Page 14 - Anatomy-of-a-Fraud
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have had unlimited powers over everything having to do with family life. On the
                        cultural level, a so-called Educational Reform was instituted, seeking to extend
                        government control to all schools, whether public or private, and uniformly
                        politicizing education’s ideological content. There were occasions when attempts
                        were made to divide the clergy; tensions between the Church and the government
                        culminated in the expulsion of several priests and the death of Father Héctor
                        Gallego.

                            On the economic level, great emphasis was placed on the government’s
                        intervention in industrial, agro-business and, eventually, mining operations, aiming
                        to reverse the previously existing 1 to 2 ratio in public and private investment.
                        Official controls over transportation and housing proliferated; in general, prices
                        and labor-management relations also came under the watchful eye of the
                        government. Thus, the polarization of the Panamanian economy was exacerbated;
                        on the one hand, there was the very free international sector, where foreign
                        investments predominate, with a sustained rate of growth but a relatively low rate
                        of job creation and government revenue generation; and, on the other, the highly
                        controlled domestic sector, where national ownership predominates, mired in a
                        prolonged crisis and therefore unable to respond to the two-fold demand of
                        creating more jobs for a rapidly expanding population and paying more taxes to a
                        government more and more in the red.
                            Thus, a “socialist militarist” scheme was hatched, aiming to change
                        Panamanian society by force, from the locus of political power and according to its
                        whims or, more accurately, to those of the military in the role of political leaders.
                        Gradually, national life became circumscribed to the government’s centralizing
                        decisions, made by the Executive Branch which, in turn, was subject to the diktats
                        of the armed forces, i.e., their General Staff and their Commander in Chief. A left-
                        leaning version of the national security ideology. Again, the regime included
                        everything but popular, pluralist participation.

                            In the area of foreign policy, this Torrijista scheme succeeded in
                        internationally dramatizing Panama’s relations with the United States over the
                        Canal. The result was the agreement to gradually decolonize the Canal Zone and
                        reduce U.S. presence in it, in exchange for the formal acknowledgment of the right
                        of the United States to eventually intervene militarily anywhere in Panama. In the
                        process, the regime committed itself to the Third World movement, including
                        some of its more radical exponents; staked out an ambiguous role in the
                        confrontation between Western democracy and Marxist-Leninist regimes; and in
                        the end gave its support to a series of regional intervention adventures, all of
                        which went far beyond the resources and the national interests of Panama.

                            The 1984 elections were exceptionally meaningful and not only because they
                        were the first in sixteen years for president and legislators and the only elections
                        the younger half of the electorate had ever known. They were exceptionally
                        meaningful because they amounted to an opportunity for a plebiscite to choose
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