Editing Manuel Noriega (section)

===1968 coup===
{{Main|1968 Panamanian coup d'état}}
[[Image:Jimmy Carter and General Omar Torrijos signing the Panama Canal Treaty.jpg|thumb|right| President Jimmy Carter shaking hands with Torrijos after signing the [[Torrijos–Carter Treaties|Panama Canal Treaty]] in 1977.]]
Arias was elected president in 1968 following a [[Populism|populist]] campaign. Soon after taking office he launched a purge of the National Guard, sending much of its [[Staff (military)|general staff]] into "diplomatic exile" or retirement.{{sfn|Dinges|1990|pp=42–45}} In response, Torrijos and a few other officers led a [[coup]] against him, ousting him after an eleven-day presidency.{{sfn|Dinges|1990|pp=42–45}} The coup was set in motion by Martínez, as the leader of the garrison at Chiriquí, and received the support of most military officers. A power struggle followed between the various forces involved in the coup, and chiefly between Torrijos and Martínez.{{sfn|Dinges|1990|pp=42–45}} Noriega was an important supporter of Torrijos during this conflict.<ref name="BBC1">{{cite news|title=Obituary: General Manuel Noriega|url=https://www.bbc.com/news/world-latin-america-16966007|access-date=May 30, 2017|work=BBC|date=May 30, 2017}}</ref> In February 1969, Torrijos's men seized Martínez and exiled him to Miami giving Torrijos control of the country.{{sfn|Dinges|1990|pp=42–45}}

At the end of 1969, Torrijos went to Mexico on holiday. A coup was launched in his absence, in which Noriega's loyalty allowed Torrijos to hang on to power, greatly enhancing Torrijos's image.{{sfn|Dinges|1990|pp=42–45}}<ref name="LP Obituary"/> Noriega was promoted to captain a month after the coup attempt:<ref name="LP Obituary"/> just 18 months later, in August 1970, Torrijos promoted him to the position of lieutenant colonel and appointed him chief of military intelligence. According to Dinges, by this point Noriega had left his undisciplined past behind him.{{sfn|Dinges|1990|pp=49–52}} When Arias's supporters launched a guerrilla uprising in his home province, Noriega as the head of intelligence played an important role in putting it down within a year.{{sfn|Dinges|1990|pp=42–45}}

Torrijos retained power as a military ruler until 1981: during this time he negotiated the [[Torrijos–Carter Treaties]] with U.S. President [[Jimmy Carter]], which ensured that control over the [[Panama Canal]] would pass to Panama in 1999.<ref name=Tran2010/> These treaties, as well as a new labor code that included [[Parental leave|maternity leave]], [[collective bargaining]] rights, and bonus pay, made Torrijos popular in Panama despite the absence of democratic elections.{{sfn|Galván|2012|pp=184–185}} Torrijos's relationship with Noriega was symbiotic; Torrijos provided the political acumen, while Noriega enforced his unpopular decisions with force, when necessary.{{sfn|Galván|2012|p=185}} Noriega would provide intelligence and carry out covert operations that were critical to Torrijos successfully negotiating the release of the Panama Canal from the U.S.{{sfn|Dinges|1990|pp=73–75}}

Upon seizing power in 1968, Torrijos's government had passed legislation favorable to foreign corporations, including banks in the U.S.{{sfn|Ropp|1992|p=219}} The following years saw a large expansion in international business activity and the influx of foreign capital, thereby giving participating corporations a stake in the continued existence of the military government.{{sfn|Ropp|1992|p=219-220}} The government used its access to foreign capital to borrow extensively, fueling a rapid expansion of the state bureaucracy that contributed to the military regime's stability.{{sfn|Ropp|1992|p=218-220}} Panama's borrowing peaked in 1978 when the Panama Canal treaty was being negotiated, a time at which the Carter government was particularly supportive of the Torrijos regime.{{sfn|Ropp|1992|p=219-220}} The Carter administration's interest in signing a new treaty led it to largely overlook the increasing militarization of the Panamanian government, and its involvement in drug-trafficking.{{sfn|Scranton|1991|p=2}}