Rethink Policy on Panama

THE swiftness with which Panama's Gen. Manuel Noriega put down the most recent coup attempt illustrates that he is a survivor. A drug trafficker and a dictator, General Noriega deserves to be treated as a pariah. But it is time that the United States rethink its position toward Panama, and redirect it toward a more low-profile, long-run strategy instead of its current short-term policy, which has resulted only in frustration and embarrassment.

US policy has inadvertently made a celebrity of Noriega and given him an international platform from which to excoriate US ``imperialism'' and thumb his nose at the most powerful country in the world. He has also created a sort of perverse prestige for himself among those who are delighted to see the US made look silly.

Two US presidents have wanted Noriega out, but the diplomatic and economic measures adopted first by Ronald Reagan and now by George Bush have not been noticeably effective.

On the diplomatic front, US diplomatic and armed-services personnel have been forbidden contact with the Panamanian government and the Defense Forces, and US consular services have been vastly reduced.

Economically, the distribution of US currency (Panama uses US dollars) to Panama has been prohibited, US citizens and corporations have been ordered to cease tax payments to the government, US foreign assistance has been cut off, and canal payments have been suspended. These measures have created a nuisance for the Panamanian government but have never threatened its downfall. The prohibition on currency transfers did create a serious cash shortage for the government (salaries were delayed, payments to creditors suspended, services curtailed, and government workers laid off), but the crisis was only temporary. Currency supplies began to accumulate and the government invented other means for substituting cash transactions.

The sanctions have had a much greater impact on the daily life of the Panamanian people than on the government. Layoffs in the private sector have driven unemployment up to record proportions, capital flight has accelerated, investment is nil, the international banking sector is being drastically reduced, and migration of Panamanians to the US is limited only by the lack of consular services and visas. The Panamanian economy has become weaker while General Noriega appears more secure. Worse, US sanctions have done the most damage to the middle class, which is both Noriega's principal source of opposition and the base upon which the US pins its hopes for a Panamanian democracy.

Given the counterproductive effects of the present policy, a significant shift seems to be in order. First, the sanctions against Panama should be either dropped or drastically modified. Sanctions never worked against Castro, they don't work against Nicaragua, and they certainly haven't been effective against Noriega. The sanctions only cripple the economy and sap the strength of the opposition. With continued sanctions the economy will weaken further and simply produce a larger bill for reconstruction (much of which will fall to the US) when Noriega finally goes.

Second, consular services should be reestablished. The reduction has primarily served to alienate our Panamanian friends rather than hurt the government.

Third, our diplomatic and armed-forces personnel should be allowed official contact with the government and the Panamanian Defense Forces. Not everyone in the Panamanian government is in Noriega's camp. Many are discontent, but the prohibition on contacts makes it very difficult to identify and encourage internal opposition. Our military and diplomatic personnel should be building bridges to elements of potential opposition and to those who might actually be in a position to put serious pressure on, if not actually overthrow, Noriega. Greater contact also would vastly improve our intelligence capabilities, something clearly lacking in the latest coup debacle.

Fourth, the US needs quietly to support the organization of the democratic opposition, much of which is in disarray. Following the nullified election in May, several leaders left the country; others have gone into self-imposed exile because of threats or direct repression. When Noriega is eventually deposed, the fragmented and often warring factions of the opposition must be united to provide solid leadership. US support of the opposition should be restrained, but generous and timely.

Finally, the US should press other Latin American nations to voice unified, if low-key, repudiation of Noriega, and supply clear support for those that could cause his downfall, be they from rebel factions within the Defense Forces or groups within the democratic opposition. Some effort has already been made through the US approval of the initiatives of the Organization of American States. But continuation of these efforts needs to be strongly and officially endorsed.

A less overtly belligerent policy would not signal a softening of US opposition. It would rob Noriega of one of his principal public-relations chips - charges of US imperialism - and give him one less issue around which he can rally Panamanian nationalism. The change in tone would also admit what we cannot do - take decisive action against Noriega - and strengthen what we can do.