During the 1980s, U.S. taxpayers spent billions of dollars propping up a right-wing regime in El Salvador, fighting Sandinista rebels in Nicaragua, and launching a full-scale Marine invasion of Panama. Today, the three Central American countries are at peace. But their politics diverge dramatically, with recent elections pushing El Salvador to the left, Panama to the right, and Nicaragua continuing on its path toward socialism and— some say — outright dictatorship, with the very president whom the United States rallied against in the 1980s.

In mid-March, former TV journalist Mauricio Funes, chief of El Salvador’s formerly Marxist Farabundo Martí National Liberation Front (FMLN), narrowly defeated conservative rival Rodrigo Ávila, whose ARENA party had won every presidential election for nearly 20 years since the end of El Salvador’s punishing civil war from 1980 to 1992.

In Panama, the pendulum swung the other way, handing a May 3 election victory to pro-American businessman Ricardo Martinelli, who owns Panama’s “Super 99” supermarket chain. Martinelli’s conservative Democratic Change party edged out the ruling Democratic Revolutionary Party, whose populist candidate Balbina Herrera once sheltered Panamanian dictator Manuel Noriega from U.S. Marines.

Funes, 49, takes office June 1, and Martinelli, 57, exactly a month later.

In Nicaragua, meanwhile, municipal elections last November that favored President Daniel Ortega’s Sandinista party were so blatantly fraudulent that even the left-leaning Washington Office on Latin America has issued declarations warning of state-sponsored repression.

If there’s one thing all three countries have in common, it’s rising poverty, economic uncertainty and a sharp up tick in gang violence, particularly in El Salvador.

“In Panama, we have a plus, in El Salvador, we have a question mark, and in Nicaragua, Daniel Ortega ran his campaign as a moderate, but now he’s gone back to his old radical mentality,” said Jaime Daremblum, who heads the Center for Latin American Studies at the right-leaning Hudson Institute. “He has become disliked by a majority of Nicaraguans because of corruption and the way he’s undermining democracy.”

Asked for specifics, Daremblum accused Ortega of, among other tactics, revoking the broadcasting licenses of radio and TV stations that oppose his government. “Ortega knows how to manipulate,” said Daremblum, Costa Rica’s former ambassador to the United States. “He’s got his people and he can make life very difficult for the opposition, and that’s exactly what he’s doing.”

In early March, the Obama administration announced it would withhold million in aid promised to Nicaragua over suspicions the ruling Sandinistas rigged last year’s municipal elections.

The funds were pledged by the Millennium Challenge Corp., a U.S. government-funded program that helps poor countries. Secretary of State Hillary Clinton decided not to completely cut off the aid but to suspend it until the Ortega government makes a “meaningful change” in its way of governing.

Meanwhile, the European Union froze .7 million in aid following the vote because, according to an EU statement, Managua “has not fulfilled the requirements of governability, transparency and respect for human rights.”

The verdict on El Salvador’s leftist resurgence is still out, with the FMLN claiming to have transformed from an armed revolutionary movement into a progressive political party that, while trying to improve life for the poor, has assured the business community it won’t jeopardize foreign investment or renege on any trade deals.

Nicaragua’s last ambassador to the United States, Arturo Cruz, left in early March and has not been replaced. Alcides Montiel, the embassy’s deputy chief of mission, is the only Nicaraguan official in Washington authorized to speak to the press. But he ignored our requests for a phone interview — as did Panama’s envoy here, Federico Humbert Arias.

However, René León, who has served as El Salvador’s ambassador to the United States for nearly 12 years, was only too happy to talk to The Washington Diplomat.

He said the recent elections prove that democracy is alive and well in Central America and in his country specifically — even if his party of choice didn’t win back home.

“We’ve seen a harmonious and very civilized democratic transition of power from [outgoing President] Tony Saca to the president-elect,” said León, who plans on tendering his resignation any day now. “I hope Mauricio Funes will maintain a course of action that is independent of the FMLN radicals who helped him get elected. Funes has differentiated himself from the hardliners. He has taken a courageous stand and does not want to be contaminated by the radicals within his party.”

By radicals, León means Salvador Sánchez, the country’s new vice president and a former guerrilla commander of the FMLN — which has many parallels with Nicaragua’s Sandinistas.

“Sánchez is a very hardened Marxist from the old days,” according to Daremblum. “After the Twin Towers attack in 2001, he organized and led a demonstration of solidarity with the 9/11 terrorists.”

Despite Sánchez’s leftist FMLN credentials, León suggests the vice president may not be all that powerful in the new government because “El Salvador is a presidential regime, and to tell you the truth it really doesn’t matter what the vice president says.”

During the height of the Cold War, throughout the 1980s, the United States made a national priority of keeping communists from taking power in El Salvador, which had known only right-wing dictatorships ever since independence from Spain in 1821. The Pentagon also covertly sent weapons to the notorious “contras” — opponents of Nicaragua’s Sandinistas — in what eventually became one of the major scandals of the Reagan administration.

Then in 1989, U.S. Marines invaded Panama in a bid to unseat then-dictator Noriega and keep the Panama Canal safe for world commerce. Noriega was captured, detained as a prisoner of war, and eventually convicted in a Miami court on eight counts of drug trafficking, racketeering and money laundering. Now 75 and in poor health, he remains in a Miami federal prison, awaiting extradition to Panama.

Unlike El Salvador and Nicaragua — both of which are relatively poor and heavily dependent on apparel and garment exports — Panama is a service-based economy that thrives on the presence of dozens of international banks. As the rest of Central America sees declines in per-capita income, Panama’s GDP is expected to rise slightly in 2009, though not as fast as in 2008.

As Panama’s new leader, Martinelli will oversee a historic expansion of the Panama Canal. The .25 billion project — expected to be finished in 2014 — involves the construction of a new set of locks aimed at doubling the canal’s capacity and allowing more traffic and the passage of longer and wider ships.

“The newly elected president of Panama is known as being very pro-American,” said Daremblum. “He believes in the free market system, and he will push for the free trade agreement that will be formally sent to Congress sometime in June.”

David Lewis, vice president of Manchester Trade Ltd., a Washington-based consulting firm that does business in Central America, agrees. “Martinelli comes from a business background, he’s an entrepreneur, and he’s already made strong statements about continuing to push for a free trade agreement between the U.S. and Panama, and expanding real estate and tourism. So I don’t think it’s a major change from the policies of [outgoing President Martin] Torrijos,” said Lewis.

“Regarding El Salvador, our sense is that very few people — even in the investment community — feel there’s a threat with Funes himself,” he added. “The key issue is who will he appoint. In the National Assembly, the FMLN is really more in control than he is. It’ll be interesting to see how that plays itself out.”

El Salvador is in the midst of an economic contraction as well as a spike in gang-related violence. During the first three months of 2009, an average of nearly 12 people a day were killed, giving Central America’s most densely populated country a homicide rate five times that of Mexico and 10 times that of the United States, according to official figures.

The bloodshed has terrified El Salvador’s 7 million people and was partially responsible for the ARENA party’s defeat at the polls in March.

Funes, a former political commentator for CNN, is the country’s first leader not to have been a combatant in El Salvador’s civil war, which left some 75,000 dead.

Shortly after his election victory, Funes vowed to get tough with criminals and members of gangs, particularly the notorious Mara Salvatrucha (MS-13). He also sought to assure voters that he wasn’t a communist in disguise — despite his long-standing ties to Venezuela’s Hugo Chávez and his pledge to establish diplomatic ties with both Cuba and mainland China (which would imply breaking relations with Taiwan).

“Nothing traumatic is going to happen here,” he promised a local TV station, adding that El Salvador will keep the dollar as its official currency despite rumors to the contrary. “We will not reverse any privatizations. We will not jeopardize private property. There is no reason at this moment for fear.”

The big question now, according to Daremblum, is how strong a voice the FMLN will really have vis-à-vis the moderates Funes hopes to appoint to positions of power.

“This weighs very heavily among the people of El Salvador, particularly among the business community,” he told The Diplomat. “Once Funes announces his cabinet, we’ll see where he’s going. He’ll have to compromise a great deal with ARENA and its alliance of small parties that hold a majority in Congress.”

León said that, despite their political differences, Saca and Funes met jointly with Vice President Joe Biden during a recent meeting of Central American leaders in Nicaragua. They also appeared together during the Summit of the Americas in Trinidad, he noted.

“There will be no major change in El Salvador’s relationship with the United States,” León said. “I think the new government has recognized the importance of keeping strong ties with Washington, and its top priority is the same as that of Saca and other ARENA governments in the past: the immigration status of hundreds of thousands of Salvadorans living in the United States.”

As for León himself, the 48-year-old envoy — one of the longest-serving ambassadors in Washington — has no immediate plans to return home, and may wind up following the career path of Daremblum, Costa Rica’s former envoy. Asked what he’ll do once he leaves the embassy, León thought for a minute, then said, “I’ll probably become a private consultant for some think tank.”

About the Author

Larry Luxner is news editor of The Washington Diplomat.