US embassy cable - 05PANAMA1975

C O N F I D E N T I A L PANAMA 001975 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN 
SOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: DECL: 09/29/2015 
TAGS: PREL, PGOV, ECON, PM, POL CHIEF 
SUBJECT: PANAMANIAN PRESIDENT AND FM ON CASTRO, CHAVEZ, AND 
MEXICO'S OIL 
 
REF: PANAMA 01818 
 
Classified By: Ambassador William Eaton for reasons 1.4 (b)&(d) 
 
1. (C) Summary:  President Torrijos told WHA DAS Fisk and 
Ambassador that his government is under intense domestic 
pressure to strike a cheap oil deal with Chavez.  The GOP 
hopes to address this by enticing Mexico to become a 
counterweight by offering similar oil deals.  Torrijos 
believes that Chavez has broken the Castro "appeal to the 
masses" mold by developing a direct message that is 
attractive to governments, the middle class, and the masses. 
According to FM Lewis, the Panamanian delegation that visited 
Havana recently observed that Chavez instead of Castro seemed 
to be calling the shots (see reftel). End Summary. 
 
2. (C)  Panamanian FM Lewis told WHA DAS Dan Fisk and 
Ambassador September 29 that the GOP is coming under 
increasing domestic political pressure to get a deal with 
Chavez to buy cheap oil and quell the domestic impact of 
rising fuel prices.  Instead, he said, Panama was reaching 
out to Mexico in hopes that Mexico would offer concessionary 
oil prices  and financing to countries in the region.  Lewis 
said that he met with Mexican FM Derbez in New York on the 
fringes of UNGA to discuss options for greater Mexican 
assistance in the region as a counterweight to Chavez.  Lewis 
indicated that Mexico was considering offering oil to Panama 
and other countries in the region in concessionary terms and 
long-term loans at below-market interest rates.  Panamanian 
President Torrijos and Lewis planned to visit Mexico next 
week to continue those discussions.  Ambassador Eaton and DAS 
Fisk encouraged GOP to continue these discussions and noted 
interest in hearing GOP ideas on how the U.S. can 
appropriately facilitate such initiatives. 
 
3.  (C) President Torrijos also expressed growing concern 
that whereas Castro tries to exert his influence through the 
disaffected classes in the region, Chavez is going directly 
to senior levels of government and society in the region to 
exert his influence.  That approach, he said, is potentially 
much more destabilizing.  Lewis mentioned in an aside to Fisk 
and Ambassador Eaton that the Panamanian delegation that 
traveled recently to Havana to reestablish diplomatic 
relations had been struck by Cuban President Castro's 
apparent physical frailty and his diminished mental agility. 
The Panamanians were also surprised to see the commanding 
role Chavez seemed to play in the Castro-Chavez relationship. 
 (Note:  Lewis did not attend the Havana meeting.  End Note.) 
 
 
4. (C) COMMENT:  The Torrijos Government is understandably 
concerned by  the growing number of demonstrations, street 
closures by taxi and bus  drivers and citizen complaints 
about the rising cost of fuel and its  associated impact on 
the cost of living here.   They know that  subsidized prices 
and other economic supports are not a sustainable  option, 
but are also aware that Chavez's offers of subsidized gas to 
other Caribbean basin countries (but not Panama) resonates 
among the  disaffected and that grand energy-conservation 
pronouncements don't  fill gas tanks.  As a result, the 
Panamanian Government feels pushed  towards Chavez, although 
Chavez has been slow to agree to the oil- financing scheme 
that the Panamanians have proposed.  Oil-rich Mexico, they 
hope, will see it in its best interests to offer greater 
support to the region. 
 
EATON