FACTORS OF INSTABILITY IN PANAMA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A001200010018-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 16, 2016
• Document Release Date: November 8, 2004
• Sequence Number: 18
• Publication Date: September 6, 1966
• Content Type: IM

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6 September 1966
No. 1-599/66
Copy No. 24
INTELLIGENCE MEMORANDUM
FACTORS OF INSTABILITY IN PANAMA
DIRECTORATE OF INTELLIGENCE
GROUP 1
Excluded from automatic
downgroding and
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SECRET
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This Document contains information affecting the Na-
tional Defense of the United States, within the mean-
ing of Title 18, Sections 793 and 794, of the U.S. Code, as
amended. Its transmission or revelation of its contents
to or receipt by an unauthorized person is prohibited
by law. The reproduction of this form is prohibited.
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 Approved For Releas T 200SEMCMT797 826AO01200010018-3
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
6 September 1966
INTELLIGENCE MEMORANDUM
Factors of Instability in Panama
TABLE OF CONTENTS
Page
Summary
. . . . .
. . . . .
.
. . . .
2
I. The Cana
l and US R
elationshi
p
. . . .
4
II. The Olig
archy . .
. . . . .
.
. . . .
7
III. The Unst
able Polit
ical Syste
m
. . . .
10
IV. Arnulfo
Arias and
the Paname
n
istasa .
15
V. Communis
m and the
Student Mo
v
ement. .
19
VI. Economic
Factors
. . . . .
.
. . . .
23
NOTE: This memorandum has been produced solely
by CIA. It was prepared by the Office of
Current Intelligence and coordinated by
the Office of National Estimates and the
Office of Research and Reports.
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Summar 3f
By early 1967, Panama's,. politicians will have be-
gun serious campaigning for the 1968 national eleo-
tions. The campaign will come at a time when the
government is particularly vulnerable to criticism
from the opposition because of the long-drawn-out
canal negotiations with the US. The Robles adminis-
tration is also subject to attacks because the public
is dissatisfied with its lot under the oligarchy.
Under these circumstances, both the conduct
and outcome of the campaign will be important to US
interests. The US stake in the present lock canal
and in a future sea-level canal gives Panama a lever
for applying pressure and embarrassing Washington.
Panama has used this leverage irresponsibly in the
past, and its internal problems of the moment may
well inspire a more dangerous employment in the
next year and a half.
Panama has more than enough issues at home for
political competition. With the country's fragile
and strife-ridden social order, its general under-
development because of undistributed wealth, and
the over-all failure of government to respond to
national needs, political contests are traditionally
personalistic and nonsubstan.tive. Evidence suggests
that the public's impatience with these conditions
may be nearing the point of combustibility.
At the same time that popular frustration and
restiveness are threatening the old, corrupt system,
the protracted canal negotiations between Panama
and the US are breeding a strong nationalistic
mood, and both sources of unease could be readily
exploited by a popular demagogue. Such a one is,
in fact, waiting in the wings: Arnulfo Arias,
irascible foe of the elite who has twice in the
past won the presidency with fervent support from
a disaffected populace. He is the leader of the
country's largest political party and has undoubtedly
set his sights on the presidency in 1968.
Incumbent President Marco Robles is gambling
on a successful conclusion to the treaty negotiations
as a solution to Panama's multitude of socio-economic
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problems, as well as to his and his party's politi-
cal problems vis-a-vis the upcoming elections.
Should he be unable to win concessions from the US
that would satisfy national aspirations, this may
drive him to take an irrational attitude toward
the US and could even lead to his ouster. If the
canal treaty remains an open issue for the next
presidential campaign, the successor government
might be more extreme in its demands.
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P A N A M A
International boundary
------- -'--- Internal administrative
boundary
.National capital
Internal administrative capital
-Railroad
-- Road
:. __.`Canal
25 50 75 Miles
0 25 50 75 Kilometers
SELECTED
UNEMPLOYMENT. 20-30% in Panama City
and Col?n
GROSS NATIONAL PRODUCT:
$617 million (1965)
$572 million (1964)
Per Capita GNP $497
Fry e. od