In a Swap of Sword for Pen, Panama Wants US Base to Be Knowledge City

With its red-roofed buildings, tree-lined sidewalks, and top-notch athletic facilities, the United States Army base at Fort Clayton in Panama looks very much like a university campus. When the base reverts to Panamanian control in September, that may be exactly what it will become.

After years of planning, legislation now being drafted would convert one of the largest military installations of the US Southern Command into one of the largest international university and research complexes in Latin America. Plans for the "City of Knowledge" include a US-style university, research institutes and branch campuses of foreign institutions, a community college, and an industrial research-and-development park.

Proponents gush about the potential benefits for Panama: new educational opportunities for students, high-tech jobs for workers, and a watershed for know-how and technology transfer. "For Panama this is the most important project since the construction of the Panama Canal," says Irene Perurena, a senior project official who says it will confer enormous long-term economic advantages on the country.

Panama's government is under increasing pressure to find productive uses for thousands of buildings and nearly 100,000 acres of land the US military is leaving behind. Under a 1977 treaty, the US will return the Panama Canal to Panama and withdraw the US Southern Command to new headquarters in Miami by Dec. 31, 1999. About 30 percent of military-base property has been turned over so far, and hundreds more buildings will revert by year's end as a third of the 6,100 US troops here withdraw.

Panama - which has no military and only 2.7 million people - must find new uses for the properties while coping with economic dislocations caused by the loss of US military spending here.

The US Southern Command estimates its presence in Panama contributes as much as $370 million a year to the economy, about 8 percent of the country's gross domestic product.

Simultaneously, Panama must take over the operation of the canal, one of the largest industrial operations in Central America.

Hundreds of installations returned to Panama in recent years remain unoccupied, and must be guarded and maintained at a cost of millions of dollars each year, according to US Southern Command estimates. "They're in a real predicament," says a Western diplomat here. "It's not easy finding new uses for many of these properties." Panama has already asked for ongoing US withdrawals from certain bases to be delayed, and there is talk of keeping a US presence at the sprawling Howard Air Force Base as part of an international counternarcotics center.

THE City of Knowledge could be a lifesaver. Draft legislation would establish a sort of international academic free-trade zone, where foreign universities and multinational companies could transfer people, equipment, and resources. It would require a multimillion-dollar endowment to get started, funds that would be raised from international donors and the state.

The project has already attracted interest from a dozen major research universities in the US and Europe, which see a prime location for tropical research, ocean sciences, and tourism and merchant marine schools.

"This would be an important investment in our future," says Stanley Muschett, vice-rector of the University of Santa Maria La Antigua in Panama City, who sits on the project's board. "We want it to reach the students at the University of Panama and even the guy on the street by having visiting professors, joint programs, continuing education, and new job opportunities."

But there are naysayers as well. US military personnel at Fort Clayton say the facility is too big and that the project should move to the smaller Albrook Air Force Station next door. And businesspeople say the bases would go to more productive use in the private sector.

The project appears likely to gain legislative approval later this summer, however, in part because it has no real enemies and in part because the government already has more property than it knows what to do with. "The hardest thing will be to convince people this investment is valuable. After all, there won't be any return for five to eight years, whereas a private enterprise might show one much faster," Ms. Perurena says. "It's much harder to get funding for long-term projects like this one."