[JUF]

This was in the New York Times this morning.

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September 1, 2004
New Panama President to Take Office
By THE ASSOCIATED PRESS

Filed at 2:01 a.m. ET

PANAMA CITY, Panama (AP) -- President-elect Martin Torrijos will face what he has called his country's ``decision of the century'' when he takes office: a possible $8 billion expansion of the Panama Canal to update the waterway to handle a new, bigger generation of ships.

Torrijos hasn't made any decision, and plans to study the issue after taking office in a ceremony that will be attended by Secretary of State Colin Powell and several world leaders.

Historic decisions run in his family. His father, late strongman Gen. Omar Torrijos, signed a deal with then-President Jimmy Carter for handover of the canal from U.S. to Panamanian authority.

Like his father, Torrijos also faces a key negotiation with the United States, this time on a free trade agreement.

After his election in May, Torrijos said ``much prudence and caution were required'' on the issue because of the economic power of the United States.

Fernando Manfredo, former assistant administrator of the canal and an adviser to the former dictator, says that Panama's agricultural technology is no match for that of the of the United States.

Negotiations for a free-trade agreement started earlier this year under outgoing President Mireya Moscoso.

Moscoso has also left Torrijos with a new diplomatic battle with Cuba and Venezuela, high expectations and government coffers low on cash.

Cuba broke relations with Panama and Venezuela recalled its ambassador last week, after Moscoso pardoned Luis Posada and three other Cuban exiles who the Cuban government said had plotted to kill Cuban President Fidel Castro at the Ibero-American Summit here in 2000.

Panamanian courts found insufficient evidence to support that accusation, but sentenced the men to seven- and eight-year terms on lesser charges.

Moscoso, who leaves office on Wednesday, said she pardoned them to prevent the new government from extraditing them to Cuba or Venezuela, where she said they would be killed.

Posada faces Venezuelan charges in the terrorist bombing of a Cuban commercial plane in 1976 in which 73 people died. Venezuela recalled its ambassador over Moscoso's action.

Torrijos criticized the pardon and is expected to renew relations with Cuba after he takes office. His father was a friend of Castro's.

While Panama has seen its economy grow by 7 percent in the last 18 months, government income has not kept up, limiting development of social programs.

Unemployment is at 14 percent, the government has trouble meeting payrolls and its generous social security and pension system is headed for bankruptcy. An estimated 40 percent of Panamanians live below the poverty level.

Recognizing disillusionment with Moscoso, Torrijos, a Texas A&M graduate with a degree in economics, has promised to fight corruption and generate more jobs.

Many Panamanians see in him the traits of his father, whom some here considered a benevolent dictator.