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-RDP79S01011A000600020005-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: November 9, 2016
• Document Release Date: September 21, 1998
• Sequence Number: 5
• Publication Date: January 21, 1952
• Content Type: SE

Approved for Relea 999/09/08 : CIA-RDP79SO1 11A 00600020005-7
CENTRAL INTELLIGENCE AGENCY
JAN 21 1952
21 January 1952
SUBJECT: SE-21i PROBABLE DEVEIAPMtNTS IN THE REPUBLIC OF PANAMA
THROUGH MID41952
THE PROBLEM
To estimate probable developments in the Republic of
Panama through mid-2952 with special reference to Communist
and other anti-US developments which might adversely affect
US interests in Panama,,
CONO JIJSIONS
1o Economics socials and political conditions in the
Republic of Panama are fundamentally unsound and are susceptible
of Communist exploitation over the long term,,. As a political
movements howevers Communism in Panama is weak and ineffective,
In no circumstances could the Communists themselves seise
power in Panama, or otherwise seriously endanger US strategic
interests there, during the period of this estimate and for some
time thereafter,
a
NC,SHANGE IN CLASS. 'n
ECLASSIFIED
CLASS. CHANGED T0[ TS S C
NEXT REVIEW DATE:
Approved For Release 1999/09/08 : CIA-RDP7 01tffl'4 0020005-7
DATE., 8 a, REVIEWER:_018557
 Approved For Releas)999/09/08 : CIA-RDP79SO1011 900600020005-7
2? Panama is suffering an economic depression attributable
primarily to the postwar reduction of US expenditures in the
Canal 2cneo Panamanian officials and businessmen look to the
United States for economic assistance and are likely to exaggerate
the Communist danger in order to obtain Ito
3. The principal, danger to US interests in Panama is
the rapid rise of the ultra-nationalistic (anti--US) Patriotic
Front Party. This Party is non-Communist, but is subI ject
to Communist penetration and influence.
40 Civil disorders in Panama are probable in connection
with the presidential election to be held on 11 May 1952,
The principal candidates in this election are Jose Rem?n9 who
is favorably disposed toward the United 3tates8 and Roberto
Chiarie who is not unfavorably disposed but is supported by
the Patriotic Front Party and the Communists, The outcome of
this contest depends on several unpredictable factors,,
5. Remon, as President, could probably control the situation
as long as he had the support of the National Police,
6. Chiari, as President, could probably free his administra-
tion of dependence on the Patriotic Front and the Communists
if he had the support of the National Police and the active
cooperation of the United States.
Approved For Release 1999/09/08 : CIA-RDP79S0101lA000600020005-7
 Approved For Releases 999/09/08 : CIA-RDP79SO101 WO0600020005-7
If Chiari became President in circumstances which
rendered him completely dependent on the continued support
of.the Patriotic Fronts Communist penetration of the administra-
tion would ensue and a situation might eventually develop
like that in Guatemalan
DISCUSSION
BASIC FACTORS IN THE SITUATION
PANAMANIAN'DEPENDENCE ON THE UNITED STATES
8. Informed Panamanians realise that close relations
between Panama and the United States are inescapable9 not
only because of US strategic interest in the Canal and US
occupation of the Canal Zoncg but also because of Panamass
economic dependence on the United States, At the same time
they are extremely sensitive to any supposed infringement of
the juridical sovereignty of Panama. Any Panamaniannia government
must strike a nice balance between satisfaction of the popular
demand for the assertion of Panamanian sovereignty and
accomodation to the realities of the situation. All0 however
nationalistic their antecedents9 have made this accomodation.
Approved For Release 1999/09/08 : CIA-RDP79S01011A000600020005-7
 Approved For Relea5) 999/09/08 : CIA-RDP79SO101'1,00600020005-7
BASIC ECONOMIC CONDITIONS
9. Panama's economic development has been limited by
sparsity of population, meagerness of natural resources, and
dearth of capital, Foreign trade is almost exclusively with
the United States* Although most of the working population
are engaged in agriculture, foodstuffs are the principal
import (70%)b Exports consist largely (62%) of one crop,
bananas, controlled by two US firms. There is an adverse
balance of trade in the order of $309000,000 annually. This
adverse balance is normally offset by dollar earnings in
the Canal Zone. Thus the economy of Panama is highly
sensitive to the level of US activity in. the Zone.
BASIC. SOCIAL CONDITIONS
10o The population of Panama is classified as
white, 19% Negro, and 65% mestizo. Racial tension exists
with respect to the Negro minority, who are contract laborers
imported from the British West Indies and their descendants.
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
Zone) and the United Fruit Company.
Approved For Release 1999/09/08 : CIA-RDP79S0101lA000600020005-7
 Approved For Release 1999/09/08 : CIA-RDP79SO1011A,, J0600020005-7
BASIC POLITICAL CONDITIONS
110 Panamanian politics are essentially a contest for
the perquisites of office among the few families which
dominate the economic and social life of the country,
Consequently they are based on personalities rather than on
issues and are characterized by kaleidoscopic shifts in alignment
amongst the many personal factions involved4 Political activity
is limited largely to the principal cities, Panama and Colon.
THE PATRIOTIC FRONT PARRTL_(PFP
12. The personal politics of Panama are increasingly
influenced by the development of an ultra.-nationalistic
youth movement now organized as the Patriotic Front Party.
The rank and file of this Party are young workers and studentsg
mostly excitable teenagers; the leaders are older and more
experienced agitators who have developed the organized mob
into an effective political weapon. The Party?s violently
anti-US line is addressed to depressed social elements
allegedly suffering the consequences of Yankee imperialism,
13 This ultranationalistic youth movement was initiated
by Arnulfo Arias in 19444 Its violent demonstrations were
the primary factor in Panamanian rejection of the Defense
Sites Agreement in 1948, Although instrumental in elevating
Approved For Release 1999/09/08 : CI RDP79S0101lA000600020005-7
 Approved For Releas 1 99/09/08 : CIA-RDP79SO1011A0 0600020005-7
Arnulfo Arias to the Presidency in 1949, it was primarily
responsible for his violent overthrow in 19514 The dominant,p
though coverts influence in the Patriotic Front now appears
to be that of Harmodio Arias, the master mind among old line
Panamanian politicianse
COMMUNISM IN PANAMA
14. The Communist apparatus in Panama is undoubtedly
in effective communication with Moscow. There are some
indications that the channel is through the Czech Legation
at Caracas. The Communist-controlled Federation of Workers
(FSTP) also has connections with the CTAL and WFTUo
15. As a political movement in Its own name, Communism
in Panama is weak and ineffective. The (Communist) People9s
Party has only some 700 members,-of whom no more than 50
could be regarded as a hard core. Panamanian Communists
are mostly intellectuals who remain as individualistic as'
other Panamanian politicians. (Many have been expelled from
the Party in the course of its internal dissensions, but
retain their Communist ideology and intellectual influence.)
In some circumstances, however, the Party may be able to
command proletarian support through its control of the
Workers Federation and its influence among the Negro employees
of the Canal,
Approved For Release 1999/09/08 : CIA-RDP79S0101lA000600020005-7
 Approved For Release 1999/09/08 : CIA-RDP79SO1011A 0600020005-7
l6p The most dangerous aspect of Communism in Panamanian
politics is the influence of individual Communists (both Party
members and expellees) among the intelligentsiab Communism
in this guise is not regarded as an alien menace, but rather
is intellectually fashionable. In this way Communism exerts
a. strong influence upon both teachers and students at all
levels of the Panamanian educational system and, through
theme threatens to control and direct the ultra-nationalism
of the Patriotic' Front0
THE NATIONAL POLLCE
The only armed force of the Republic of Panama is
the National Po1iceo the present active strength of which is
29453,, The Police are fairly well equipped with small arms
and control the only considerable stock of arms in Panama,,
Their morale is good: they are unlikely to become divided
by political partisanship.'
18