PANAMANIANS HOPE FOR A SUCCESSFUL COUP

S E C R E T SECTION 01 OF 05 PANAMA 08545

E.O.12356: DECL:OADR
TAGS: PGOV PREL PM US
SUBJECT: PANAMANIANS HOPE FOR A SUCCESSFUL COUP
-- NORIEGA PLANS FOR A NEW YEAR IN POWER


1. SECRET - ENTIRE TEXT.

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SUMMARY
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2. THROUGHOUT 1989, RAPIDLY UNFOLDING POLITICAL
DEVELOPMENTS HELD OUT HOPE TO MANY PANAMANIANS FOR
A RESOLUTION TO PANAMA’S POLITICAL AND ECONOMIC
CRISIS: THE ELECTION OF MAY 7, THE SUBSEQUENT OAS
NEGOTIATIONS, THE CONSTITUTIONAL DEADLINE OF
SEPTEMBER 1, THE COUP ATTEMPT OF OCTOBER 3, AND
THE TREATY DEADLINE OF JANUARY 1, 1990.
PROJECTING INTO THE FIRST HALF OF 1990, NO SUCH
HOPEFUL EVENTS AND DATES ARE READILY APPARENT.
THE OPPOSITION’S MAIN OBJECTIVE WILL BE TO SURVIVE
POLITICALLY, ECONOMICALLY, AND LITERALLY UNTIL THE
NEXT COUP. NORIEGA WILL HAVE TO TRY AND
CONSOLIDATE HIS CONTROL OVER THE PANAMA DEFENSE
FORCES (FDP) AND AVOID ANOTHER UPRISING.


3. PRESSURES ON NORIEGA HAVE INCREASED ACROSS THE
BOARD, BUT HE SEEMS TO HAVE DETERMINED THAT HE CAN
MANAGE THEM. DESPITE NEW U.S. ECONOMIC SANCTIONS,
THE MOST PRECIPITOUS ECONOMIC DROP IS OVER FOR
NOW, FOLLOWING A TWO-YEAR, 25 PERCENT DROP IN
GDP. INTERNATIONAL ISOLATION REMAINS AN IRRITANT
TO THE REGIME, BUT IT IS NOT A SERIOUS PROBLEM FOR
NORIEGA’S STABILITY. U.S. ACTIONS, FROM THE
APPOINTMENT OF AN ACTING CANAL ADMINISTRATOR TO
RUMORED COVERT PLANS AGAINST NORIEGA AS WELL AS
NEW ECONOMIC SANCTIONS, ALLOW NORIEGA TO BEAT THE
NATIONALISTIC DRUM AND MAKE IT APPEAR AS IF
DOMESTIC SUPPORT FOR HIM IS GROWING.


4. NORIEGA’S WEAKEST POINT REMAINS HIS OWN
INSTITUTION. WHISPERS THAT “THE OCTOBER 3 COUP IS
NOT OVER” CONTINUE AND NORIEGA CONTINUES TO HOLD
ON MAINLY BY BRUTAL REPRESSION OF ANY POTENTIAL
NEW INSIDE OPPONENTS. WHEN ANOTHER ACTION TO
REMOVE NORIEGA WILL TAKE PLACE IS UNCERTAIN, BUT
WAITING FOR THAT POSSIBILITY IS THE MAIN PROSPECT
FOR PANAMA IN 1990. END SUMMARY.

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THE CRISIS GRINDS ON
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5. THE PANAMA CRISIS CONTINUES TO GRIND ON WITH
NO CLEAR END IN SIGHT. NORIEGA TENACIOUSLY HOLDS
ON TO POWER, INTIMIDATING HIS OPPONENTS AND FIRING
UP HIS SUPPORTERS WITH SLOGANS CALLING FOR
RETRIBUTION AGAINST “PANAMANIAN TRAITORS AND THEIR
U.S. MASTERS,” SHOULD ANYTHING HAPPEN TO HIM.
NORIEGA IS WEAKER THAN HE WAS AT THIS TIME LAST
YEAR, BUT THE IMPACT OF THE CURRENT SET OF
PRESSURES HAVE SO FAR FAILED TO EJECT HIM FROM
OFFICE.


6. NEVERTHELESS, RECENT PRESS REPORTS OF AN
ALLEGED U.S. COVERT ACTION PLAN AGAINST NORIEGA
HAVE ONCE AGAIN RAISED HOPES OF SOME PANAMANIANS
THAT THIS MAY BE THE BEGINNING OF HIS END.
NORIEGA HIMSELF IS APPARENTLY ATTACHING SOME
CREDIBILITY TO THE PRESS REPORTS. HE HAS REACTED
NERVOUSLY BY STEPPING UP HARASSMENT OF THE
OPPOSITION AND INCREASING THE SIZE, TRAINING,
ACTIVITY, AND ARMAMENT OF HIS “DIGNITY
BATTALIONS.” THE OPPOSITION LEADERSHIP IS
CONCERNED OVER THE NEW “EYE FOR AN EYE”
PARA-MILITARY CAMPAIGN, WHICH NORIEGA HAS USED TO
REMIND THE OPPOSITION OF ITS VULNERABILITY.

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REGIME POLITICAL ACTIVITY
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7. THE RODRIGUEZ ADMINISTRATION, UNSURPRISINGLY,
REMAINS INEFFECTUAL, BUT CONTINUES TO LIMP ALONG.
REGIME SOURCES INDICATE WITH SOME DEGREE OF
CERTITUDE THAT NORIEGA IS UNHAPPY WITH HIS
CIVILIAN PUPPETS, THAT HE MAY EVEN FIRE RODRIGUEZ,
AND PLANS TO TAKE OVER THE FORMAL REIGNS OF
GOVERNMENT SOON. THE ASSEMBLY OF 510 LOCAL
DISTRICT REPRESENTATIVES (ANRC) CONFIRMED HIM AS
”NATIONAL COORDINATOR” ON NOVEMBER 22. THIS
BRINGS HIM ONE STEP CLOSER TO BEING NAMED “HEAD OF
GOVERNMENT”, WHICH HE AND OTHERS AROUND HIM HAVE
HINTED AT FOR SOME TIME.


8. MANY VIEW THIS NORIEGA MOVE AS THE FINAL STEP
TOWARD A TOTALITARIAN REGIME AND FURTHER SEVERE
REPRESSION. SOME SEE THIS AS A PENDING NORIEGA
MISTAKE. AS “HEAD OF GOVERNMENT”, HE WOULD HAVE
TO BEAR FULL OFFICIAL RESPONSIBILITY FOR REGIME
ACTIONS. AT THE SAME TIME, BY INTRODUCING A NEW
ELEMENT -- HIS GOVERNMENTAL ROLE -- INTO THE STALE
POLITICAL SITUATION, NORIEGA MAY BE ABLE TO USE
HIS USUAL MIXTURE OF OBFUSCATION AND INTIMIDATION
TO BUY HIMSELF MORE TIME AND POLITICAL BREATHING
SPACE.

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THE OPPOSITION
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9. NORIEGA’S MOST RECENT PARA-MILITARY SHOW OF
FORCE FURTHER CONVINCED THE OPPOSITION THAT
POLITICAL ACTION WILL RESULT ONLY IN GREATER
REGIME BRUTALITY AGAINST THEM, NOT NORIEGA’S
DEPARTURE. THE OPPOSITION LEADERSHIP QUIETLY
HOPES THAT CLANDESTINE (AND OTHER) U.S. ACTION,
POSSIBLY COUPLED WITH ANOTHER COUP WILL REMOVE
NORIEGA. THE LEADERS SEE THEMSELVES PLAYING A
ROLE IN THE NEXT COUP ATTEMPT AND THEIR CURRENT
PREPARATIONS ARE FOCUSED ON BEING ABLE TO MOVE IN
TO FILL THE GOVERNMENT VACUUM IF THE NEXT EFFORT
SHOULD SUCCEED. THE CIVILIAN OPPOSITION
RECOGNIZES THE POLITICAL REALITY THAT THE MILITARY
IS THE MAIN POLITICAL FORCE IN PANAMA.


10. AS THE MEMORY -- AND TO SOME EXTENT THE
LEGITIMACY -- OF THE MAY ELECTION RECEDES, THE
PRESSURE ON THE LEADERSHIP FROM WITHIN THE
OPPOSITION RANKS “TO DO SOMETHING” TO MAINTAIN
POLITICAL LEGITIMACY IS GROWING, HOWEVER.
OPPOSITION ABILITY TO CULTIVATE POLITICAL SUPPORT
AND TRUST IN THE ADOC LEADERSHIP ARE HAMPERED BY
EFFECTIVE NORIEGA INTIMIDATION AT THE GRASS ROOTS
LEVEL. MEANWHILE, U.S. ECONOMIC SANCTIONS ARE
CONTINUING TO HURT AND NEW MEASURES ARE
UNPOPULAR. THE OPPOSITION LEADERSHIP FEARS THAT
MANY PANAMANIANS -- INCLUDING THEIR FOLLOWERS --
WILL INCREASINGLY DEMAND THAT THE AMERICANS GET
OFF THEIR BACKS, IF NORIEGA WON’T.


11. PANAMA’S OPPOSITION AND PANAMANIANS IN
GENERAL RAN UP MANY SHORT TERM HILLS IN 1989 -
WITH THE END ALWAYS JUST OVER THE HORIZON. MAY
ELECTIONS, THE OAS NEGOTIATIONS, SEPTEMBER 1,
OCTOBER 3, AND NOW JANUARY 1, 1990 HAVE ALL TOO
EASILY BEEN ACCEPTED AS TARGETS FOR WHEN THE
PANAMA CRISIS WOULD “HAVE TO” BE SOLVED. ALREADY
ADOC LEADER GUILLERMO “BILLY” FORD IS TALKING OF
FEBRUARY 25 (NICARAGUAN ELECTION DAY) AS A DATE
BEFORE WHICH NORIEGA MUST FALL IF THE U.S. DOES
NOT WISH TO HAVE THE PRECEDENT OF AN ANNULLED
ELECTION REPEATED IN NICARAGUA . OVERALL,
HOWEVER, THE OPPOSITION HAS LITTLE ENERGY LEFT TO
CHARGE UP ANOTHER HILL UNLESS CONVINCED IT IS THE
LAST ONE. ONLY ANOTHER COUP HOLDS OUT SUCH A
PROMISE, BUT THE OPPOSITION IS NOT ABLE TO
INFLUENCE THAT TO ANY SIGNIFICANT DEGREE.

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THE NEXT COUP ATTEMPT
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12. THE MOST (AND MAYBE ONLY) HOPEFUL SIGN FOR
NORIEGA’S OPPONENTS IN 1990 IS THAT TROUBLES
INSIDE THE FDP ARE WORSE THAN THEY HAVE EVER
BEEN. REASSIGNMENTS AND PROMOTIONS FLOWING FROM
THE POST-COUP PURGE ARE JUST NOW BEING MADE --
MORE THAN TWO MONTHS AFTER THE EVENT. MANY OF THE
MORE “PROFESSIONAL” FDP OFFICERS AND NCO’S WERE
KILLED, TORTURED, OR DISMISSED AFTER OCTOBER 3.
THE SUCCESSOR CROP OF TRUE BELIEVERS HAS NEITHER
THE EXPERIENCE, TRAINING OR INTELLIGENCE TO FILL
THE SHOES OF THEIR PREDECESSORS. NORIEGA HAS HAD
TO RELY MAINLY ON HIMSELF OR THE SUPPORT OF THIS
SMALL CLIQUE OF LOYALISTS SINCE THE COUP ATTEMPT.
HIS INCREASED USE OF DIGNITY BATTALIONS IS ALSO
WEARING ON THE CAREER SOLDIERS. WHAT LITTLE
MILITARY PRIDE THEY HAVE LEFT HAS BEEN INJURED BY
THE ACTIVITIES OF THIS PARA-MILITARY RABBLE WHICH
THEY FEAR WILL GET OUT OF CONTROL AND ULTIMATELY
HURT THE INSTITUTION. WITH THE DIGNITY BATTALIONS
AND OTHER IRREGULARS OVER 2000 IN NUMBER THE IMAGE
OF A COMPETING PARA-MILITARY FORCE IS BEGINNING TO
ARISE.


13. DISCONTENT AND FEELINGS OF REVENGE CONTINUE
TO FESTER INSIDE THE FDP AND THERE ARE NUMEROUS
REPORTS THAT THERE ARE “INDIVIDUALS” WHO ARE
PREPARED TO ACT ON THESE EMOTIONS. ONE REGIME
INSIDER RECENTLY CLAIMED THAT NORIEGA’S NOMINAL
NUMBER 2, COLONEL MARCO JUSTINES, IS HIMSELF
LOOKING FOR WAYS TO INCH OUT HIS BOSS. MEANWHILE,
NOTORIOUS CIVILIAN SUPPORTERS OF NORIEGA, SUCH AS
XXXXXXXXXXXXXX(STRICTLY PROTECT),
ARE ALREADY LOOKING BEYOND NORIEGA’S DEPARTURE IN
ADVOCATING WITH EMBOFFS AN OPPOSITION DECLARATION
OF AMNESTY FOR REGIME SUPPORTERS. SOURCES NOW
INDICATE THAT NORIEGA SUSPECTS ANOTHER ATTEMPT TO
UNSEAT HIM AS EARLY AS DECEMBER 15.

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THE STATUS OF “UNRELENTING PRESSURES”
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INTERNATIONAL
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14. THE RECENT RESOLUTION OF THE OASGA CONFIRMED
NORIEGA’S ISOLATION IN THE HEMISPHERE, BUT WAS MET
WITH ONLY FLEETING INTEREST IN PANAMA. THE FDP’S
DISINVITATION TO THE RECENT CONFERENCE OF THE
AMERICAN ARMIES IN GUATEMALA WAS POTENTIALLY A
MORE SERIOUS BLOW TO FDP MORALE, BUT THIS COLD
SHOULDER FROM THEIR LATIN COLLEAGUES PASSED
LARGELY UNNOTICED BECAUSE OF NORIEGA’S ABSOLUTE
CONTROL OF INFORMATION INSIDE AND OUTSIDE HIS
INSTITUTION.


15. AMBASSADORS OF MOST NATIONS REMAIN OUTSIDE
PANAMA, EITHER ON VACATION OR CONSULTATIONS, BUT
LOCAL DIPLOMATIC ISOLATION MAY BE IN DANGER. THE
FRENCH AMBASSADOR RECENTLY RETURNED FROM HIS
”VACATION” TO REJOIN HIS ITALIAN AND SPANISH
COLLEAGUES WHO NEVER LEFT. SEVERAL AMBASSADORS
AND MILITARY ATTACHES (E.G. MEXICO) MAY VISIT
THEIR FAMILIES WHICH ARE RESIDING HERE AT
CHRISTMAS. NORIEGA IS MAKING ALL HE CAN OUT OF
CONTACTS WITH THE USSR, THE PRC, LIBYA, CUBA,
NICARAGUA, AND EVEN U.S. ANTI-ESTABLISHMENT
GROUPS. HE WILL ALSO SEEK TO CONJURE UP SOME
LIMITED LEGITIMACY IN HIS PLEA FOR LATIN
SOLIDARITY OVER THE CANAL ADMINISTRATOR ISSUE.

ECONOMIC
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16. THE REGIME CONTINUES TO HAVE CASH FLOW
PROBLEMS, BUT THE ECONOMIC DOWNWARD SPIRAL HAS
LEVELED OFF FOR NOW. NORIEGA IS ABLE TO COMBAT
THE WORST DISRUPTIONS BY SALARY ADJUSTMENTS AND
CONTINUED GOVERNMENT EMPLOYMENT OF LOYALISTS.
UNEMPLOYMENT OVERALL IS ON THE RISE, BUT ONE OF
THE “PILLARS” OF THE PANAMANIAN SERVICE ECONOMY --
THE COLON FREE ZONE -- IS HAVING RECORD SALES AND
PROVIDES SOMEWHAT INCREASING EMPLOYMENT IN THE
POLITICALLY VOLATILE COLON AREA.


17. MEANWHILE, PARA-MILITARY DIGNITY BATTALIONS
ARE ENLISTING OR SCARING THE UNEMPLOYED.
BUSINESSMEN, HURT BY NORIEGA AND U.S. SANCTIONS,
ARE INCREASINGLY MORE LIKELY TO MOVE TOWARD
ACCOMMODATION WITH NORIEGA. MANY FEEL THEY HAVE
TO GIVE PRIORITY TO BEING ABLE TO STAY IN BUSINESS.

U.S. PRESSURES
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18. FURTHER U.S. ECONOMIC SANCTIONS HEIGHTEN THE
SENSE OF CRISIS IN PANAMA, CREATING THE PARADOX OF
REGIME-OPPOSITION-CHURCH AGREEMENT IN OPPOSING
THEM. THE ANNOUNCEMENT OF THE U.S. PORT BAN FOR
PANAMANIAN FLAGGED VESSELS AND THE APPOINTMENT OF
A TEMPORARY CANAL ADMINISTRATOR CREATE NEW
PROBLEMS AND OPPORTUNITIES FOR NORIEGA. BANNING
PANAMANIAN FLAGGED VESSELS FROM THE U.S. WILL ROB
NORIEGA AND HIS CRONIES OF A CONSIDERABLE AMOUNT
OF INCOME. SOME OF THE LATTER MAY EVEN JUMP SHIP
AND TURN ON HIM. BUT IN THE END RESULT, MANY MORE
MAY REALIZE THAT IT WAS THEY WHO DEPENDED ON HIM,
NOT HE ON THEM.


19. THE CANAL ADMINISTRATOR APPOINTMENT OFFERS
NORIEGA SOME ADDITIONAL NATIONALISTIC PEGS TO
SUPPORT HIS SEARCH FOR DOMESTIC AND INTERNATIONAL
SUPPORT. BLOWING THE TREATY VIOLATION AND
NATIONAL SOVEREIGNTY WHISTLE MAY WELL GAIN HIM
SOME SUPPORT. PLAYED WELL, HE MAY AGAIN BE ABLE
TO DO WHAT HE DOES BEST: BUY TIME.

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THE FUTURE OF THE PANAMA CRISIS
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20. DOMESTIC AND FOREIGN OPPOSITION TO NORIEGA IS
SHOWING SIGNS OF FATIGUE. FOREIGN ATTENTION IN
PARTICULAR IS DISTRACTED BY MUCH HIGHER PROFILE
REGIONAL AND INTERNATIONAL EVENTS, FROM EL
SALVADOR TO BERLIN. OF COURSE, NORIEGA TOO IS
TIRING, EXEMPLIFIED IN HIS SLOWNESS IN SETTLING
THE TURMOIL INSIDE HIS OWN INSTITUTION. BUT HE IS
A MASTER OF SURVIVAL AND ABLE TO BUILD ON THE
FATIGUE OF OTHERS. RENEWED NOISES IN RECENT
REGIME PRONOUNCEMENTS OF A WILLINGNESS TO “TALK”
ARE A CLASSIC MANIFESTATION OF TRIED AND TRUE
NORIEGA TIME-BUYING TACTICS.


21. THE POLITICAL TENSION IN PANAMA, INCREASED BY
RECENT PRESS REVELATIONS AND U.S. SANCTIONS
ANNOUNCEMENTS, WILL LIKELY EBB IN EARLY 1990,
ABSENT SOME MAJOR EVENT. NORIEGA IS SHOWING NO
SIGNS THAT HE HAS ANY INTENTION OF LEAVING
VOLUNTARILY. GIVEN BROAD POLITICAL REALITIES IN
THIS COUNTRY, THE ONLY HOPE FOR A FIRST STEP IN
CRISIS RESOLUTION IS ANOTHER COUP. WAITING FOR
THAT TO HAPPEN IS THE MAIN POLITICAL PROSPECT FOR
PANAMA IN 1990.


BUSHNELL