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-RDP79S01011A000600020004-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: November 9, 2016
• Document Release Date: September 21, 1998
• Sequence Number: 4
• Publication Date: January 21, 1952
• Content Type: MF

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CENTRAL INTELLIGENCE AGENCY
BOARD OF NATIONAL ESTIMATES
21 January 1952
104ORANDUM FOR: Mr. Allan Evans, OIR
Colonel B. B. Talley, G?2
Captain Ray Malpasa, ONI
Colonel Edward H. Porter, AFOIN
Colonel S. Id. Lansing, JIG
SUBJECT z SE-21: Probable Developments in the Republic
of Panama through Mid-1952
1. The attached text, prepared on a "crashr basis in
response to a request by the Special Assistant, Intelligence,
Department of State, is circulated for your consideration.
2. It is important that this text be ready for considera,-
tion by the IAC itself at its next meeting, 10:30 Thum,
2.4. January.
3. It would therefore be appreciated if your represen-
tatives could convene with us at 2:30 Tuesday, 22 January,
in Room 346 South Building, to consider this text.
25X1A9a
Distribution t"Btt
DOCUMENT NO.
-2~~
NO CHANGE IN CLASS. ^
X DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE:
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SECURITY INFORMATION
CENTRAL INTELLIGENCE AGENCY
91 Ja m azy 1952
SUBJECTt SE-21t PRO MM DEVIaLOPLfl rLS IN THE REPUBLIC OF
PAM?3.AP1A THROUGH I M3-1952
To estimate probable developments in the Republic of
Panama through'mid-1952 with special reference to Colmmmist
and other anti-US developments which might advor8ely affect
US interests in Panama.
1a As a political movvemmentj, Communism in the Republic
of Panama is weak and ineffective, In no circus t,:nces could
the Communists themselves seize power in Panama,: or otherwise
soriously endanger US strategic Interests there, during the
period of this estimate and for song time thereafter.
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2? Economic, social? and political conditions in Panama
are, however, fundamentally unsound and are susceptible of
Communist exploitation over the long teen,
3g, Panama is suffering an economic depression attributable
primarily to the postwar reduction of US expenditures' in the
Canal Zone, Panamanian officials and businessmen look to the
United States for economic assistance and are likely to exaggorate
the Communist danger in order to obtain its
44 The principal danger to US interests in Panama is the
rapid rise of the ultra-nationalistic (anti-US) Patriotic Front
-Party< This Party is not now Communist controlled, but its
ultra-nationalistic and anti-US bias make it subject to Communist
penetration and influenced
5Q Civil disorders in Panama are probable in connection
with the presidential election to be hold on 11 '-:ay 1952,
The principal candidates in this election are Jose' Reston, who
is favorably disposed toward the United States, and Roberto
Chiati, with 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,
6Q :gin n, as Prosident, could probably control the situation
as long as he had the support of the National PoliceQ
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7. Chiari, as President, could probably free his administrar.-
tion of dependence on the patriotic Front and t?le Communists if
he had the Support of the National Police and the active
cooperation of the United States,
8,, If Chiari became President in circumstances which rendered
him completely dependent on the continued support of the Patriotic
Front, Communist penetration of the administration would ensue
and in time, the Communists might attain dominant influence.
DISCUSSION
Basic Factors in the Situation
Panamanian Dependence on the United States
9, Informed Panamanians realize that close relations between
Panama and the United Status are inescapable, not only because
of US strategic interest in the Canal and US occupation of the
Canal Zone,, but also because of Panama's economic dependence on
the United States, At the sane time they are extremely sensitive
to any supposed infringement of the sovereignty of Panama, Any
Panamanian government must strike a nice balance between satisfaction
of the popular demand for the assertion of Panamanian sovereignty
?3
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and accommodation to the realities of the situation0 All,, however
nationalistic their antecedents have made this accommodation,
Basic Economic Conditions
10, 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 percent), .Exports consist largely (61 percent) of one crop,
bananas, controlled by two US firms, There is an adverse balance
of trade in the order of 30,000,,000 annually, ,his 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
11. The population of Panama is classified as 14 percent
white, 19 percent Negro? and 65 percent mestizo (mixed). 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
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principal employers of gage labor are the United States (in
the Canal Zon?) and the United Fruit Company.
Basic Political Conditions
12p Panamanian politics are essentially a contest for the
perquisitos of office among the few families which dominate the
econoiic and social life of the countrsro Conscquentiy they are
based almost exclusively on personalities rathcr than on issues
and are characterized by kaleidoscopic shifts in alignment amongst
the man,q personal factions involvedd Political activity is limited
largely to the principal cities' Panama and Colon,
The Patriotic Front Party (PFP)
IY Miles Y
13a 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 students; the leaders are older and
more experienced agitators who have developed the organized mob
into an effective political vreapono The Party's violently anti-US
line is addressed to depressed social elements allegedly suffering
the consequences of Yankee imperialism.
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3.4. This ultra.-nationali:itic youth wovement was initiated
by Arnulfo Arias in 19440 its violent demonstrations were an
important factor in Pana.ian rejection of the Defense Sites
Agreement of 1947, Although instrumental in elevating Arnulfo
Arias to the Presidency in 1949,9 it participated in his violent
overthrow in 1951, The dominants though coverts influence in the
Patriotic Front now appears to be that of 1Iarmodio Ariass the
master mind among old lane Panamanian politicians?
C,omxnism in Panama
15$ The Communist apparatus in Panama is presumably in at least
indirect communication with iioscowo There are some indications
that the channel is through the Czech Legation at Caracas, The
Communist.-controlled Federation of Workers (. STP) also has con.-
nections with the major Communist labor fedorations,, the Latin
American CTAL and the world-wide YXTU,
16, As a political movement in its own names Communism in
Panama is weak and ineffective, The (Communist) Poople's Party
has only some 700 memberss of whom no more than 50 could be
regarded as a hard core, Panamanian Communists are mostly
intellectuals wbo remain as individualistic as other Panamanian
politicans, Some have been expelled from the Party in the course
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Of its internal dissensions$ but re7:zin their Comiuuniot ideologyn
In some circwustanceas hewover$ the Party may be able to command
proletarian support through its control of the Worker's Federation
and through its influence anon- the 13cgro employees of the Canal,
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17, The most dangerous aspect of Communism in Panamanian
politics is the influence of individual Communists (both I-arty
members and expeUeea) among the intelligentsia. Communism
in this guise is not regarded as an alien menaces, 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 them,
may eventually gain control of the Patriotic Front.
The National Police
18, The only armed force of the Republic of Panama is
the National Police, the present active strength of which is
2,453. 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,
19a The National Police are capable of suppressing any
probable Communist or Patriotic Front disorders. They may
hesitate, however, to use force against student rioters, the
students being sons of the "best families" of Panama. This
weakness was illustrated by the vacillation of the Commandant,
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Colonel Reman, daring the overthrow of President Arias, Remio`n
appears to have turned against Arias, not on his own initiative,
but because of his unwillingness to suppress the rioters by
force of arms.
The Current Crisis
7he Economic 'Situation
200 The postwar reduction in US expenditures in the Canal
Zone has caused an economic depression in Panama. Probably
15 percent of the economically active population of Panama
City and Colon is unemployed. Bank deposits have declined and
there has been an important bank closure. Local mismanagement,
graft, and capital expenditures for unproductive purposes have
contributed to this situation. Most Panamanians, however,
disclaim any national responsibility in the matter and look
to the United States to solve the problem through economic
assistance. With that and in view officials and businessmen
may purposefully exaggerate the Communist danger, the proved
formula for obtaining US'aid.
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The Approaching Election
21 o There is danger of riotous disturbances in Panama,,
not as a result of Comnunf.st exploitation of the economic
situation, but in relation to the presidential election to be
held on.1:4. May 1952, in which Jose Antonio Ramon and Roberto
Chiari will be the principal candidateso Such disturbances
mould be in the ordinary course of Panamanian politics, Any
Communist gains from them would be essentially indirect.
hemon and the National Patriotic Coaliti.ozt
22m In October 1951 Colonel Remon resigned as Commandant
of the National Police in order to quality as a candidate for
the Presidency. The *+iscellany of traditional parties or
factions supporting him calls itself the National Patriotic
Coalition, Their program, as exjressed by Remon, includes the
maintenance of friendly relations with the United States,
special attention to agricultural and financial problems, and
free elections.
23. The principal element of strength on Romon's side is
the rood will of the National Police, The present Commandant,
Colonel Vallarino? is supporting Rerr in's candidacy, but is not
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subservient to him. It appears that the Police, as a force,
are committed no further than to maintain order and ensure a
free election.
Chiari and the Civil Alliance
24. 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 and factions called the Civil
Alliance in contradistinction to Remon'a "military" character.
Chiari is reasonably well disposed toward the United States,
as are his conservative supporters, Common opposition to Remon,
however, has brought to Chiari's side the ultra-nationalistic
(anti-US) Patriotic Front Party. The (Communist) People's party
is not formally a member of the Civil Alliance,, but is also
actively opposing Rembn and is represented in the Alliance through
Communist participation in the Patriotic Front.
25. The dominant personality in the Civil Alliance is Harmodio
Arias, who is determined that Reton shall not attain the
Presidency. If necessary, Arias would employ the Patriotic Front's
01
capabilities for mob violence to defeat Remo
n.
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Arnulfo Arias and the Fanamen .etas
26, A third factor in the political situation is Arnulfo
Arias, the deposed President, who is in jail but retains a
considerable popular following organized as the Panamenista .
Party, Arias offers his support in exchange for his liberty
and may hold the balance of electoral power, Remon is disposed
to bargain in terms of Arias's release after the election, but
Arias demands release beforehand. Neither trusting the other,
no deal has yet been made.
Probable Developments
27. The outcome of the election depends on three
unpredictable factors: the direction in which Arnulfo Arias
throws his support; the possibility of mob action 'by the
Patriotic Front; and the conduct of the National Police.
28o 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 respectable
(constitutional) means. Probably he could win a free election
with his present supports Almost certainly he would win with
the additional support of Arnulfo Arias.
12
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29. Harmodio Arias is determined to prevent Remon from
attaining the Presidency. It is possible that he might do so
by gaining for Chiari the support of Arnulfo Arias. It is
quite likely, however, that Harmodio Arias will feel it necessary
to resort to mob violence before the election in order to
influence the result, or in order to obviate the election by a
coup d@etat.
30. If Remon concluded that his election would be prevented,
by one means or the other, he might attempt to seize the
Presidency 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 unpredictable., Whatever course
the Police took would be likely to prove decisive.
31. Renon, as President, could expect the implacable
opposition of the Patriotic Front and the Communists, including
civil disturbances, but could probably control the situation
as long as he had the support of the National Police.
32. Chiari, as President, would not himself be unfriendly to
the United States and could probably free his administration of
dependence on the Patriotic Front if he had the support of the
National Police and the active cooperation of the United States.
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Arr.
PECU-
33. If Chiari became President in circumstances which
rendered him completely dependent on the continued support of
the Patriotic Front, Communist penetration of the administration
would ensue and in time the Communists might attain dominant
influence.
31, In no circumstances is the situation likely to develop
in such a way as to endanger immediately the strategic interests
of the United States in Panama, or to bring the Communists
directly to power there.
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