More History

Subsequent Panamanian history was dominated by the issue of whether the republic would someday gain sovereign control over the canal zone. None of several U.S.-Panamanian–negotiated modifications of the 1903 treaty satisfied Panamanian desire for full control. In 1977 an agreement was reached on repatriation of the zone.

Gen. Torrijos, who negotiated the treaties, was Panama's most powerful leader until his death in 1981. Aristides Royo, president from 1978 to 1982, was succeeded by Ricardo de la Espriella. Nicolas Ardito Barletta, president in 1984–85, was forced out by defense strongman Noriega. His successor, Eric Arturo Delvalle, was ousted in 1988 by Noriega, who then installed Manuel Solis Palma as president. The United States suspended aid and imposed economic sanctions in 1987 following anti-American demonstrations orchestrated by the government. Sanctions were intensified in 1988, after two U.S. courts indicted Noriega on drug charges, and again in 1989, after Noriega annulled elections held in May and installed Francisco Rodriguez as president. An Oct. 3, 1989, coup attempt failed; anti-American incidents increased; and U.S. forces invaded Panama on Dec. 20, 1989, and deposed Noriega.

Guillermo Endara, generally viewed as the victor in the May election, was installed as president. His government later came under attack for staffing the police with former members of the Panamanian army, failing to crack down on the drug traffic, money laundering, and restricting press freedom. He was succeeded in September 1994 by Ernesto Pérez Balladares. This wealthy businessman was the first freely elected president of Panama in 25 years. He had campaigned as the heir to General Torrijos and as the leader of the revitalized party of Torrijos and Noriega. In August 1998, Panama's voters went to the polls and rejected a proposal to revise the constitution to allow Balladares to run for a second term in 1999.

The May 1999 presidential elections were won by Mireya Moscoso. She was the widow of three-time Panamanian president Arnulfo Arias, whose final term in office had been cut short by the 1968 Torrijos-led coup. Martin Torrijos, Torrijos's son and her chief rival, had been the candidate of the ruling Democratic Revolutionary party. Upon assuming office on Sept. 1, 1999, Moscoso became Panama's first female president. In November the United States completed its military withdrawal from Panama. Formal ceremonies marking the transfer of the canal and surrounding land to Panama took place on Dec. 14, 1999; the U.S. presence did not officially end until Dec. 31, 1999. The ceremonies represented the end of the special relationship between the United States and Panama that had existed since Panama gained independence in 1903. Ties between the two countries nevertheless remained close. On Nov. 3, 2003, Panama celebrated the 100th anniversary of its founding.

On May 2, 2004, Panama held its first presidential elections since the canal turnover. The winner was Martin Torrijos. He assumed office on September 1. Torrijos strongly supported a proposed multibillion-dollar expansion of the canal that would allow it to handle the largest container vessels. The canal expansion project—the largest in its history—was approved by the legislature on July 15, 2006. It was approved by voters in a referendum later that year.

When a new presidential election was held in May 2009, supermarket tycoon Ricardo Martinelli of the center-right Democratic Change party easily defeated the candidate of the ruling center-left party. His victory reflected voter concerns in an atmosphere of global recession. Among his top priorities were finalizing a free-trade accord with Panama's largest trading partner, the United States, and overseeing the planned expansion of the Panama Canal. He also pledged to crack down on corruption and crime.