Panama has long been of key interest to the USA because of the Panama Canal, but in the 1970s the US Administration agreed to transfer its direct control over the Canal to the Panama government – the handover occurred in October 1979. At the time Panama was effectively under the military rule of Omar Torrijos who had promised presidential elections in 1984. After Torrijos died in a plane crash in July 1981, power remained with the military, passing to Manuel Noriega. He bribed the Supreme Court judges to rule that Nicolas Barletta had won the 1984 presidential elections and then later forced Barletta to resign when he proposed to investigate the 1985 assassination (indeed brutal decapitation) of regime critic and former health minister, Hugo Spadafora. Since 1984, oppositon groups had begun to cooperate more closely and broaden their base of support, but what triggered public protest in 1987 were the accusations broadcast by the military head of staff – forced into retirement by Noriega – that Noriega was responsible for a bomb causing Torrijos’ plane crash, had stolen the presidential elections, and had ordered the murder of Spadafora.
The US government initially backed Noriega, who had been on the CIA’s payroll since 1967. They had tolerated his money laundering and links with the Medellin drug cartel, but after he refused to offer sanctuary to Ferdinand Marcos from the Philippines and when he ceased supporting the Contras’ efforts to bring down the Sandinista government in Nicaragua, Washington began to seek better options.
There were mass strikes and demonstrations in Panama in February/March 1988, partly prompted by the economic conditions created by sanctions. The opposition parties (supported by US President George Bush) chose candidates to oppose Noriega in the May 1989 elections, and won a large majority. But Noriega refused to go. Troops fired on mass demonstrations in support of the opposition candidates and a general strike called on 17 May fizzled out. The US gave up hope of internal change and invaded in December 1989.