Panama: price of protest may make negotiations more attractive. Talks increasingly seen as only way to head off violence and total economic shutdown

Though uncertainty clouds Panama's political future, there are faint glimmers of hope for a negotiated end to the government-opposition stalemate. The businessmen and industrialists who have, through the national Civic Crusade, spearheaded the month-long protests against military strong man Gen. Manuel Antonio Noriega, are beginning to feel the economic pinch. And they appear reluctant to use one potential weapon at their disposal - a total shutdown - because of the financial costs.

In addition, some Panamanian opposition leaders and Crusade supporters have expressed doubts about how much more the Crusade could achieve while respecting its pledge of nonviolence.

Both these factors appear to have left the protesters hamstrung, and there are signs of a readiness to discuss an end to the crisis with the government.

But it seems unlikely, diplomatic and political observers here say, that General Noriega will lose his job as armed forces chief anytime soon as a result.

Some opposition leaders say the government's show of force in preventing a mass protest rally Friday has only inspired them to further action. ``There's more awareness, and more disgust, so people are readier to do more,'' a prominent government critic said Friday night.

But, warns one businessman, who says he enthusiastically joined the Crusade, ``Turning all the discontent [with the government] into a popular uprising will be very, very difficult.''

The Civic Crusade and opposition political parties are demanding Noriega's ouster on a number of corruption and murder allegations. Friday's attempted rally resulted in dozens of injuries and the reported detaining of at least 100 demonstrators. Troops and riot police, firing shotgun pellets and teargas grenades, prevented thousands of protesters from gathering. But the forces were careful to avoid the sort of bloodshed that could have sparked an uncontrollable wave of violence.

Noriega has so far showed no signs of resigning his post, and his opponents seem unable to make a significant dent in his power, no matter how many white handkerchiefs they wave as symbols of their discontent.

Crusade leader Gilberto Mallol said that his movement has dug in for the long haul. ``You don't topple a dictator overnight,'' he mused. ``this is a struggle over time, and we are going to wage it.''

Whether this is economically feasible, though, is an open question. Panama's economy, founded on international banking and shipping, has so far not taken too severe a beating, economic analysts here say.

``After the first week of trouble [in June] the business mood was a skeptical `wait and see,''' says one foreign economic observer. ``Now the mood is turning sour, because the troubles are continuing. The fight will be longer drawn out, and that is bad for business.''

One big employer says, ``You don't get cooperation from business and industry for long strikes, because they are not making money, yet they have to pay salaries, and it breaks the cash flow.''

When President Eric Arturo Delvalle called for a dialogue last week, the Roman Catholic Church and the United States Embassy made tentative efforts to broker talks. Though they came to nothing, spokesmen for both the government and the Crusade have since repeated their willingness for discussions.

Romulo Escobar Bethancourt, president of the ruling Revolutionary Democratic Party (PRD), said last week that he was ready to debate ``any reforms needed to guarantee honest elections in 1989.''

For the Crusade, private-enterprise leader Eduardo Villarino argued that ``dialogue is always good and necessary.'' And, significantly, he did not set Noriega's departure as a precondition for negotiations.

The authorities appear as firm as ever that they are not prepared to entertain such a demand.

Noriega himself confidently told a television reporter Friday that fewer than 5,000 people wanted to see him go and Mr. Escobar insisted that ``Noriega's departure is not negotiable as a discussion point.''

Both business leaders and some senior members of the PRD, however, have expressed worries that the continuing crisis is encouraging the left wing of the ruling party, and the trade unions, to press for radical changes in the government's conservative economic policies.

They point to a fierce speech by Ramiro Vasquez, the PRD's leading radical, who recently advocated ``confronting'' the government's wealthy opponents ``in their deepest and most loved interests ... their property and their cash registers.''

That kind of talk, say diplomats here, alarms Mr. Delvalle and his Cabinet colleagues almost as much as it does opposition business leaders. And in their common concerns, they say, the government and opposition could find common ground for understanding.

If Crusade leaders have so far fallen short of their initial aim - Noriega's resignation - they seem likely to win something from their campaign to ``clean up'' Panama of the corruption they complain of.

``What they are looking at now as topics for negotiation,'' a Western diplomat says, ``is electoral reform and the judicial system.''

Even if talks do begin, however, they are not likely to be easy in the wake of the vicious insults that the government and the opposition have been slinging at each other in recent days.

``I think there is a growing will'' for a dialogue, Catholic Archbishop Marcos McGrath said last week. ``But what we need is mutual trust.''