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A year after taking canal Panama is proud

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December 31, 2000 

PANAMA CITY, Panama-- (AP) - The Panama Canal is operating smoothly a year after the U.S. handover, but the Americans' departure has aggravated an economic slowdown and doubts about Panama's ability to defend its southern border.

"The country has learned to live on its own and to walk on its own feet," said political analyst Mario Rognoni. "Sadly, we have had to live through a recession this year."

Operations at the 50-mile (80-kilometer) canal that the United States had run since 1914 are mostly unchanged since Panama took control at midday on Dec. 31, 1999.

It took in dlrs 574.2 million in 2000, about 1 percent more than last year.

"The Panamanians have managed the canal as well as the United States, possibly better," said former President Jimmy Carter, who signed the 1977 canal handover treaty with Panama.

But with the departure of the last U.S. troops and the closure of military bases, Panama lost more than dlrs 250 million that the Americans spent yearly. Many Panamanians lost high-paying jobs, adding to an unemployment rate of about 13 percent.

Growth in the gross domestic product has slowed, with 2000 seeing an increase of only 2.5 percent compared to 3 percent in 1999 and 4.4 percent in 1998, according to the Economic Commission for Latin America and the Caribbean.

Rising prices for imported oil, restrictions on the European banana market and a 1999 slump in business at the massive Colon free trade port held back the economy as well.

Among those most hurt by the exit of the Americans are shopkeepers and real estate agents.

"Things are not going well at all, especially since the departure of the gringos," said Elena Rodriguez, a 52-year-old vegetable seller in Panama City.

"The Americans bought handicrafts, went out with girls to the discotheques and lived in luxury apartments," she said. "All that money that came in has gone."

Panama's leaders have tried to convert the former bases alongside the canal into centers for business and tourism - with mixed results. A plan to build three large hotels at the former Fort Amador U.S. Army base has stalled.

"The lack of foresight to make those areas produce has affected us," Rognoni said. "The big projects have been a failure."

On the other hand, the country attracted large cruise ships to the Atlantic port of Colon for the first time this year, and the free zone seems to be recovering from its 1999 slump.

The departure of U.S. troops has also created a feeling of insecurity for some, especially with periodic incursions across the southern border by small groups of Colombian guerrillas.

The country has had no formal army since the U.S. invaded to topple the government dominated by Gen. Manuel Noreiga in 1989, and its police are only lightly armed.

"Panama has not achieved the levels of security we desired," said Rognoni, who suggested creating a special police force to guard the southern border.