PANAMA CITY — In four years under his command, Gen. Manuel A. Noriega likes to boast, the old National Guard has "exchanged night sticks for rocket launchers" and become a modern army.
Critics of Panama's dominant institution, now called the Panama Defense Forces, say it has another mission. They call it a mafia, run by uniformed gunmen who have muscled into a major share of the country's legitimate and illegitimate business and become fabulously rich.
Both images of the Panama Defense Forces are evoked these days to explain the survival of Central America's only traditional military dictatorship. After three months of popular unrest over Noriega, there is no sign that its 19-man military high command or nearly 20,000 troops are willing to overthrow him.
Opposition leaders, who still count on such a move, point to professional pride, financial greed, suspicion of civilians and fear of Noriega among his men as reasons why it has not yet happened.
"Noriega has succeeded so far in portraying the attacks on him as attacks on the military as an institution," said Richard Millett, a professor at Southern Illinois University, who visited Panama this summer.
The military has dominated Panama since a 1968 coup by the National Guard that brought then-Col. Omar Torrijos to power. Torrijos reigned as the nation's unchallenged strongman until his death in an airplane crash in 1981. Lacking Torrijos' popular appeal, the 49-year-old Noriega dominates the military through skillful maneuvering inside the officer corps.
After a decade of building files on real and potential foes as director of intelligence, he rose to commander in chief in 1983. Former colleagues say he then reneged on a deal to take turns in the post with two other officers.
As commander, Noriega has changed the name and expanded the role of the National Guard, nearly doubling its strength and putting officers in control of a host of lucrative enterprises from traffic fines to the sale of immigrant visas.
The system was shaken last June when Col. Roberto Diaz Herrera, after being eased out as Noriega's second-in-command, publicly denounced it as corrupt. He also accused Noriega of rigging the 1984 election of a docile civilian government and ordering the killing of a leading critic of the military--charges the general has denied.
Sensing a breach in the military, thousands of protesters took to the streets. They organized the broad-based National Civic Crusade to press for Noriega's removal, an investigation of the allegations against him and free elections to restore civilian supremacy.
Dissident Colonel Arrested
But Noriega moved to head off any dissent among active-duty officers by dispatching helicopters and troops to attack Diaz Herrera's home and arrest him.
Opposition activists now admit that they underestimated the general's staying power. But some believe that the sensational allegations and continuing street protests might still prompt disgruntled officers to act against Noriega if they ever find a leader.
"I don't think the murmur inside the institution has stopped," said Ricardo Arias Calderon, president of the Christian Democratic Party. "It just hasn't surfaced as a movement against Noriega."
Noriega has also countered the opposition with intense politicking among his men. He eats lunch daily with the high command, his advisers say, and visits the barracks often.
In public pep talks to the troops, he stresses professional solidarity and a twofold mission: to develop rural Panama through Peace Corps-style civic action projects and bolster national defense.
First Military Academy
Under Noriega, the Defense Forces has set up Panama's first military academy and organized three new battalions for defense of the Panama Canal and the country's borders.
Institutional esprit de corps is reinforced by a network of social agencies that involve army wives in charity work and provide scholarships to army children.
Noriega's recent pep talks also provide a history lesson. In 1904, he says, the United States reduced Panama's army to a police force after helping Panama achieve its independence from Colombia. Today, he warns, the institution is threatened again by an "oligarchy" of Panamanian politicians backed by the United States, which has endorsed the Civic Crusade and suspended aid programs here.
"But they know that the slander and the offenses, the attacks and the pressures, have not produced a single scratch on the Defense Forces' solid wall of discipline, which has no price," Noriega declared at a military ceremony last month.
Renato Pereira, a civilian adviser to the general, said the conflict with Washington has strengthened Noriega by enabling him to pose as a shield against foreign interference.
'Firmness of Character'
"These attacks have allowed him to show a firmness of character that his fellow officers find reassuring," Pereira said. "If he had shown weakness, the Defense Forces would have expelled him."