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Panama, officially the Republic of Panama ( ; ), is the southernmost country of both Central America and, in turn, North America. Situated on the isthmus connecting North and South America, it is bordered by Costa Ricamarker to the northwest, Colombiamarker to the southeast, the Caribbean Seamarker to the north and the Pacific Oceanmarker to the south. The capital is Panama Citymarker.

Panama is an international business center, and has the largest economy in Central America, followed by Guatemalamarker, Costa Ricamarker and El Salvadormarker. It is also the fastest growing economy and the largest per capita consumer in Central America.


There are several theories about the origin of the name "Panama". Some believe that the country was named after a commonly found species of trees. Others believe that the first settlers arrived in Panama in August, when butterflies abound, and that the name means "many butterflies" in indigenous tongue. The best known of these versions is that a village populated by fishermen originally bore the name "Panamá", after a beach nearby, and that this name meant "many fish". Captain Antonio Tello de Guzmán, while exploring the Pacific side in 1515, stopped in a small indigenous fishing town by the name of Panama. This was communicated to the Crown and in 1517 Don Gaspar De Espinosa, a Spanish Lieutenant, decided to settle a front post there. In 1519, Pedrarias Dávila decided to establish the Empire's Pacific city in this site. The new settlement replaced Santa María La Antigua del Darién, which had lost its function within the Crown's global plan after the beginning of the Spanish exploitation of the riches in the Pacific.

Blending all of the above together, Panamanians believe in general that the word Panama means "abundance of fish, trees and butterflies". This is the official definition given in Social Studies textbooks approved by the Ministry of Education in Panama. Some believe the word Panama comes from the Kuna word "Bannaba" which means "distant" or "far away". Kunas are one of the native tribes of the Latin American nation. Ultimately, the etymology of the word Panamá is not very clear.


The earliest known inhabitants of Panama were the Cuevas and the Coclémarker tribes, but they were decimated by disease and fighting when the Spaniards arrived in the 1500s.

Pre-Columbian period

The Isthmus of Panama was formed in a very long process that started 20 million years ago, up to about 3 million years ago when the isthmus finally closed and plants and animals gradually crossed it in both directions (Mayo 2004: 9-10). Dolores Piperno (1984) has located the human occupancy of the isthmus at around the Late Glacial Period (cited in Mayo 2004: 13). Olga Linares (1979: 21-43) points out in turn that the existence of the isthmus had an impact on the dispersal of people, agriculture and technology throughout the American continent from the appearance of the first hunters and collectors to the era of villages and cities (cited in Cooke and Sánchez 2004: 3).

Richard Cooke and Luis Sánchez (2004: 4, 41-42) emphasize the permanence of peoples in the terrestrial bridge of Central America, and the higher probability that Pre-Columbian peoples in the isthmus satisfied their needs by the exchange of goods, by commercial exchange and through social relationships with neighbouring communities, rather than by long distance exchanges (Cooke and Sánchez 2004: 41).

Dendrograms proposed by genetists and linguists and available information about styles and iconography of ceramic and stone objects point to a successively complex dispersal of a population of millenary permanence in the isthmus and neighbouring areas (see, for example, Corrales 2000, cited in Cooke and Sanchez 2004: 39). Cooke and Sánchez (2004: 4) argue therefore that Panama is a singular example of diversity and endemism, and that Christopher Columbus’ observations (1501-02) that ‘although dense, every (village) has a different language and they don’t understand one another’ (quoted in Jane 1988) describe the ethnographic phenomenon of scattering and diversification of peoples that had inhabited the isthmus for several thousands of years.

The earliest traces of these indigenous peoples include fluted projectile points. Central Panama was home to some of the first pottery-making villages in the Americas, such as the Monagrillo culture dating to about 2500–1700 BC. These evolved into significant populations that are best known through the spectacular burials of the Conte site (dating to c. AD 500–900) and the beautiful polychrome pottery of the Coclé style. The monumental monolithic sculptures at the Barriles (Chiriqui) site were another important clue of the ancient isthmian cultures. Prior to the arrival of Europeans, Panama was widely settled by Chibchan, Chocoan, and Cueva peoples, among whom the largest group were the Cueva (whose specific language affiliation is poorly documented). There is no accurate knowledge of the size of the indigenous population of the isthmus at the time of the European conquest. Estimates range as high as two million people, but more recent studies place that number closer to 200,000. Archeological finds as well as testimonials by early European explorers describe diverse native isthmian groups exhibiting cultural variety and suggesting people already conditioned by regular regional routes of commerce.

Conquest era

Rodrigo de Bastidas, sailing westward from Venezuelamarker in 1501 in search of gold, was the first European to explore the isthmus of Panama. A year later, Christopher Columbus visited the isthmus and established a short-lived settlement in the Darienmarker. Vasco Nunez de Balboa's tortuous trek from the Atlantic to the Pacific in 1513 demonstrated that the Isthmus was, indeed, the path between the seas, and Panama quickly became the crossroads and marketplace of Spainmarker's empire in the New World. Gold and silver were brought by ship from South America, hauled across the isthmus, and loaded aboard ships for Spain. The route became known as the Camino Real, or Royal Road, although it was more commonly known as Camino de Cruces (Road of the Crosses) because of the abundance of gravesites along the way.

Panama was part of the Spanish empire for 300 years (1538–1821). From the outset, Panamanian identity was based on a sense of "geographic destiny," and Panamanian fortunes fluctuated with the geopolitical importance of the isthmus. The colonial experience also spawned Panamanian nationalism as well as a racially complex and highly stratified society, the source of internal conflicts that ran counter to the unifying force of nationalism.

In 1538 the Real Audiencia de Panama was established, initially with jurisdiction from Nicaragua to Cape Horn. A Real Audiencia (royal audiency) was a judicial district that functioned as an appeals court. Each audiencia had oidores (Spanish: hearer, a judge).

Panama was the site of the ill-fated Darien schememarker, which set up a Scottishmarker colony in the region in 1698. This failed for a number of reasons, and the ensuing debt contributed to the union of Englandmarker and Scotlandmarker in 1707.

When Panama was colonized, the indigenous peoples who survived many diseases, massacres and enslavement of the conquest ultimately fled into the forest and nearby islands. Indian slaves were replaced by Africans.

The prosperity enjoyed during the first two centuries (1540–1740) while contributing to colonial growth; the placing of extensive regional judicial authority (Real Audiencia) as part of its jurisdiction; and the pivotal role it played at the height of the Spanish Empire -the first modern global empire- helped define a distinctive sense of autonomy and of regional or national identity within Panama well before the rest of the colonies.
Santo Domingo Church.
In 1744 Bishop Francisco Javier de Luna Victoria y Castro established the College of San Ignacio de Loyola and on June 3, 1749 founded La Real y Pontificia Universidad de San Javier. By this time, however, Panama’s importance and influence had become insignificant as Spain’s power dwindled in Europe and advances in navigation technique increasingly permitted to round Cape Horn in order to reach the Pacific. While the Panama route was short it was also labor intensive and expensive because of the loading and unloading and laden-down trek required to get from the one coast to the other. The Panama route was also vulnerable to attack from pirates (mostly Dutch and English) and from 'new world' Africans called cimarrons who had freed themselves from enslavement and lived in communes or palenques around the Camino Real in Panama's Interior, and on some of the islands off Panama's Pacificmarker coast. During the last half of the Eighteenth century and the first half of the Nineteenth century, migrations to the countryside decreased Panama Citymarker’s population and the isthmus' economy shifted from the tertiary to the primary sector.

In 1717, the viceroyalty of New Granada (northern South America) was created in response to other Europeans trying to take Spanish territory in the Caribbeanmarker region. The Isthmus of Panama was placed under its jurisdiction. But the remoteness of Santa Fe de Bogota proved a greater obstacle than the Spanish crown anticipated as the authority of New Granada was contested by the seniority, closer proximity, previous ties to the viceroyalty of Lima and even Panama's own initiative. This uneasy relationship between Panama and Bogotamarker would persist for century or two.

Modern Panamanian history has been shaped by its transisthmian canalmarker, which had been a dream since the beginning of Spanish colonization. From 1880 to 1890, a French company under Ferdinand de Lesseps attempted unsuccessfully to construct a sea-level canal on the site of the present Panama Canal.

On the other hand, the Panamanian movement for independence can be indirectly attributed to the abolishment of the encomienda system in Azuero, set forth by the Spanish Crown, in 1558 because of repeated protests by locals against the mistreatment of the native population. In its stead, a system of medium and smaller-sized landownership was promoted, thus taking away the power from the large landowners and into the hands of medium and small sized proprietors.

The end of the encomienda system in Azuero, however, sparked the conquest of Veraguas in that same year. Under the leadership of Francisco Vázquez, the region of Veraguas passed into Castillan rule in 1558. In the newly conquered region, the old system of encomienda was imposed.

On November 10, 1821, the Grito de La Villa de Los Santos occurred. It was a unilateral decision by the residents of Azuero (without backing from Panama City) to declare their separation from the Spanish Empire. In both Veraguas and the capital this act was met with disdain, although on differing levels of said emotion. To Veraguas, it was the ultimate act of treason, while to the capital, it was seen as inefficient and irregular, and furthermore forced them to accelerate their plans.

The Grito was an event that shook the isthmus to the core. It was a sign, on the part of the residents of Azuero, of their antagonism towards the independence movement in the capital, who in turn regarded the Azueran movement with contempt, since they (the capital movement) believed that their counterparts were fighting their right to rule, once the peninsulares (peninsular-born ) were long gone.

It was an incredibly brave move on the part of Azuero, which lived in fear of Colonel José de Fábrega, and with good reason: the Colonel was a staunch loyalist, and had the entirety of the isthmus' military supplies in his hands. They feared quick retaliation and swift retribution against the separatists.

What they had not counted on, however, was the influence of the separatists in the capital. Ever since October 1821, when the former Governor General, Juan de la Cruz Murgeón, left the isthmus on a campaign in Quito and left the Veraguan colonel in charge, the separatists had been slowly converting Fábrega to the separatist side. As such, by November 10, Fábrega was now a supporter of the independence movement. Soon after the separatist declaration of Los Santos, Fábrega convened every organization in the capital with separatist interests and formally declared the city's support for independence. No military repercussions occurred because of the skillful bribing of royalist troops.

Post-colonial Panama

Aftermath of urban warfare during the U.S. invasion of Panama.
In the first eighty years following independence from Spain, Panama was a department of Colombiamarker. The people of the isthmus made several attempts to secede and came close to success in 1831, and again during the Thousand Days War of 1899–1902. When the Senate of Colombia rejected the Hay-Herran Treaty, the United States decided to support the Panamanian independence movement. In November 1903, Panama proclaimed its independence and concluded the Hay/Bunau-Varilla Treaty with the United States.The treaty granted rights to the United States "as if it were sovereign" in a zonemarker roughly 10 miles wide and 50 miles long. In that zone, the U.S. would build a canal, then administer, fortify, and defend it "in perpetuity." In 1914, the United States completed the existing 83-km (52 mile) canal. The early 1960s saw the beginning of sustained pressure in Panama for the renegotiation of this treaty.

From 1903 until 1968, Panama was a constitutional democracy dominated by a commercially oriented oligarchy. During the 1950s, the Panamanian military began to challenge the oligarchy's political hegemony.

Amidst negotiations for the Robles-Johnson treaty, Panama held elections in 1967. The candidates were Dr. Arnulfo Arias Madrid, Antonio González Revilla, and Engineer David Samudio, who had the government’s support. Samudio was the candidate of Alianza del Pueblo (“People’s Alliance”), Arias Madrid was the candidate of Unión Nacional (“National Union”), and González Revilla was the candidate of Democracia Cristiana (“Christian Democrats”) (see Pizzurno Gelós and Araúz, Estudios sobre el Panamá republicano 508).

Arias Madrid was declared the winner of elections that were marked by violence and accusations of fraud against Alianza del Pueblo. On 1 October 1968, Arias Madrid took office as president of Panama, promising to lead a government of “national union” that would end the reigning corruption and pave the way for a new Panama. A week and a half later, on the 11 October 1968, the National Guard (Guardia Nacional) ousted Arias, and initiated the downward spiral that would culminate with the United States invasion in 1989. Arias, who had promised to respect the hierarchy of the National Guard, broke the pact and started a large restructuring of the Guard. To preserve the Guard’s interests, Lt. Colonel Omar Torrijos Herrera and Major Boris Martínez commanded the first coup of a military force against a civilian government in Panamanian republican history (see Pizzurno Gelós and Araúz, Estudios sobre el Panamá republicano 523).

The military justified itself by declaring that Arias Madrid was trying to install a dictatorship, and promised a return to constitutional rule. In the meantime, the Guard began a series of populist measures that would gain support for the coup. Amongst them were the freezing of prices on food and other goods until 31 January 1969, the freezing of renting prices, the legalization of the permanence of squatting families in boroughs surrounding the historic site of Panama Viejo, and the freezing of prices on medicines (Pizzurno Gelós and Araúz, Estudios sobre el Panamá republicano 529). Parallel to this, the military began a policy of repression against the opposition, which were labelled communists. The military appointed a Provisional Government Junta that would arrange new elections. However, the National Guard would prove to be very reluctant to abandon power, and soon began calling itself El Gobierno Revolucionario (“The Revolutionary Government”).

During Omar Torrijos’s control, the military regime transformed the political and economic structure of the country by initiating massive coverage of social security services and expanding public education. The Constitution was changed in 1972. For the reform to the Constitution, the military created a new organization, the Assembly of Corregimiento Representatives, which replaced the National Assembly. The new assembly, also known as the Poder Popular (“Power of the People”), was composed of 505 members selected by the military without the participation of political parties, which had been eliminated by the military. The new Constitution proclaimed Omar Torrijos the “Maximum Leader of the Panamanian Revolution,” and conceded him unlimited power for six years, although, to keep a façade of constitutionality, Demetrio B. Lakas was appointed president for the same period (Pizzurno Gelós and Araúz, Estudios sobre el Panamá republicano 541).

Torrijos' death in 1981 altered the tone but not the direction of Panama's political evolution. Despite the 1983 constitutional amendments, which appeared to proscribe a political role for the military, the Panama Defense Forces (PDF), as they were then known, continued to dominate Panamanian political life behind a facade of civilian government, committing numerous human rights violations. By this time, General Manuel Noriega was firmly in control of both the PDF and the civilian government.

In the 1984 elections, the candidates were Nicolás Ardito Barletta Vallarino, supported by the military in a union called UNADE; Dr. Arnulfo Arias Madrid, for the opposition union ADO; the ex-General Rubén Darío Paredes, who had been forced to an early retirement by Noriega, running for Partido Nacionalista Popular PNP (“Popular Nationalist Party”), and Carlos Iván Zúñiga, running for Partido Acción Popular PAPO (“Popular Action Party”). Nicolás Ardito Barleta was declared the winner of elections that had been clearly won by Arnulfo Arias Madrid. Ardito Barletta inherited a country in economic ruin and hugely indebted to the IMF and the World Bank. Amidst the economic crisis and Barletta’s efforts to calm the country’s creditors, street protests arose, and so did military repression.

Meanwhile, Noriega's regime had fostered the development of a well-hidden criminal economy that operated as a parallel source of income for the military and their allies, providing revenues from drugs and money laundering. Towards the end of the military dictatorship, a new wave of Chinese migrants arrived at the Isthmus, in the hope of migrating to the United States. The smuggling of Chinese became an enormous business, with revenues of up to 200 million dollars for Noriega’s regime (see Mon 167).

The military dictatorship, at that time supported by the United States, perpetrated the assassination and torture of more than one hundred Panamanians and forced into exile at least another hundred dissidents (see Zárate 15). Noriega also began playing a double role in Central America under the supervision of the CIA. While the Contadora group conducted diplomatic efforts to achieve peace in the region, Noriega supplied the Nicaraguan Contras and other guerrillas in the region with weapons and ammunition (Pizzurno Gelós and Araúz, Estudios sobre el Panamá republicano 602).

On 6 June 1987, the recently retired Colonel Roberto Díaz Herrera, resentful for Noriega’s violation of the “Torrijos Plan” of succession that would turn him into the chief of the military after Noriega, decided to denounce the regime. He revealed details of the electoral fraud, accused Noriega of planning Torrijos’s death, declared that Torrijos had received 12 million dollars from the Shah of Iran so that Panama would give the exiled Iranian leader asylum, and blamed Noriega for the assassination by decapitation of opposition leader Dr. Hugo Spadafora (Pizzurno Gelós and Araúz, Estudios sobre el Panamá republicano 618).

On the night of 9 June 1987, the Cruzada Civilista (“Civic Crusade”) was created and began organizing actions of civil disobedience. The Crusade called for a general strike. In response, the military suspended constitutional rights and declared a state of emergency in the country. On 10 July, the Civic Crusade called for a massive demonstration that was violently repressed by the “Dobermans,” the military’s special riot control unit. That day, later known as El Viernes Negro (“Black Friday”), left six hundred people injured and another six hundred detained, many of whom were later tortured and raped.

United States President Ronald Reagan began a series of sanctions against the military regime. The United States froze economic and military assistance to Panama in the summer of 1987 in response to the domestic political crisis in Panama and an attack on the U.S. Embassy. Yet these sanctions did little to overthrow Noriega, and severely damaged Panama’s economy. The sanctions hit the Panamanian population hard, and caused the Gross Domestic Product (GDP) to decline almost 25% between 1987-1989 (see Acosta n.p.).

On 5 February 1988, General Manuel Antonio Noriega was accused of drug trafficking by federal juries in Tampa and Miami.

In April 1988, U.S. President Ronald Reagan invoked the International Emergency Economic Powers Act, freezing Panamanian Government assets in all U.S. organizations. In May 1989 Panamanians voted overwhelmingly for the anti-Noriega candidates. The Noriega regime promptly annulled the election, and embarked on a new round of repression.

On 19 December, President George H. W. Bush decided to use force against Panama, declaring that the operation was necessary to safeguard the lives of United States citizens in Panama, defend democracy and human rights, combat drug trafficking, and secure the functioning of the Canal as required by the Torrijos-Carter Treaties (New York Times, A Transcript of President Bush's Address n.p.).

Operation Just Cause was justified by the United States as necessary to secure the functioning of the Canal and re-establish democracy in the country. Although described as a surgical maneuver, the action led to civilian deaths whose estimated numbers range from 400 to 4,000 during the two weeks of armed activities in the largest United States military operation after the Vietnam War. For some commentators, the action was not intended only to rid Panama of the dictatorship, but served also to reinforce United States authority over the region right at the end of the Cold War, as well as use Panama as practice field for weapons and strategies that would shortly after be used in the Gulf War (Cajar Páez 22).

The urban population, living below the poverty level, was greatly affected by the 1989 invasion, becoming the ‘collateral cost’ of the democratization of the country. As pointed out in 1995 by a UN Technical Assistance Mission to Panama, the bombardments during the Invasion caused the displacement of 20,000 persons. The most stricken district was El Chorrillo where several blocks of apartments where completely destroyed. El Chorrillo had been since Canal construction days a series of wooden barracks; these easily caught fire under the United States attack. According to the Technical Mission, the displaced were segregated to unfinished USAID dwellings, far from communications and basic services, or were sent back to live in El Chorrillo's new low-standard multi-family buildings constructed hastily by the Panamanian Government in replacement of their lost homes (see Committee on Economic, Social and Cultural Rights, n.p.). As stated by respondents in a 2005 survey conducted in El Chorrillo, after the invasion, crime and drug trafficking increased, and living conditions in the neighborhood worsened. Coleen Acosta points out that “the intervention added further to (Panama’s) economic decline. Some sections of Panama City were heavily damaged, leaving thousands homeless, and subsequent looting left businesses with damages in the hundreds of millions. The economic damage caused by the invasion and subsequent civil disobedience has been estimated to be between 1.5 and 2 billion dollars (...) Unemployment rose to record highs as the government infrastructure was left in chaos. According to the chamber of Commerce, 10,000 employees lost their jobs in the aftermath of the war (n.p.).

The U.S. troops involved in Operation Just Cause achieved their primary objectives, and Noriega eventually surrendered to U.S. authorities. He completed his sentence for drug trafficking charges in September 2007. In August 2007, a U.S. federal court in Miami found Noriega extraditable to France to serve a sentence imposed there after an in absentia conviction for money laundering. Noriega remains in custody pending the outcome of his legal challenges to the certificate of extradition issued in August 2007.

Post-invasion era

Though Panama suffered heavy economic upheavals because of military warfare, it has managed to slowly rebuild its economy.
Panama's Electoral Tribunal moved quickly to rebuild the civilian constitutional government, reinstated the results of the May 1989 election on December 27, 1989, and confirmed the victory of President Guillermo Endara and Vice Presidents Guillermo Ford and Ricardo Arias Calderon.

During its five-year term, the often-fractious government struggled to meet the public's high expectations. Its new police force was a major improvement over its predecessor but was not fully able to deter crime. Ernesto Pérez Balladares was sworn in as President on September 1, 1994, after an internationally monitored election campaign.

Perez Balladares ran as the candidate for a three-party coalition dominated by the Democratic Revolutionary Party (PRD), the erstwhile political arm of military dictatorships. Perez Balladares worked skillfully during the campaign to rehabilitate the PRD's image, emphasizing the party's populist Torrijos roots rather than its association with Noriega. He won the election with only 33% of the vote when the major non-PRD forces splintered into competing factions. His administration carried out economic reforms and often worked closely with the U.S. on implementation of the Canal treaties.

On September 1, 1999, Mireya Moscoso, the widow of former President Arnulfo Arias Madrid, took office after defeating PRD candidate Martin Torrijos, son of the late dictator, in a free and fair election. During her administration, Moscoso attempted to strengthen social programs, especially for child and youth development, protection, and general welfare. Moscoso's administration successfully handled the Panama Canal transfer and was effective in the administration of the Canal.

The PRD's Martin Torrijos won the presidency and a legislative majority in the National Assembly in 2004. Torrijos ran his campaign on a platform of, among other pledges, a "zero tolerance" for corruption, a problem endemic to the Moscoso and Perez Balladares administrations. Since taking office, Torrijos has passed a number of laws making the government more transparent. He formed a National Anti-Corruption Council whose members represent the highest levels of government, as well as civil society, labor organizations, and religious leadership. In addition, many of his closest Cabinet ministers are non-political technocrats known for their support for the Torrijos government's anti-corruption aims. Despite the Torrijos administration's public stance on corruption, many high-profile cases, particularly involving political or business elites, have been acted upon.


The nine provinces and three provincial-level comarcas of Panama.

Panama's politics take place in a framework of a presidential representative democratic republic, whereby the President of Panama is both head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The judiciary is independent of the executive and the legislature.

For all people national elections are universal and mandatory for all citizens 18 years and older. National elections for the executive and legislative branches take place every five years. Members of the judicial branch are appointed by the head of state. Panama's National Assembly is elected by proportional representation in fixed electoral districts, so many smaller parties are represented. Presidential elections do not require a simple majority, and Panama's last three presidents were elected with the support of only 30–40% of voters.

Since the U.S. invasion and the end of the 21-year military dictatorship, Panama has successfully completed three peaceful transfers of power to opposing political factions. The political landscape is dominated by two major parties and many smaller parties, many of which are driven by individual leaders more than ideologies. Former President Martin Torrijos is the son of former military dictator Omar Torrijos. He succeeded Mireya Moscoso, the widow of Arnulfo Arias. Panama's most recent national elections occurred on May 3, 2009 with Ricardo Martinelli being elected. He was sworn for a five-year term in Panama City on July 1, 2009.

Provinces and regions

Panama is divided into nine provinces, with their respective local authorities (governors) and has a total of ten cities. Also, there are five Comarcas (literally: "Shires") which house a variety of indigenous groups.


Panama is located in Central America, bordering both the Caribbean Sea and the Pacific Ocean, between Colombia and Costa Rica. Its location on the Isthmus of Panama is strategic. By 2000, Panama controlled the Panama Canalmarker that links the Atlantic Oceanmarker via the Caribbean Sea with the North Pacific Ocean. Panama, at 75,420 sq km, is ranked 124th worldwide on the basis of land size.

The dominant feature of the country's landform is the central spine of mountains and hills that forms the continental divide. The divide does not form part of the great mountain chains of North America, and only near the Colombian border are there highlands related to the Andean system of South America. The spine that forms the divide is the highly eroded arch of an uplift from the sea bottom, in which peaks were formed by volcanic intrusions.

The mountain range of the divide is called the Cordillera de Talamancamarker near the Costa Rican border. Farther east it becomes the Serranía de Tabasará, and the portion of it closer to the lower saddle of the isthmus, where the canal is located, is often called the Sierra de Veraguas. As a whole, the range between Costa Rica and the canal is generally referred to by geographers as the Cordillera Centralmarker.

The highest point in the country is the Volcán Barúmarker (formerly known as the Volcán de Chiriquí), which rises to 3,475 meters (11,401 ft). A nearly impenetrable jungle forms the Darien Gapmarker between Panama and Colombia where Colombian guerrilla and drug dealers are operating with hostage-taking. This and forest protection movements create a break in the Pan-American Highway, which otherwise forms a complete road from Alaskamarker to Patagonia.

Panama's wildlife holds the most diversity of all the countries in Central America. It is home to many South American species as well as North American wildlife.


The Chagres River.
Nearly 500 rivers lace Panama's rugged landscape. Mostly unnavigable, many originate as swift highland streams, meander in valleys, and form coastal deltas. However, the Río Chagresmarker (Rio Chagres) is one of the few wide rivers and a source of enormous hydroelectric power. The river is located in central Panama. The central part of the river is dammed by the Gatun Dammarker and forms Gatun Lakemarker, an artificial lake that constitutes part of the Panama Canalmarker. The lake was created between 1907 and 1913 by the building of the Gatun Dammarker across the Chagres Rivermarker. At the time it was created, Gatun Lake was the largest man-made lake in the world, and the dam was the largest earth dam. It drains northwest into the Caribbean Seamarker. The Kampia and Madden Lakes (also filled with water from the Río Chagres) provide hydroelectricity for the area of the former Canal Zone.

The Río Chepo, another source of hydroelectric power, is one of the more than 300 rivers emptying into the Pacific. These Pacific-oriented rivers are longer and slower running than those of the Caribbean side. Their basins are also more extensive. One of the longest is the Río Tuira which flows into the Golfo de San Miguel and is the nation's only river navigable by larger vessels.
Colón, Panama.


The Caribbean coastline is marked by several good natural harbors. However, Cristóbal, at the Caribbean terminus of the canal, had the only important port facilities in the late 1980s. The numerous islands of the Archipiélago de Bocas del Toro, near the Beaches of Costa Rica, provide an extensive natural roadstead and shield the banana port of Almirantemarker. The over 350 San Blas Islandsmarker, near Colombia, are strung out for more than 160 km along the sheltered Caribbean coastline.


Cold climate is usual near and in the Panamanian highlands.
Panama has a tropical climate. Temperatures are uniformly high—as is the relative humidity—and there is little seasonal variation. Diurnal ranges are low; on a typical dry-season day in the capital city, the early morning minimum may be 24°C (75°F) and the afternoon maximum 29°C (84°F). The temperature seldom exceeds 32°C (90°F) for more than a short time. Temperatures on the Pacific side of the isthmus are somewhat lower than on the Caribbean, and breezes tend to rise after dusk in most parts of the country. Temperatures are markedly cooler in the higher parts of the mountain ranges, and frosts occur in the Cordillera de Talamanca in western Panama. Climatic regions are determined less on the basis of temperature than on rainfall, which varies regionally from less than 1.3 to more than 3 meters per year. Almost all of the rain falls during the rainy season, which is usually from April to December, but varies in length from seven to nine months. In general, rainfall is much heavier on the Caribbean than on the Pacific side of the continental divide. The annual average in Panama City is little more than half of that in Colón. Although rainy-season thunderstorms are common, the country is outside of the hurricane belt.

Panama's tropical environment supports an abundance of plants. Forests dominate, interrupted in places by grasslands, scrub, and crops. Although nearly 40 percent of Panama is still wooded, deforestation is a continuing threat to the rain-drenched woodlands. Tree cover has been reduced by more than 50 percent since the 1940s. Subsistence farming, widely practiced from the northeastern jungles to the southwestern grasslands, consists largely of corn, bean, and tuber plots. Mangrove swamps occur along parts of both coasts, with banana plantations occupying deltas near Costa Rica. In many places, a multi-canopied rain forest abuts the swamp on one side of the country and extends to the lower reaches of slopes in the other.


Colón's Christ Church by the Sea.

Panama had a population of 3,309,679 in 2008. As of the year 2000, the majority of the population, 50.1%, was Mestizo. Blacks and Mulattos were together the largest minority, accounting for 22%. For the remaining groups the percentages were: Amerindian 6.7%, White 8.6%, Asian 5.5%, and other 7.1%. The Amerindian population includes seven indigenous peoples: the Emberá, Wounaan, Guaymí, Ngöbe Buglé, Kuna, Naso and Bribri. More than half the population lives in the Panama City–Colónmarker metropolitan corridor.

The culture, customs, and language of the Panamanians are predominantly Caribbean and Spanish. Spanish is the official and dominant language. About 93% speak Spanish as their first language, though there are many citizens who speak both English and Spanish or native languages, such as ngabere.

Panama, because of its historical reliance on commerce, is above all a melting pot and a separated country. This is shown, for instance, by its considerable population of Afro-Antillean and Chinese origin. The first Chinese immigrated to Panama from southern China to help build the Panama Railroad in the 19th century. They were followed by several waves of immigrants whose descendants number around 50,000. Starting in the 1970s, a further 80,000 have immigrated from other parts of Chinamarker as well.Most of the Panamanian population of West Indian descent owe their presence in the country to the monumental efforts to build the Panama Canal in the late 19th and early 20th centuries.

The country is the smallest in Spanish-speaking Latin America in terms of population (est. 3,309,679), with Uruguay as the second smallest (est. 3,463,000).

The most common religion in Panama is Roman Catholicism – various sources estimate that 75–85% of the population identifies itself as Roman Catholic and 15–25% percent as evangelical Christian. The Bahá'í Faith community of Panama is estimated at 2.00% of the national population, or about 60,000 and is home to one of the seven Baha'i Houses of Worship. Smaller religious groups include Jewish and Muslim communities with approximately 10,000 members each, and small groups of Hindus, Buddhists and Rastafarians. Indigenous religions include Ibeorgun (among Kuna) and Mamatata (among Ngöbe Buglé).


The culture of Panama derived from European music, art and traditions that were brought over by the Spanish to Panama. Hegemonic forces have created hybrid forms of this by blending African and Native American culture with European culture. For example, the tamborito is a Spanish dance that was blended with Native American rhythms, themes and dance moves. Dance is a symbol of the diverse cultures that have coupled in Panama. The local folklore can be experienced through a multitude of festivals, dances and traditions that have been handed down from generation to generation. Local cities host live Reggae en Español, Cuban, Reggaeton, Kompa, Colombian, jazz, blues, salsa, reggae and rock performances. Outside of Panama Citymarker, regional festivals take place throughout the year featuring local musicians and dancers. Another example of Panama’s blended culture is reflected in the traditional products, such as woodcarvings, ceremonial masks and pottery, as well as in its architecture, cuisine and festivals. In earlier times, baskets were woven for utilitarian uses, but now many villages rely almost exclusively on the baskets they produce for tourists.

An example of undisturbed, unique culture in Panama stems from the Kuna Indians who are known for molas. Mola is the Kuna Indian word for blouse, but the term mola has come to mean the elaborate embroidered panels that make up the front and back of a Kuna woman's blouse. Molas are works of art created by the women of the Central American Cuna (or Kuna) tribe. They are several layers of cloth varying in color that are loosely stitched together made using an appliqué process referred to as "reverse appliqué".


According to the CIA World Factbook, Panama has an unemployment rate of 5.1%. According to the ECLAC, the poverty rate is 28.6% as of 2006 and is expected to decline to 11% by 2009, in spite of the Global financial crisis of 2008 - 2009. Also, an alimentary surplus was registered in August 2008, and infrastructure works are progressing rapidly. On the Human Development Index Panama is ranked at number 58 (2008). The International Monetary Fundmarker has predicted that Panama will be the fastest growing economy in Latin America in 2009. It was the second fastest growing economy in Latin America in 2008, after Peru.

Since taking office in 1994 President Ernesto Perez Balladares advanced an economic liberalization program designed to liberalize the trade regime, attract foreign investment, privatize state-owned enterprises, institute fiscal discipline and privatized its two ports in 1997 and approved the sale of the railroad in early assets. Panama joined the World Trade Organization (WTO) and a banking reform law was approved by the legislature in early 1998 and dismantled the Central bank. After two years of near stagnation the reforms began to take root; GDP grew by 3.6% in 1997 and grew by more than 6% in 1998. The most important sectors which drove growth were the Panama Canal and the shipping and port activities of The Colon Free Zone which also rebounded from a slow year in 1996.

Economic sectors

El Valle de Antón.
Balboa - Panama's currency.
Panama's economy is mainly based on a well developed service sector heavily weighted towards banking, commerce, tourism, trading and private industries, because of its key geographic location. The handover of the Canal and military installations by the United States has given rise to some construction projects. A referendum regarding the building of a third set of locks for the Panama Canal was approved overwhelmingly (though with low voter turnout) on 22 October 2006. The official estimate of the building of the third set of locks is US$5.25 billion. The canal is of economic importance since it pumps millions of dollars from toll revenue to the national economy and provides massive employment. The United States had a monopoly over the Panama Canal for 85 years. However, the Torrijos-Carter Treaties signed in 1977 began the process of returning the canal to the Panamanian government in 1999.


The Panamanian currency is officially the balboa, fixed at parity with the United States dollar since independence in 1903. In practice, however, the country is dollarized; Panama has its own coinage but uses U.S. dollars for all its paper currency. According to the Economic Commission for Latin American and the Caribbean, Panama's inflation as measured by weight CPI was 2.0% in 2006. Panama has traditionally experienced low inflation, as it shares currencies with the U.S.

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.

Panamanian banknotes, denominated in balboas, were printed in 1941 by President Arnulfo Arias. They were recalled several days later, giving them the name "The Seven Day Dollar." The notes were burned after the seven days but occasionally balboa notes can be found with collectors. These were the only banknotes issued by Panama and U.S. notes have circulated both before and since.

International trade

Traditional coffee-drying at the Alto Boquete plant of Cafe Ruiz.
The high levels of Panamanian trade are in large part from the Colón Free Trade Zone, the largest free trade zone in the world Western Hemispheremarker. Last year the zone accounted for 92% of Panama's exports and 64% of its imports, according to an analysis of figures from the Colon zone management and estimates of Panama's trade by the United Nations Economic Commission for Latin America and the Caribbean. Panama's economy is also very much supported by the trade and exportation of coffee and other agricultural products.

The Bilateral Investment Treaty (BIT) between the governments of the United States and Panama was signed on October 27, 1982. The treaty protects U.S. investment and assists Panama in its efforts to develop its economy by creating conditions more favorable for U.S. private investment and thereby strengthening the development of its private sector. The BIT with Panama was the first such treaty signed by the U.S. in the Western Hemisphere. A Trade Promotion Agreement between the United States and Panama was signed by both governments in 2007, but neither country has yet approved or implemented the agreement.


Tourism in the Republic of Panama kept its growth during the past 5 years. The number of tourists arriving between January and September 2008 was 1,110,000, 13.1% or 128,452 visitors. This was a significant increase to the 982,640 travelers who had arrived in the same period of 2007, a year that beat all records regarding the entry of tourists into the country.

The arrival of tourists from Europe to Panama grew by 23.1% during the first nine months of 2008. According to the Tourism Authority of Panama (ATP), between January and September, 71,154 tourists from the Old Continent entered the country that is 13,373 more than figures for same period last year.

Most of the Europeans who have visited Panama were Spaniards (14,820), followed by Italians (13,216), French (10,174) and British (8,833). From Germany, the most populous country in the European Union, 6997 tourists arrived.

Europe has become one of the key markets to promote Panama as a tourist destination.

In 2007 1.445.5 million entered into the Panamanian economy as a result of tourism. This accounted for 9.5% of gross domestic product in the country, surpassing other productive sectors.

Panama´s Law No. 8 is still the most modern and comprehensive law for the promotion of tourism investment in Latin America and the Caribbean. In so-called Special Tourism Zones, Law 8 offers incentives such as 100% exemption from income tax, real estate tax, import duties for construction materials and equipment, and other taxes.

Panama has declared different parts of the country as Special Tourism Zones which are benefited with multiple tax exemptions and tax holidays.

See also

Further reading

  • Mellander, Gustavo A.; Nelly Maldonado Mellander (1999). Charles Edward Magoon: The Panama Years. Río Piedras, Puerto Rico: Editorial Plaza Mayor. ISBN 1563281554. OCLC 42970390.
  • Mellander, Gustavo A. (1971). The United States in Panamanian Politics: The Intriguing Formative Years. Danville, Ill.: Interstate Publishers. OCLC 138568.


External links

  • García-Huidobro, Guillermo, El trabajo infanto juvenil de Panama en los años noventa, UNICEF, Panamá.
  • García-Huidobro, Guillermo, 2001 Panamá, Política Económica y Empleo en los años noventa,
  • The Panama Deception (1992) A US produced and directed documentary that received an Academy Award, a.k.a. Oscar, in 1992, and which documents the December 1989 U.S. invasion of Panama


Government and diplomacy

General information

  • Panama at UCB Libraries GovPubs
  • Panama at Harvard University


News media

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