Panama must take a leading role in the Venezuelan crisis | Opinion

On Dec. 21, 1989, the United States invaded Panama to remove dictator Manuel Noriega. Despite the controversy, many Panamanians view the invasion as the only viable solution to end a dictatorship.

This context parallels Venezuela today, where the struggle for democracy after years of oppression raises questions about the necessity and impact of foreign intervention.

In July, Venezuelans participated in a highly-anticipated election, which was fraught with significant irregularities. The National Electoral Council, under Nicolás Maduro’s control, hastily declared him the winner without evidence.

This announcement was discredited by independent observers and the opposition, exposing the election as a subversion of democratic principles.

In response, newly-elected Panamanian President José Raúl Mulino suspended diplomatic relations with Caracas, recognizing Edmundo González as Venezuela’s legitimate president. Mulino’s stance is informed by personal and historical contexts, as he actively opposed Noriega. before his downfall.

Today, Venezuela has evolved from a foreign policy concern into a critical issue of national security for Panama, as noted by Diego Area, Deputy Director at the Atlantic Council. “It has become a key matter of national interest. Given its unique position, Panama is ideally suited to lead efforts in addressing the Venezuelan crisis—a role that could significantly impact regional stability.”

Migration on the Darién Gap

As the region braces for a potential surge in migration resulting from the discredited Venezuelan elections, Panama’s strategic role becomes even more critical.

Since taking office on July 1, Mulino has actively sought to manage and mitigate migration challenges in the Darién Gap, aiming to ensure national stability and security.

The Darién Gap’s prominence is highlighted by the record 520,085 migrants traversed it in 2023, with Venezuelans comprising 67 percent of this flow.

Given the anticipated increase in migration pressure, it is essential for Panama to reinforce its efforts in this area to safeguard both its domestic stability and broader regional interests.

Addressing the Venezuelan crisis presents Panama with an opportunity to bolster its diplomatic and economic ties with the U.S.

Should U.S. political dynamics shift, Panama’s stance could strengthen its role as a key regional partner, enhancing U.S.-Panama relations and contributing to regional stability. More broadly, Panama’s active involvement with the OAS aligns it with democratic nations and distances it from authoritarian regimes.

Last month, Panamanian Foreign Minister Javier Martinez-Acha emphasized the importance of supporting democracy in Venezuela, drawing parallels to Panama’s own history.

By supporting the OAS resolution condemning Venezuela’s flawed elections, Panama builds strategic alliances and reinforces its diplomatic position. The resolution garnered backing from 17 countries, including the U.S., with 11 abstaining and five absent.

Consequences for Panama

The suspension of diplomatic ties with Venezuela has economic consequences for Panama, potentially disrupting trade and Copa Airlines flights, which affects both passengers and commerce.

Panama also faces financial risks from unpaid receivables and diminished business with Venezuelan traders in the Colón Free Zone (ZLC).

With over 5,000 Venezuelan businesses investing more than $1.8 billion in the ZLC from 2013 to 2023, the disruption is likely to impact operations, particularly in re-exports.

In response, Panama could intensify scrutiny of financial flows linked to the Maduro regime, targeting assets held by regime affiliates in Panama.

By implementing rigorous financial regulations, Panama could enhance its international reputation, address concerns about money laundering, and align with its broader goals of economic reform and anti-corruption.

Impact on the diaspora

With over 140,000 Venezuelans now in Panama, their economic and social contributions are substantial. Addressing Venezuela’s democratic issues is crucial for avoiding internal instability that could affect this community.

According to Area, strengthening ties with the diaspora not only supports them but also positions Panama to benefit from Venezuela’s eventual recovery, creating new opportunities for its private sector.

But the situation in Venezuela is so unsettled it is hard to know today what it will all mean Panama, which must remain ready to act.

Cristina Guevara is a public policy analyst and freelance writer based in Panama, with a decade of experience in Latin American politics. Her background includes serving as an advisor to members of Panama’s National Assembly. She frequently writes about corruption, democracy and human rights in Panama and Latin America. She holds an M.A. in International Affairs from The George Washington University.