Mr. Chairman and distinguished members:

It is a privilege to be invited to testify today on the general topic of Panama and the impact of the U.S. departure from that country insofar as it affects our regional anti-drug capabilities.

As you must already know, under the Carter-Torrijos treaties, ratified by the United States Senate in 1978, no country other than Panama may maintain military forces in that country after December 31, 1999. That date is very nearly upon us. Today the process of turning over our bases to the Republic of Panama is well advanced. All of our military people will be out of that country by the end of the year.

The transition process from the treaties to the actual turnover of the Canal and its adjacent facilities has been stretched out over a 22-year period. During that time many people in both Panama and the United States have had second thoughts about whether a complete drawdown of our presence there ultimately served the interests of both countries. The emergence of a serious problem of drug trafficking in the circum-Caribbean—an issue which was far less salient two decades ago when the treaties were drafted—has obviously been one motivation for revisionism.

Indeed, the Clinton and Perez Balladares administrations have looked into the possibility of some sort of residual U.S. military presence for the precise purpose of drug interdiction. However, in practice it proved impossible to bring the two sides close enough together to reach an agreement.

The basic problem was that, as chief representative of the party of General Torrijos, President Perez Balladares could not be seen as betraying the latter’s nationalist legacy by overturning key provisions of the treaty—one that dealt with the ultrasensitive subject of U.S. troops. Hence, the Panamanian government confected the idea of a "multilateral" anti-narcotics center which—it repeatedly explained—would neither be a U.S. base nor even a military installation. Though it was understood that ninety percent of the personnel would be from the U.S., and the overwhelming majority of those would be uniformed officers and enlisted personnel, they would have take shelter under a kind of fictitious juridical international persona.

Even this did not satisfy President Perez Balladares’ critics, particularly the Arnulfistas, the second largest party in Panama, which repeatedly accused him of conniving to overturn the treaties and impose a new era of U.S. military hegemony in Panama. This view was largely shared by the other opposition parties.

Thus even if the U.S. and Panama had been able to reach final agreement, it is more than probable that it would have failed to win approval in a plebiscite.

To say that the drug center idea is dead amounts to saying that the only device by which the U.S. could credibly remain a military presence in Panama is dead also. Although there are many people in both countries who still hope against hope that some deal can be struck at the eleventh hour, the divided nature of the Panamanian political community, the fact that all Panama’s presidents are minority presidents, the short seven months that remain to draft an agreement and convoke a plebiscite—all of these things suggest that we should pack our bags and look elsewhere for the tasks of drug interdiction, if that in fact is what we want our military to do.

I for one do not think that this is necessarily a bad thing.

First of all, our departure will allow Panama to become—for the first time in its independent history—a "normal" country, with all the problems and possibilities that such a category entails. Many Panamanians argue that they can replace (or even exceed) the resources formerly obtained from the resources spent locally by the U.S. military by converting the U.S. military bases into more productive facilities—for tourism, manufacturing, ship repairing, etc. If this is so, more power to them. If not, that is something they should have thought of before they decided to ask us to leave.

Second, it frees the United States from the responsibility to assure Panama’s political stability and economic welfare. The massive U.S. presence in that country over nearly a century imposed a certain minimal obligation to assure a safe and secure environment there. It also inevitably led many Panamanians, and particularly Panamanian politicians, to view the United States as ultimately responsible for all of their problems, difficulties, and deficiencies. It is true that in the past we could not afford to allow anything too strange to occur there, because we had so many military people and dependents vulnerable to the mercies of the urban mob. In the future, however, only Panamanians will suffer from any disruption of the civic peace, and Panamanian politicians—not American military officers, or Canal Zone officials, or the U.S. Congress—will have to answer for the deficiencies of Panamanian society.

Third, the example of Panama scrambling to replace resources which formerly fell its way automatically—thanks to the $250 million which U.S. personnel spent there every year, not to mention the invisible insurance benefit for international investors which derived from the presence of American troops—may prove instructive to those countries where we propose to relocate our anti-drug operations. In effect, Panama may well demonstrate that exaggerated "anti-imperialism" in the post-Cold War era is a luxury which small countries in the circum-Caribbean cannot really afford. There are many Panamanians, including some responsible politicians and publicists, who are already saying this in one way or another. Many more may be saying it in the future. Their comments will not go unnoticed elsewhere in the region.

The end of the military presence in Panama is therefore in my opinion a net gain for the United States. I would go even further and suggest that we are better off that the agreement over a "multilateral" drug center failed. The dispersion of our anti-drug efforts in the area among a number of countries is bound to render our position less vulnerable vis-à-vis any individual partner, since it will allow us to balance out the pressures and obligations of a presence, no matter how small, among a number of interlocutors.

I look forward to responding to your questions.

Mark Falcoff is a resident scholar at AEI.