In Venezuela's Backyard, Here's a U.S. Invasion That Ended Well

(Bloomberg) -- The Trump administration’s maneuvers to oust Venezuelan President Nicolas Maduro evoke for many a U.S. history of meddling in foreign countries from Afghanistan to Chile, often with disastrous consequences.

Among the cases of U.S.-led regime change gone bad, however, there’s a notable success story, and it’s right in Venezuela’s back yard: Panama.

Three decades after President George H. W. Bush sent in 26,000 troops to overthrow the military strongman Manuel Noriega, the country of 4 million is Latin America’s economic darling, a functioning democracy in a region of instability. Many Panamanians point to the invasion as a turning point, painful though it was.

In Venezuela's Backyard, Here's a U.S. Invasion That Ended Well

“I wasn’t in favor of it, and it came at a high cost for Panama,” said ex-President Ernesto Perez Balladares, who won the first election after the coup and belongs to the party closely affiliated with the military. “But if you look at it in retrospect, it’s obvious that it cleared the table for a new beginning.”

The scenes outside Balladares’s 10th-floor office in Panama City pay testament to how far the country has come: a burgeoning steel-and-glass skyline, residents jogging along a palm-tree-lined waterfront promenade, tourists crowding Argentine steak houses and Caribbean rum bars in a Colonial neighborhood that was largely abandoned after the invasion.

Panama will overtake Chile this year and compete with Uruguay to become one of Latin America’s wealthiest nations, according to International Monetary Fund projections. In May, the Central American country that had suffered 21 years of authoritarian rule is set to hold its sixth presidential election since Noriega was overthrown.

In Venezuela's Backyard, Here's a U.S. Invasion That Ended Well

Panama is an outlier in the history of U.S. interference for two reasons: The transition went smoothly with minimal repression, and the country earns enormous sums from the Panama Canal, which the U.S. handed over in 1999. Last year alone, the canal brought in almost $3.2 billion in revenue.

For many Panamanians, nonetheless, the trauma of a foreign intervention that killed at least 1,000 people hasn’t become less painful over time.

“The invasion was unnecessary, and the military force was excessive,” said Jose Luis Sosa, who, as a college student, watched American tanks roll through his neighborhood. His childhood friend was killed while trying to take an injured friend to the hospital.

The U.S. incursion left “an open wound,” said Sosa, who runs a truth commission the government established in 2016.

Chile, Iraq

Last month, with Venezuela spiraling into ruination, the Trump administration began drumming up support to push out Maduro. It probably won’t invade, but if it does, history doesn’t augur well. In Chile, the U.S. helped install an authoritarian government that carried out widespread human-rights abuses. In other places, including Iraq, full-blown disasters followed.

Things went much better in Panama.

In Venezuela's Backyard, Here's a U.S. Invasion That Ended Well

Noriega, a career military man, took power in 1981 and ran sham elections to install puppet leaders. While informing for the U.S. Drug Enforcement Administration and Central Intelligence Agency, he was also working for the Cubans and Colombian drug cartels.

By 1989, even before the Panamanian military killed a U.S. Marine, Noriega had lost popular support. Bush had tried to oust him and the killing offered a pretext. “Operation Just Cause” lasted little more than a month. Noriega turned himself in and was convicted in U.S. and Panamanian courts. He died in prison in 2017.

“The invasion was horrible, but out of it came positive things,” said I. Roberto Eisenmann Jr., who founded La Prensa newspaper in 1980 to oppose the military regime.

Overnight Transition

The country transitioned almost overnight from dictatorship to democracy, and an economy some expected would take two decades to recover was back on its feet in two years, Eisenmann said. Panama’s history with the U.S. helped: The Americans wrestled it away from Colombia in 1903 and has always had strong influence.

Eisenmann, whose newspaper was shuttered by Noriega, began publishing days after the incursion. Expecting the public to turn against the U.S., he began running polls.

In Venezuela's Backyard, Here's a U.S. Invasion That Ended Well

“I was surprised because after the invasion there was an appreciation,” he said. “Panamanians felt the U.S. had liberated us. I doubt there has been any country in the world that was more pro-Yankee than Panama after being invaded.”

By 1994, the government rewrote the constitution to formally abolish the military. Money Panamanians sent abroad during the dictatorship came rushing back. Foreign banks, located in Panama since before the Noriega regime, provided cheap capital for businesses to rebuild.

Independent Institutions

The government created independent institutions, such as an electoral court, and ran elections that were open to all, including the Democratic Revolutionary Party, which had been linked to the military regime.

Ex-President Balladares, a founding member of that party, embarked on a “kind of a shock therapy” that included partially privatizing state-owned companies and embracing globalization. Today Panama attracts more foreign direct investment as a percentage of its gross domestic product than any other country in the region. Outside of canal management, the U.S. played little role in the reforms, Balladares said.

In Venezuela's Backyard, Here's a U.S. Invasion That Ended Well

There are signs the country is cleaning up its banking system and sharply reducing poverty. U.S.-style suburbs with track housing are replacing shantytowns. Diesel-belching buses are being retired from public transport. The second line of a subway will open this year.

To be sure, Panama still suffers from many of the problems that plague its neighbors, with large gaps between the urban rich and rural poor, cases of corruption at the highest level of government and a dark reputation for banking secrecy.

And the invasion isn’t exactly a source of celebration. In the Chorrillo neighborhood that felt the brunt of the destruction, there are no monuments to the victories, no streets bearing Bush’s name, no parks honoring U.S. Marines as liberators. There is, on one corner, a sign in white letters against black paint: “December 20, 1989. National Mourning.”

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