Panama's history has been shaped by the evolution of the world economy
and the ambitions of great powers. Rodrigo de Bastidas, sailing westward
from Venezuela in 1501 in search of gold, was the first European to explore
the Isthmus of Panama. A year later, Christopher Columbus visited the isthmus
and established a short-lived settlement in the Darien. Vasco Nunez de
Balboa's tortuous trek from the Atlantic to the Pacific in 1513 demonstrated
that the isthmus was, indeed, the path between the seas, and Panama quickly
became the crossroads and marketplace of Spain's empire in the New World.
Gold and silver were brought by ship from South America, hauled across
the isthmus, and loaded aboard ships for Spain. The route became known
as the Camino Real, or Royal Road, although was more commonly known as
Camino de Cruces (Road of the Crosses) because of the frequency of gravesites
along the way.
Panama was part of the Spanish empire for 300 years (1538-1821). From
the outset, Panamanian identity was based on a sense of "geographic destiny,"
and Panamanian fortunes fluctuated with the geopolitical importance of
the isthmus. The colonial experience also spawned Panamanian nationalism
as well as a racially complex and highly stratified society, the source
of internal conflicts that ran counter to the unifying force of nationalism.
Building the Canal
Modern Panamanian history has been shaped by its transisthmian canal,
which had been a dream since the beginning of Spanish colonization. From
1880 to 1900, a French company under Ferdinand de Lesseps attempted unsuccessfully
to construct a sea-level canal on the site of the present Panama Canal.
In November 1903, with U.S. encouragement and French financial support,
Panama proclaimed its independence and concluded the Hay/Bunau-Varilla
Treaty with the United States.
The treaty granted rights to the United States "as if it were sovereign"
in a zone roughly 10 miles wide and 50 miles long. In that zone, the U.S.
would build a canal, then administer, fortify, and defend it "in perpetuity."
In 1914, the United States completed the existing 83 kilometer (50 mile)
lock canal, which today is one of the world's greatest engineering triumphs.
The early 1960s saw the beginning of sustained pressure in Panama for the
renegotiation of this treaty. (See discussion of U.S.-Panama relations
and the 1977 Panama Canal Treaties below.)
Military Coups and Coalitions
From 1903 until 1968, Panama was a constitutional democracy dominated
by a commercially oriented oligarchy. During the 1950s, the Panamanian
military began to challenge the oligarchy's political hegemony. In October
1968, Dr. Arnulfo Arias Madrid, twice elected president and twice ousted
by the Panamanian military, was again ousted 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, but he was a charismatic leader whose populist domestic
programs and nationalist foreign policy appealed to the rural and urban
constituencies largely ignored by the oligarchy.
Torrijos' death in 1981 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.
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 and prohibiting
payments by American agencies, firms, and individuals to the Noriega regime.
When national elections were held in May 1989, 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, and the regime's
paranoia made daily existence unsafe for American citizens.
On December 20, 1989, President George H.W. Bush ordered the U.S. military
into Panama to protect U.S. lives and property, to fulfill U.S. treaty
responsibilities to operate and defend the Canal, to assist the Panamanian
people in restoring democracy, and to bring Noriega to justice. The U.S.
troops involved in Operation Just Cause achieved their primary objectives
quickly, and troop withdrawal began on December 27, 1989. Noriega
eventually surrendered voluntarily to U.S. authorities. He is now serving
a 40-year sentence for drug trafficking.
Panamanians moved quickly to rebuild their civilian constitutional government.
On December 27, 1989, Panama's Electoral Tribunal invalidated the Norieiga
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 Calderon.
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. Ernesto Perez Balladares was sworn
in as President on September 1, 1994, after an internationally monitored
Perez 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 Noriega years.
A long-time member of the PRD, Perez 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 Martin Torrijos, son of the late dictator.
The elections were considered free and fair. Moscoso took office on September
1, 1999. She is term-limited to a single term in office. National
elections were held May 2, 2004. The PRD’s Martin Torrijos won the presidency
and a PRD legislative majority in the Assembly. Torrijos will be inaugurated
September 1, 2004.
During her administration, Moscoso has attempted to strengthen social
programs, especially for child and youth development, protection, and general
welfare. Education programs also have been highlighted. More recently,
Moscoso has focused on Panama’s desire for a free trade agreement (FTA)
with the United States. Moscoso's administration successfully handled the
Panama Canal transfer and has been effective in the administration of the
Panama's counternarcotics cooperation has been excellent, and the Panamanian
Government has expanded money-laundering legislation and concluded with
the U.S. a counternarcotics maritime agreement and a stolen vehicles agreement.
The Panamanian Government also has been paying increasing attention to
maritime security issues. In the economic investment arena, the Panamanian
Government has been successful in the enforcement of intellectual property
rights and has concluded with the U.S. a Bilateral Investment Treaty Amendment
and an agreement with the Overseas Private Investment Corporation. The
Moscoso administration has been very supportive of the United States in
combating international terrorism.