CONGRESS has before it a $500 million request for aid to Panama. But this aid package will neither cure Panama's economy nor resolve its long-term social problems. For domestic political reasons, the Bush administration is anxious to get United States troops off Panama's streets, where they have been attempting to cope with a frightening crime wave. Rather than train civilians to take over security functions, which would take time, the first priority of the US has been to rearm and train some 13,000 former members of the Panamanian Defense Force (PDF) who are in the new Panamanian Public Force (PPF).
While this strategy keeps the former PDF members off the streets, where they would have access to guns and could cause trouble, it carries serious risks over the long run. There have been purges of high-level officers, changes in the line of command, and changes in control over the budget designed to make the PPF more responsive to civilian authority. Nobody can say for sure, however, that such theoretical controls will gain any real substance.
For example, the new investigative unit, the Judicial Technical Police, is administered by the attorney general - but it is made up of former members of the National Department of Investigations, notorious for abuse under Noriega.
It is far from certain that Panama needs 13,000 men to keep the peace. (Nobody argues that such a force could ever protect the canal, which will ultimately remain a US responsibility.) The danger is that these men could end up the most coherent political force in Panama.
The PDF was corrupt and abusive, but unlike neighboring armies in Central America, it was not an army of occupation defending an entrenched economic elite. This could change, unless Panama avoids the social and economic polarization that has torn apart the rest of the isthmus.
President Guillermo Endara's government is weak in many ways. Two-thirds of the electorate voted for Mr. Endara and his running mates in the elections annulled last May, but this vote reflected repudiation of General Noriega much more than broad-based support for the current government. The parties of the governing coalition do not have real roots in the poorer sectors of society.
Government plans see the private sector as the engine for economic growth and job creation. This means a difficult period of adjustment for the 25 percent of the work force employed by the state - and unemployment is already near 30 percent in Panama City. If poor Panamanians are left waiting for economic benefits to trickle down, their support for the government is likely to trickle away.
The political opposition to the Endara government has yet to take shape. Charges have been filed against hundreds of former government officials loyal to Noriega, which may not augur well for the institutionalization of political pluralism in the future. Some labor unions have reported arrests and unfair dismissals.
The Endara government's ability to deliver a better life to Panamanians - and consolidate itself politically - largely depends on reactivating the economy. The Bush administration is counting on its proposed $500 million in aid to provide a ``jump-start'' after which it says no further US aid will be needed. But Panama's debt is a whopping $6 billion, and its international credit lines are shaky.
Prospects for reviving the service sector, which has traditionally upheld the economy, are uncertain. Capital that fled Panama's banks has moved on to safer havens. The government hopes to develop a strong productive base, but even if this works, any potential payoffs will not come immediately. If the population's high expectations for new jobs and better welfare are not met, there will eventually be a political price to pay for the US and Panamanian governments.
The US is providing training, equipment, and a limited amount of lethal equipment for the PPF, under a waiver of legislation banning aid to foreign police forces. Congress needs to monitor this aid carefully - perhaps with a time limit to the waiver - to insure that we do not reincarnate the PDF monster we created over the past two decades. The history of US-trained police forces in Latin America - from Somoza's National Guard to Salvadoran and Guatemalan security forces - does not provide encouraging examples.
By next year, Panama's problems will have receded from their current privileged place on the US foreign policy agenda. If the final legacy of the invasion is a strong security force and deep social divisions, the US's proclaimed concern for democracy will be shown false. Sadly, Washington may not notice until the next crisis erupts.