-SECRET- bXD bX3 50 USC 403g Count toelgmce Agengr jP c 0ENT %'' 'CA tp 33 57C X CD e pnocjai» DIRECTORATE OF INTELLIGENCE 24 April 1989 Panama bX1 bX3 50 USC 403g Tfye Poet-Election Political Landecape Sunnary In tha absence of a major US initiative following a fraudulent regime victory in tha 7 Kay elections we axpact Defence Chief Noriega to have little difficulty In consolidating hie grip qn Panama and eliminating organised opposition to him In the near term a rogino olectoral victory will probably even buttroaa Noriega's support in tha Defense fforces whiah has feared that an opposition victory would load to retaliation against the military For their pa t leaders of the Democratic Opposition Alliance ADQC are unlikely to risk regime reprisals by protesting fraudulent elections in the streets Instead they and Panamanian exiles will look to Washington for a strong reaction I MO M W use40 Having surmounted the elections challenge Noriega may find hlmpelf under Increased pressure from his subordinates in the military to resolve bilateral tensions with the US We believe he probably will turn his attention to tha search for a rapprochement but may calculate that his ability to determine the electoral outcome will lead Washington to resign Itself to an accommodation with him With his confidence boosted by the elections he will continue to see littlo reason to offer major concessions or to negotiate himself out of 1 6X1 power bX3 50 USC 403g This typescript was propered by I bX1X 6X3 50USC 403g and Latin American Analysis may be directed to the bX1 bX3 SO USC 403fl O ffic e o f A fric a n Comments and queries are welcome and bxi MP 5Fusc40 AU bX1 bX3 50USC403o ALA M 8 9 -2 0 0 3 2 bX1 bX3 50 USC 403g I bXD bX3 50USC403g bX1 bX3 50USC403g P o t e n t i a l f o r Oppcjo i t i on Tr o t e a t s While some violence is likely in polling places throughout the country when hundreds of opposition voters find themselves stricken from the voting registration list we judge it unlikely that the election proceedings or fraudulent results will spark general unrest Democratic Opposition Alliance ADOC leaders have made faw plane for responding to fraudulent elections other than calls by some for a general strike and we believe they will be loath to risk regime reprisals gainst themselves their families and properties by fomenting street demonstrations ADOC laadera are undoubtedly aware of reports -that the regime plans to arrest them immediately if they incite antiTtatate activities Moreover some opposition leaders can be expected to seek refuge on US military bases if the regime follows through on reported preparations to parpetrate violence as an excuse to crack down on opponents m n b m souses Some of ADOC e supporters are likely to stage spontaneous demonstrations however raising the possibility of clashes with regime goon squadip Unorganised sporadic protests may occur in Colon and in some neighborhoods in Panama City as well as in front of Electoral Tribunal headquarters where protests occurred after th« fraudulent 19l 4 elections t u s c Nevertheless we judge that these actions will be shortlived particularly if regime roughnecks and soldiers are visible on tho etreete in large numbers None of the ADOC political parties maintains a large youth wing or a paramilitary capability and rsgims opponents Hack the organisation and leaderahip--and the kind of logistical support and training available to the dominant ruling party's paramilitary Tendencia faction for exampls— to sustain a confrontation beypnd s few days bxi bX3 5ousc4038 Longer Term Consequences for the Opposition Opposition leaders are sure to look to Washington immediately for a strong US reaction to the elections results Most probably SECRET bX l bX3 50USC403g - will feel that they have dona everything expactad of tham by waging an effective electoral campaign and will almost certainly lobby for direct US intervention to oust Noriega Some exile leaders may try to strike out on $heir own to remove the Defense Chief but their chances of success are dubious given that their activities have long been closely monitored by Panamanian security forces in our view the odds ar at least 50-50 that deposed President Delvalle who has played an increasingly marginal role in opposition politics will resign before his term of office expire on August 3 X 0 Xi bX3 5ousc4O3g I bX1 bX3 50USC403g The member parties of the ADOC coalition will probably continue to function but almost certainly will be consigned to the margins in the poet-elections political scene We estimate the regime will limit the opposition to no more than 15 or so of the 67 legislative seats through manipulation of the vote The Christian Democrata PDC are the beefy organised and most coheslvs party in the opposition As sych it will likely be the most capable of withstanding the Effects of a regime crackdown on Its leadership and activities Even so without broadbased popular support and legislative cloutj its Influence and room for action will almoMt certainly decline Similarly the small National Republican Liberal Movement MOLIRENA will continue as the main vehicle for some business and middle clase interests but with reduced membership and Influence in the legislature bXD bX3 50usc403g Other o p p o s i t i o n groups probably will retrench and become politically ineffective • -- The Civil Crusade composed of pro-ADOC businessmen is alresdy crippled by the departure of many of its leaders and may be dissolved altogether after the elections Others in the prlvafye sector will see the elections as an opportunity to return to business as usual and will hope for relative stability that can bring rsnswsd foreign investment to Panama — Organised labor with its largely leftist pro-Noriega leadership la likely to toe the regime line Frustrations over late salary payments and the firings of pro-opposition public-segtor workers may result in some labor unrest but we beilevtf the regime will be able to manage it bXl bX3 50 USC 403g This excludes Authentic Panamenista Party-Arnulfista b» HlM br ndo Hico i _______ SEGPET bX1 bX3 50 USC 403g L — Likewise Panama's highly nationalist students have not forged any substantial links with the opposition and are unlikely to launch major protests I MOmajsouscasg bX 1 bX3 50USC403g - L in accordance with a government decree students ftfili not return to classes until two weeks after the elections— a move intended to head off any possible campus unjest I Mifcwmaouscs The Impact of the Elect ons on Noriega's Support in the Military We believe a peaceful election-'-even a blatantly stolen on«-will buttress Noriega's support in the military The Defense Chief's ability tg maintain the allegiance of his officers rests largely on their ghared determination to retain control of the political arena fnd the Defense Forces have played a key role in planning and executing election fraud I bXD bX3 5ousc403g „ iX3l50 s 4 o_ Nor legs' e widespread unpopularity officers appear convinced that thp use of fraud to assure a regime victory is justified to protect the Defense Forces from opposition retaliation and they appear prepared to weather international condemnation Maintaining even pi transparent facade of political legitimacy through the elections will allow the Defense Forces to claim a victory over the US and the domestic opposition bxi bX3 5ousc403o bXI bX3 50 USC 403g Noriega's Near Term Agenda bX1 bX3 SO USC 403g The Defense Chief is unlikely to move Panama sharply to the following the elections but he will continue to broaden his sources of outsids support as well as to reduce Panama's economic -SECRET bX1 bX3 50 USC 403g ' dependence on the United States to maintain leverage with Washington We believe Noriega will probably look increasingly to Cuba Nicaragua nd Libya for economic military and intelligence assistance although he will continue to proceed cautiously to avoid antagonizing antitrCommunist officers in the Defense Forces and alarming the business community He probably expects that absent a strong US reactio most Latin American governments--except Venezuela which fill probably condemn the election results--will move quickly to recognize the new administration bX1 bK3 50USC403o Panama's economy probably will continue to deteriorate this year possibly as much as 5 to 10 percent Business confidence is likely to remain Jow because of continued poor relations with the United States and limited credit availability which will encourage capital flight and discourage investment The continuation of US sanctions may forge some US and Panamanian businessmen to relocate to countries that enjoy US trade benefits However businessmen from Japan Taiwafy and South Korea may view Duque's election as a sign of future stability and begin looking for opportunities for limited new investment The Colon Free Zone the Canal and the large US military presence will continue to provide employment pumping US dollar into tho economy bxi bX3 sousc403Q The Duque administration probably will be able to muddle through over the pext year or so by trimming expenditures and implementing revenue-generating measures The regime is likely to fire some public employees particularly those who supported the opposition in conjunction with levying new taxes and fees Noriega probably is also counting on post-election stability to inersase income tax receipts Panama City which has run arrears to all of its creditors is unlikely to receive any new loans from western i da low Dealing with the y s Finally Nor V«9 probably will turn hia attention to resolving the political impose# with the United States He may already be under Increased pressure from military officers to find a solution to bilatsral tension souses bX1MbX3 50USC403fl We believe Noriega will continue to try to manage such pressures by testing the waters through intermediaries for signs of any interest in Washington in a rapprochement Noriega probably will calculate that Washington's failure to dislodge him through the elections may lead US policymakers to resign themselves to the status quo and th need to accommodate him The Defense Chief will likely use President-elect Duque to make initial overtures in an attempt to prees Washington to grant the elections legitimacy Duque will almost certainly request the immediate release of nFK3 50ifec403g bK1 - Panamanian government funds frozen in the United States calculating that the US will J ave difficulty justifying their retention after he le installed as Panama's new president in September The Defense Chief may relax ntydia restrictions and curb the harassment of US citizens to project a moderate image for the new regime and to siolllfy Washington Noriega's confidence in his staying power will have been boosted after weathering the elections however and he will see little m a s o n to offer significant concessions to the United States t XD bX3 souses