Last year was a probationary year for the Bush Administration's policy in Latin America. No one expected bold moves, but creativity and reliance on a broad spectrum of experience were assumed. With an understandable desire to avoid the quagmire in which its predecessor found itself, the new administration adopted a low-profile approach to the region-sharp contrast to President Reagan's ideological policies or President Carter's crusading zeal. Then, in the last few days of 1989, the new administration drew a line through its image of reluctant hemispheric activist and took over Panama militarily to overthrow the government of General Manuel Antonio Noriega.

What has emerged is a form of U.S. policy pragmatism. This would be laudable if only it were anchored by an identifiable regional strategic vision. Although the Panamanian operation demonstrated political courage, Washington's Latin American policy process in 1989 failed to develop a four-to-eight-year strategy. U.S. interest in the Caribbean, for example, almost evaporated. Many in and out of Washington therefore watched with some concern the increasingly complex unfolding and execution of President Bush's Latin American policy.

The U.S. policy emphases that gradually became apparent in 1989 had four main features:

-a tenuous bipartisan consensus in the United States regarding Central American policy, built around a truce struck early in the year between the administration and a Democratic-controlled Congress;

-a belief that the debt problem in Latin America, if allowed to fester, would quickly shift from a giant accounting problem to one with political and security implications;

-the immediate priority of U.S. relations with Mexico;

-the rediscovery of multilateral diplomacy by the new administration, with policy subplots involving regional narcotic concerns and Panama; limited initial results of the latter triggered on December 20, 1989, the U.S. unilateral action in Panama.

In the absence of a strategic framework the Bush Administration's regional response has been to adjudicate issues bureaucratically for the various executive departments to manage. That process, however, suffered from a number of visible shortcomings. Latin America had not been an issue in the 1988 presidential campaign and much of the Republican and Democratic expertise in that area reached somewhat overlapping conclusions regarding regional priorities. Coming off an easy political succession, it is unclear how wide a net was thrown by the new administration to secure a qualified pool of skills. A degree of back-alley warfare was provoked by Bernard Aronson's appointment as assistant secretary for Inter-American Affairs, and by appointments for positions in the National Security Council and several ambassadorial choices in the region.

Attempts to put Latin American affairs on the back burner had by the last quarter of 1989 stumbled predictably over the renewal of violence in El Salvador, the end of the cease-fire in Nicaragua, the October coup attempt in Panama and subsequent U.S. military operation, a far from complete regional debt agenda and a strong Latin American drug connection. Finally, at a time when the trend was toward liberalization elsewhere in the communist world, considerable attention-if not clear policy interest-was focused on Cuba, or more specifically, on the graying of the Castro government.

As the new decade unfolds, Latin America has become synonymous with drugs, illegal immigration, death squads, guerrillas, capital flight and that nefarious term, "U.S. intervention." Those intractable problems seem stark when compared with the opportunities offered in the Pacific basin, Eastern Europe and the European Community. Latin America's march toward democratization continues, but it is being outflanked in popular attention and strategic significance by dramatic developments in the communist bloc. The attendant financial and trading implications for the United States are of a greater order of magnitude than the sometimes pathetic patterns of Latin American economic management. Latin America, once the fertile ground for foreign investment and an encouraging example of development, is in the half-way house of international finance-attempting to beat its addiction to more money, larger bureaucracies and institutionalized corruption.

The degree to which that environment generates pressure for more proactive policies has been very limited. The U.S. approach avoids attending to politically divisive issues that offer no immediate gains, but are nevertheless full of both pitfalls or opportunities in the long run. The situation is made worse by skepticism about the region at the most senior level of the U.S. foreign-policy establishment. As a result, circumstances have not triggered a positive vision of hemispheric affairs, nor contributed to a coherent long-term program.

II

Drugs as a source of national and international concern received high-level attention in early September when the Bush Administration announced a National Drug Control Strategy. Not surprisingly, parts of the plan focused on Latin America, which is the world's single largest source of cocaine, marijuana and, to a lesser degree, heroin. Peru produces 65 percent of the world's coca, Bolivia grows another 25 percent, while Colombia alone refines 80 percent of the cocaine reaching the United States.

Significantly, many Latin American drug producers have now acquired their own consumer populations. To process huge profits (estimates of the U.S. market range up to $250 billion), an extensive money-laundering system has penetrated the U.S. banking system. To further complicate matters, tactical cooperation among some drug-trafficking insurgents-the narco-guerrillas of Peru and Colombia-has emerged in recent years. The governmental role of Cuba and Panama in drug trafficking has also received more attention.

The Colombian drug war intensified in August after several years during which the country's judicial, law enforcement, military and governmental administrations were gradually worn down by the twin attacks of the drug trade and guerrilla groups, such as the Colombia Revolutionary Armed Forces and the April 19 Movement. What led to governmental action was the murder of presidential candidate Luis Carlos Galán. Through terrorist attacks the drug lords have tried to force the government of President Virgilio Barco to retreat from the state-of-siege measures taken in August and a halt in extraditions of drug suspects (the so-called extraditables) to the United States-a fate apparently worse than death in Colombia. As the country gets closer to elections in mid-1990 the drug war is likely to become an issue of greater debate.

In prosecuting its war Colombia received $65 million in U.S. military support, but in September President Barco came to Washington asking for more assistance and economic relief. The U.S. anti-drug strategy has earmarked about $260 million for the Andean countries in FY1990. Colombia may need more than money, however, because the war is being fought with governmental agencies reportedly penetrated at all levels by drug informants. In any event, the immediate impact has been to disrupt the drug trade and to force some of it to relocate in more isolated areas of Brazil, Peru and Colombia itself.

In Peru, despite President Alan Garcia's almost perfect economic mismanagement, the terror of guerrilla groups like the Shining Path and the Revolutionary Tupac Amaru Movement and the impact of cocaine traffickers, the country was inching its way toward elections in 1990 in which well-known author Mario Vargas Llosa is favored to win. Violence did not prevent a respectable turnout for mayoral elections in November. In the interim, the United States remains involved in a low-grade war against cocaine growers and has established in the highlands of Peru the largest and most expensive field installation in the regional drug war. Over the next five years the Andean countries have been tentatively allocated close to $2 billion by the U.S. anti-drug plan.

Elsewhere, improved U.S. cooperation with Mexico and the Caribbean still leave uncertain the degree of regional commitment to stopping drug activities. Mexico, for example, took exception in November to the establishment in El Paso of a military coordinating task force for drug interdiction efforts along the U.S.-Mexican border. The United States has had difficulty convincing Latin governments to overcome age-old principles, such as noninterference, that prevent active anti-drug regional cooperation. When the United States went to the Organization of American States (OAS) to promote regional action against Noriega in part because of his drug connections, the response was revealingly weak. Seven Latin American governments did hold a drug summit of sorts in southern Peru in mid-October and, simultaneously, the White House accepted an invitation to join Latin leaders in February 1990 to discuss measures to combat the drug problem. As a show of solidarity and courage, President George Bush seems determined to attend such a meeting in Colombia despite obvious security concerns and policy implications-a meeting whose character is now additionally colored by the U.S. military operation in Panama.

As the anti-drug campaign has expanded, involvement of U.S. military forces has been a subject of debate both in this country and in the region. The ultimate success of the Colombian or Peruvian army efforts remains in doubt. U.S.-civilian law enforcement agencies (particularly the Drug Enforcement Agency) have also operated for some time in almost military-like specialized operations. What is not fully appreciated is the degree to which policy changes in 1988 and 1989 have thrust the U.S. Defense Department more directly into supporting the Latin American drug war. The Pentagon became the lead U.S. agency for border detection and monitoring of drug traffic, much of it from Latin America and the Caribbean; the Defense Department was tasked with developing an effective communications and technical intelligence network; and it also enhanced the role of the National Guard forces (already active in support of law enforcement agencies along the Mexican border and in Florida). When operating outside American borders, U.S. military forces have been given authority to arrest drug traffickers. Three military coordinating operations are now in place facing southern border areas: Joint Task Force-4 in Key West; JTF-5 south of Long Beach; and JTF-6 in El Paso. Four military commands have acquired a more visible drug policy emphasis, including the U.S. Southern Command based in Panama.

III

The second U.S. policy issue is the debt problem. The launching of the Brady Plan marked a significant shift in Washington's attitude, from deferral to reduction of Third World debt. Also significant was the fact that most major Latin American governments finally, albeit reluctantly, came to the conclusion that their debt was only part of a larger economic management challenge that demanded dramatic restructuring.

Much of the financial support that has been provided to Latin America in recent years has responded to crisis circumstances rather than economic performance. The consequences have been staggering. Compared to the 1970s, only sub-Saharan Africa has seen its gross domestic product decline lower in the 1980s. In 1988 less than $1 billion in net new capital flowed to Latin America. Although trade has increased, particularly for the region's major economies, overall economic activity remained sluggish in 1989-high interest rates, inflation and fiscal deficits remain as major interrelated problems. Latin America's foreign debt stands at a little over $400 billion (in addition to a growing internal debt, $50 billion in the case of Mexico), yet Latin Americans themselves have reportedly invested about $325 billion in the United States alone.

The "debt crisis" is no longer a crisis for all parties involved. The overall exposure rate of U.S. financial institutions has declined: Bank reserves against default have been increased, the flow of new credit is down dramatically, various instruments for debt conversion have appeared on the scene and, perhaps most important, the political mood in the United States surrounding the debt issue has changed.

The region itself, however, still suffers from years of economic mismanagement, and there is now evidence of a sea change in governmental and popular attitudes. Chile may be the most positive example and Mexico the best-known. In recent years Chile has diversified its exports (and export partners), maintained lower inflation rates and pursued debt reduction. For its part Mexico has confounded veteran Mexico watchers (and some "Mexico bashers") accustomed to seeing a country on the brink of collapse. That pleasant surprise is based on 12 months of nonstop activity: liberalized tariffs, fewer investment restrictions, privatization efforts, loosened regulations on competition (in the trucking industry, for example), and a few well-placed punches against entrenched labor and business interests. Mexico participates in the General Agreement on Tariffs and Trade, and works with the United States under the U.S.-Mexico Trade and Investment Framework Understanding.

Mexico's economic improvement was accomplished with a preemptive policy interest in Washington. Inching its way up in the consciousness of U.S. policymakers throughout the decade, Mexico was moved higher up by a new administration with a strong Texas flavor. The result was a flurry of activity beginning with the November 1988 meeting in Houston between presidents-elect George Bush and Carlos Salinas de Gortari, and followed by the meeting of the Binational Commission in August (which brought the bulk of the U.S. cabinet to Mexico City) and Salinas' high-profile visit to Washington in October 1989 during which new trade agreements were signed.

Operating in much less auspicious circumstances, and to the surprise of many, President Carlos Saúl Menem of Argentina has attempted to distance himself from traditional statist Peronist precepts, promising economic "surgery without anesthetic." Economic restructuring has also made a tentative reappearance in Venezuela. In February after only a few weeks in office, President Carlos Andrés Peréz faced several days of rioting linked to the implementation of new economic measures.

The road to recovery continues to confront an ever faster-ticking political time bomb. In seeking to defuse it the United States significantly amended its existing policy regarding Third World debt, turning to the set of debt-reduction measures in the Brady Plan. This approach may have generated greater expectations in the short run than it can deliver. Among the three Latin American countries that faced the test of eligibility, Chile did so with relative ease and agreement with Costa Rica was expected in 1990. Negotiations on the much larger Mexican debt ($103 billion) began to stall at the end of 1989; although Salinas' reforms appear imposing, the reality is that many U.S. and foreign commercial institutions, fearful of throwing good money after bad, are tempted to use this opportunity to bail out of the Latin market altogether.

The real problem may be elsewhere: the uncompetitive nature of the Latin market at a time when credit and investment opportunities are growing in other parts of the globe. Waiting in the wings for debt relief under the Brady Plan were Venezuela and, possibly, Uruguay and Ecuador. More problematic was the case of Argentina, where the success of economic reform plans was doubtful by the end of the year. Brazil also faced a serious challenge, particularly after its economic outlook worsened in late 1989.

IV

Democracy enjoyed a good year throughout the region. More than a dozen national elections were held during 1989, while Mexico and Venezuela entered their first year of administrations elected in late 1988. There were spectacular failures only in Panama where Noriega's regime first attempted to rig elections and then annulled them.

Latin America appears to be returning to a path begun many decades ago. That encouraging trend was confirmed by several significant, though often difficult, transitions: elections in El Salvador in the spring of 1989, held in adverse political conditions; the election of free-market supporter Rafael Leonardo Callejas in Honduras; the quiet transitions in Jamaica and Belize; the first constitutional transition in more than six decades in Argentina, from Raúl Alfonsín to Carlos Menem; the transfer of power in Bolivia from Victor Paz Estenssoro to Jaime Paz Zamora; Paraguay's tentative shift in May to the liberalizing column of Latin regimes; the end of the military regime in Chile; the final step of Brazil's convoluted transition back to democracy with the election of a new president, Fernando Collor de Mello; and subdued elections in Uruguay.

Where free choice was possible, many 1989 elections hinged not so much on new initiatives as on a recognition that the incumbent regime was not performing properly. Elections in Argentina represented a rejection of Alfonsín's economic mismanagement, not approval for Menem's economic proposals. In El Salvador, Christian Democrats lost the presidency to the conservative ARENA party not only because of politics but because of the public's perception of political corruption and economic incompetence surrounding the government of outgoing President José Napoleón Duarte.

Despite (or perhaps because of) continuous political and economic calamities imposed by Latin American societies and their governments upon themselves, Latin Americans from Mexico to Chile are now engaged in exposing the sins of statism. Privatization is on the upswing and even traditionally populist governments appear more willing than before to take the political heat. Similar trends are also evident in Central America and the Caribbean. Aside from Chile's earlier steps, Mexico's recent reform plans have been the most ambitious. Next on the horizon of difficult Latin experiments in 1990 after Argentina will probably be the government of newly elected Brazilian President Collor, who faces arduous political and economic tasks.

Democracy remains a fragile commodity in Latin America. In 1989 Argentina took a stab at defusing shaky civil-military relationships, with relative success. In Chile that broad issue now faces the newly elected government of Patricio Aylwin. In Guatemala Vinicio Cerezo faced coup attempts and rumors throughout the year. In Colombia, Peru and El Salvador political pluralism took a severe beating at the hands of either drug dealers or guerrillas-or both. In Panama the democratic movement was bloodied and humiliated by the Noriega regime. And in Haiti and Cuba, democracy still waits to get off the ground.

Much of Latin America is entering the 1990s in a race between economic deterioration and political progress. It is doubtful that economic instruments such as the Brady Plan will pay off in the near future. Mexico is perhaps the most crucial current test, due to the relatively large size of its debt. The situation elsewhere, particularly in South America, may be more precarious. Domestic constraints will inhibit Washington from showering the region with new resources; the United States will applaud from the sidelines and continue to encourage Japan and other countries to do their part.

V

In the heat of the 1988 presidential campaign, George Bush indicated that he would not abandon the armed Nicaraguan opposition, the contras. It is also evident, however, that both he and Secretary of State James Baker had read congressional signals indicating resistance to any contra military-aid package. Some have argued since then that the message was heard too loudly rather than too clearly. The White House wisely wanted to avoid another stalemate in the U.S. debate on policy toward Nicaragua. As a result, 1989 could be described either as downtime, during which Washington caught its breath, or, alternatively, as an attempt at orderly withdrawal to the sidelines, allowing others to lead the game.

The Tesoro Beach accord of February 1989 added pressure on the new administration by setting in motion a framework that focused specifically on Nicaragua. Building on the stalled Esquipula II regional peace process, the Central American presidents agreed to a specific timetable for establishing democracy in Nicaragua: elections no later than February 25, 1990; electoral campaigning for six months beforehand; revision of Nicaragua's electoral laws to provide for free and fair elections. The agreement also seemed to foreclose the contras' political future by committing to a policy in which they would be dismantled through "demobilization, repatriation or voluntary relocation."

The gist of the bipartisan agreement reached in Washington was that Congress would approve nonmilitary aid to the contras through the 1990 elections in Nicaragua and the Bush Administration would forgo requests for lethal aid. Suggestions were later made that the president's authority was being eroded (in the bargain any one of the four Democratic congressional committee chairmen could have halted the aid package by November 30). Furthermore, it was charged that an agreement calling for the "voluntary reintegration" or "regional relocation" of the contras was a sellout. The administration's early bargain, however, accomplished its primary goal of smoothing out relations with the Democratic leadership on Capitol Hill on this contentious issue, in the process suggesting that the administration sought a new cooperative style overall. Yet the agreement established no consensus on the fundamentals of security policy in the region. Nor did it sufficiently link delays in contra policies with a broader understanding of what might happen elsewhere-in particular, El Salvador and Guatemala.

The formal package for nonmilitary aid to the contras ($66 million, which included $49 million in direct humanitarian aid) passed through Congress in mid-April by a vote of 309 to 110 in the House and 89 to 9 in the Senate. Some Democratic critics of the administration's policy in Central America were not convinced but bowed to the notion ("a leap of faith," according to Democratic Senator Patrick Leahy of Vermont) that this might support the regional peace process. Conservative Republicans swallowed hard, though they believed that the aid package would at least keep the contras alive.

The Tesoro Beach accord and the bipartisan agreement fostered the impression that the Sandinista regime could be forced into an electoral timetable and free elections. An international apparatus of expertise on law and elections sprung up in the United States and elsewhere. Serious disagreements regarding the electoral rules surfaced, and by late summer a series of compromises had led only to a somewhat unsatisfactory operational framework for the February 1990 elections. The large voter registration turnout begun in late October delighted the Nicaraguan opposition, and public opinion polls suggested their lead over the Sandinista National Liberation Front headed by President Daniel Ortega and his vice president, Sergio Ramírez.

After considerable delays, 14 opposition parties formed the National Opposition Union and in September chose Violeta Chamorro and Virgilio Godoy as their standard-bearers. Chamorro provided name recognition and symbolism of the kind that elected Corazon Aquino in the Philippines. The opposition received further enhancement through the addition of previously exiled leaders such as Alfredo Cesar, who returned in June under the provisions of the Tesoro Beach accord.

To the surprise of both supporters and foes, the Nicaraguan contras did not fade away. Although there was severe infighting among the movement's political leadership, a core of field commanders around military leader Enrique Bermudez resisted disintegration and calls to disband. Attempting to put the disbandment of the contras into operation, the August Tela agreement fixed an implausible target date of December 8. In response, some contra commanders simply moved forces across the border. Washington continued to emphasize that the disbandment of the contras was a "voluntary" process (in line with the bipartisan agreement reached in Washington back in the spring). The United States still viewed a viable contra force-even behind the border in Honduras-as a useful presence to guarantee fair elections in 1990.

That environment set the stage for Ortega's announcement on November 1, 1989, ending the 19-month-old cease-fire set up as a result of the Sapoá talks in 1988. Conventional wisdom supposes that Ortega was attempting to complicate the framework of the elections to his advantage and perhaps delay them; the Sandinistas were also angered by the continuing strength of the contras and wanted to draw Washington, specifically the U.S. Congress, into a partisan fight: a debate over whether to resume contra military aid, which would have in effect cancelled the elections, or cut off all aid to the contras by November 30.

President Ortega, like everyone else, was also reading the public opinion polls indicating a likely defeat in February for the Sandinistas. Providing his security apparatus with a freer hand in case of trouble would be important. Halting the cease-fire also allowed Nicaragua to put the contra issue right back on the table as a negotiable item. Ortega and his government had good reasons to be concerned. As the electoral campaign entered its formal phase toward the end of 1989, Nicaragua faced the prospect of international scrutiny on a scale likely to cause heartburn for any Marxist-Leninist regime. But would such close attention guarantee free elections? After a late start, the United States formally put its weight in dollars behind the electoral process; because of campaign regulations only a small percentage of the $9-million U.S. aid package is likely to reach the opposition.

The discovery in El Salvador in late November of two Nicaraguan planes being used to transport weapons to the Salvadoran guerrillas-the Farabundo Martí National Liberation Front-should have ended any doubts over the tactical link between the FMLN and Managua. The evidence was overwhelming; indeed, a key reason why the FMLN has survived so long is because of its secure base of support in Nicaragua. Coming in the middle of a major guerrilla offensive on San Salvador lasting several weeks, the aircraft incident led the government of Alfredo Cristiani to suspend relations with Nicaragua. It raised doubts regarding Sandinista compliance with the February 1990 elections and appeared to lead to a complete impasse in the region's convoluted peace process. But in an astounding and almost implausible appeal, the five Central American presidents met in Costa Rica in mid-December and issued a new challenge: demobilization of guerrillas in El Salvador and disbandment of the contras in Nicaragua.

Occurring within a few weeks of the Malta superpower summit, those Central American developments were also publicly linked to Cuba. The September meeting in Jackson Hole, Wyoming, between Secretary Baker and Foreign Minister Eduard Shevardnadze had produced vague Soviet commitments to hold back Moscow's Latin allies. No one seemed really convinced by Soviet proclamations; the link between Soviet resources and Cuban and Nicaraguan support of the FMLN was too obvious. The issue was again raised at Malta where Mikhail Gorbachev publicly denied direct responsibility for Castro's action. Gorbachev's vague answers received more press attention than Moscow's endorsement of the Central American peace process.

The return of El Salvador (and Panama late in the year) to the front pages was further proof that Central America would retain its full complexity in 1990. In El Salvador the gruesome killings of six Jesuit priests legitimately triggered an avalanche of public and congressional condemnation (as did the later arrest of an American social worker for allegedly stockpiling rebel arms), although the assassination of political figures or their families had generated little interest (or, in previous years, the liquidation of Christian Democratic mayors). Frustrated by its failure early in 1989 to engage the government in a negotiated settlement, the FMLN also fell short on the military front late in the year. Its major military offensive at least brought the rebels new attention at a time when their reservoir of political capital had declined dramatically. Toward the end of 1989 Congress passed an $85-million aid package to El Salvador but was likely to revisit that issue early in 1990.

VI

Washington spent the bulk of the year finding creative ways to resist involvement in Panama-until December 20 when it deployed U.S. military troops to overthrow General Noriega. Before then, the United States had done little to avert the stolen May elections, taking a circuitous route in October, during an attempted coup, to appear both involved and unattached.

Catapulted to crisis level in 1987, the final disposition of Washington's war with Noriega was the product of extraordinary frustrations from the president on down. The U.S. government had for some time turned a blind eye on the Panamanian Defense Forces' manipulation of the nation's politics and economics. Noriega's career in the PDF intelligence operation made him a troublesome asset. Through sheer inattention the Reagan Administration never fully conceptualized the Panama problem, leaving the initiative to a somewhat unholy alliance of congressional liberals and conservatives for waging a public relations war on the cheap. With some U.S. encouragement and a false confidence in its capabilities, Panama's civilian opposition (ultimately, the Civic Crusade) weighed in but was quickly bloodied into submission by Noriega's henchmen.

The Bush Administration's overall regional strategy at first relegated Panama to the category of an intractable problem. Washington appears to have done little to shape the May 7 elections and, along with the rest of the international community, looked on with dismay as the elections were rigged and then halted by the Noriega regime. An extensive cadre of international observers gave opposition candidate Guillermo Endara a three-to-one vote ratio, a total that brought him and his two running mates (Ricardo Arias Calderón and Guillermo Ford) a public beating at the hands of Noriega's goon squads-a powerful scene that was televised and shocked the American public.

The eruption of violence triggered several U.S. responses. Aside from diplomatic condemnation, 2,000 additional U.S. combat troops were quickly dispatched to Panama. Simultaneously, the United States further personalized the conflict by publicly calling on the PDF to overthrow Noriega. Washington also launched a multilateral offensive through the OAS that would last through the end of the summer, though it would come to naught. Along with some back-channel communications exploring the possibility of a personal deal with Noriega, those actions in effect defined the U.S. posture until the end of the year.

American pressure did not prevent Noriega from pushing through in early September a successor to the defunct regime of Eric Arturo Delvalle (which in the eyes of Washington had remained the legal government of Panama-despite its ouster by Noriega in February 1988). The coup attempt by PDF officers on October 3 brought into the open both Washington's hand in plots against Noriega as well as the division within the PDF itself. The failed coup, however, was a public relations disaster for the White House, not so much because of its ultimate decision not to support the coup but rather because of perceived indecision among the most senior circles of the American foreign and defense policy apparatus. That indecision profoundly frustrated the president and embarrassed the White House; it may have shaped actions later in the year-especially the U.S. military operation in Panama.

In any case, the United States and Noriega were on a collision course. Washington had hoped that Noriega would provide a pretext for a more surgical strike. Following the failed October coup, Noriega was a man on the run. Perhaps in compensation he had himself named head of the Panamanian government and announced a "state of war" with the United States. It did not take long for incidents to develop with U.S. personnel, which in the end triggered the U.S. military action against both Noriega and the PDF.

Launched in the early hours of December 20, Operation Just Cause was the largest involvement of U.S. forces since the Vietnam War. With a complement of 24,000 men (later reinforced with another 2,000), the United States pursued multi-point attacks on the PDF. Although that large military operation encountered greater resistance than anticipated, its only significant setback was the failure to capture Noriega. With his "Dignity Battalions," and thugs of all sorts living their last moments, Noriega turned himself in on Christmas Eve for diplomatic protection at the Vatican's local offices. After over a week of tangled political and diplomatic negotiations, the fallen Panamanian leader was finally taken into U.S. custody on January 3.

American objectives in the invasion of Panama were simple: to remove Noriega from power, to restore democracy and to support U.S. interests in the region as a whole. Addressing concerns over the legal and economic standing of a successor regime, Endara was sworn in within minutes of the U.S. invasion, and U.S. economic sanctions were quickly lifted. The international reaction was lukewarm to critical; the OAS censured the U.S. use of force and in the U.N. Security Council the United States had to veto a resolution critical of its action. Of greater significance were indications that the already delicate sensitivity toward effective multilateral anti-narcotics efforts could be affected by this latest display of U.S. force.

How the U.S. invasion of Panama would shape the planned anti-drug summit in Colombia was uncertain. Although the bulk of U.S. public opinion rallied behind the president, critical voices appeared fairly soon among some liberal congressional and academic circles. The fact that the U.S. invasion received such widespread domestic support was likely to be analyzed carefully in Managua and Havana. Although Moscow condemned the action, the events in Panama occurred simultaneously with the violent end of another communist regime in Romania, further isolating the U.S.S.R.'s troublesome allies in the Caribbean basin. In the final analysis, however, the Panama operation was the latest phase of a complex U.S.-Panama relationship with uncertain implications in the 1990s. Likewise, in its second year, the Bush Administration faces a "triple decker" policy sandwich in Central America (Panama, Nicaragua and El Salvador) rather than the phasing-out procedure that Washington had hoped for early last year.

VII

Gorbachev's April visit to Cuba had the markings of an unwelcomed call on an aging revolutionary profoundly suspicious of the Soviet leader's intentions. Gorbachev's speech to the Cuban national assembly included a warning that a changing world requires new policies and approaches. The Soviet leader appeared to suggest an end to the policy of revolutionary internationalism so central to the Cuban regime's legitimacy. With Soviet contributions running at $5 billion a year and with the Cuban economy in a tailspin, there are increasing public indications that the Soviet Union would like to curtail that hemorrhage of resources. Given the prospects of closer superpower relations, Havana has reason to be worried.

Castro's problems have taken their toll. His speech on July 26 was long and almost incoherent. Anti-American rhetoric reached a vitriolic state, but Castro reserved some harsh comments for what he bitterly viewed as Gorbachev's gradual sellout of Marxism-Leninism. Objectively, Castro realizes that any deviation on his part would likely trigger a swift end to his regime and by implication a less than glorious conclusion to his contribution to history. Gorbachev's record in Eastern Europe has made Castro apprehensive about possible developments in the aftermath of superpower agreements.

Yet Castro holds to the position of faithful and trustworthy strategic ally of the Soviet Union; for its part Moscow has so far shown little outward indication of wanting to modify the fundamental nature of its ties with Cuba. The results of the Malta summit appeared to confirm that conclusion, though it could change. In the meantime, Moscow continued to supply Havana with sophisticated weapons (most recently sustaining an upgrade of air capabilities to MiG-29 from MiG-23 jet fighter aircraft).

In that uncertain context, the affair of General Arnoldo Ochoa sprung up in the early summer when the popular Cuban was charged with drug smuggling. Speculation regarding the reasons for Ochoa's downfall will continue for some time, but most observers conclude that the heart of the matter was political, that the narcotics charges were only a convenient pretext. The grandiose scale of the investigation suggests a much broader purpose. Ochoa and three other officers were executed, while 28 officials either received prison sentences, were fired or forced to retire from the military or, in one case, committed suicide. Among those implicated was the minister of the interior, in effect the third-ranking member of the Cuban hierarchy with authority over internal security.

There are indications that Ochoa and his associates (many from his overseas military experiences) were toying with ways to test Castro's leadership and that they might have been encouraged through Soviet contacts. At a minimum that would have been a threat to traditional Soviet military channels through Fidel's brother, Defense Minister Raúl Castro. Significantly, most purged officials were replaced with individuals linked to him. The Cuban drug link had been highlighted earlier in 1989 with the guilty pleas in U.S. courts of cocaine smugglers operating through a Cuban air force base. The case implicated the Castro brothers. Simultaneously, the investigation of General Noriega's drug operations hinted at verifiable Cuban connections.

Havana is on the defensive; Cuban appeals for cooperation on anti-drug policy faded away. The United States has remained vocal in protesting Cuban human rights abuses, although this has not prevented Castro from locking up Cuba's miniscule human rights movement. To forestall complete isolation, Cuba may make a run at OAS membership. Nevertheless, with rapid changes in the Soviet bloc, Castro is fast becoming a flamboyant though dangerous relic, perhaps opening new opportunities for U.S. policy in the 1990s.

VIII

Based on centuries of experience, the unique character of hemispheric relationships is not likely to fade any time soon. If nothing else the strong Latin American component in U.S. society and the growing Americanization in the rest of the hemisphere are powerful ingredients that are likely to expand rather than decline in years to come. For all its current problems, Latin America will remain a source of U.S. economic interest as it has for more than a century. The region's political and security proclivities and manifold development problems will ensure the existence of a unique relationship.

If closer U.S.-Soviet relations lead to a global restructuring, it will trigger a reorientation of U.S. interests in a unified Europe, in Japan and the Pacific basin, as well as in Latin America. For the United States a new inter-American state system predicated on the concept of a two- or three-tiered "American Community" might emerge. Such a community would displace the notion of a single-hemisphere partnership and replace it with a series of subregional compacts adapting to varying hemispheric situations.

What would such a new global equilibrium of distinct regions hold for U.S.-Latin American relations? The fact that Latin America continues to straddle the First and Third Worlds will not help its competitive cause. But the hemisphere's capacity to address its problems is already being enhanced-and made more complex-by the increasing involvement of our European and Pacific basin allies in Latin affairs. Canada's entry into the OAS in late 1989 has also added a new dimension to hemispheric diplomacy, and perhaps a boost to varying levels of regional cooperation. As Latin American decision-makers have slowly come to recognize, continued economic growth and support for political pluralism cannot be assured without full hemispheric participation in global affairs. Among several upcoming tests will be Latin America's adaptability to the unified European market after 1992.

The management of hemispheric affairs has already become a more collective process. The major frustration may be a lack of effective institutional vehicles rather than any deep regional mistrust-which the declining effectiveness of the OAS appears to suggest. In any event, the interaction of extra-hemispheric actors with Latin America is already being accomplished in the context of broader international economic cooperation and some diplomatic institutionalization. In contrast, communist penetration-despite Gorbachev's new thinking-has remained troublesome.

Those dynamics will eventually lead to some new concepts of U.S. hemispheric thinking. Among several possible configurations, Washington is likely to draw the most interest from those countries that are closest to it geographically, economically and socially. In its broadest framework, that scenario could evolve into a U.S.-Canada-Mexico North American free trade area with its attendant political implications.

A reorientation of economic and socio-political ties on the North American continent, however, would challenge the hemisphere. The manner in which Central America and the Caribbean look northward may depend in part on the perceived success of existing frameworks, such as the Caribbean Basin Initiative for the United States, the Lomé Convention for Europe, or Japanese and Asian economic assistance to the Third World. Clearly there is built-in tension for Washington: Will involvement by other countries contribute to growth and stability in Mexico and the Caribbean basin or will it simply diminish U.S. economic opportunities?

A new North American community would probably trigger complementary approaches. A two-tiered structure is evident in U.S. policymaking and is already in place regarding Mexico; it could apply to Brazil as well, particularly if the latter took note of that interest. Such distinct bilateral relationships would assure continued U.S. involvement in the region by providing strong strategic policy anchors. The rest of U.S.-Latin American relations may evolve primarily along multilateral lines, and force more attention on common agendas (drugs, the environment, technology) and effective regional and subregional institutions that address those issues. But without U.S. leadership and vision, hemispheric cooperation could disintegrate, with results much less favorable to the United States.

George Bush began his term during the 100th anniversary of the modern inter-American system and at the beginning of a third century of U.S. relations with Latin America and the Caribbean. His fourth year in office will coincide with the 500th anniversary of the discovery of the Americas. Those events will inspire ceremonies and rhetoric and perhaps little else. Alternatively, they could be the occasion for a serious and welcome reassessment of hemispheric policy as we proceed toward the 21st century.

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  • Georges A. Fauriol is Senior Fellow and Director of the Latin American Program at the Center for Strategic and International Studies in Washington, D.C. He is the author of The Third Century: U.S. Latin American Policy Choices for the 1990s.
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