PANAMANIAN PRESIDENT AND FM ON CASTRO, CHAVEZ, AND

C O N F I D E N T I A L PANAMA 001975

SIPDIS

DEPARTMENT FOR WHA/CEN
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 09/29/2015
TAGS: PREL PGOV ECON PM POL CHIEF
SUBJECT: PANAMANIAN PRESIDENT AND FM ON CASTRO, CHAVEZ, AND
MEXICO'S OIL

REF: PANAMA 01818

Classified By: Ambassador William Eaton for reasons 1.4 (b)&(d)


1. (C) Summary: President Torrijos told WHA DAS Fisk and
Ambassador that his government is under intense domestic
pressure to strike a cheap oil deal with Chavez. The GOP
hopes to address this by enticing Mexico to become a
counterweight by offering similar oil deals. Torrijos
believes that Chavez has broken the Castro "appeal to the
masses" mold by developing a direct message that is
attractive to governments, the middle class, and the masses.
According to FM Lewis, the Panamanian delegation that visited
Havana recently observed that Chavez instead of Castro seemed
to be calling the shots (see reftel). End Summary.


2. (C) Panamanian FM Lewis told WHA DAS Dan Fisk and
Ambassador September 29 that the GOP is coming under
increasing domestic political pressure to get a deal with
Chavez to buy cheap oil and quell the domestic impact of
rising fuel prices. Instead, he said, Panama was reaching
out to Mexico in hopes that Mexico would offer concessionary
oil prices and financing to countries in the region. Lewis
said that he met with Mexican FM Derbez in New York on the
fringes of UNGA to discuss options for greater Mexican
assistance in the region as a counterweight to Chavez. Lewis
indicated that Mexico was considering offering oil to Panama
and other countries in the region in concessionary terms and
long-term loans at below-market interest rates. Panamanian
President Torrijos and Lewis planned to visit Mexico next
week to continue those discussions. Ambassador Eaton and DAS
Fisk encouraged GOP to continue these discussions and noted
interest in hearing GOP ideas on how the U.S. can
appropriately facilitate such initiatives.


3. (C) President Torrijos also expressed growing concern
that whereas Castro tries to exert his influence through the
disaffected classes in the region, Chavez is going directly
to senior levels of government and society in the region to
exert his influence. That approach, he said, is potentially
much more destabilizing. Lewis mentioned in an aside to Fisk
and Ambassador Eaton that the Panamanian delegation that
traveled recently to Havana to reestablish diplomatic
relations had been struck by Cuban President Castro's
apparent physical frailty and his diminished mental agility.
The Panamanians were also surprised to see the commanding
role Chavez seemed to play in the Castro-Chavez relationship.
(Note: Lewis did not attend the Havana meeting. End Note.)


4. (C) COMMENT: The Torrijos Government is understandably
concerned by the growing number of demonstrations, street
closures by taxi and bus drivers and citizen complaints
about the rising cost of fuel and its associated impact on
the cost of living here. They know that subsidized prices
and other economic supports are not a sustainable option,
but are also aware that Chavez's offers of subsidized gas to
other Caribbean basin countries (but not Panama) resonates
among the disaffected and that grand energy-conservation
pronouncements don't fill gas tanks. As a result, the
Panamanian Government feels pushed towards Chavez, although
Chavez has been slow to agree to the oil- financing scheme
that the Panamanians have proposed. Oil-rich Mexico, they
hope, will see it in its best interests to offer greater
support to the region.

EATON