Lively Panama election could begin to erode power of military

The era of the military strong man in Central America may fade a little more next month as Panamanians go to the polls to elect a president, two vice-presidents, and a legislature.

The vote will be the country's first free election after 16 years of military rule. And although the power of Panama's Gen. Manuel Antonio Noriega, commander of the National Guard, will not end with the election, it may be at least crimped. Some 14 parties are campaigning for votes, and the public seems to like this democratic exercise.

The most popular candidate, according to campaign opinion polls, is Arnulfo Arias Madrid - a fiesty 82-year-old politician who has been elected Panama's president three times but ousted from office after each election in military coups. Arias is the candidate of the Panamanian Party.

Dr. Nicolas Ardito Barletta, until recently a vice-president of the World Bank, is the candidate of the governing Revolutionary Democratic Party. ''Nicky'' is thought to be favored unofficially by the United States, but any such stamp of approval may not carry him far. The US has traditionally been a strong influence in Panamanian affairs, but it is playing its least overt role here in recent history. The election process was promoted by the US, however, in hopes of ensuring the continuing safety of the strategic Panama Canal, which the US is gradually turning over to Panama, with the final transfer of control to occur by 1990.

The crucial question surrounding the electoral process is what Noriega and National Defense Forces eventually will make of it.

Many observers suspect that if front-runner Arias wins again, his penchant for personal power will create unsustainable conflict with General Noriega. Arias has a very personal brand of nationalism and anticommunism.

While Arias's age could have been an issue in the election, he has chosen two younger, widely respected vice-presidential candidates, banker Carlos Rodriguez and Ricardo Arias Calderon of the Christian Democratic party. He apparently thinks he might not survive a full six-year term, and says he wants ''to leave the country in good hands.''

A third candidate, former National Guard Cmdr. Ruben Dario Paredes, came in second to Arias in a recent public opinion poll. But the general, who many think resigned from the Guard just to run for the presidency, also may prove unpalatable to Noriega.

The National Guard has essentially ruled Panama since Brig. Gen. Omar Torrijos Herrera seized power in a coup in 1968. There have been civilian presidents since Torrijos decided to create that post again in 1979, but they are widely viewed as ''finger'' presidents - literally people fingered by the military to assume office, people usually viewed as unthreatening to the armed forces.

The civilian-military balance has become more tenuous, however, since the general's death in a plane crash in 1981, and Panama has had three presidents in the past 21/2 years.

In February, President Ricardo de la Espriella resigned without explanation, allegedly refusing to stack his Cabinet to the military's liking. He was succeeded by his vice-president, Jorge Illueca.

Among the key election issues in Panama, as almost everywhere that elections are held, is the pocketbook. Living costs are soaring, unemployment is 15 percent a year, and the International Monetary Fund has said Panama should institute further austerity measures to reduce its $3.5 billion foreign debt.

For the first time since 1904, the United States is not itself an issue in a Panamanian election. There are no posters or bumper stickers urging the US to leave the former Canal Zone; the US agreed six years ago gradually to turn control of the zone over to Panama.

So far the transition process under the Panama Canal Treaty charted by Torrijos and former US President Jimmy Carter is proceeding smoothly.

''The Canal is in better condition and more efficient than ever,'' says Fernando Manfredo, deputy canal administrator. There are problems, too. Canal traffic fell in 1983, affected by the world recession and a drought that lowered canal water levels. The canal also has new competition from an oil pipeline across the isthmus and from alternate shipping routes.

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