WHILE other Caribbean countries crackle with political tension, the Republic of Panama is reasonably relaxed. Such tranquillity amid swirling turbulence not only makes surprising news; Panama’s current stability also offers its leaders and U.S. policy makers a chance to plan progress for an underdeveloped country in a positive, professional way.

The short-run factors that give Panama a breathing period are three: John F. Kennedy’s entry into the White House, Roberto Chiari’s assumption of the Panamanian presidency last October, and various concessions to Panamanian pride made by the United States in its administration of the Panama Canal Zone after the riots of November, 1959.

Kennedy’s accession to the U.S. presidency is reassuring because practically all Panamanians are in favor of the Democratic Party. Courtly, retired Panamanian diplomats will tell the stateside visitor that in the days of Franklin D. Roosevelt’s Good Neighbor policy, the White House door was always open to them, whereas in recent, Republican years they have found assistant secretaries of state for Latin America stiff, and secretaries of state well-nigh inaccessible.

West Indies-born Negroes working in Colon near the Atlantic terminus of the Panama Canal explain their preference for the Democrats in bread-and-butter terms: “You remember under Hoover? There was no work. Under President Roosevelt, there was work. When there is work in the United States, there is more work for people everywhere.” A point of pride with hundreds of Panamanians is how late they stayed up last November listening to the U.S. election returns on the radio — and how resoundingly they celebrated the victory of the Democrats. Panamanians are confident that a Democratic Administration in Washington will do wonders for them.

As far as their own new President, Roberto Chiari, is concerned, Panamanians of almost all local political persuasions are prepared to give him a year to fulfill his campaign promises. Chiari, a wealthy owner of sugar mills and other commercial interests, has said that he would be the last member of the aristocratic class to be President of Panama. Anticipating the rise to power of the middle and lower classes, Chiari has promised broad programs of social and economic reform, housing construction for the squatters on government land outside Panama City, farranging land reform, augmented public health and social welfare services, general economic progress.

The well-to-do are waiting to see if they can go along with the higher taxes and the inroads on their privileges that Chiari’s program implies. The poor are waiting to see whether Chiari can indeed arrange a compromise between the interests of the rich and the poor. In a country with a considerable sense of fair play, not even the extremists are prepared to challenge Chiari before he has a chance to show what he can do.

Less friction in the Canal Zone

The changes in the Canal Zone made in the course of 1960 are bound to have an important effect on the local climate of opinion. In the November, 1959, riots the Panamanians reasserted their contention that they are sovereign over the Canal Zone. Since September, 1960, the Panamanian flag has been allowed to fly beside the American in a moderately conspicuous spot in the Zone. Panamanian drivers and bus passengers must cross the Canal Zone to get from the eastern to the western part of their own country, and they have been pleased that reciprocity of license plates has been arranged between the Zone and the Republic of Panama.

Another point of friction was the fact that the 10,000 Panamanian laborers employed on the canal were paid at local wage rates, whereas the American technicians working on the canal received at least double local wages. A slight reshuffling of wage rates, even though it did not abrogate the sharp distinction between local pay scales and U.S. pay scales, has soothed many ruffled feelings.

Beyond all this, the five to six thousand U.S. army troops stationed in the Canal Zone have methodically embarked on “Operation Friendship.”U.S. officers now play golf matches with upper-class Panamanians; army dentists trade professional experiences with Panamanian practitioners; and GI’s teach sports to Panamanian youngsters and contribute to the support of needy Panamanian families. All these developments, after some rather bad years in which U.S. Canal Zone personnel and Canal Zone policy were cold and contemptuous toward the Panamanians, make the people feel better about the United States.

The U.S. potential

In Panama, the United States plays a greater part, relative to the national area, population, and economy, than it does in any other country in the world. The Canal Zone cuts a swath 10 miles wide and 50 miles long through the center of the small republic. Fourteen thousand people work on the canal; the U.S. army, navy, and air force bases in the Zone are manned by some 10,000 more. With the families of the working personnel, the retired Canal Zone employees, and other residents, the Zone dominates the lives of 100,000 people in a country whose population is around one million and whose politically conscious population, concentrated in Panama City at the Pacific end and in Colon at the Atlantic end of the Canal, scarcely exceeds 300,000.

In the small Panamanian economy, the Panama Canal Company is by far the biggest employer. The economic predominance of the canal is enhanced by its engineering magnificence: the spectacle of 10,000-ton freighters rising and falling in the canal locks as gigantic electric pumps add or subtract water by the millions of gallons creates not only respect for man’s mastery over nature but also for the United States as the agent of the process. The large part played by the United States in the Panamanian economy is a measure of its constructive potential.

The nature of Panama and the Panamanians is highly receptive to sensible, practical, progressive influences. The country is marvelously compact and manageable: it really revolves around the Canal Zone. The hinterlands toward Central America on the west and Colombia on the east, while becoming more influential because of the awakening of the Indians who work the banana and coffee plantations, are still rather inarticulate dependencies of the country’s core. At the center, the true Panamanian character is seen.

The Panamanians are a cosmopolitan people whose consciousness is shaped by geography, by the fact that they live on the bridge between two oceans and amidst much of the world’s traffic in goods and men. The most uneducated Panamanian knows how the Spanish gold traffic came up from Peru, ran across the isthmus over trails and bridges, which are still partially preserved, and connected with the west-bound galleons on the Atlantic coast. Panamanians remember, too, that American fortyniners crossed their country to get to California’s gold.

Exposed to travel and movement, the Panamanians hunger for travel themselves. The well-to-do are globe-trotters, and the talented look for wider arenas: Panamanian José Quintero is a luminary of the U.S. theater, and his compatriots Manuel Ycaza and Flee tor Lopez are stellar figures of American turf and baseball, respectively.

The sense that all the world is before them makes the Panamanians personally outgoing, tolerant, and hospitable. The levelheaded Panamanians would like to live at peace, provided they get the gradual progress that their alert intelligence tells them they should have.

The U.S. can do so much to help Panama that it would be very sad if the country were neglected. Furthermore, the results of progress in Panama would not be confined to the local scene. A year ago, the Panamanian poor and their spokesmen were in favor of Cuba’s Fidel Castro. They saw him as the apostle of the social reform that any underdeveloped country requires. Now Panamanians have turned against Castro because they feel his cause has been taken over by the Communists. If economic and social progress is made in Panama, the country can be a demonstration to all of Latin America that cooperation with the United States is a better route into the future than Castro’s road of revolution.

The challenge within

We shall be deluding ourselves, however, if we do not recognize that beneath the placid surface extremist forces lie in wait. The Cuban ambassador, who made a substantial impact with his propaganda, has been asked by the Panamanian government not to return. But he may well have a more subtle successor. Egyptian diplomats, who energetically urged the Panamanians to emulate Nasser’s seizure of Suez by grabbing the Panama Canal, have quieted down. They may become vociferous again.

Among the Panamanians themselves, the Communists are not idle. They are alleged to have three floating training schools in the country; they are apparently trying to infiltrate the political parties that cater to the middle classes and the poor, and one of the ablest Panamanian union leaders has completed his course of education in the U.S.S.R.

Perils to stability also loom from the Panamanian far right, the crafty and wealthy “haves” who intend to check any social evolution in order to preserve their own prerogatives. The traditional joint assault of the far left and the far right on the constitutional order may have to be faced and beaten back in Panama in the coming months.

U.S. policy makers have taken the first steps to protect the moderate Chiari government against potential attacks. The Chiari government has received a $5 million loan to pay off its inherited bills, some of them 16 months overdue, and to re-establish its credit. Money has been advanced by Washington for the building of rural roads. This is an essential prerequisite for land reform, since the new peasant proprietors must have the means of getting their produce to market. Good U.S. technical advisers on road building and rural problems are on hand. The attitude of U.S. diplomatic and military personnel in Panama, cordial as it is, contributes to the stability of the Chiari regime.

Higher tolls

However, the United States has it in its power to do much more than defend President Chiari. One issue that will soon have to be faced is the question of the tolls on the Panama Canal. Panama now receives an annual fee of $1.9 million from the canal company, which does a gross business of about $90 million a year on the basis of a toll of 90 cents a ton on the freight that comes through.

The argument of the Canal Zone authorities against increasing the returns to Panama from the canal is that the operating costs of the interocean waterway are really borne by the consumers of the freight that passes through it — that is, largely by the American people, who either export or import some 70 per cent of the goods going through the canal. This argument overlooks the essential point that if the American consumer and producer had to ship around the tip of South America, their costs would be a great deal higher.

The toll of 90 cents a ton seems too low to represent economic equity these days, and the payment of $1.9 million to Panama seems like very low taxes on U.S. control of 500 square miles of soil and operation of a very lucrative enterprise. Greater earnings by the canal could not only provide more revenue for Panama but could also create an economic assistance fund for some of Panama’s neighbors. Such a form of economic aid would also make its recipients feel that they had earned it by making a Latin American physical facility available to produce it, rather than getting it as a U.S. handout. Moreover, the businessmen and consumers who now benefit from the canal would be lightly taxed for the development of the people through whose country the canal runs.

Wages with less discrimination

Even more immediate in Panamanian eyes is the question of wage scales in the Canal Zone. The 10,000 Panamanian laborers receive from 54 cents to about $1.14 an hour, which is generous by local standards. But then the rate of pay jumps sharply to $2.50 an hour and up for the 4000 skilled employees, of whom only about 400 are Panamanians. While this distinction was somewhat modified by wage readjustments after the 1959 riots, the wage pattern still reflects an invidious division of Canal Zone workers into inferior and superior.

Many Panamanians — and many thoughtful Americans on the spot — believe that the Canal Zone wage pattern of the future has to be standardized and that local wage scales should be disregarded. Such a change would not only be a psychological boon. An upward progression of wages would also suggest that Panamanians could move step by step up the ladder of skills and status. Thus, the Canal Zone could become a training ground for Panamanians in technical proficiencies, which would redound to the benefit of their country’s economy and to their own social progress. Under wise American management, the Canal Zone could be an enormous instrument for Panamanian order, stability, and progress.

Changes in the canal tolls and in the Canal Zone wage scales would not constitute U.S. “concessions.” They would simply be instances of justice. The opportunity that the United States has in Panama to help an intelligent and receptive people and to brighten its own record is enormous.

There is always the danger that, since things are now going well in Panama, the country will be the low man on the totem pole in the eyes of a Washington officialdom harried by Latin American eruptions. But there is the great opportunity for the United States in Panama to raise a standard of social, economic, and political performance to which all the wise and honest in Latin America can point.