Panama.
Less than three weeks later, on November 18, 1903, the Hay–Bunau-Varilla Treaty was signed between Frenchman Philippe Bunau-Varilla, who had promptly been appointed Panamanian ambassador to the United States, representing Panamanian interests, and the United States Secretary of State John Hay. The treaty allowed for the construction of acanal and U.S. sovereignty over a strip of land 10 miles (16 km) wide and 50 miles (80 km) long, (16 kilometers by 80 kilometers) on either side of the Panama Canal Zone. In that zone, the U.S. would build a canal, then administer, fortify, and defend it "in perpetuity."
Roosevelt’s explanation of the U.S.’ role in the region was made abundantly clear throughout the many speeches and addresses he gave from 1902 on. First he invoked the Mallarino–Bidlack Treaty; second, he made it clear that Colombia had rejected his government's offers for a deal; and finally, he demonstrated that Colombia had never been capable of preventing Panama from regaining its sovereignty. On his December 7, 1903 Third Annual Message to the Senate and House of Representatives he enumerated an extensive list of interventions the U.S. armed forces had made in Panama since 1850 explaining:
The above is only a partial list of the revolutions, rebellions, insurrections, riots, and other outbreaks that have occurred during the period in question; yet they number fifty-three for the fifty-three years...
And he added:
In short, the experience of over half a century has shown Colombia to be utterly incapable of keeping order on the Isthmus. Only the active interference of the United States has enabled her to preserve so much as a semblance of sovereignty. Had it not been for the exercise by the United States of the police power in her interest, her connection with the Isthmus would have been sundered long ago.
It is evident that treaties like the Bidlack-Mallarino Treaty were not considered unconstitutional, or illegal, at the time given the fact that they included interference of the U.S. government in internal matters of a sovereign country. It is also evident that Roosevelt speeches made clear that the United States decided to unilaterally break with the Bidlack-Mallarino treaty and, instead of solving the internal Panamanian problem as the treaty forced them to do, helped with the separation of Panama from Colombia. Thus enforcing that part of the treaty which was of interest to the United States, namely, "It granted the U.S. significant transit rights over the Panamanian isthmus"
It is a common mistake to call the 1903 events ‘Panama’s independence from Colombia’. Panamanians do not consider themselves former Colombians. They celebrate their independence from Spain on November 28, 1821; and November 3, 1903, the separation from Colombia.
The Panama Canal was built by the U.S. Army Corps of Engineers between 1904 and 1914; the existing 83-kilometer (50-mi.) lock canal is considered one of the world's greatest engineering triumphs. On January 5, 1909 the government of Rafael Reyes in Colombia signed and presented to its Congress a treaty that would officially recognize the loss of its former province, but the matter was dropped due to popular and legislative opposition, without any ratification being achieved. Different negotiations continued intermittently until a new treaty was signed on December 21, 1921 which finally and formally accepted the independence of Panama.
While Roosevelt’s ‘walk softly and carry a big stick’ as well as the Canal Company’s apartheid administrative policies, early on, have been the subject of much criticism, the fact is that, beyond the financial injection to the country’s economy and workforce, the changes brought about by the canal venture were largely positive for Panama. Well aware of the need to sanitize the area before and during the construction, engineers developed an infrastructure that guaranteed the treatment of potable water, sewage, and garbage that encompassed both the Canal Zone as well as the cities of Panama and Colon. High standards employed in construction techniques, transportation systems and landscaping maintenance operations for the Canal Zone's urban development employed during the first half of the 20th century, had no parallel in tropical regions in the hemisphere. The work of Dr.William Gorgas deploying the techniques pioneered by Cuban physician Carlos Finley made it possible to rid the area of yellow fever between 1902 and 1905. Gorgas' work in the sanitation of the Canal Zone and the cities of Panama and Colon eventually made him a sought after authority internationally.
The entire Panama Canal, the area supporting the Canal, and remaining US military bases were turned over to Panama on December 31, 1999.
Military coups and coalitions
Jimmy Carter's speech upon signing the Panama Canal treaty, September 7, 1977.
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From 1903 until 1968, Panama was a republic dominated by a commercially-oriented oligarchy. During the 1950s, the Panamanian military began to challenge the oligarchy's political hegemony. The January 9, 1964 Martyrs' Day riots escalated tensions between the country and the U.S. government over its long-term occupation of the Canal Zone. Twenty rioters were killed, and 500 other Panamanians were wounded.
In October 1968, Dr. Arnulfo Arias Madrid was elected president for the third time. Twice ousted by the Panamanian military, he was again ousted (for the third time) as president by the National Guard after only 10 days in office. A military junta government was established, and the commander of the National Guard, Brig. Gen. Omar Torrijos, emerged as the principal power in Panamanian political life. Torrijos' regime was harsh and corrupt, and had to confront the mistrust of the people and guerrillas backing the populist Arnulfo Arias. However, he was a charismatic leader whose Socialist domestic programs and nationalist foreign policy appealed to the rural and urban constituencies who were largely ignored by the oligarchy.
On September 7, 1977, the Torrijos–Carter Treaties were signed by the Panamanian head of state and U.S. President Jimmy Carter for the complete transfer of the Canal and the fourteen US army bases from the US to Panama by 1999. These treaties also granted the U.S. a perpetual right of military intervention. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the intervening years.
General Manuel Noriega
Torrijos died in a mysterious plane crash on August 1, 1981. The circumstances of his death generated charges and speculation that he was the victim of an assassination plot. Torrijos' death altered the tone but not the direction of Panama's political evolution. Despite 1983 constitutional amendments, which appeared to proscribe a political role for the military, the Panama Defense Forces (PDF), as they were then known, continued to dominate Panamanian political life behind a facade of civilian government. By this time, Gen. Manuel Noriega was firmly in control of both the PDF and the civilian government, and had created the Dignity Battalions to help suppress opposition.
Despite undercover collaboration with Ronald Reagan on his Contra war in Nicaragua (including the infamous Iran-Contra Affair), which had planes flying arms as well as drugs, relations between the United States and the Panama regime worsened in the 1980s.
The United States froze economic and military assistance to Panama in the summer of 1987 in response to the domestic political crisis and an attack on the U.S. embassy. General Noriega's February 1988 indictment in U.S. courts on drug-trafficking charges sharpened tensions. In April 1988, President Reagan invoked the International Emergency Economic Powers Act, freezing Panamanian Government assets in U.S. banks, withholding fees for using the canal, and prohibiting payments by American agencies, firms, and individuals to the Noriega regime. The country went into turmoil. When national elections were held in May 1989, the elections were marred by accusations of fraud from both sides. An American, Kurt Muse, was apprehended by the Panamanian authorities, after he had set up a sophisticated radio and computer installation, designed to jam Panamanian radio and broadcast phony election returns. However, the elections proceeded as planned, and Panamanians voted for the anti-Noriega candidates by a margin of over three-to-one. The Noriega regime promptly annulled the election and embarked on a new round of repression. By the fall of 1989, the regime was barely clinging to power.
When Guillermo Endara won the Presidential elections held in May 1989, the Noriega regime annulled the election, citing massive US interference. Foreign election observers, including the Catholic Church and Jimmy Carter certified the electoral victory of Endara despite widespread attempts at fraud by the regime. At the behest of the United States, the Organization of American States convened a meeting of foreign ministers but was unable to obtain Noriega's departure. The U.S. began sending thousands of troops to bases in the canal zone. Panamanian authorities alleged that U.S. troops left their bases and illegally stopped and searched vehicles in Panama. During this time, an American Marine got lost in the former French quarter of Panama City, ran a roadblock, and was killed by Panamanian Police (who were then a part of the Panamanian Military). On December 20, 1989 the United States troops commenced an invasion of Panama. Their primary objectives were achieved quickly, and the combatants withdrawal began on December 27. The US was obligated to hand control of the Panama Canal her to Panama on January 1 due to a treaty signed decades before. Endara was sworn in as President at a U.S. military base on the day of the invasion. General Manuel Noriega is now serving a 40-year sentence for drug trafficking. Estimates as to the loss of life on the Panamanian side vary between 500 and 7000. There are also unproven claims that U.S. troops buried many corpses in mass graves (which have never been found) or simply threw them into the sea. For different perspectives, see references below. Much of the Chorillo neighborhood was destroyed by fire shortly after the start of the invasion due to the use of incendiary devices being tested by the United States Military, as well as deliberate burning by fleeing members of the Panamanian government.
Following the invasion, President George H. W. Bush announced a billion dollars in aid to Panama. Critics argue that about half the aid was a gift from the American taxpayer to American businesses, as $400 million consisted of incentives for U.S. business to export products to Panama, $150 million was to pay off bank loans and $65 million went to private sector loans and guarantees to U.S. investors.
Politics and institutions after Noriega
In the morning of December 20, 1989, a few hours after the beginning of the invasion, the presumptive winner of the May 1989 election, Guillermo Endara, was sworn in as president of Panama at a U.S. military installation in the Canal Zone. Subsequently, on December 27, 1989, Panama's Electoral Tribunal invalidated the Noriega regime's annulment of the May 1989 election and confirmed the victory of opposition candidates under the leadership of President Guillermo Endara and Vice Presidents Guillermo Ford and Ricardo Arias Calderón.
President Endara took office as the head of a four-party minority government, pledging to foster Panama's economic recovery, transform the Panamanian military into a police force under civilian control, and strengthen democratic institutions. During its 5-year term, the Endara government struggled to meet the public's high expectations. Its new police force proved to be a major improvement in outlook and behavior over its thuggish predecessor but was not fully able to deter crime. In 1992 he would have received 2.4 percent of the vote if there had been an election. Ernesto Pérez Balladares was sworn in as President on September 1, 1994, after an internationally monitored election campaign.
Pérez Balladares ran as the candidate for a three-party coalition dominated by the Democratic Revolutionary Party (PRD), the erstwhile political arm of the military dictatorship during the Torrijos and Norieiga years. A long-time member of the PRD, Pérez Balladares worked skillfully during the campaign to rehabilitate the PRD's image, emphasizing the party's populist Torrijos roots rather than its association with Noriega. He won the election with only 33% of the vote when the major non-PRD forces, unable to agree on a joint candidate, splintered into competing factions. His administration carried out economic reforms and often worked closely with the U.S. on implementation of the Canal treaties.
On May 2, 1999, Mireya Moscoso, the widow of former President Arnulfo Arias Madrid, defeated PRD candidate Martín Torrijos, son of the late dictator. The elections were considered free and fair. Moscoso took office on September 1, 1999.
During her administration, Moscoso attempted to strengthen social programs, especially for child and youth development, protection, and general welfare. Education programs have also been highlighted. More recently, Moscoso focused on bilateral and multilateral free trade initiatives with the hemisphere. Moscoso's administration successfully handled the Panama Canal transfer and has been effective in the administration of the Canal.
Panama's official counternarcotics cooperation has historically been excellent (in fact, officials of the DEA praised the role played by Manuel Noriega prior to his falling-out with the U.S. over his own drug dealing ) The Panamanian Government has expanded money-laundering legislation and concluded with the U.S. aCounternarcotics Maritime Agreement and a Stolen Vehicles Agreement. In the economic investment arena, the Panamanian Government has been very successful in the enforcement of intellectual property rights and has concluded with the U.S. a very important Bilateral Investment Treaty Amendment and an agreement with the Overseas Private Investment Corporation (OPIC). The Moscoso administration was very supportive of the United States in combating international terrorism.
In 2004, Martín Torrijos again ran for president but this time won handily