P 131914Z DEC 89
FM AMEMBASSY PANAMA
TO SECSTATE WASHDC PRIORITY 7213
INFO SECDEF WASHDC
DIA WASHDC
USIA WASHDC 8090
USCINCSO QUARRY HTS PM
PANCANAL COMM
USLO CARIBBEAN
AMEMBASSY BOGOTA
AMEMBASSY CARACAS
AMEMBASSY SAN JOSE
AMEMBASSY MANAGUA
AMEMBASSY PARIS
AMEMBASSY ROME
AMEMBASSY MADRID
AMEMBASSY BONN

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. 

-------------------------------- 
SUMMARY 
-------------------------------- 
¶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. 

--------------------------------------- 
THE CRISIS GRINDS ON 
--------------------------------------- 
¶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. 

--------------------------------------- 
REGIME POLITICAL ACTIVITY 
--------------------------------------- 
¶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. 

------------------------------------------ 
THE OPPOSITION 
------------------------------------------ 
¶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. 

--------------------------------------- 
THE NEXT COUP ATTEMPT 
--------------------------------------- 
¶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. 

------------------------------------------ 
THE STATUS OF “UNRELENTING PRESSURES” 
------------------------------------------ 

INTERNATIONAL 
------------- 
¶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 
-------- 
¶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 
-------------- 
¶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. 

--------------------------------------------- 
THE FUTURE OF THE PANAMA CRISIS 
--------------------------------------------- 
¶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