More foreign affairs in a crazy, mixed-up world

Seizing the Panama Canal; updates on Suriname, Barbados

Will the Panama Canal retain its independence and public neutrality, or will the new U.S. administration follow through on its barely-veiled threats to seize the century-old waterway? That is a primary question on the minds of many alarmed observers in and beyond Central America these days, as the region awaits a fact-finding tour this weekend by the new U.S. Secretary of State, former Senator Marco Rubio.

In advance of his trip, Rubio has already targeted a key player in the suddenly-controversial administration of the Canal, once owned by the United States: the Hong Kong-based port firm, Hutchison Ports, which holds exclusive rights to the operation of two of Panama’s seven ports at either end of the 50-mile canal under an agreement with the government, recently renewed for a second 25-year period.

During his recent confirmation hearing, Rubio told the Senate Foreign Affairs Committee that China could, if it wanted to, tell the port operators to “Shut it down and don’t let the U.S. go through there,” foreseeing a possible showdown and a “big, big problem … a big economic problem and a big national security and defense problem.” [See “Panic and defiance,” https://www.theguardian.com/world/2025/jan/26/panic-and-defiance-in-panama-after-trump-threatens-to-take-back-canal .]

A cruise ship transits the inner potion of the Panama Canal. Public domain photo

It is worth noting that Hutchison Ports—a farflung firm which operates 53 ports worldwide (including five in Mexico and another dozen or so in Europe, though none in the United States)—is not owned by the Chinese government, though it arguably remains subject to the dictates of that government. (Hutchison also operates seven ports in Mexico, another in The Bahamas, and 13 in Europe.) Nor are any Chinese military troops known to be stationed in Panama, as some have falsely claimed.

Apparently, the threat is far more insidious than that—more like a John LeCarre novel, in which Chinese “moles” paralyze U.S. container cranes and use explosives collapse that new bridge into the canal, closing it to all traffic until Taiwan, for example, has been safely occupied.

As a member of the Nonaligned Movement [NAM], a group formed during the Cold War “dedicated to representing the interests and aspirations of developing countries” and declining to align with either the United States or the former Soviet Union, Panama remains confoundingly independent and essentially neutral, although its ties with China have grown significantly since the two countries established full diplomatic relations in 2017 (after former President Varela broke off Panama’s relations with Taiwan).

Since then, the United States has sought repeatedly to minimize Chinese influence in Panama and helped block Chinese plans to build a fourth bridge across the Panama Canal, for example, until 2024, according to a recent New York Times article. That bridge is now roughly half-completed. [See “What China wants in Panama,” January 15, 2025, https://www.nytimes.com/2025/01/15/world/asia/china-panama-explained.html .]

The current hubbub may yet turn out to be just another example of empty chest-thumping by Donald Trump in his second term as U.S. president—or it may actually come to pass, perhaps provoking military intervention. Trump is visibly angry at what he sees as the unwarranted high fees being charged to all ships, and has claimed that U.S. ships deserve sweetheart rates, because we built the canal and used to own it. Raising tariffs on Panama if it doesn’t comply is a familiar threat, like the one that apparently forced Colombia to back down in January and accept planeloads of deported migrants, after initially refusing. To be sure, he is not the only one to be leery of Chinese inscrutability, of course, or Panamanian corruptibility.

In either case, the prevailing winds toward Panama bespeak a woefully complete ignorance of the complicated history of the canal itself—and the often-fractured relations between the United States and the very country Teddy Roosevelt willed into existence to get his way in 1903. The dangers involved in both today’s silly threats and tomorrow’s possible unwarranted actions are irrelevant. The frenzied scenarios described by Republican senators at a hearing this week (by such deep thinkers as Ted Cruz) may border on the preposterous, but “fake news” seems to be blotting out calmer dialogues, at least according to a lengthy analysis by Lloyds List [See “Why Would U.S invade Panama,” January 29, https://www.lloydslist.com/LL1152389/Why-would-US-invade-Panama-US-Senate-hearing-gives-rationale ].

During the hearing, Cruz called Panama a “bad actor” and accused Panamanian leaders of greed and corruption. [See “Senate Republicans Explore,” January 28, https://nypost.com/2025/01/28/us-news/senate-republicans-explore-panama-canal-takeover-cruz-rips-central-american-nation-as-bad-actor/ .]

The last time the U.S. military took any comparable action in Panama was back in 1989, when then-President George H. W. Bush ordered the arrest of Manuel Noriega, the military dictator wanted in the United States on drug trafficking charges—who was soon apprehended and extradited to the States after a tense diplomatic showdown at the Vatican City embassy in Panama City, where Noriega had sought asylum. The United States temporarily reactivated its dormant military bases in Panama during that invasion. That sparked ill feelings that took years to die out, even among Noriega’s many detractors.

And we no longer have that support option, having relinquished ownership of all buildings in the former Canal Zone in 1999. [You can read more about the Noriega incident in “War on the Rocks,” a 2017 commentary, at https://warontherocks.com/2017/06/remembering-manuel-noriega-and-his-capture/ .]

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Map of the Panama Canal. Courtesy Britannica.com

I was never fortunate enough to visit Panama or travel through the Canal during my Foreign Service career, but a childhood friend—still active at 90—was stationed there in the mid-1950s. I have also heard many travelers sing its praises since then, including one Foreign Service spouse and longtime friend who recently took a round-the-world cruise.

Panama’s turbulent relationship with the United States, on the other hand, poses an ominous backdrop for the prospect of U.S. military intervention. Crime and the potential threat of civil unrest are noted by the State Department in its most recent Travel Advisory (Level 2), which urges U.S. travelers to Panama to “exercise caution” and warns them not to visit certain areas of the country at all, particularly the southernmost areas bordering Colombia. Apparently riots are not as rare as one would hope. [See https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories/panama-travel-advisory.html .]

A quick history lesson may help illuminate the increasingly muddled situation. In 1902-1903, Teddy Roosevelt’s Secretary of State, John Hay, negotiated what seemed to be the perfect treaty with his Colombian counterpart, Tomas Herran, for U.S. construction of the Panama Canal in its then-northernmost province. But the Colombian Senate decided not to ratify the treaty, essentially because U.S. financial incentives were unacceptably low. Rather than simply raise the ante, the United States gave tacit approval when rebels in the province announced they had a better plan—declare independence, bolstered by U.S. support, and sign a rapidly-amended version of the treaty themselves.

In an extraordinary demonstration of “gunboat diplomacy,” Roosevelt quickly sent U.S. warships to defend ports at both ends of what would later become the Canal—Balboa, on the Pacific end, and Colon, on the Atlantic-Caribbean terminus—and Colombian troops were unable to get to Panama City in time to reclaim their seceding territory. A hastily-rewritten treaty allowed the United States to pay the new quasi-government of Panama $10 million for the Canal and its 10-mile wide strip of territory, dubbed the Canal Zone, and agreed to pay the new country $250,000 every year, later raised to satisfy the corrupt government’s increasing greed. [See “Building the Panama Canal, 1903-1914,” https://history.state.gov/milestones/1899-1913/panama-canal .]

Relations between the new country and its northern benefactor generally remained good, at least until after World War II, when the U.S.-owned Canal Zone became a key location for supplying U.S. military troops in the Pacific. As many as 67,000 U.S. troops were actually stationed at U.S. bases in the Canal Zone during that war, and it later played a key role in training troops to be sent to Vietnam in a jungle-like environment.

In the 1960s, however, unrest among dissident Panamanians and a dispute over flying the Panamanian flag in the Canal Zone led to a brief break in diplomatic relations. Negotiations over a new treaty began under President Lyndon Johnson in 1967, and continued intermittently, despite political obstacles, under Presidents Richard Nixon and Gerald Ford, who supported the proposed treaties. Despite his own initial opposition to the proposed treaty, new President Jimmy Carter changed his mind and chose to complete the treaty negotiations in 1977 with Panama’s military dictator, Omar Torrijos [See “The Panama Canal and the Carter-Torrijos treaties,” https://history.state.gov/milestones/1977-1980/panama-canal .]

President Jimmy Carter and Panamanian leader Omar Torrijos. Courtesy Carter Library

The two treaties disbanded the U.S. Canal Zone and guaranteed a 20-year transition period under joint U.S.-Panamanian administration, after which ownership of the Canal would pass entirely to Panama—as it did in December 1999—along with the permanent neutrality of the Canal, to be safeguarded by the U.S. military.

It is that separate neutrality treaty which current critics are so worried about. Its wording permits the United States to “use its military to defend the Panama Canal against any threat to its neutrality, thus allowing perpetual U.S. usage of the Canal,” according to the State Department history. Apparently, however, it does not specify how that threat should be documented, nor does it allow for international arbitration to resolve any crisis.

The Canal is now administered by an independent Panamanian body, the Panama Canal Authority, which sets market rates for fees and oversees maintenance and repairs. A significant widening of the Canal, completed about a decade ago, enlarged the Canal by adding a third lane—using excavations begun by the U.S. in the late 1930s but suspended in 1942, during World War II—and new, wider locks to accommodate most of the world’s largest new vessels.

It was financed through $2.3 billion in loans from an international consortium of five government-owned development banks, to be paid back, within a 10-year period or so, out of higher fees charged vessels using the Canal. (Some 15,000 vessels—including oil tankers and huge container ships—use the Canal each year, reportedly paying fees of as much as $800,000 charged the largest container vessels for a one-way trip.)

A massive container ship traverses the new Agua Clara locks. Photo courtesy New York Post

“We didn’t give it to China,” Trump said during his inaugural address in January, according to an NBC News article. “We gave it to Panama, and we’re taking it back.”

Panama strongly rebuked Trump’s comments, with President José Raúl Mulino saying the canal “is and will continue to be Panama’s.”

Mulino also rejected Trump’s claim that China controls the canal. “There is no presence of any nation in the world that interferes with our administration,” he said [in Spanish] in response to Trump’s assertions.

[See “Trump says China controls the Panama Canal,” January 21, 2025, https://www.nbcnews.com/news/world/trump-panama-canal-china-rubio-rcna188491 ].

Mulino has softened his stance slightly since then, promising a full audit of the administration of the Hutchison ports and a reexamination of the fee structures. Only time will tell if that is enough to soothe the savage breast …

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Panama has been something of a very large question-mark in the minds of many since the scandalous Panama Papers were published a decade ago. Its government is also under the microscope of the U.S. government for another more timely subject: allowing its flag to be flown on suspicious vessels, including “dark fleet” oil tankers and evading U.S. sanctions against Iran.

In December, the U.S. Treasury Department “once again targeted Surinamese companies and officials allegedly involved in sanctions-busting activities by assisting in the transport and sale of sanctioned Iranian oil,” while flying the Panamanian flag, according to a Caribbean Life report. According to the OFAC report itself, “The Panama-flagged vessel VIGOR (IMO: 9262156) is being identified as property in which Galaxy Management NV has an interest.”

“Galaxy Management was involved in transporting Iranian petroleum through 'Galaxy Management NV,’ a Suriname-based company.” It was not the first time; two months earlier, “a number of Surinamese companies were lashed with sanctions for allegedly facilitating sanctions against Iran,” although Foreign Minister Albert Ramdin claimed that local firms linked to companies identified by the U.S. are on their own “because this is not a government issue.” [See “U.S. sanctions Surinamese companies,” December 25, 2024, https://www.caribbeanlife.com/us-sanctions-surinamese-companies/ .]

Panama has long served as a flag of convenience for world vessels, with little attention paid to its growing flock of suspicious vessels. The Panama Ship Registry is “currently the world’s largest, with over 8,000 vessels totaling 250 million GT,” but has recently taken steps to vet its list more carefully under watchful U.S. eyes, according to an article from gCaptain.com. [ See “Panama Maritime Authority,” October 1, 2024, https://gcaptain.com/panama-maritime-authority-tightens-ship-registry-rules-to-combat-sanctions-evasion/ .]

The Panama Maritime Authority (PMA) then “announced stringent measures to maintain the integrity of its ship registry in response to recent sanctions imposed on seven Panamanian-flagged vessels by the U.S. Office of Foreign Assets Control (OFAC).” How many ships fell off the list was not disclosed—nor the amount of revenue Panama had to forego.

Panama and Barbados—an up-and-coming maritime registry always on the lookout for anyone wishing to rent its flag—were among the countries with the largest number of flagged vessels involved in illicit trade, particularly involving vessels transporting sanctioned oil owned by Iran and Russia. Barbados has long denied any wrongdoing on its part—but has not followed Panama’s lead in reducing its list—and was also cited in the December sanctions action by the United States for flagging a handful of newly suspicious vessels.

The issue of the Panamanian flag on the Surinamese vessel has yet to be resolved publicly, but will almost certainly lead to Panama’s withdrawing its flag from the sanctioned vessel. Even so, it is unlikely to have any effect on bilateral relations with Suriname. The two nations remain friends and low-level trade partners, with a combined export total of $30 million (mostly refined petroleum, construction vehicles, delivery trucks and cranes) in 2022.

Although Suriname and Panama have had diplomatic relations since 1979, and both belong to the UN, NAM, and Organization of American States (OAS), neither country has yet seen fit to open an embassy in the other’s capital. Both countries, however, have large new Chinese embassies, which may facilitate communications on their behalf. Perhaps China can bring them closer together …

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Barbados also features a full Chinese Embassy in Bridgetown, but has not yet opened anything larger than an honorary consulate in Paramaribo.

But Barbadian Prime Minister Mia Mottley, recently tapped as head of CARICOM, spends much time there, having taken pains to bring CARICOM member Suriname into the international sunlight. Almost alone among world leaders, she counted former Surinamese dictator-turned-president Desi Bouterse as a personal friend. She praised him after his recent death for his “history ranging from freedom fighter to Head of State of the Republic of Suriname. Whether you agree with him or not, you would have to appreciate the force of his personality.”

For her efforts, Mottley recently received one of Suriname’s highest national awards—an award which a more thoughtful regional leader might have written off as as an empty gesture from a forgettable country that has yet to establish even a vaguely respectable record on the international scene. She, instead, seemed to appreciate it. [See “Barbados Prime Minister,” https://www.guardian.co.tt/news/barbados-prime-minister-gets-surinames-national-award-6.2.2209579.01dac94010 .]

Barbados Prime Minister Mia Mottley shakes hands with Chan Santokhi. Public domain photo

The tireless politician—reportedly campaigning to become the first woman U.N. Secretary General—may, in fact, well be looking for support from Bouterse’s successor, Chan Santokhi. So far she has not yet begun to court Vice President Ronnie Brunswijk—Bouterse’s former military bodyguard turned guerrilla opponent, turned political ally, and possible Santokhi successor—but it may only be a matter of time.

For Ronnie Brunswijk has continued to make the news in recent weeks—with one report that the Surinamese government intended to arrest him if he did not provide information to them about his knowledge of the whereabouts of former Surinamese dictator and president Desi Bouterse, who died in December after a year on the lam, and was buried in early January.

Brunswijk told Caribbean Life that he both knew where Bouterse was during his year-long disappearance—at a rural compound he owned downriver from Paramaribo— and had actually visited him there on more than one occasion. The government of President Santokhi—which had denied Bouterse a state funeral—took strong exception to Brunswijk’s remarks, and ordered him to come in and make a full statement to the country’s police last week or be arrested.

Government officials continue to deny any knowledge of Bouterse’s whereabouts after his January disappearance, just before he had been slated to begin a 20-year term for his role in the 1982 murders of 15 Surinamese opposition leaders. But other sources dismiss the government’s claim as laughable, saying almost everyone in Suriname knew where he was the whole time—and the government had only tolerated his “disappearance” in exchange for his staying out of the public eye until after the 2025 elections.

I served in Paramaribo as a Foreign Service Officer at the U.S. embassy in 1989 and 1990, and was daily mystified and appalled at the Alice-in-Wonderland qualities of the country’s politics. Since then, it seems, very little has changed—except that Desi Bouterse, finally, is now “seriously dead,” as Saturday Night Live comic Chevy Chase used to say about Spanish dictator Francisco Franco in the 1970s.

With Bouterse out of the way, the delicate balance of Surinamese politics may now depend on the outcome of the Santokhi-Brunswijk showdown, since the two men—not known to be close friends—are temporary fair-weather allies, as leaders of the two-party coalition controlling Suriname’s parliament. Since the 2020 elections, the 51-seat Parliament has been controlled by a coalition of Santokhi’s VHP (Progressive Reform Party, 20 seats) and Brunswijk’s ABOP (General Liberation and Development Party, 8 seats).

Truth in advertising: Brunswijk had previously formed a coalition with the NDP, allowing Bouterse’s election as president for his first term in 2010. After the NDP lost its top billing in 2020, Santokhi—Bouterse’s onetime prosecutor—was then elected president with Brunswijk’s cooperation; in return, he was named vice president, despite his criminal conviction in absentia in European courts for drug trafficking.

What will happen in May 2025 is anyone’s guess, but many observers believe the late Bouterse’s NDP (National Democratic Party, 16 seats) may once again emerge as the nation’s largest party, perhaps with enough seats (26) to elect a new president outright—perhaps NDP chairman Jennifer Simons, or even Bouterse’s widow, Ingrid, the former First Lady for 10 years and a powerful force in her own right.

A showing of 25 seats or fewer for the NDP, however, would require building a coalition with one or more small parties—with Brunswijk’s ABOP perhaps demanding his promotion to the presidency in exchange for his party’s votes. Under such a scenario, Ingrid Bouterse-Waldring, who holds a strong grudge against Santokhi for the brazen “disrespect” shown to her and her late husband after his death, could conceivably succeed Brunswijk as vice president.

Meanwhile, rumors about the circumstances of the former dictator’s death—and how his lifeless body mysteriously appeared at his wife’s home on Christmas Eve—continue to swirl. One credible report says that Bouterse had been dead for at least two days when his decomposing body was left at the front door of his wife’s riverfront home just before midnight in a wooden native casket, perhaps having been floated up the river from his hideaway.

Another report describes Bouterse, just days away from dying of liver failure due to alcoholism, begging to be allowed to talk to his U.S.-imprisoned son Dino by telephone. That apparently was not allowed. In early January, Bouterse was cremated after a private funeral held by his family members and NDP leaders—a funeral to which Brunswijk was pointedly not invited, although he later said he had asked to be allowed to attend.

After 44 years as a cancer on Suriname’s body politic, the bloodthirsty demon who terrified Suriname for four decades was finally gone—with help from God and dependence on hard liquor—but apparently, never to be truly forgotten, by his successor, by Mia Mottley, or anyone else.

Next time: Chronicling the amazing history of Union Institute & University