R.I.P. Noriega – Lessons Learned from Panama – ENCORE

Noriega RIP - Photo 1The world is acknowledging the passing of Manuel Noriega (1934-2017), the General and former Military Dictator of Panama (1983–1989), the Central American country with a Caribbean coastline. His life experience is one of highs and lows, ascending to great heights and depressing depths. There is so much for the planners of the new Caribbean to learn considering the historicity of Noriega.

… and the historicity of Panama.

One lesson – from Panama – was presented before in a previous Go Lean blog-commentary from February 10, 2015, encored here.

This previous blog-commentary, and the life of Noriega, portrays the duplicity and complexity of operating in the shadows of/for the United States of America. The theme is consistent:

American interest is not always Caribbean interest.

“From the 1950s until shortly before the [1989] U.S. invasion, Noriega worked closely with the U.S. Central Intelligence Agency. Noriega was one of the CIA’s most valued intelligence sources, as well as one of the primary conduits for illicit weapons, military equipment and cash destined for U.S.-backed counter-insurgency forces throughout Central and South America. Noriega was also a major cocaine trafficker, something which his U.S. intelligence handlers were aware of for years, but allowed because of his usefulness for their covert military operations in Latin America.”[4][5][6][7]

See the full blog-commentary regarding the Panamanian currency – Balboa – here:


Go Lean Commentary – A Lesson in History – Panamanian Balboa

America has surely changed over the past century!

The people, institutions and governance of the US are now more tolerant of minorities and their communities. As such, there are no more American complexities in overthrowing Latin American & Caribbean governments.


This hypothesis is validated with the lesson in history from 1941 in the Republic of Panama. This Central American country is a young nation; they were formed in 1903 after seceding from the Republic of Colombia, with US backing. The new country immediately signed a treaty with the US to allow the construction of the Panama Canal, by the US Army Corps of Engineers, and a perpetual lease* for its operations. The country’s separation from Colombia also included changing from the Colombian Peso currency. So in 1904 the Panamanian Balboa currency was launched, but as coins only; the country used the US Dollar as banknotes.

A basic tenant of macro-economics is that countries should issue their own currency and banknotes so as to better influence the economic engines in their communities. By manipulating the banknote quantity and the “Discount Rate” in a Fractional Central Banking System, monetary supply can be regulated, interest rates controlled; credit markets tamed; and yes, money can be created from “thin air”. Panama had none of this control, due to its lack of banknotes.

In 1941, the then-President Dr. Arnulfo Arias pushed the government to create the Central Bank and to issue paper currency. [2] The bank was authorized, constitutionally, to issue up to 6 million Balboas worth of paper notes, but only 2.7 million Balboas were issued on 2 October 1941. Seven days later, Arias was deposed in a military coup – supported by the United States – and replaced by Dr. Ricardo Adolfo de la Guardia Arango as President. The new government immediately closed the bank, withdrew the issued notes, and burned all unissued money stock. In the 74 years since then, the country has never re-attempted to issue its own paper money currency; they continue to use US Dollars, even today.

A bit extreme?

This lesson in history is presented in a consideration of the book Go Lean…Caribbean; it serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) and Caribbean Central Bank (CCB) to provide better stewardship in ensuring that the currency and economic failures of the past, in the Caribbean and other regions, do not re-occur here in the homeland. The book posits that we must NOT fashion ourselves as an American parasite economy, but rather pursue a status as a protégé.

The full details of the Panamanian Balboa history is provided here:

Title: Panamanian Balboa
(Source: Wikipedia Online Encyclopedia (Retrieved 02/09/2015) – http://en.wikipedia.org/wiki/Panamanian_balboa)

The Balboa (sign: B/.; ISO 4217: PAB) is, along with the United States dollar, one of the official currencies of Panama. It is named in honor of the Spanish explorer / conquistador Vasco Núñez de Balboa. The Balboa is subdivided into 100 centésimos.

The history of the Panamanian Balboa

The Balboa replaced the Colombian Peso in 1904 following the country’s independence. The Balboa has been tied to the United States dollar (which is legal tender in Panama) at an exchange rate of 1:1 since its introduction and has always circulated alongside dollars.


In 1904, silver coins in denominations of 2½, 5, 10, 25, and 50 centésimos were introduced. These coins were weight-related to the 25 gram 50 centésimos, making the 2½ centésimos coin 1¼ grams. Its small size led to it being known as the “Panama pill” or the “Panama pearl”. In 1907, copper-nickel ½ and 2½ centésimos coins were introduced, followed by copper-nickel 5 centésimos in 1929. In 1930, coins for 110, ¼, and ½ Balboa were introduced, followed by 1 balboa in 1931, which were identical in size and composition to the corresponding U.S. coins. In 1935, bronze 1 centésimo coins were introduced, with 1¼ centésimo pieces minted in 1940.

CU Blog - A Lesson in History - Panamanian Balboa - Photo 1

In 1966, Panama followed the U.S. in changing the composition of their silver coins, with copper-nickel clad 110 and ¼ Balboa, and .400 fineness ½ Balboa. 1 balboa coins, at .900 fineness silver, were issued that year for the first time since 1947. In 1973, copper-nickel clad ½ Balboa coins were introduced. 1973 also saw the revival of the 2½ centésimos coin, which had a size similar to that of the U.S. half dime, but these were discontinued two years later due to lack of popular demand. In 1983, 1 centésimo coins followed their U.S. counterpart by switching from copper to copper plated zinc. Further issues of the 1 Balboa coins have been made since 1982 in copper-nickel without reducing the size.

Modern 1 and 5 centésimos and 110, ¼, and ½ balboa coins are the same weight, dimensions, and composition as the U.S. cent, nickel, dime, quarter, and half-dollar, respectively. In 2011, new 1 and 2 balboa bi-metal coins were issued.[1]

In addition to the circulating issues, commemorative coins with denominations of 5, 10, 20, 50, 75, 100, 150, 200, and 500 Balboas have been issued.


In 1941, President Dr. Arnulfo Arias pushed the government to enact Article 156 to the constitution, authorizing official and private banks to issue paper money. As a result, on 30 September 1941, El Banco Central de Emission de la Republica de Panama was established.[2]

CU Blog - A Lesson in History - Panamanian Balboa - Photo 2

The bank was authorized to issue up to 6,000,000 Balboas worth of paper notes, but only 2,700,000 balboas were issued on 2 October 1941. A week later, Dr. Ricardo Adolfo de la Guardia Arango replaced Arias as president in a coup supported by the United States. The new government immediately closed the bank, withdrew the issued notes, and burned all unissued stocks of same. Very few of these so-called “Arias Seven Day” notes escaped incineration.

Reference Notes:
1. http://worldcoinnews.blogspot.com/search/label/panama
2. Linzmayer, Owen (2012). “Panama”. The Banknote Book. San Francisco, CA: www.BanknoteNews.com.

Panama is out-of-scope of this Go Lean empowerment roadmap. They are not a member-state that caucuses with the Caribbean Community (CariCom), and they do not even have an “Observer” representation/status within the trade bloc. But since a part of their territory-coastline is on the Caribbean Sea, their dealings should generate review and monitoring from Caribbean planners. There are many issues for the Caribbean to consider  – from an academic point-of-view – about this history of Panama: an obvious failed-state as recent as the 1980’s.

Is the American manipulations in Panama’s past reflective of the same America today? The assumption is No! The US no longer draws such “hard lines” in their interactions with peoples of different ethnicity. The country has endured deep soul-searching and reconciliation of its racial past, (Civil Rights Movement, Affirmative Action, etc.), and now even the President of the United States is a Black Man. On the surface today, America is a color-blind society.

On the surface!

Behind the scenes, under the covers, there is another reality. The current American experience is that Black-and-Brown is still institutionally disadvantaged and Wall Street, and by extension “Big American Business”, wields uncanny power over the socio-economic-political affairs of the country. For this and other reasons, the Go Lean movement advocates for Caribbean people and institutions to take their own lead for their own determination. We want to be a protégé of the US, not a parasite.

The roadmap calls for a cooperative entity of the existing regional Central Banks to foster interdependence for the regional Greater Good. We must issue Caribbean banknotes, branded Caribbean Dollars (C$). The totality of the regional market, 42 million people in 30 member-states, is large enough to allow for streamlining of the marketplace, creating the right climate for viable currency/financial/securities markets. While there might be some reticence for liberal currency operations, considering that so many Caribbean member-states had to learn hard lessons on currency over the decades – painful devaluations – the CU is to be structured as a technocracy, with the right mix of skilled talent, gifted genius and independent oversight to allow regional C$ currency markets to soar.

The strategy is not a pro-American stance, no pegging to the US Dollar, therefore no losses will be experienced when the US dollar drops value compared to other international currencies, a far too frequent an occurrence in the last 50 years. The US Dollar planners (Federal Reserve) do not have the Caribbean best-interest in mind for their technocratic decisions regarding their currency management; they have American self-interest in mind. Therefore the Caribbean region must overcome any “fear of math” because the C$ may become stronger, (see VIDEO below), in comparison to the US$. This is why e-Commerce and e-Payments schemes are strongly urged within the CU/Go Lean roadmap.

In general, the CU will employ strategies, tactics and implementations to impact its prime directives; identified with the following 3 statements:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines and mitigate internal and external threats.
  • Improve Caribbean governance to support these engines.

Early in the Go Lean book, this need for careful technocratic stewardship of the regional Caribbean economy was pronounced (Declaration of Interdependence – Page 12 – 13) with these acknowledgements and statements:

xi.   Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xii.   Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.

xxiv.   Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.   Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Go Lean book, and previous blog/commentaries, stressed the key community ethos, strategies, tactics, implementations and advocacies necessary to regulate and manage the regional financial eco-system for the Caribbean currency. These points are detailed in the book as follows:

Community Ethos – Economic Principles – Economic Systems Influence Individual Choices Page 21
Community Ethos – Economic Principles – Consequences of Choices Lie in the Future Page 21
Community Ethos – Economic Principles – Money Multiplier Page 23
Community Ethos – Governing Principles – Lean Operations Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Mission – Fortify the Stability of the Banking Institutions Page 45
Strategy – Provide Proper Oversight and Support for the Depository Institutions Page 46
Tactical – Ways to Foster a Technocracy Page 64
Tactical – Growing the Economy – Minimizing Bubbles Page 69
Tactical – Separation-of-Powers – Caribbean Central Bank Page 73
Tactical – Separation-of-Powers – Depository Institutions Regulatory Agency Page 73
Anecdote – Turning Around CARICOM – Effects of 2008 Financial Crisis Page 92
Implementation – Assemble Caribbean Central Bank as a Cooperative Page 96
Implementation – Ways to Better Manage Debt Page 114
Planning –10 Big Ideas – Single Market / Currency Union Page 127
Planning – Ways to Improve Failed-State Indices Page 134
Planning – Lessons Learned from 2008 Page 136
Planning – Ways to Measure Progress Page 147
Anecdote – Caribbean Currencies Page 149
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Control Inflation Page 153
Advocacy – Reforms for Banking Regulations Page 199
Advocacy – Ways to Impact Wall Street Page 200
Advocacy – Ways to Impact Main Street Page 201
Appendix – Controlling Inflation – Technical Details Page 318
Appendix – Jamaica’s International Perception – “High inflation and currency dysfunction” Page 297

The points of effective, technocratic banking/economic stewardship of regional currencies, were further elaborated upon in these previous blog/commentaries:

http://www.goleancaribbean.com/blog/?p=3889 RBC EZPay – Ready for Change
http://www.goleancaribbean.com/blog/?p=3858 ECB unveils 1 trillion Euro stimulus program
http://www.goleancaribbean.com/blog/?p=3814 Lessons from the Swiss unpegging the franc
http://www.goleancaribbean.com/blog/?p=3743 Trinidad cuts 2015 budget as oil prices tumble
http://www.goleancaribbean.com/blog/?p=3582 For Canadian Banks: Caribbean is a ‘Bad Bet’
http://www.goleancaribbean.com/blog/?p=3090 Lessons Learned – Europe Sovereign Debt Crisis of 2009
http://www.goleancaribbean.com/blog/?p=2930 ‘Too Big To Fail’ – Caribbean Version
http://www.goleancaribbean.com/blog/?p=949 Inflation Matters
http://www.goleancaribbean.com/blog/?p=833 One currency, divergent economies
http://www.goleancaribbean.com/blog/?p=518 Analyzing the Data – What Banks learn about financial risks
http://www.goleancaribbean.com/blog/?p=378 US Federal Reserve Releases Transcripts from 2008 Meetings/Stimulus
http://www.goleancaribbean.com/blog/?p=273 10 Things We Don’t Want from the US – #3: Quantitative Easing

Similar to Panama, there are a number of Caribbean member-states that use the US dollar as their sole paper currency:

  • British Virgin Island
  • Turks & Caicos Islands
  • Dutch Caribbean Territories: Bonaire, Sint Eustatius and Saba
  • US Territories of Puerto Rico & US Virgin Islands

The Go Lean book reports that previous Caribbean administrations have failed miserably in managing regional currencies. Consider Jamaica for example, despite being pegged 1-to-1 with the US dollar in 1960’s, the J$ was trading at 87-to-1 with the US$ at press time for the book (November 2013). Other countries (like Trinidad, Dominican Republic, and the Eastern Caribbean Currency Union states) experienced similar turmoil, though at lesser rates of devaluation. The book opens with the declaration that the Caribbean is in crisis because of episodes like these currency failings. In every case, the direct after-effect was increased societal abandonment, and now the reported brain-drain rate is estimated at 70%, with some countries even reporting up to 81%. This disposition is symptomatic of a Failed-State status.

Currency management includes details of more than just the paper-money people carry in their wallets. The book describes the 4 basic functions of money:

  • a medium of exchange
  • a unit of account
  • a store of value
  • a standard of deferred payment

These dynamics have an effect on inflation/deflation and trade facilitation with other countries. So Central Banks must strenuously manage currency issues to ensure economic progress and avoid financial dysfunction. This point is conveyed in the following VIDEO, as regards the Central Bank management of the Chinese Yuan.

VIDEO: Pegging the Yuan – http://youtu.be/S-9iY1OgbDE

Uploaded on Oct 25, 2010 – How the Chinese Central Bank could peg the Yuan to the dollar by printing Yuan and buying dollars (building up a dollar reserve). This lesson in macro-economics can be applied to any Central Bank, any other currency.

There are so many currency issues that have to be coordinated that the Go Lean book describes the effort as heavy-lifting. The roadmap (Page 5) declares that change has come to the Caribbean, and that new technocrats are ready to assume oversight of regional currency issues:

Please swallow your pride
If I have things you need to borrow
For no one can fill those of your needs
That you won’t let show
You just call on me brother, when you need a hand

We all need somebody to lean on
I just might have a problem that you’d understand
We all need somebody to lean on

(Lyrics of song: Lean On Me, by Singer/Songwriter: Bill Withers)

This is not the same world as 1941 Panama, but still there are many lessons to learn and apply in the Caribbean. The goal is simple, to move the region to a new destination: a better homeland to live, work and play. Now is the time for all of the Caribbean, the people, banking establishments and the governing institutions, to lean-in for the changes described in the book Go Lean … Caribbean.


Download the free e-Book of Go Lean … Caribbean – now!


* Appendix Footnote: Subsequent treaties added an expiration date for 1999; the Canal is now fully Panamanian.

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