Countries of the world


May 24, 2013, 1:23 pm
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Panama Canal in operation viewed from the observation deck. @ C.Michael Hogan

Panama is a nation of three-and-a-half million people, located between Costa Rica to the north and Columbia to the south.

Panama connects the continental land masses of North America and South America. The Isthmus of Panama (also called the "Isthmus of Darien") is the narrow strip of land in the center of the country bisected by the 80 kilometer long Panama Canal that connects the Atlantic Ocean to the Pacific Ocean.

Major environmental issues in Panama include:

  • water pollution from agricultural runoff, threateningfishery resources;
  • deforestation of tropical rainforest;
  • land degradation and soil erosion, threatening siltation of Panama Canal;
  • air pollution in urban areas; and,
  • mining operations that threaten ecosystems and natural resources.

Panama is susceptible to occasional severe storms and forest fires in the Darien area.

Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia.

With US backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the US allowing for the construction of a canal and US sovereignty over a strip of land on either side of the structure (the Panama Canal Zone). The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914.

In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades.

With US help, dictator Manuel Noriega was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999.

In October 2006, Panamanians approved an ambitious plan to expand the Canal. The Panamax project, which began in 2007 and could double the Canal's capacity, is expected to be completed in 2014-15. 

Panama has a strategic location on eastern end of isthmus forming land bridge connecting North and South America; it controls Panama Canal that links North Atlantic Ocean via Caribbean Sea with North Pacific Ocean


Location: Central America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica

Geographic Coordinates: 9 00 N, 80 00 W

Area: 78,200 sq km (75,990 sq km of land, 2210 sq km of water) 

Coastline: 2490 km

Maritime Claims:

Territorial sea to 12 nautical miles;
a contiguous zone to 24 nautical miles;
an exclusive economic zone to 200 nautical miles or the edge of continental margin.

Natural Hazards: Occasional severe storms and forest fires in the Darien area.

Terrain: Interior is mostly steep, rugged mountains and dissected, upland plains; coastal areas are largely plains and rolling hills. Highest point is Volcan Baru 3,475 m.

Climate: Tropical maritime; hot, humid, cloudy; prolonged rainy season (May to January), short dry season (January to May).

Capital: Panama City

Ecology and Biodiversity

See main article: Ecoregions of Panama

Source: World Wildlife Fund

1. Mesoamerican Gulf-Caribbean mangroves (Bocas del Toro-San Bastimentos Island-San Blas mangroves)
2. Isthmian-Atlantic moist forests
3. Talamancan montane forests
4. Isthmian-Pacific moist forests
5. Southern Mesoamerican Pacific mangroves
6. Panamanian dry forests
7. South American Pacific mangroves
8. Eastern Panamanian montane forests
9. Chocó-Darién moist forests

The subtropical and tropical Mesoamerica Biodiversity Hotspot includes the northern two thirds of Panamá, from the border with Costa Rica to the Panama Canal. From the Panama Canal, the Tumbes-Chocó-Magdalena Biodiversity Hotspot extends south and east into the wet and moist forests of Panama's Darién Province. The hotspot includes a wide variety of habitats, ranging from mangroves, beaches, rocky shorelines, and coastal wilderness. 

Protected Areas
The Coiba National Park and its Special Zone of Marine Protection is one of the last relics of tropical moist forest in Pacific Central America, a site of great beauty and great marine and terrestrial diversity, preserving endemic and endangered species. The coral reefs exemplify successful reef growth under sheltered but very restricted conditions and serve as a refuge and source of species replenishment for other islands, including the Cocos and Galapagos, during and after El Niño disturbances.

Panama Canal

The Panama Canal is an important route connecting the Pacific Ocean with the Caribbean Sea and Atlantic Ocean. The Canal is 50 miles long, and only 110 feet wide at its narrowest point called Culebra Cut on the Continental Divide. Over 14,000 vessels transit the Canal annually, of which more than 60 percent (by tonnage) represent United States coast-to-coast trade, along with United States trade to and from the world that passed through the Panama Canal.

Closure of the Panama Canal would greatly increase transit times and costs adding over 8,000 miles of travel. Vessels would have to reroute around the Straits of Magellan, Cape Horn and Drake Passage under the tip of South America.

The United States is the top country of origin and destination for all commodities transiting through the Panama Canal. While it is not a significant route for U.S. petroleum trade, the canal is an oil transit chokepoint.

Source: BBC News

People and Society

Population: 3,510,045 (July 2012 est.)

Panamanians' culture, customs, and language are predominantly Caribbean Spanish. Because of Panama’s unique location as a transit point and because of people coming over the years to work on the railroad and the Canal, the majority of the population is ethnically a mix of Spanish, indigenous, and of African descent. The remaining population is of Afro descent, Caucasian, indigenous, Chinese, and others. Spanish is the official and dominant language; English is a common second language spoken by the West Indians and by many businesspeople and professionals. More than half the population lives in the Panama City-Colon metropolitan corridor.

Panama is rich in folklore and popular traditions. Lively salsa--a mixture of Latin American popular music, rhythm and blues, jazz, and rock--is a Panamanian specialty, and Ruben Blades its best-known performer. Indigenous influences dominate handicrafts such as the famous Kuna textile molas. Artist Roberto Lewis' Presidential Palace murals and his restoration work and ceiling in the National Theater are widely admired. Roberto Duran is a famous boxer. Mariano Rivera is a pitcher for the New York Yankees. As of 2010, more than 117,600 Panamanian students attended the University of Panama, the Technological University, the Autonomous University of Chiriqui , and the University of Santa Maria La Antigua, a private Catholic institution. Including smaller colleges, there are 88 institutions of higher education in Panama. The first 6 years of primary education are compulsory. As of 2010, there were 723,666 students enrolled in primary and secondary school. More than 94.5% of Panamanians are literate.

Ethnic groups: mestizo (mixed Amerindian and white) 70%, Amerindian and mixed (West Indian) 14%, white 10%, Amerindian 6%

Age Structure:

0-14 years: 28.6% (male 504,726/female 484,291)
15-64 years: 64.2% (male 1,123,777/female 1,098,661)
65 years and over: 7.2% (male 115,425/female 133,582) (2011 est.)

Population Growth Rate: 1.41% (2012 est.)

Birthrate: 19.17 births/1,000 population (2012 est.)

Death Rate: 4.69 deaths/1,000 population (July 2012 est.)

Net Migration Rate: -0.38 migrant(s)/1,000 population (2012 est.)

Life Expectancy at Birth: 77.96 years 

male: 75.18 years
female: 80.86 years (2012 est.)

Total Fertility Rate: 2.53 children born/woman (2009 est.)

Languages: Spanish (official), English 14%; note - many Panamanians bilingual

Literacy: (age 15 and over can read and write) 91.9% (2000 census)

Urbanization: 75% of total population (2010) growing at a 2.3% annual rate of change (2010-15 est.)


Panama's history has been shaped by the evolution of the world economy and the ambitions of great powers. The earliest known inhabitants of Panama were the Cuevas and the Coclé tribes, but they were decimated by disease and fighting when the Spanish arrived in the 1500s.

Rodrigo de Bastidas, sailing westward from Venezuela 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 Darien. 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 Spain'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.

Building the Canal
Modern Panamanian history has been shaped by its trans-isthmian canal, 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. In November 1903, with U.S. encouragement, 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 zone 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-kilometer (52 mile) canal, which is one of the world's greatest feats of engineering. The early 1960s saw the beginning of sustained pressure in Panama for the renegotiation of this treaty.

Military Coups and Coalitions
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. In October 1968, Dr. Arnulfo Arias Madrid, twice elected president and twice ousted by the Panamanian military, was ousted for a third time as president by the National Guard after only 10 days in office. A military government was established, and the commander of the National Guard, Brigadier General Omar Torrijos, soon emerged as the principal power in Panamanian political life. Torrijos' regime was harsh and corrupt, but his charisma, populist domestic programs, and nationalist (anti-U.S.) foreign policy appealed to the rural and urban constituencies largely ignored by the oligarchy.

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. By this time, General Manuel Noriega was firmly in control of both the PDF and the civilian government.

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. In April 1988, President 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. By the fall of 1989 the regime was barely clinging to power, and the regime's paranoia made daily existence unsafe for American citizens.

On December 20, 1989, President George H.W. Bush ordered the U.S. military into Panama to protect U.S. lives and property, to fulfill U.S. treaty responsibilities to operate and defend the Canal, to assist the Panamanian people in restoring democracy, and to bring Noriega to justice. The U.S. troops involved in Operation Just Cause achieved their primary objectives quickly, 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 was extradited to France in April 2010 after exhausting all his appeals in U.S. courts, and was sentenced to a 7-year prison term. In December 2011, French authorities returned Noriega to Panama, where he remains in prison facing charges of aggravated murder.

Rebuilding Democracy
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 5-year term, the often-fractious Endara 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 Perez 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. Under Torrijos, Panama continued strong economic growth and initiated the Panama Canal expansion project.

In May 2009, Panama held general elections and selected Ricardo Martinelli as president. President Martinelli assumed the presidency on July 1, 2009 and promised to promote free trade, establish a Panama City metro system, reform the health care system, and complete the expansion plan for the Panama Canal.


Government Type: constitutional democracy

Panama is a representative democracy with three branches of government: executive and legislative branches elected by direct vote for 5-year terms, and an appointed judiciary. The judicial branch is organized under a nine-member Supreme Court (each judge is appointed for a 10-year term) and includes all tribunals and municipal courts. An autonomous Electoral Tribunal supervises voter registration, the election process, and the activities of political parties. Anyone over the age of 18 may vote.

Capital: Panama City (capital) 1.346 million (2009)

Panama city panoramic view from the top of Ancon hill. Source: Brian Gratwicke/Flickr

Administrative divisions:  9 provinces (provincias, singular - provincia) and 3 indigenous territories* (comarcas); Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Embera-Wounaan*, Herrera, Kuna Yala*, Los Santos, Ngobe-Bugle*, Panama, Veraguas

Source: Wikimedia Commons


Independence Date:  3 November 1903 (from Colombia; became independent from Spain on 28 November 1821)

Legal System: civil law system; judicial review of legislative acts in the Supreme Court of Justice. Panama  accepts compulsory International Court of Justice (ICJ) jurisdiction with reservations; and accepts International criminal court (ICCt) jurisdiction.

International Environmental Agreements

Panama is party to Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, and Whaling.


Total Renewable Water Resources: 148 cu km (2000)

Freshwater Withdrawal0.82 cu km/yr (67% domestic, 5% industrial, 28% agricultural)

Per Capita Freshwater Withdrawal: 254 cu m/yr (2000)


Agricultural products:

Irrigated Land: 430 sq km (2008)


Natural Resources:  copper, mahogany forests, shrimp, hydropower

Land Use:

Arable land: 7.26%
Permanent crops: 1.95%
Other: 90.79% (2005)


Panama's dollar-based economy is based primarily on a well-developed services sector that accounts for about 77% of GDP. Services include the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, tourism, and medical and healthcare.

In October 2006, Panamanians voted overwhelmingly in favor of a $5.25 billion Canal expansion project to construct a third set of locks, which is expected to be completed in 2014. The Government of Panama expects the project to help maintain the value of this strategic transportation asset by doubling the capacity of the waterway. The expansion is financed through a combination of loans from multilateral institutions and current revenues.

GDP growth in 2011 surpassed 10%. Recent growth has been fueled by government investment in infrastructure as well as the construction, transportation, maritime, tourism sectors, and Panama Canal-related activities. Panama maintains one of the most positive growth rates in the region. As a result of this growth and sound fiscal management, government debt as a percentage of GDP dropped to 41.2% in 2011, and government-issued debt is classified as the lowest rung of investment grade. Socially, poverty has fallen from 32.7% in 2008 to about 28% in 2011, with a reduction in the extreme poverty rate from 18.8% in 1997 to 11.4% in 2011. The distribution of income, while improving slightly in recent years, remains among the most unequal in the hemisphere.

Panama has bilateral free trade agreements (FTAs) in force with Peru, Chile, El Salvador, Taiwan, Singapore, Guatemala, Honduras, Nicaragua, and Costa Rica, and has completed negotiations with Canada and the European Union. Panama has started free trade negotiations with Colombia, and EFTA. The U.S. and Panama signed a Trade Promotion Agreement (TPA) in June 2007. The agreement was overwhelmingly approved in July 2007 by the Panamanian National Assembly. In April 2011, Panama completed indicated steps relating to labor code and tax transparency to ready the Trade Agreement for submission to the United States Congress. The Trade Agreement was passed by the U.S. Congress and signed by President Obama in October 2011, and both countries are working to bring the agreement into force. Once implemented, the agreement will promote economic opportunity by eliminating tariffs and other barriers to trade of goods and services and will provide a framework for any trade disputes.

Panama also plans to construct a metro system in Panama City, valued at $1.2 billion and scheduled to be completed by 2014. Panama's booming transportation and logistics services sectors, along with aggressive infrastructure development projects, have lead the economy to continued growth in 2011.

Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About 30% of the population lives in poverty; however, from 2006 to 2010 poverty was reduced by 10 percentage points, while unemployment dropped from 12% to less than 3% of the labor force in 2011.

A US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011. Seeking removal from the Organization of Economic Development's gray-list of tax havens, Panama has also recently signed various double taxation treaties with other nations.

GDP: (Purchasing Power Parity): $50.25 billion (2011 est.)

GDP: (Official Exchange Rate): $30.6 billion (2011 est.)

GDP- per capita (PPP): $13,600 (2011 est.)

GDP- composition by sector:

agriculture: 4.3%
industry: 16.6%
services: 79.1% (2011 est.)

Industries: Construction, brewing, cement and other construction materials, sugar milling

Natural Resources: copper, mahogany forests, shrimp, hydropower

Currency: Balboas (PAB) 


While it is not a significant route for U.S. petroleum trade, the canal is an oil transit chokepoint. Roughly one-fifth of the traffic through the canal (measured by both transits and tonnage) was by tankers. According to the Panama Canal Authority, 755,000 bbl/d of crude and petroleum products were transported through the canal in Fiscal Year 2011, of which 637,000 bbl/d were refined products, and the rest crude oil (EIA conversions from long tons to barrels). Nearly 80 percent of total petroleum, or 608,000 bbl/d, passed from north (Atlantic) to south (Pacific).

The relevance of the Panama Canal to the global oil trade has diminished, as many modern tankers are too large to travel through the canal. Some oil tankers, such as the ULCC (Ultra Large Crude Carriers) class tankers, can be nearly five times larger than the maximum capacity of the canal. The largest vessel that can transit the Panama Canal is known as a PANAMAX-size vessel (ships ranging from 60,000 – 100,000 dead weight tons in size and no wider than 108 ft.)

In order to make the canal more accessible, the Panama Canal Authority began an expansion program to be completed by the end of 2014. However, while many larger tankers will be able to transit the canal after 2014, some ULCCs will still be unable to make the transit. The Panama Canal Authority features a description of the expansion program and progress reports.

Trans-Panama Pipeline

The Trans-Panama Pipeline (TPP) is operated by Petroterminal de Panama, S.A. (PTP) and is located outside the former Canal Zone near the Costa Rican border. It runs from the port of Charco Azul on the Pacific Coast to the port of Chiriquie Grande in Bocas del Toro on the Caribbean. The pipeline was built in 1982, with the original purpose of facilitating crude oil shipments from Alaska's North Slope to refineries in the Caribbean and the U.S. Gulf Coast. However, in 1996, the TPP was shut down as oil companies began shipping Alaskan crude along alternative routes. Since 1996, there were intermittent requests and proposals to utilize the TPP. In August 2009, TPP completed a project to reverse its flows in order to enable it to carry oil from the Caribbean to the Pacific. The pipeline's current capacity is about 600,000 bbl/d.

BP and PTP recently signed a seven-year transportation and storage agreement, allowing BP to lease storage located on the Caribbean and Pacific coasts of Panama and to use the pipeline to transport crude oil to U.S. West Coast refiners. According to PTP, BP has leased 5.4 million barrels of PTP's storage and committed to east-to-west oil shipments through the pipeline averaging 100,000 b/d. BP started shipping crude oil through the TPP earlier this year. The route reduces transport time and costs of ships having to go around Cape Horn at the tip of South America to get to the U.S. West Coast.

See Energy profile of Central America

caption Image by Christian Mehlführer



Administration, E., Fund, W., International, C., & Department, U. (2013). Panamá. Retrieved from


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