Page 301 - The Rough Guide to Panama (Travel Guide)

History CONTEXTS 299
During his first term he set about disenfranchising Afro-Antillean and Chinese-
Panamanians and pursuing racist immigration policies. On the positive side he instigated
the social security system, improved many workers’ rights (a policy strand abandoned in
his later term), modernized banking and gave the vote to women. Crucially, he was
adamant about pushing for a better deal with a US government intent on expanding its
military defences outside the Canal Zone. But the US-backed Panamanian Policía
Nacional (National Police) and its successor, the Guardia Nacional (National Guard),
made sure that no president who challenged the status quo lasted long in office and
Arias was ousted by military coup each time, the last after only two weeks.
Nevertheless, anti-US riots erupted periodically over the next thirty years. The
ten-thousand-strong protest in 1947 against the US attempt to extend the lease on
World War II-era bases outside the Canal Zone helped persuade the deputies not to
ratify the proposal. By 1948, the US military had withdrawn from outside the Zone.
The most infamous disturbances, however, were the so-called flag riots of 1964. The
flying of flags was a trivial but symbolic battleground for Panamanian-US antagonism.
When the US flag was flown on its own for two days in succession in Balboa High
School – not along with the Panamanian flag, as had been agreed – two hundred
Panamanian students arrived at the school to rectify the situation. A skirmish broke
out and the Panamanian flag was torn, prompting full-scale mob violence. The 21
Panamanians who died were later elevated to the status of national martyrs,
commemorated annually on January 9, Día de los Mártires (Martyrs’ Day).

Omar Torrijos and the new canal treaty
After a brief power struggle following the coup to oust Arnulfo Arias in 1968,
Lieutenant Colonel Omar Torrijos of the National Guard established himself as leader
of the new military government. Fracturing the political dominance of the white
merchant oligarchy (known disparagingly as the rabiblancos, or “white tails”) in his
pursuit of a pragmatic middle way between socialism and capitalism, he was a
charismatic, populist leader. Over twelve years he introduced a wide range of
reforms – a new constitution and labour code, nationalization of the electricity and
communications sectors, expanded public health and education services – while
simultaneously maintaining good relations with the business sector, establishing
Colón’s Zona Libra and initiating the banking secrecy laws necessary for Panama’s
emergence as an international financial centre. Rather more darkly, he was extremely
intolerant of political opposition and his critics were often imprisoned or simply
“disappeared”. Several mass graves from the period were unearthed during a Truth
Commission instigated by President Moscoso, though there was no evidence of
Torrijos’ direct involvement in the atrocities.
Central to Torrijos’ popular appeal was his insistence on gaining Panamanian control
over the Canal. After lethargic negotiations with the Nixon and Ford administrations,
Torrijos signed a new canal treaty with US president Jimmy Carter on September 7,
1977. Under its terms the US agreed to a gradual withdrawal, passing complete
control of the Canal to Panama on December 31, 1999; in the meantime it was
to be administered by the Panama Canal Commission, composed of five US and four
Panamanian citizens. Even so, the US retained the right to intervene militarily if the

1983 1988
Colonel Manuel Noriega becomes de facto US charges Noriega with rigging elections, drug
military ruler. He is initially supported by the smuggling and murder; Noriega declares state of
US, but also cultivates drug-cartel connections. emergency, dodging a coup and repressing opposition.

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