In just two weeks, more than 700 corrugated metal and cardboard shacks have sprung up on top of a putrid 45-year-old industrial toxic-waste dump in the old section of this capital. On four other empty plots of private property in the city, invading squatters have staked illegal claims within recent weeks.
The invaders - some moved as much by political opportunism as by any genuine need - are evidence of the chaos nipping at the edges of this nation's social order, observers say.
There are three types of people moving in, hoping to stake a claim, according to a Ministry of Public Housing survey. ``There are the people who really need housing, there are speculators collecting $15 or $100 or $200 from new arrivals for the lots they've claimed illegally, and there are political promoters ... who would be creating a constituency [large enough to elect them in some future election],'' says Ricardo Bermudez, Minister of Public Housing.
Although land takeovers are illegal in Panama, the government has not tried to remove the squatters.
Desperately trying to stay in power, strong man Gen. Manuel Antonio Noriega is unwilling, many believe, to do anything that could damage his remaining support among the poorer classes.
The volatile atmosphere of uncertainty in Panama is evident across the socio-economic spectrum. Lines now snake 24-hours-a-day from the US Consulate as the wealthy pack off their families to the United States for safety from this nation's political and economic crisis. The poorest loot food warehouses.
The new land invasions are viewed widely as a way for speculators and political opportunists to take advantage of the weaknesses of the dueling factions of this nation's crisis. The political struggle here pits the wealthy and middle classes of this sophisticated Latin American banking center against the corrupt regime of General Noriega.
The general was indicted in the US in February on drug-trafficking and racketeering charges. His remaining popular support lies among small sectors of the lower socio-economic level that respond to his nationalist anti-US rhetoric.
``While the big poles [the wealthy business sector and the Noriega regime] fight, the little ones sneak in to take advantage of both sides,'' admits Luis Antonio Morales, a leader of the invasion at the Panama Viejo - old town - site and a pro-Cuba leftist.
He says the strategy of the invaders - who are well-funded and organized enough to already have printed resident ID cards - is to demand that the owner sell them land. He adds they would like to get credit to finance the buy out from international banks.
``The political circumstances of the moment permit these invasions,'' says Alvaro Uribe, an urban architect who studies land problems at the National Institute of National Studies, a leftist think-tank at the University of Panama.
Although land invasions are very typical in Panama, where more than 30 percent of the population of the capital lives in self-constructed housing on invaded land, says Mr. Uribe, ``we've almost never had invasions of private land like this.''
Invasions of private property have usually been immediately dismantled by the government when they occurred, Uribe says. But the five new invasions of private property are an alarming precedent for the middle and upper classes, he says, because they are three weeks old now and continue to grow without government intervention.
The fact that the Panama Viejo invasion is blooming on an industrial waste dump is somehow obscured by all the political and economic implications of the invasion problem.
The dump - rented since 1942 by the Panama Canal Zone and more recently by the Panama military - is a heap of toxic- heavy metals and chemicals that government officials have publicly warned could take years to sanitize enough for human habitation. The foul smell of the area alone is an indication of the problem, and the scorched areas of the land bear witness to the putrefaction that causes frequent spontaneous combustion from beneath the surface.
Nonetheless, the new inhabitants - including more than 1,000 children under the age of 11 - seem unaware of the health hazard they've built on. Indeed, they even trap and eat contaminated land crabs that forage on the 50-acre waste mound.
Despite public statements by the government housing minister that the invasions are illegal and that government authorities are preventing further development in these areas, military authorities carry on a cordial relationship with the invaders.
Last Wednesday, a Monitor reporter rode along with squatters in a pickup truck loaded with wooden pallets to make floors for new shacks. Police patrolling the area stopped for a friendly chat with the squatters and made no comment about the new construction under way.
This, despite his trespassing complaints, only convinces Rolando Chanis, the site's owner, that the government is promoting the invasions to rally support among the poor classes and to intimidate the middle- and upper-class opposition to Noriega.
``The police can stop demonstrations [by the opposition] with water hoses, and dogs, and tear gas ... but they can't do anything here,'' Dr. Chanis says sarcastically.
It is generally believed here, even by some who have close government ties, that the secret police have encouraged and protected the invaders.
Minister Bermudez denies the government backs the invasions. ``The law says you can't invade private property and the government supports that. But we don't want to send troops in,'' he says, noting the volatile atmosphere already existing in Panama.