The Panama Canal: Can We Afford To Give It Up?
AUTHOR Major Frank M. Stewart, USMC
CSC 1988
SUBJECT AREA National Security
EXECUTIVE SUMMARY
TITLE: THE PANAMA CANAL: CAN WE AFFORD TO GIVE IT UP?
I. Purpose: To identify the strategic, political, and
military importance of the Panama Canal, to identify present
problems in each area, and to propose a solution to these
problems
II. Thesis: Although the Panama Canal Treaty of 1977
outlines the return of the Canal to Panama and initially
improved diplomatic relations, the return of the Canal will
have significant strategic, political, and military reper-
cussions for the long-range interests of the United States.
III. Data: The present political situation in Panama has
deteriorated to the point where the security of the United
States and its allies is questionable. The security of the
Panama Canal continues to be the main issue. Critics have
argued that the Canal is no longer strategically important
while others have strongly supported the Canal's strategic
importance. Panamanian politics have degenerated to a
"Mafia-like" government ruled by a dictator, General Manuel
Noriega. As a result, the government is closely compared to
an organized crime family. The U.S. government has cut off
all economic aid and has charged General Noriega with crimi-
nal charges. Additionally, one hundred U.S. Marines have
been sent to Panama to emphasize the importance of the Canal
to the U.S. The United States has refused to recognize the
present government of Panama and recognized only the exiled
government as the true government of Panama. Strategically,
Panama governs our southern flank and is the key to the
security of the Caribbean and the Gulf of Mexico. The U.S.
cannot allow a communist presence in Panama. If General
Noriega continues in power, the United States could be
forced to take military action. Militarily, the Canal is of
tremendous importance for moving militay forces from ocean
to ocean, rapid deployment of forces, and training forces in
jungle warfare. The U.S. cannot allow a corrupt government
to continue, or a communist power to control the Canal. The
United States must take action now before it is too late and
war comes to this hemisphere.
IV. Summary: The Panama Canal plays an important role in
the security of the United States. Political changes must
occur in Panama with a democratically elected government
that is friendly to the United States. The United States
must continue to emphasize the strategic importance of the
Canal and not allow communist influence to continue Mili-
tarily, the Canal must continue to be defended with U.S.
forces and the military bases used for training U.S. forces.
Then and only then will the strategic, political, and mili-
tary objectives of the United States be met.
V. Recommendations: General Noriega must be removed as the
leader of Panama. Democracy must be reinstituted and a
President elected who is friendly to the United States. The
Panama Canal Treaty of 1977 must be declared invalid and a
new treaty negotiated. The defense of the Canal should be a
joint function of both Panamanian and U.S. forces. The
United States must have indefinite basing rights for U.S.
armed forces in Panama.
TITLE: THE PANAMA CANAL: CAN WE AFFORD TO GIVE-IT UP?
OUTLINE
Thesis: Although the Panama Canal Treaty of 1977 outlined
the return of the Canal to Panama and initially improved
diplomatic relations, the return of the Canal will have
significant strategic, political, and military repercussions
for the long-range interests of the United States.
I. Strategic Importance of the Panama Canal
A. Security of the United States
1. Flexibility and mobility of naval forces
2. Two-ocean Navy concept
B. Security of the Caribbean and Gulf of Mexico
1. Southern flank
2. Facilities in Panama
C. Communist Control of Canal
D. Panama Canal - Maritime bottleneck of the world
E. Loss of Canal - Strategic significance
II Political Importance of the Panama Canal
A. Panamanian Political Victory
B. 1977 Treaty
C. Panamanian Political Problems
1. Corruption of military
2. Election fraud
D. U.S. and Panamanian Relations
E. Communist Presence
F. Present Political Situation
III. Military Importance of the Canal
A. Transfer of Combat Power
B. Economic Considerations
C. Training Facilities
D. Deployment of Combat Power
E. Defense of Canal
F. Use of Combat Power
1. Against Panamanians
2. Limited Intensity conflict
3. Costly
4. Prolonged conflict
THE PANAMA CANAL: CAN WE AFFORD TO GIVE IT UP?
It is now December 30, 1999. Tomorrow the Panama Canal
will belong officially to the Republic of Panama. A General
Manuel Noriega-type dictator publicly declares himself ruler
for life. Furthermore, he announces that the government of
Panama now will be considered communist and modeled after
Cuba. Additionally, he states that on January 1 all diplo-
matic relations will be broken with the United States.
Furthermore, he orders all American armed forces out of the
Republic of Panama and denies the use of the Panama Canal to
the United States. Cuba, Nicaragua, and the Soviet Union
support him politically and militarily. General Noriega is
now master of a waterway that is of enormous importance to
the United States and other maritime nations.
In Washington, the President of the United States calls
an emergency meeting with his top military and political
advisors. The subject is Panama, the Canal, and "the little
dictator." What will be the outcome of this meeting? Will
the President commit military forces? Is the Canal still
important to the defense of the United States? Is the Canal
worth going to war over? All of these questions must be
answered if action is to be taken. Although the Panama
Canal Treaty of 1977 outlined the return of the Canal to
Panama and initially improved diplomatic relations, the
return of the Canal will have significant strategic, politi-
cal, and military repercussions for the long-range interests
of the United States.
Strategically, the Panama Canal plays an important role
in the security of the United States. The Panama Canal
provides the United States with the ability to rapidly move
its naval forces from the Pacific to the Atlantic, thus
providing flexibility and mobility to our naval forces in
peace and war.1 If the Panamanian government closed the
Canal to the United States, our naval forces would have to
rely on what naval forces were available in theater. Addi-
tional forces could be introduced only by transiting the tip
of South America or traveling long distances across other
waterways. Critics of the Canal have argued that since the
United States now has a "two-ocean Navy," the Canal is no
longer important. Retired Marine General Victor H. Krulak
refuted critics of the Canal when he blasted the argument
that the Canal was no longer needed because of the "two-
ocean Navy." He further stated that the only way the Navy
could exercise flexibility in times of emergency is by
shuttling ships through the canal. If the Navy could do
this, only then could it be described as a "two-ocean
Navy."2
Another strategic consideration is the security of the
Caribbean and the Gulf of Mexico. If the use of the Panama
Canal and its facilities were denied to the United States,
the United States would lose its southern and western anchor
in the Caribbean. Additionally, when we consider the impor-
tance of southern Florida, the Florida Keys, Guantanamo Bay,
and Puerto Rico, Panama offers air and land facilities which
strengthen the security of our southern flank. It is within
the above framework that Panama is of greatest significance
to the control of the Caribbean and the Gulf of Mexico.3
The scenario mentioned earlier that the Canal could be
owned and operated by a Communist government. Strategic-
ally, this would be a serious blow to the security of
America. As long as the United States can own and operate
the Canal, it will always be an asset to our strategic
interests. Once a nation or nations, actively or poten-
tially hostile to he United States, takes complete control
of the Canal, it will be a menace to the security of the
United States.4 This could become a reality if the United
States fails to act now before the treaty expires.
The Panama Canal is recognized as one of the main
maritime bottlenecks of the world. The Canal allows ships
of all nations to transit easily from one ocean to another.
Strategically, these sea routes are vital arteries connec-
ting the United States with its allies and trading partners.
Hemispheric safety of the United States depends on the
ability of the United States Navy to control the trade
routes of the Caribbean Sea, the Atlantic, and the Pacific.5
The loss of the Canal will certainly interfere with the
security of the United States and many other nations.
Furthermore, the ability of the United States to react in
crisis or war would certainly be reduced.
Turning over of the Panama Canal to the Republic of
Panama could prove to be an unacceptable strategic loss to
the United States. General Krulak wrote the following:
The idealist who negotiated the surrender of this
great strategic asset, through which two-thirds of
our imported strategic minerals pass, did so on
the fragile assumption that Panama could handle
their responsibility.6
It appears that our strategic interests are now gov-
erned by how Panama handles its responsibilities. Histor-
ically, the Panamanian government has had problems maintain-
ing and operating even the smallest of facilities. I lived
in the Republic of Panama during the last three years.
During this time, I noticed that every facility that was
turned over to the Panamanian government quickly became
poorly maintained. For example, the United States Embassy
put the Panama Railroad off limits to all United States
personnel. The Railroad was run down and declared unsafe.
Additionally, other facilities in the Zone, under Panamanian
control, quickly became poorly maintained. The list could
go on and on. I believe the only reason the Canal continues
to work is that we still operate it. If the Panamanian
government cannot responsibly handle even the smallest fa-
cility, I seriously doubt they can handle the responsibility
of operating the Canal.
The Panama Canal Zone unites Panama politically and
emotionally.7 The 1977 Panama Canal Treaty was a boost to
Panama's sense of pride and nationalism. The treaty trans-
ferred ownership of the canal to Panama on 31 December 1999.
Additionally, it turned over the defense of the Canal to
Panama's military. This was a major political victory for
Panama.
Politically the validity of the 1977 Treaty has often
been debated in the United States. Opposition to the Treaty
was intense. The only way the Treaty was ratified by the
Senate was the addition of a reservation to the Treaty. The
reservation asserted the United States' right, if anyone
interfered with Canal operations, to use military force to
restore its integrity. However, after the Senate approved
the treaty, the Panamanian government declared that the
United States had no right to use force. The Panamanian
government's declaration against the U.S. right to use force
certainly raised the question of whether or not the Treaty
was valid.8
Panama's political and internal problems began with the
death of Panama's ruler Omar Torrijos in a mysterious plane
crash in 1981. After the accident, General Noriega quickly
manipulated his own appointment to the top military position
in Panama. In 1983 he succeeded Dario Paredes as Commander-
in-Chief, and promised Paredes his support in the 1984
presidential elections. Noriega then withdrew the military
support for another candidate, Nicolas Barletta. Barletta
won the election, but not without many charges of voting
fraud. He later was forced to resign by General Noriega in
1985 as a result of Barietta's attempt to investigate the
death of the opposition leader, Mr. Hugo Spadafora.
In 1985, United States intelligence sources revealed
that Noriega himself planned the late 1985 murder of Mr.
Spadafora, the opposition leader. Spadafora had publicly
accused Noriega of drug trafficking. Shortly thereafter,
Spadafora's body was found, tortured and headless.9 This
was just the beginning of political corruption in Panama.
In order to pressure General Noriega to resign, a
Federal grand jury in Miami indicted him on charges of drug
trafficking, money laundering, and racketeering. This is
the first time the United States has charged the leader of
an allied country with criminal acts.10
Since the resignation of Panama's President Barletta in
1985, and the appointment of Vice-President Delvalle as
President of Panama, General Manuel Noriega emerged as the
true head of government. He rules the government with a
"Mafia style" of leadership. According to US News and World
Report, dated 21 July 1987, General Noriega's accusers
charge him with political murder, election fraud, drug traf-
ficking, money laundering, gun-running, and selling United
States secrets and technology to Cuba's Fidel Castro and
Libya's Muammar Qadhafi. Furthermore, General Noriega's
senior command has been compared to an "organized crime"
family. United States officials suspect that General
Noriega and other senior officers get a cut of all illicit
cash flowing through Panama.11
Recently, Panamanian politics have taken a dramatic
turn. President Eric Delvalle publicly demanded that
General Noriega resign and step down as Commander of the
Panama Defense Force. In less than an hour, General Noriega
convened the National Assembly, and had President Delvalle
voted out as President. He then appointed Manuel Palma, a
friend and ally of Noriega, as Acting President. Later,
Delvalle was ordered out of the country, but refused to
leave. He is now in hiding somewhere in Panama; however,
he stills claims to be the legitimate President of Panama.
Politically, President Delvalle's ouster appears to
have stripped Noriega's government of international support,
and has isolated the new government. As a result, the
Organization of American States (OAS) will have to decide
which government to officially recognize.12
The United States has also refused to recognize
Panama's new government. Additionally, according to many
news reports, the United States has instituted economic
sanctions, and has sent an additional one hundred U. S.
Marines to Panama. This clearly tells Noriega that the
United States is not leaving Panama. Even with the con-
tinued focus on politics, the Panama Canal continues to be
the focal point of everyone's discussion. On 28 February
1988, Senator Lugar, on Meet the Press, stated the United
States should rethink its position on the Panama Canal if
Noriega is still in power in 1999. This is a clear indica-
tion that if Noriega is still in power in 1999, the validity
of the treaty must be re-examined. The United States should
not turn the Canal over to a power hostile to the United
States; to do so would be a tremendous blow to the security
of the United States and its allies.
Politically, the main fear is the Communist presence in
Panama. General Noriega himself has been a noted Communist
since he was a student. He has turned over the former
United States Naval Air Station at Coco Solo to the Soviets
and appointed many Communists to the local government.
Additionally, he has increased relations with Cuba and
Nicaragua. It certainly appears that democracy is history.
It is also apparent that the Panamanian government has
neither the strength or stability that would ensure the
safety of the Panama Canal.13
The United States cannot retreat from the political
arena in Panama. To do so would probably put the last nail
in the coffin of the Monroe Doctrine.14 Politically, the
United States must remain a dominant force in Panama.
America cannot allow Communist domination of Panamanian
politics and Communist control of the Panama Canal.
Panamanian politics will play an important role in the
future. The Panama Defense Force (PDF), even though plagued
by a corrupt leader, General Noriega, will be a strong
political force. Secondly, the National Civic Crusade (NCC)
has become a dominant political party. The NCC has called
for the removal of General Noriega and the return of democ-
racy. It has also refused to negotiate with the government
until General Noriega is removed. The NCC has stated that
Noriega's actions have systematically undermined the values
of Panama as a civilized community.15 Both the NCC and the
POF, coupled with United States politicians, will play an
important role in the political solution to the problems in
Panama.
Militarily, the Canal is essential for the rapid trans-
fer of combat power from one ocean to another. The Canal
allows logistics to flow quickly and efficiently from one
part of the globe to another. Economically, it is the most
economical route for shipping equipment and supplies to
support military activities. Simply put, the Canal allows
the United States military the speed and flexibility to
deploy anywhere in the world in both peacetime and war.16
Panama has some of the best military training facili-
ties available for United States forces. The Army Jungle
Warfare School trains United States forces year-round.
Live-fire ranges are also available. Training areas are
available for tactical field operations. The loss of these
facilities would limit the United States' ability to train
its forces in jungle operations and survival techniques.
The ability to rapidly deploy combat forces in times of
military crises is of prime importance. United States mili-
tary forces stationed in Panama can quickly deploy to any
potential crisis area in Latin America. The loss of this
capability will limit our capability to react. If United
States forces are ordered to leave Panama in 1999, plans
must be made on how the United States forces will be employ-
ed in Latin America.
The defense of the Canal, after all United States
military forces leave Panama, concerns all branches of the
Armed Forces. How are we going to defend the Canal with no
forces stationed ashore? This is a question that must be
answered. My answer to this question is the employment of a
Marine Expeditionary Brigade (MEB), combined with United
States Navy, United States Army, and United States Air Force
forces. If Panama fails in defending and operating the
Canal, an operation of this type could be executed quickly.
Furthermore, if Cuba, Nicaragua, and the Soviet Union become
the dominant forces in Panama, the United States may have no
other choice than to use military force. The use of "the
bayonet" may be the only way to regain this strategic asset
if other means fail.
Even though the use of military force may be the solu-
tion to the Panamanian problem, it will have serious reper-
cussions for the United States. People sometimes forget
that the Panamanians have a tremendous sense of nationalism.
United States military intervention into internal Panamanian
politics could turn this nationalism against the United
States.
If the Panamanian people unite against the United
States, it would cause serious problems in defending the
Canal. The United States would have a long land mass to
defend and a hostile population to deal with. This could
result in the building of a concrete fortress around the
Canal to prevent the populace from taking hostile action
against United States personnel and the Canal.
Another military consideration is the number of mili-
tary personnel necessary to defend the Canal. If the Pana-
manian population is hostile, it could take as many as
100,000 United States troops to defend the area. This would
be a significant drain of personnel and equipment. Further-
more, to support a force of this size would be costly to the
United States government. As a result, the use of military
force must be a last resort tactic.
Combat readiness in Latin America depends largely on
United States military bases in Panama. Presently, the
United States has over 10,000 personnel stationed permanent-
ly in Panama. These forces can quickly be deployed in
Central America, South America, and the Caribbean. If these
bases were lost, the United States would have to deploy
troops from home bases or the sea. U.S. bases in Panama
must be considered vital to the security of the United
States, and be extended beyond the year 2000 deadline speci-
fied in the Panama Canal Treaty of 1977.
If armed conflict between the United States and Panama
occurred, the United States would be at war with a Panaman-
ian defense force of over 15,000. Additionally, the United
States would have to deal with Cuba, Nicaragua, and the
Soviet Union. Furthermore, other Latin American countries
would probably side with Panama, which would damage United
States relations with other countries, and further compli-
cate military operations. l seriously doubt-whether mili-
tary operations would be simple to plan or execute. Jungle
operations would be a big player in the outcome of a mili-
tary solution. Military operations in urban terrain would
also have to be conducted, since Panama City is heavily
populated. Military forces would have to prepare themselves
for prolonged low-intensity conflict operations. As anyone
can easily deduct, a military solution would be the most
costly in both American and Panamanian lives.
The solution to this complex problem will involve both
diplomats and military forces. General Victor H. Krulak
addressed both a political and a military approach to the
problem as follows:
We should openly support the many responsible
Panamanians who are dedicated to establishing a
free and democratic government, while withholding
all support whatsoever from the Noriega govern-
ment. And we should make our position doubly
emphatic by a substantial increase in the United
States forces in the Canal Zone.17
Additionally, the United States Ambassador to Panama,
Arthur Davis, related the future of the Canal to democrati-
zation. He addressed the fact that Panamanian democratic
functioning institutions are the best guarantee to Americans
and Panamanians alike for the successful turnover of the
Canal.18
Both of the above solutions point directly to a change
of government in Panama as the key to the security of the
Panama Canal. A democratic outcome is only possible if the
Panama Defense Force steps down and is no longer the decis-
ive element in national politics.19
I believe the solution to this problem is the immediate
resignation and departure from Panama of General Noriega and
his staff of corrupt officers and followers. Secondly, the
United States must back Panamanian political leaders who
will restore democracy to Panama and who will be friendly to
the United States. Furthermore, the validity of the Panama
Canal Treaty of 1977 is questionable. It must be considered
invalid and a new treaty negotiated. This new treaty must
require a joint defense consisting of U.S. and Panamanian
armed forces and indefinite basing rights for United States
Armed Forces. Then and only then will the strategic, polit-
ical, and military objectives of the United States be served.
The failure to obtain a solution to the Panamanian
problem before the year 2000 will create a serious problem
for the security of the United States. If democratization
fails to take place, and General Noriega and his "Mafia-
like" followers continue in power until the year 2000, the
United States will be forced to make a strategic, political,
and military decision that may bring war to Latin America.
FOOTNOTES
1Paul Ryan, The Panama Canal Controversy (Stanford,
California: Hoover Institutional Press, 1977), p. 142.
2Ibid., p. 145.
3Hanson Baldwin, "The Panama Canal: Sovereignty and
Security," American Enterprise Institute Defense Review, 4
(August 1977), p. 14.
4Ibid., p. 13.
5Ryan, p. 135.
6Victor Krulak, "Panama, Ten Years Later," Strategic
Review, XV (Summer 1987), p. 5.
7Abraham Lowenthal and Milton Charlton, "The United
States and Panama: Confrontation of Cooperation," American
Enterprise Institute Defense Review, 4 (August 1977), p. 7.
8Krulak, p. 5.
9Nancy Cooper, et al. "Drugs, Money and Death," News-
week, 15 February 1988, p. 35.
10Ibid., p. 32.
11Ibid., p. 33.
12William Branigan, "Panama's President in Hiding," The
Washington Post, February 28, 1988, Section A, p. 1.
13Krulak, p. 5.
14Baldwin, p. 5.
15Ricardo Calderon, "Panama: Disaster of Democracy,"
Foreign Affairs, (Winter 1987/1988), p. 336.
16Lowenthal and Charlton, p 6.
17Krulak, p. 6.
18Calderon, p. 6.
19Fred Woerner, "U.S. Southern Command - Shield of
Democracy in Latin America," Defense 87 (Nov-Dec 1987), p.
24.
BIBLIOGRAPHY
Baldwin, Hanson. "The Panama Canal: Sovereignty and Secur-
ity." American Enterprise Institute Defense Review, 4
(August 1977), 12-34.
Branigan, William. "Panama's President is Hiding." The
Washington Post, February 28, 1988, Section A, p. 1.
Calderon, Ricardo. "Panama: Disaster of Democracy." Foreign
Affairs, (Winter 1987/1988), 328-347.
Cooper, Nancy et al. "Drugs, Money and Death." Newsweek, 15
February, 1988, pp. 32-38.
Krulak, Victor. "Panama, Ten Years Later." Strategic Re-
view, XV (Summer 1987), 5-6.
Lowenthal, Abraham and Milton Charlton. "The United States
and Panama: Confrontation of Cooperation." American
Enterprise Institute Defense Review, 4 (August 1977),
2-11.
Ryan, Paul. The Panama Canal Controversy. Hoover Institu-
tional Press, 1977.
Woerner, Fred. "U.S. Southern Command - Shield of Democracy
in Latin America." Defense 89 (Nov-Dec 1987), 20-27.
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