Canal enters countdown
Politics is the only fear as nations ready year-end switch
By Tom Carter
THE WASHINGTON TIMES
he old man sat beneath a coconut palm skillfully slicing
into coconut husks with a machete, exposing the white
meat he would later shred and make into cookies to sell.
"I use the [coconut] milk to make the cookies," said Ernesto
Atherly, revealing his secret recipe with a whack.
Mr. Atherly's grandfather came from Barbados to help
build the Panama Canal nearly 100 years ago, and his father
spent years working for the U.S. agency that will continue
running the canal until the end of this year.
Mr. Atherly briefly protested the American occupation of
Panama Canal Zone in the early 1960s but later went to work
for the Americans as well, mowing the lawns at Fort Gulick, a
U.S. base near the city of Colon.
He said that he had enjoyed working for the Americans,
and that he always had been paid well and treated fairly.
That life will end at noon Dec. 31, when the Panama Canal
Commission shuts down and the U.S. military leaves Panama
under the terms of a 1977 treaty signed by President Jimmy
Carter for the United States and President Omar Torrijos for
Asked what he plans to do when the Americans leave, Mr.
Atherly stared back as if he had just been asked about the
"You believe that?" he said. "The Americans aren't going to
He then turned to a friend and told him what the visitor had
said, and the two old friends laughed. "The Americans will
never leave," the friend agreed.
By some accounts, half of all Panamanians think there will
continue to be a significant U.S. presence in Panama beyond
the year 2000.
"You hear it all the time. They think something will happen
at the last minute and we will stay," said a U.S. Embassy
official with years of experience in Panama. "A lot of
Panamanians are going to be in for a rude awakening."
But Americans, military and civilian alike, seem resigned
that the American century in Panama will come to a close on
the last day of this year.
In a ceremony that probably will occur on the back terrace
of the elegant and imposing Panama Canal Commission
building in Balboa Heights, the American flag will come down.
If past ceremonies are a guide, a white symbolic key will be
passed and, for the first time, all of Panama's territory, including
the 600-plus square miles of the Panama Canal Zone, will be
held by Panamanians.
With the hand-over less than a year away -- U.S. and
Panamanian government offices alike display makeshift wall
calendars counting the days -- as many questions remain as
answers regarding the future of Panama and its namesake
Almost everyone agrees the United States has been a good
--even excellent -- steward of the 50-mile-long canal and the
10-mile-wide strip of pristine rain forest slicing through the
middle of the Panamanian isthmus. But the canal will be under
Panamanian management in less than a year.
Panama is working overtime to assuage investor and
international anxiety. The message to the world is, relax:
Panama can run the canal, it will be properly maintained, the
environment will be cared for, the democracy is stable and
foreign investments are safe.
"The Panama Canal is and always will be important for
Panama and for the rest of humanity," President Ernesto Perez
Balladares said in a speech in Mexico in September. "On
midday Dec. 31, 1999, the canal will be entirely Panamanian.
The military bases on our territory will only be a memory. The
canal will be neutral, and ... Panama will fulfill its historical
But Panama's democracy, while genuine and vibrant, is
barely 10 years old. There are concerns, not entirely
unfounded, that some brand of personality cult or military
dictatorship could re-emerge.
Polls indicate that up to 70 percent of Panamanians would
like to see some sort of continued U.S. presence.
"Panama is not yet capable of handling the canal," said
Dalinda Hernandez, a housewife shopping in the cereal aisle of
Reys grocery store. "It is my children's future, and I'm not sure
[the transfer] is to the benefit of Panama. The way the United
States has handled it was the best way."
Even some politicians publicly agree, despite a risk of being
"Can we administer and run the canal? Absolutely," said
Mayin Correa, the popular mayor of Panama City. "Are we
capable of managing the millions of dollars worth of assets
being turned over to Panama? No. There is too much
Panamanian and U.S. officials both describe the transition
from U.S. to Panamanian ownership as "seamless."
For 10 years, the canal has been run by Panamanians.
Today, about 93 percent of the 9,000 canal employees are
Panamanian, including the top administrators.
"There is no lack of technical or managerial expertise to
operate and maintain the canal when Panama takes over,"
Joseph Cornelison, deputy administrator of the Panama Canal,
told businessmen in a recent speech in Washington.
While the canal has been a U.S. government-owned,
not-for-profit utility, the Panamanians will run it as a
government-owned business, free to borrow capital for
expansion and raise tolls as warranted.
There will be some downsizing, and there is considerable
concern about the impact that will have on Panama's work
force, which already suffers from an unemployment rate of 13
Panama is expected to lose about $330 million a year that
U.S. military personnel would have spent on maids, gardeners
and drivers and in other areas of the Panamanian economy --
totaling an estimated 16,000 jobs.
All the Panamanian employees of the military commissaries,
for example, soon will be looking for work; the jobs they find
are not likely to pay as much or provide the same benefits.
"We wish the Americans would stay," said the woman
behind the cash register in a corner store in the colonial quarter
of Panama behind the presidential palace. "Many tourists come
here. Who will buy my Cokes and cookies when the troops
are gone? I'll lose money."
The managers of several downtown restaurants agreed.
"Fifteen to 20 percent of my business is American. About
half of that comes from the bases," said Carlos Madrigal,
manager of Italianni's. "It will hurt when they leave."
Analysts say the pain of the military "draw-down" will be
eased by solid economic growth, estimated at 4 percent in
1998, and a buoyant stock market.
But several questions remain:
Can the Panamanians run the canal with the same
efficiency the Americans have shown for nearly 100
"The old girl is nearly 100 years old; she needs a lot of
maintenance," said Paul Karst, a union leader for federal
canal workers trying to keep jobs and benefits under the
Is the United States losing a vital strategic and
geopolitical security asset in turning over the canal?
A company with close ties to the Chinese government
has established itself at both ends of the canal. "What if
there is a war in the Atlantic and the Pacific?" asked
Richard Delgaudio, a conservative activist in
Can the Panamanian government overcome the
temptation to see the canal as a golden goose, milking its
treasure at the expense of its long-term good?
"I'm afraid that some Panamanians see the canal as a
kind of El Dorado, as a profit-making business. It's just
not true," said Mark Falcoff, Latin American specialist at
the American Enterprise Institute and author of
Can a Panamanian government with a history of
patronage and corruption problems resist the temptation
to inject domestic political concerns into the running of
"The future of Panama looks good for a lot of reasons --
if they don't bring in the politics," said Nils Petterson, a
telecommunications businessman seeking to invest $10
million in a fiber optics cable network using canal
Will the government, facing huge population pressures,
enforce the laws that protect the forests that surround
the canal and ensure a supply of fresh water without
which it cannot function?
"You can see the edges of the rain forest from here,
where the people are already cutting into the park. Of
course, I am concerned. My business depends on the
rain forest," said Raul Arias de Para, whose hotel for
eco-tourists sits in the treetops overlooking the canal.
The Panama Canal is still considered, 84 years after it
opened, one of the greatest engineering achievements of all
time. A new documentary by the Discovery Channel calls it the
"Eighth Wonder of the World."
The 50-mile-long ditch, dug through the jungle at a cost of
nearly 25,000 lives, connects the Atlantic and the Pacific
oceans via the artificial Gatun Lake, which is 85 feet above sea
It could not have been built 30 years earlier.
New technologies in medicine, engineering, electricity,
making steel alloy and dozens of other fields were discovered
and used. The most massive health campaign in the history of
the world was mounted to overcome yellow fever and malaria
in the Panamanian forest.
The canal's opening on Aug. 15, 1914, reduced the length
of a voyage from Peru or Chile to New York to less than
3,000 miles, making it shorter than a trip from New York to
Between the time the United States took over the project in
1903 and its completion in 1914, tens of thousands of men dug
232 million cubic yards of dirt, enough to pile an average city
block almost 20 miles high.
A massive system of locks remains as impressive today as it
was at the turn of the century.
"Even compared to sending a man to the moon, I still
consider this the greatest engineering achievement of all time,"
said Mercedes Morris Garcia, spokesperson for the Panama
The 40-horsepower engines, each about the size of a small
tractor and built by the General Electric Co., still open and
close the massive 700-ton gates on the locks today, though
they are to be replaced during a $1 billion renovation and canal
expansion now under way.
Since opening, the locks have been filled and emptied by
gravity, requiring 52 million gallons of fresh water to flow from
Lake Gatun into the Pacific or Atlantic Ocean for each of the
700,000 ships that has passed through.
About 30 to 40 ships a day pass through the locks, each
paying an average of $40,000 in tolls. The cruise ship
Rhapsody of the Seas last April paid $165,235, the largest
registered toll, to pass through the canal. The lowest toll, 36
cents, was paid by Richard Halliburton, who swam the canal in
The largest ships the canal can accommodate, known as
"Panamax," pass through the locks with just 24 inches of
clearance on either side. The ships rise 85 feet from sea level
through three locks to Gatun Lake. The ships steam across the
lake and descend through three more locks to the other ocean.
About 14 percent of all U.S. shipping traffic goes through
the canal, but alternatives have become increasingly
cost-effective. Many companies now prefer to ship their goods
in rail containers across the United States.
More than 84 years after the SS Ancon made the first
official crossing of the canal on Aug. 15, 1914, engineers still
marvel at the simplicity and efficiency of the design and salute
the determination and vision of those who built it.
"The creation of a water passage across Panama was one
of the supreme human achievements of all time, the culmination
of a heroic dream of 400 years and of more than 20 years of
phenomenal effort and sacrifice. The 50 miles between the
oceans were among the hardest ever won by human effort and
ingenuity, and no statistics ... can begin to convey the grandeur
of what was accomplished," wrote David McCullough in "The
Path Between the Seas," the definitive history of the canal.