SE-21: PROBABLE DEVELOPMENTS IN THE REPUBLIC OF PANAMA THROUGH MID-1952

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01011A000600020003-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: November 9, 2016
• Document Release Date: September 21, 1998
• Sequence Number: 3
• Publication Date: January 23, 1952
• Content Type: MF

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JAN 2 3 1952
CENTRAL INTELLIGENCE AGEINCT
WARD OF NATIONAL E&T fl4AT13
23 JaIaary 2952
ME IORAHDUM FOR THE INTELLIG NCE ADV1 ORY CSDPIMITTEE
$JDJ 's SE-21i PROBABLE DEVELOFN NTS IN THE
REPOBLIC OF PAJAMA THROUGH MM-1952
A* The attached draft estimate has been approved
1y the Board of National Estimates pursuant to con-
sideration by the ZAC representatives*
2a This estimate has been placed on the agenda
of the ZAO meeting scheduled for 10009 Thursday,, 22
Jaa* 19524
25X1A9a
(Distribution "Ali
tip Seeretary
DOCUMENT NO.
NO CHANGE IN CLASS. ^
DECLASSIFIED
CLASS. CHANGED TO. TS S C
NEXT REVIEW DATE:
AUTH: HR 10.2
DATE: )-F"3 9'LREVIEWER:_018557
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SEW RITY 3T~1J1 TION
CENTRAL INTELLIGENCE AGENCY
23 Jaxmary 1952
SDBJECTt SEi PROBABLE DEVEIMMII IN THE REPUBLIC OF
PAN.41 sA THROUGH MID-1952
THE?PROBLEK
To estimate probable developments in the Republic of
Panama through mid .952 with special reference to Conuniat
and other antioUS developments which might adversely affect
US interests in Panaanaa
CONCLUSIONS
to As an organised political foxes operating in its own
nave, Commmnism in the Republic of Panama is weako In no airy
camstaraea could the Coma mists themselves seize power in
Panama, or otherwise politically endanger US strategic inter-
sets there, during the period of this estimate,
20 Economic, social, and political, conditions in Panama
are manta unsound, however, and are susceptible of
Corramnist exploitationo
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34 Panama is suffering an economic depression attri-
butable primarily to the postwar reduction of US expenditures
in the area, Panamanian officials and businessmen look to the
United States for economic assistance and are likely to
exaggerate the Communist danger in order to obtain it,
4o The principal danger to US interests in Panama is the
rapid rise of the ultranationalistic (anti US). Patriotic Front
Party,, This Party is not now Conrau4et controlled, but its
ultra-nationalistic and anti-US bias make it subject to Communist
penetration and influence,
The principal candidates in the presidential election
to be held on 11 May 1952 are Jose Ramon, who is favorably dig.
posed toward the United States, and Roberto Chiari, who is not.
unfavorably disposed but is dependent on the support of the
Patriotic Front, Ramon could probably win a free election, The
Patriotic Front and, the Communists, however, are likely to resort
to mob violence in their determination to defeat him. Ramon, who
has the support of the National police, is reluctant to resort
to force to gain the Presidency, but might do so if he concluded
that otherwise his election would be prevented. It is not cerm
tain that the Police would support Remon in a coup d?etat, bat
it is likely that they would do so. Whatever course they took'
would probably prove decisive.
2
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6o Civil disturbances are therefore probable in connection
with the forthcoming election and a coup d~etat by either side
is possible, The intensity of such disturbances will affect
both the outcome and the ensuing political situation,.
7? lomin, as President,, could expect the continuing' im.
placable opposition of the Patriotic Front and the Comnunists0
If he had come to power by the use of force those elements would
claim justification for their charge of militarism against him
and would probably receive greater popular sympathy for their
continued opposition than would otherwise be the case, Reran
could probably control the situation, however, so long as he had
the support of the National Police.
8* Chiarig President,, could probably free his adminis-
tration of dependence on the Patriotic Front and the Cominteta
if he had the support of the National Police and the active
cooperation of the United States.
9o If Chiari became President in circumstances which randerw
ed him completely dependent on the continued support of the
Patriotic Front? Commnist penetration of the administration
would ensue and in time the Communists might attain dominant
influence.
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Basic Factors in the Situation
Panamanian nd a on the United States
io Informed Panamanians realize that alone relations be-
tween Panama and the United States are inescapable, not only
because of US strategic interest in the Canal and US occupation
of the Canal Zone, but also because of Panamams econom?.e deperr-
deuce on the United ,teso At the same time they are extremity
sensitive to arq supposed infringement of the sovereignty of
Panamao Aiy Panamanian government nmet strike a nice balance
between satisfaction of the popular demand for the assertion
of Panamanian sovereignty and accommodation to the realities
of the situation. All Panamanian governments, however national-
istic their antecedents, have made this acconemodationo
Basic Economic Conditions
U,. Panama's economic development has been ] imi.ted by
sparsity of population, meagerness of natural resources,
dearth of capital and concentration on the "Canal econorr" to
the neglect of agricultural developments Foreign trade IS
al-
moat exclusively with the United States. Although most of the
working population are engaged in agriculture, foodstuffs are
- 4
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the principal import (70 percent) o Exports consist largely
(61 ppercent) of one crop' bananas, controlled by two US. firmso
There is normally a large adverse balance of trade which in
1951 amounted to $30,OOO,000, This adverse balan - is normally
offset by dollar earnings in the Canal Zone, Thus the econonv
of Panama is highly sensitive to the level of US activity in
the Zoned
Basic, Social Conditions
l2, The population of Panama is classified as 24 percent
white, 19 percent Negro, and 65 percent mestizo or mixedo
Racial tension exists with respect to the Negro minority of
British West Indian origin, A few white families control most
Panamanian economic activity above the level of subsistence
farming, The principal employers of wage labor are the United
States (in the Canal lone) and the United Fruit Company,
Basic Political Conditions
13, Panamanian politics are essentially a contest for the
perquisites of office sing the few families which dominate the
economic and social life of the country, Consequently they are
based almost exclusively on personalities rather than on Issues
and are characterized by kaleidoscopic shifts in alignment amongst
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the many personal factions involved, Political activity is
limited largely to the principal cities,, Panama and Colon0
The Patriotic Front Paq'
?1 FO10
14o The personal politics of Panama are increasing]y in.
fluenced by the' development of an ultra-nationalistic youth
movement now organized as the Patriotic Front PartV0 The rank
.and file of this Party are young corkers and students; the leaders
are older and more experienced agitators two have developed use
of the mob as an effective political weapon, The Party0s vehe-
mently anti=US line is addressed to supersensitive nationalists
and to depressed social elements allegedly suffering the coned
quen s of Yankee imperialism0
15o. This ultra-nationalistic youth movement was initiated
by Arraxlfo Arias in 191he Its popular demonstrations were an
important factor in Panamanian rejection of the Defense Sites
Agreement in 1947. Although instrumental in elevating 4rnulfo
Arias to the Presidency in 19l$98 it participated in his violent
overthrow in 2952, The dominant, though covert, influence in the
Patriotic Front now appears to be that of Harmed o Arias,$ the
master mind among old line Panamanian politicians,
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Comeainism in Panama
16, The Communist apparatus in Panama is presumably in at
least indirect eoar nication with Moscow. There are some indi-
cations that the channel may be through the Czech Legation at
Caracas. The st-contaroUl.ed Federation of Workers (PSTRP)
has connections with the armor Communist labor federations,, the
Latin American CTAL and the world-wide WFTU,
37,, As an organized political force operating in its own
name, Communism in Panama is iaieaak. The (Communist) Peoples
Party has only some 500 members, of uttom no - more than 50 . could
be regarded as a hard core. Leading Panamanian Caa mists are
no individualistic intellectuals, Some have been expelled
from the Paa - in the course of its internal dissensions, but
retain their Communist ideology. In some otaumetaances,,, the
Party may be able to enli. st proletarian support through its cones.
trol of the Workeres Federation and through its potential In-
fluence amng the Negro emplayees of the Canal.
18, The met daa igerous aspects of C mmcnism in Panamanian
politics is the influence of individual Co nist-e (both Paste
members and expellees) among the intelligentsia, In these airt.
class, in which philosophical Y4'aarcism is a respectable and widely
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I%W *Me
aepted doctrine, Communism is not regarded as an alien menace,
Communism exerts a strong influence upon both tomhere and sta.
dents at all levels of the Panamanian educational system and,,
through them, may eventually gain control of the Patriotic
Front,
The National Fore;
19. The only armed force of the aapublio of Panama is the
National Police, the present active strength of which is 2,g453o
The Police are fairly well ecpipped with small arms and control
the only considerable stock of azms in Panama, Their morale is
goods they are unlikely to' become divided by political parts'
eanshipo
20, The National Police are capable of suppressing any
probable Cc unist or Patriotic Front disorders, They may heel-
tats,, however, to fire'upon student rioters, some of whom would
be the sons of the "best families" of Panama,
The Current Crisis
The I7sonomic Situation
2l0 The postwar reduction in US expenditures. in the area
has caused an economic depression in Panes, Probably 15 per-
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cent of the normally employed population of Panama City and
Colon are now unemployedd Bank deposits have declined and
there has been an important bank closure, Local mismanagement,
grip and capital tires for unproductive seas have
ooa4tributed to. this situation? Most Panamanians, however, dis-
cl.aim any national responsibility in the matter and look to the
United States to solve the problem through economic assistance,
With that end in view officials and businessmen may purposefully
exaggerate the Communist danger, the favored fornuala for obtain-
ing US aide
The pproaching Election
22, There is danger of riotous disturbance' in Panama, not
primarily, as a result of Communist exploitation of the economle
situation, but in relation to the presidential election to be
held on 11 May 1952, in which Jose Antonio Rencn and Roberto
Chiari will be the principal candidates, Such disturbances would
be in the ordinary course of Panamanian politics,
Rev4n and the National Patriotic Coalition
23 In October 1951 Colonel Reman resigned as Commandant
of the National. Police in order to qualify as a candidate for
the Presidency. The miscellany of traditional parties or
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factions supporting him calls itself the National Patriotic
Coalition, Their program, as expressed by Remgn, includes
the maintenance of friendly relations with the United States,
special attention to agricultural and financial problems, and
free elections,
24, An important element of strength on RemSn's side is
the good will of the National Police. The present Commandant,
Colonel Vallarino, is supporting Remoln i s candidacy, but is not
subservient to him, It appears that the Police, as a force,
are now. committed no further than to maintain orderm
Chiari and the Civil Alliance
25, The opposing candidate is Roberto Chiari, a successful
businessman and member. of one of the old families of Panama,
supported by a group of parties end factions called the Civil
Alliance in contradistinction' to Reemonea "military" character,
Chlari is reasonably well disposed toward the United States., as
are his conservative supporters, Common opposition to Remo/n,
however., has brought to Chiarive side the ultra-nationalistic
(anti-US) Patriotic Front Party. The (Commaxnist) People,?e Party
is not formally a member of the Civil Alliance., but is also
actively opposing Ramon and is represented in the Alliance
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through the participation of Comminists in the Patriotic Front,
26. The dominant personality in the Civil Alliance is
Harmodio Arias,, who is determined that Remin shall not attain
the Presidency, If necessary, Arias would probably employ
the Patriotic FrontVa capabilities for mob violence in an
effort to defeat Remon,
Arnulfo Arias and the Panamenistas
27. A third factor in the political situation is Arnulfo
Arias,, the deposed President, who is in jail but retains a con.
siderable popular following organized as the Panamer"fista Party,
Arias is willing to exchange his political support for his liQ
berty and may hold the balance of electoral power,
Probable Developments
28 The course of events will largely depend on three un-
certain factors: the direction in which Arnulfo Arias throws
his support; the possibility of mob action by the 'Patriotic,
Front; and the condact of the National Policed
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29. Reman is a self-made man and is ambitious to achieve
respectability by attaining the Presidency, hitherto reserved
for the socially elect, He is therefore sensitive to the
charge of militarism and anxious to come to power by respect-
able (constitutional) means. Probably he could win a free
election with his present support, Almost certainly he could
win with the additional support of Arnilfo Arias.
30, Ha odio Arias is determined to prevent Rem6n from
attaining the Presidency, It is possible that he might do so
by gaining 'for Chiari the support of Armalfo Arias. It is c.ito
likely, however, that Harnaodio Arias will feel it necessary to
resort to mob violence to order to accomplish his purpose,
3L If Rem6n concluded that his election would be prevented,
by one means or the other, he might attempt to seize the Presi-
dency with the aid of the National Police. The behavior of
the National. Police in such a case, or in the face! of student
disorders in behalf of Chiari, is uncertain but likely to favor
Rezone Whatever course the Police took would be likely to prove
decisive,
32, Relm6n, as President, could expect the continuing imp
placable opposition. of the Patriotic Font and the Communists,
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he had core to power by the use of fore these elements would
claim justification for their charge of militarism against him
and would probably receive a greater degree of poprlar sympathy
for their continued opposition than would otherwise be the casez
Hem& could probably control the situation, however? so long as
he had the suppcirt of the National PoUcec
33, ChiariF, as Presidasnt,c would not himself be unfriendly
to the United States and could probably free his a ac%lnlstratieae
of dependence on the Patriotic Fart if he had the support or
the National Police and the active cooperation of . the .United
States-
. A., If Chiarri became President in cireunstanses which sen~ ,
dared him completely dependent an the continued support of
the Patriotic Fraont0 Coemsam mist penetration of the administration
would ensue, and In tiros the C iets might attain doninant,
influence,
35G In no sirs st$aoe s is the political situation likely
to develop In such a way as to endanger iasrrseediatelly the strata
gi+o interest* of the United States isa Paremaag, or to bring the
Cc mists directly to pcwer therm.
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