Panama's problems lingering Economy is reeling a year after invasion


PANAMA CITY, Panama -- "I wish the hell they never came," said Hernando Bonilla, 28, of the U.S. troops who last December stormed into his country to oust Gen. Manuel Antonio Noriega. "I haven't been able to find work since the invasion."

Once a sailor, he now scratches out a living collecting shattered glass and discarded wood at a dump.

To Mr. Bonilla and thousands of Panamanians, the invasion was a mixed blessing, removing a hated dictator but leaving behind a society with few jobs, scarce housing and little to eat.

While many Americans have long forgotten Panama, this tiny, strategic nation is locked in an economic crisis that "could eventually fuel social instability and require the intervention of American troops stationed here," said a business executive who advises the government.

Already the government has imprisoned six members of the Public Force -- including its former head -- for trying to destabilize the government. (The 12,000-man armed force, renamed after General Noriega's ouster, has been sanitized of most of its old officers, leaving an ill-trained gendarmerie led by junior officers of uncertain caliber.)

Other, perhaps more powerful, forces -- particularly in the socialist-oriented labor movement -- could provoke further polarization, capitalizing on the contrast between the nation's white-skinned leadership that has benefited financially from the invasion and the vast dark-skinned majority who remain the victims of the invasion and its aftermath.

When President Bush begins his South American tour next month, he will fly over a prostrate nation that has 44 percent of its 2.5 million people living in poverty and 27 percent unemployed.

Panama's jails hold 3,610 prisoners in facilities designed for 1,500 -- far more than during the seven-year reign of General Noriega.

More than 17,000 criminal charges have been filed since the invasion, but almost none of them has come to trial, said First Vice President Ricardo Arias Calderon, who heads the prison system as minister of government and justice.

"It is quite frankly a scandal," he said.

In two airplane hangars a few miles from Mr. Arias Calderon's office live the remnants of the El Chorrillo neighborhood that was flattened by the invading Americans in their attack on General Noriega's command center.

Despite promises that the 18,000 residents would have new housing within a year, families continue to live in crowded, paper-thin alcoves.

The promised new apartment buildings are vacant lots.

In the heart of the humid capital are 1,000 other disenchanted Panamanians. They pack General Noriega's infamous Modelo prison, which was designed to hold 250. None has been brought to trial.

The invasion disillusionment has spread even to Mr. Arias Calderon. In recent days, he has sharply assailed Washington's delay in dispensing the rest of the $462 million in promised aid, about a fifth of which remains legally stalled by Panama's unwillingness to sign a treaty giving U.S. authorities indirect access to secret banking records.

"Now that we have accomplished democracy in Panama, it is up to the U.S. to do its part," he said.

Said Eusebio Marchosky, a magistrate who heads the commission seeking the return of property and cash stolen by the Noriega regime: "As far as we can tell from Washington's attitude, Panama is not . . . among the priorities; it is not even on the list."

U.S. Ambassador Dean Hinton, in an interview last month, said that all the aid had been committed and that it was simply being held up by the bureaucracy in both governments.

To be sure, the economy has made substantial strides from the dark days of General Noriega, when U.S. economic sanctions caused the gross national product to plummet 18 percent and capital flight reached $30 billion, the largest in Latin America.

The invasion and the sanctions are believed to have cost Panama about $2 billion.

The GNP is expected to grow by 6 percent this year, and the nation's large banking system has attracted $2.1 billion, bringing total capital to $14 billion.

Moreover, new construction is everywhere evident in the capital, and rents and housing costs have skyrocketed.

But in Colon, the nation's second-largest city, the war-blasted buildings and an estimated 70 percent unemployment rate attest to a different reality.

Last month, a group of 500 Colon citizens marched 50 miles to the National Assembly to scream at the "white plutocrats" who, in the words of one of their leaders, "used us to get rid of Noriega and now want to pretend we don't exist."

Although black, English-speaking Colon has had long, historic differences with white, Spanish-speaking Panama City, the harsh rhetoric is becoming more evident elsewhere in the country, notably among students, labor leaders and ordinary citizens.

"We have tried to obtain a role in the economic planning of the government, but we have been completely ignored," said Isaac Rodriguez, who was part of the efforts to oust General Noriega and is a major force in a new coalition of left-leaning unions.

"Instead, the government proposed a new labor law that looks pTC like it was written in the 19th century.

"From our point of view, the invasion opened up great opportunities, but all we have seen so far is a bunch of rich guys getting richer," he said.

Compounding the problem is the leadership of President Guillermo Endara, who has been branded "Mr. McGoo" by one newspaper columnist for alleged bumbling and shortsightedness that caused his popularity to plummet in a recent poll.

The 54-year-old president's obsession with Ana Mae, his new bride of 24, is also causing him problems. "I think he spends more time buying her jewelry than running the presidency," said one of his supporters.

Another now ex-supporter is the El Chorrillo representative for Mr. Endara's party, who lives in one of the World War II hangars. "I've tried to get the attention of the presidency to our plight, but no one wants to listen," he said.

Has the president ever visited the hundreds of families living in the hangars? "You've got to be kidding," he said. "I'm not sure he knows we are here."

Instead, Ana Mae Endara dispatches a presidential chauffeur to deliver the daily want ads.

"The least she could do was send the whole paper," said one El Chorrillo resident.

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