Panamanian /pan'euh may"nee euhn, -mah"-/, adj., n.Panamic /pa nam"ik/, adj.
/pan"euh mah', -maw'/, n.
1. a republic in S Central America. 2,693,417; 28,575 sq. mi. (74,010 sq. km).
2. Also called Panama City. a city in and the capital of Panama, at the Pacific end of the Panama Canal. 438,000.
3. Isthmus of. Formerly, Isthmus of Darien. an isthmus between North and South America.
4. Gulf of, the portion of the Pacific in the bend of the Isthmus of Panama.
5. (sometimes l.c.) See Panama hat.
Also, Panamá Sp. /pah'nah mah"/ (for defs. 1, 2).

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Introduction Panama -
Background: 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. On 7 September 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of 1999. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the intervening years. 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 turned over to Panama by or on 31 December 1999. Geography Panama
Location: Middle America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica
Geographic coordinates: 9 00 N, 80 00 W
Map references: Central America and the Caribbean
Area: total: 78,200 sq km water: 2,210 sq km land: 75,990 sq km
Area - comparative: slightly smaller than South Carolina
Land boundaries: total: 555 km border countries: Colombia 225 km, Costa Rica 330 km
Coastline: 2,490 km
Maritime claims: contiguous zone: 24 NM exclusive economic zone: 200 NM territorial sea: 12 NM
Climate: tropical maritime; hot, humid, cloudy; prolonged rainy season (May to January), short dry season (January to May)
Terrain: interior mostly steep, rugged mountains and dissected, upland plains; coastal areas largely plains and rolling hills
Elevation extremes: lowest point: Pacific Ocean 0 m highest point: Volcan de Chiriqui 3,475 m
Natural resources: copper, mahogany forests, shrimp, hydropower
Land use: arable land: 6.72% permanent crops: 2.08% other: 91.2% (1998 est.)
Irrigated land: 320 sq km (1998 est.)
Natural hazards: occasional severe storms and forest fires in the Darien area Environment - current issues: water pollution from agricultural runoff threatens fishery resources; deforestation of tropical rain forest; land degradation and soil erosion threatens siltation of Panama Canal; air pollution in urban areas; mining threatens natural resources Environment - international party to: Biodiversity, Climate
agreements: Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: Marine Life Conservation
Geography - note: strategic location on eastern end of isthmus forming land bridge connecting North and South America; controls Panama Canal that links North Atlantic Ocean via Caribbean Sea with North Pacific Ocean People Panama -
Population: 2,882,329 (July 2002 est.)
Age structure: 0-14 years: 29.6% (male 433,494; female 418,120) 15-64 years: 64.3% (male 939,550; female 914,646) 65 years and over: 6.1% (male 84,130; female 92,389) (2002 est.)
Population growth rate: 1.26% (2002 est.)
Birth rate: 18.6 births/1,000 population (2002 est.)
Death rate: 4.96 deaths/1,000 population (2002 est.)
Net migration rate: -1.04 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.04 male(s)/female under 15 years: 1.04 male(s)/female 15-64 years: 1.03 male(s)/female 65 years and over: 0.91 male(s)/ female total population: 1.02 male(s)/ female (2002 est.)
Infant mortality rate: 19.57 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 75.89 years female: 78.74 years (2002 est.) male: 73.14 years
Total fertility rate: 2.22 children born/woman (2002 est.) HIV/AIDS - adult prevalence rate: 1.54% (1999 est.) HIV/AIDS - people living with HIV/ 24,000 (1999 est.)
HIV/AIDS - deaths: 1,200 (1999 est.)
Nationality: noun: Panamanian(s) adjective: Panamanian
Ethnic groups: mestizo (mixed Amerindian and white) 70%, Amerindian and mixed (West Indian) 14%, white 10%, Amerindian 6%
Religions: Roman Catholic 85%, Protestant 15%
Languages: Spanish (official), English 14% note: many Panamanians bilingual
Literacy: definition: age 15 and over can read and write total population: 90.8% male: 91.4% female: 90.2% (1995 est.) Government Panama -
Country name: conventional long form: Republic of Panama conventional short form: Panama local short form: Panama local long form: Republica de Panama
Government type: constitutional democracy
Capital: Panama Administrative divisions: 9 provinces (provincias, singular - provincia) and 1 territory* (comarca); Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Herrera, Los Santos, Panama, San Blas*, and Veraguas
Independence: 3 November 1903 (from Colombia; became independent from Spain 28 November 1821)
National holiday: Independence Day, 3 November (1903)
Constitution: 11 October 1972; major reforms adopted 1978, 1983 and 1994
Legal system: based on civil law system; judicial review of legislative acts in the Supreme Court of Justice; accepts compulsory ICJ jurisdiction, with reservations
Suffrage: 18 years of age; universal and compulsory
Executive branch: chief of state: President Mireya Elisa MOSCOSO Rodriguez (since 1 September 1999); First Vice President Arturo Ulises VALLARINO (since 1 September 1999); Second Vice President Dominador "Kaiser" Baldonero BAZAN Jimenez (since 1 September 1999); note - the president is both the chief of state and head of government head of government: President Mireya Elisa MOSCOSO Rodriguez (since 1 September 1999); First Vice President Arturo Ulises VALLARINO (since 1 September 1999); Second Vice President Dominador "Kaiser" Baldonero BAZAN Jimenez (since 1 September 1999); note - the president is both the chief of state and head of government cabinet: Cabinet appointed by the president elections: president and vice presidents elected on the same ticket by popular vote for five-year terms; election last held 2 May 1999 (next to be held NA May 2004) note: government coalition - PA, MOLIRENA, Democratic Change, MORENA, PLN, PS election results: Mireya Elisa MOSCOSO Rodriguez elected president; percent of vote - Mireya Elisa MOSCOSO Rodriguez (PA) 44%, Martin TORRIJOS (PRD) 37%
Legislative branch: unicameral Legislative Assembly or Asamblea Legislativa (71 seats; members are elected by popular vote to serve five-year terms) election results: percent of vote by party - NA%; seats by party - PRD 34, PA 18, PDC 5, PS 4, MOLIRENA 3, PLN 3, Democratic Change 2, PRC 1, MORENA 1 note: legislators from outlying rural districts are chosen on a plurality basis while districts located in more populous towns and cities elect multiple legislators by means of a proportion-based formula elections: last held 2 May 1999 (next to be held NA May 2004)
Judicial branch: Supreme Court of Justice or Corte Suprema de Justicia (nine judges appointed for 10-year terms); five superior courts; three courts of appeal Political parties and leaders: Arnulfista Party or PA [Mireya Elisa MOSCOSO Rodriguez]; Civic Renewal Party or PRC [Serguei DE LA ROSA]; Democratic Change [Ricardo MARTINELLI]; Democratic Revolutionary Party or PRD [Martin TORRIJOS]; National Liberal Party or PLN [Raul ARANGO Gasteazopo]; National Renovation Movement or MORENA [Pedro VALLARINO Cox]; Nationalist Republican Liberal Movement or MOLIRENA [Ramon MORALES]; Popular Party or PP (formerly Christian Democratic Party or PDC) [Ruben AROSEMENA]; Solidarity Party or PS [Samuel LEWIS Galindo] Political pressure groups and Chamber of Commerce; National Civic
leaders: Crusade; National Council of Organized Workers or CONATO; National Union of Construction and Similar Workers (SUNTRACS); National Council of Private Enterprise or CONEP; Panamanian Association of Business Executives or APEDE; Panamanian Industrialists Society or SIP; Workers Confederation of the Republic of Panama or CTRP International organization CCC, ECLAC, FAO, G-77, IADB, IAEA,
participation: IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, ISO (correspondent), ITU, LAES, LAIA (observer), NAM, OAS, OPANAL, OPCW, PCA, RG, UN, UNCTAD, UNESCO, UNIDO, UPU, WCL, WFTU, WHO, WIPO, WMO, WToO, WTrO Diplomatic representation in the US: chief of mission: Ambassador Guillermo "Billy" FORD FAX: [1] (202) 483-8416 consulate(s) general: Atlanta, Houston, Miami, New Orleans, New York, Philadelphia, San Francisco, Tampa telephone: [1] (202) 483-1407 chancery: 2862 McGill Terrace NW, Washington, DC 20008 Diplomatic representation from the chief of mission: Ambassador
US: (vacant); Charge d'Affaires Frederick A. BECKER embassy: Avenida Balboa and Calle 37, Apartado Postal 6959, Panama City 5 mailing address: American Embassy Panama, Unit 0945, APO AA 34002 telephone: [507] 207-7000 FAX: [507] 227-1964
Flag description: divided into four, equal rectangles; the top quadrants are white (hoist side) with a blue five-pointed star in the center and plain red; the bottom quadrants are plain blue (hoist side) and white with a red five-pointed star in the center Economy Panama
Economy - overview: Panama's economy is based primarily on a well-developed services sector that accounts for three-fourths of GDP. Services include the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. A slump in Colon Free Zone and agricultural exports, the global slowdown, and the withdrawal of US military forces held back economic growth in 2000- 01. The government plans public works programs, tax reforms, and new regional trade agreements in order to stimulate growth.
GDP: purchasing power parity - $16.9 billion (2001 est.)
GDP - real growth rate: 1.4% (2001 est.)
GDP - per capita: purchasing power parity - $5,900 (2001 est.) GDP - composition by sector: agriculture: 7% industry: 17% services: 76% (2000 est.) Population below poverty line: 37% (1999 est.) Household income or consumption by lowest 10%: 1.2%
percentage share: highest 10%: 35.7% (1997) Distribution of family income - Gini 48.5 (1997)
index: Inflation rate (consumer prices): 1% (2000 est.)
Labor force: 1.1 million (2000 est.) note: shortage of skilled labor, but an oversupply of unskilled labor Labor force - by occupation: agriculture 20.8%, industry 18%, services 61.2% (1995 est.)
Unemployment rate: 13% (2000 est.)
Budget: revenues: $1.9 billion expenditures: $2 billion, including capital expenditures of $471 million (2000 est.)
Industries: construction, petroleum refining, brewing, cement and other construction materials, sugar milling Industrial production growth rate: 2% (2000 est.) Electricity - production: 4.894 billion kWh (2000) Electricity - production by source: fossil fuel: 29.49% hydro: 69.11% other: 1.4% (2000) nuclear: 0% Electricity - consumption: 4.651 billion kWh (2000)
Electricity - exports: 20 million kWh (2000)
Electricity - imports: 120 million kWh (2000)
Agriculture - products: bananas, rice, corn, coffee, sugarcane, vegetables; livestock; shrimp
Exports: $5.9 billion (f.o.b., 2001 est.)
Exports - commodities: bananas, shrimp, sugar, coffee, clothing
Exports - partners: US 45.9%, Sweden 8.1%, Benelux 5.3%, Costa Rica 5.1% (2000 est.)
Imports: $6.7 billion (f.o.b., 2001 est.)
Imports - commodities: capital goods, crude oil, foodstuffs, consumer goods, chemicals
Imports - partners: US 33.1%, Ecuador 7.2%, Venezuela 6.6%, Japan 5.5% (2000 est.)
Debt - external: $7.6 billion (2001 est.) Economic aid - recipient: $197.1 million (1995)
Currency: balboa (PAB); US dollar (USD)
Currency code: PAB; USD
Exchange rates: balboas per US dollar - 1.000 (fixed rate)
Fiscal year: calendar year Communications Panama - Telephones - main lines in use: 396,000 (1997) Telephones - mobile cellular: 17,000 (1997)
Telephone system: general assessment: domestic and international facilities well developed domestic: NA international: 1 coaxial submarine cable; satellite earth stations - 2 Intelsat (Atlantic Ocean); connected to the Central American Microwave System Radio broadcast stations: AM 101, FM 134, shortwave 0 (1998)
Radios: 815,000 (1997) Television broadcast stations: 38 (including repeaters) (1998)
Televisions: 510,000 (1997)
Internet country code: .pa Internet Service Providers (ISPs): 6 (2000)
Internet users: 45,000 (2000) Transportation Panama -
Railways: total: 355 km broad gauge: 76 km 1.524-m gauge narrow gauge: 279 km 0.914-m gauge (2001)
Highways: total: 11,592 km paved: 4,079 km (including 30 km of expressways) unpaved: 7,513 km (2000)
Waterways: 882 km note: 800 km navigable by shallow draft vessels; 82 km Panama Canal
Pipelines: crude oil 130 km (2001)
Ports and harbors: Balboa, Cristobal, Coco Solo, Manzanillo (part of Colon area), Vacamonte
Merchant marine: total: 4,838 ships (1,000 GRT or over) totaling 118,878,358 GRT/ 180,588,102 DWT ships by type: bulk 1,445, cargo 907, chemical tanker 337, combination bulk 73, combination ore/oil 18, container 560, liquefied gas 207, livestock carrier 5, multi- functional large-load carrier 12, passenger 38, passenger/cargo 3, petroleum tanker 542, railcar carrier 2, refrigerated cargo 283, roll on/roll off 104, short-sea passenger 38, specialized tanker 34, vehicle carrier 230 note: includes some foreign-owned ships registered here as a flag of convenience: Albania 2, Angola 1, Antigua and Barbuda 1, Argentina 11, Australia 13, Austria 2, Bahamas, The 5, Belgium 2, Belize 6, Brazil 6, British Virgin Islands 8, Cambodia 1, Canada 9, Chile 12, China 259, Colombia 14, Croatia 2, Cuba 20, Cyprus 3, Denmark 3, Dominican Republic 1, Ecuador 3, Egypt 16, Equatorial Guinea 1, France 9, Germany 72, Greece 523, Haiti 1, Honduras 3, Hong Kong 299, Iceland 1, India 18, Indonesia 48, Ireland 1, Israel 5, Italy 9, Japan 1642, Kenya 1, Kuwait 2, Latvia 8, Liberia 5, Lithuania 1, Malaysia 18, Malta 2, Marshall Islands 1, Mexico 8, Monaco 112, Netherlands 19, Netherlands Antilles 1, Nigeria 3, Norway 98, Paraguay 1, Peru 15, Philippines 49, Poland 5, Portugal 7, Puerto Rico 2, Romania 7, Russia 12, Saint Kitts and Nevis 1, Saint Vincent and the Grenadines 5, Saudi Arabia 4, Seychelles 1, Singapore 112, South Africa 3, South Korea 342, Spain 52, Sri Lanka 3, Sudan 1, Sweden 2, Switzerland 81, Taiwan 334, Thailand 14, Trinidad and Tobago 1, Tunisia 1, Turkey 4, Ukraine 1, United Arab Emirates 54, United Kingdom 73, United States 115, Venezuela 6, Virgin Islands (UK) 8 (2002 est.)
Airports: 107 (2001) Airports - with paved runways: total: 42 over 3,047 m: 1 2,438 to 3,047 m: 1 1,524 to 2,437 m: 5 914 to 1,523 m: 14 under 914 m: 21 (2001) Airports - with unpaved runways: total: 65 914 to 1,523 m: 12 under 914 m: 53 (2001) Military Panama -
Military branches: an amendment to the Constitution abolished the armed forces, but there are security forces (Panamanian Public Forces or PPF includes the Panamanian National Police, National Maritime Service, and National Air Service) Military manpower - availability: males age 15-49: 789,973 (2002 est.) Military manpower - fit for military males age 15-49: 540,052 (2002 est.)
service: Military expenditures - dollar $128 million (FY99)
figure: Military expenditures - percent of 1.3% (FY99)
Military - note: on 10 February 1990, the government of then President ENDARA abolished Panama's military and reformed the security apparatus by creating the Panamanian Public Forces; in October 1994, Panama's Legislative Assembly approved a constitutional amendment prohibiting the creation of a standing military force, but allowing the temporary establishment of special police units to counter acts of "external aggression" Transnational Issues Panama - Disputes - international: none
Illicit drugs: major cocaine transshipment point and major drug money-laundering center; no recent signs of coca cultivation; monitoring of financial transactions is improving; official corruption remains a major problem

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officially Republic of Panama

Country, Central America.

It is bounded by the Caribbean Sea to the north, Colombia to the east, the Pacific Ocean to the south, and Costa Rica to the west. Area: 28,950 sq mi (74,979 sq km). Population (2002 est.): 2,915,000. Capital: Panama City. The people are mostly mestizos (mixed European and Indian) and Indian groups, including the Guaymí, Kuna, and Chocó. Other mixed groups were created from Africans (originally brought as slaves) and North American, French, and Chinese migrant labourers. Languages: Spanish (official), English, and indigenous Indian languages. Religion: Roman Catholicism (majority). Currency: balboa. Panama consists of three distinct areas: the lowlands, or hot lands (nearly nine-tenths of the country); the temperate lands; and the highlands, or cold lands. It has a market economy based on services, mostly transportation, communications, and storage connected with the Panama Canal as well as international banking and tourism. It is a republic with one legislative house; its head of state and government is the president, assisted by vice presidents. The land was inhabited by Indians when the Spanish arrived in 1501. The first successful Spanish settlement was founded by Vasco Núñez de Balboa in 1510. Panama was part of the Viceroyalty of New Granada until it declared its independence from Spain in 1821 to join Colombia. In 1903 it revolted against Colombia and was recognized by the U.S., to whom it ceded the Canal Zone. The completed canal was opened in 1914; control of the canal passed to a joint U.S.-Panamanian commission in 1979. An invasion by U.S. troops in 1989 overthrew the de facto ruler, Gen. Manuel Noriega. In 1999 the country elected its first female president, Mireya Moscoso, and later that year the canal came under the full control of Panama.
(as used in expressions)
Republic of Panama

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▪ 2009

75,173 sq km (29,024 sq mi)
(2008 est.): 3,310,000
Panama City
Head of state and government:
President Martín Torrijos

      Politically, the year 2008 in Panama marked the beginning of the campaign cycle that would culminate with the May 2009 general elections. The country's two largest parties, the ruling Democratic Revolutionary Party (PRD) and the Arnulfista Party (PA), held primaries to select their standard-bearers in the presidential contest. The PRD chose a woman, Balbina Herrera, a former minister of housing and mayor of the populous district of San Miguelito. The PA picked Juan Carlos Varela, a businessman and political novice. A third major presidential candidate also emerged: wealthy businessman Ricardo Martinelli, leader of the Democratic Change party. Early polls pointed to a close contest between Herrera and Martinelli.

      In July, Pres. Martín Torrijos issued a series of controversial executive decrees aimed at reforming the police and security institutions. After the U.S. invasion of Panama in 1989, Panama abolished the military and created a series of civilian-led police and security agencies, but Torrijos argued that these had become incapable of meeting the security challenges facing the country in the 21st century. Among other changes, his decrees mandated the creation of a National Frontier Service to strengthen border security, the merging of the National Air Service and the National Maritime Service into a National Aeronaval Service, and the establishment of a National Intelligence and Security Service. As part of the move to strengthen the country's defenses, Panama also rejoined the Inter-American Defense Board. The new measures sparked significant protests from opposition political parties and civil-society organizations that had fought the military dictatorship of the 1980s; these groups claimed that the decrees would remilitarize Panama's security apparatus.

      Panama's economy, benefiting from a continued boom in the construction sector, was expected to grow at an annual rate of 8.5% in 2008. The economy had experienced growth ranging from 7% to 9% in the previous three years. Most economists, however, expected the rate of growth to slow in 2009 as a result of the global financial crisis.

Orlando J. Pérez

▪ 2008

75,040 sq km (28,973 sq mi)
(2007 est.): 3,343,000
Panama City
Head of state and government:
President Martín Torrijos

      In June 2007 Panama's free-trade agreement with the U.S. was signed by government representatives at the Washington headquarters of the Organization of American States. The Panamanian National Assembly quickly ratified the treaty by a vote of 58–3, with one abstention (only 62 of the 78 members were present).

      On September 3 Pres. Martín Torrijos presided over the official opening of the $5.25 billion expansion of the Panama Canal. The project was to be completed by 2014 and was expected to increase the canal's capacity significantly and extend its role in global maritime trade well into the 21st century.

      The fate of former Panamanian strongman Manuel Antonio Noriega—who was due to be released from a Florida jail after having served some 17 years in prison for cocaine trafficking, racketeering, and money laundering—occupied Panamanian government officials and the country's media for the second half of the year. Though Noriega completed his sentence on September 9, he remained in prison as he appealed his extradition to France, where in 1999 he had been tried in absentia and convicted of money laundering and other crimes. On August 28 a U.S. judge approved the U.S. Justice Department's motion to have Noriega extradited to France, but the Panamanian government said that it would continue to seek his return to Panama.

      U.S.-Panama relations were soured with the selection on September 1 of Pedro Miguel González to preside over Panama's congress. González, a member of the ruling Democratic Revolutionary Party, was accused by the U.S. government of having murdered a U.S. soldier in advance of the visit to Panama in 1992 of then U.S. president George H.W. Bush. González claimed in his inauguration speech that he was acquitted by a Panamanian court in 1997. The U.S. Senate, which had not yet ratified the U.S.-Panama free-trade agreement, declared that it considered González's election “a serious obstacle” to the deal.

Orlando J. Pérez

▪ 2007

75,040 sq km (28,973 sq mi)
(2006 est.): 3,191,000
Panama City
Head of state and government:
President Martín Torrijos

 The year 2006 in Panama was marked by the referendum to expand the capacity of the Panama Canal, which handled an estimated 5% of world trade annually. The recent rapid growth of Asian economies, notably those of China and India, led to a surge in shipping worldwide, and the canal was operating at near capacity. According to the Panama Canal Authority, the project would cost an estimated $5.25 billion, be self-financed by increased tolls, and take seven to eight years to conclude. The proposal called for building two new three-chamber locks at the Pacific and Atlantic ends of the canal and creating a third lane of traffic capable of handling large container ships and tankers that the canal was unable to accommodate previously. In addition, the project sought to excavate new access channels to the new locks, widen and deepen existing navigational channels, and elevate Gatún Lake's maximum operating level. The proposed expansion would allow the canal to meet the entire shipping demand projected through 2025 and beyond. Opponents contended not only that the project was based on uncertain projections about maritime trade and the world economy but also that it would cost much more than had been budgeted. In the referendum, held on October 22, 78% of voters supported the proposed expansion, and 22% opposed it. Voter turnout, while low at 43%, was in line with historical patterns for other referenda.

      Two tragedies captured media attention. Over 40 people died after they consumed contaminated cough syrups and antihistamines obtained at the Social Security Hospital. Media reports pointed to negligent supply management that allowed outdated and degraded glycerin into the medicines distributed by the Social Security Health System. The death of 4 children and 14 adults after a bus caught fire was blamed on poor oversight of the public-transportation system and corruption in the issuing of bus licenses.

      The UN General Assembly elected Panama to serve a two-year term as a nonpermanent member of the UN Security Council after Guatemala and Venezuela ended a stalemate by withdrawing their nominations for the seat.

Orlando J. Pérez

▪ 2006

75,040 sq km (28,973 sq mi)
(2005 est.): 3,140,000
Panama City
Head of state and government:
President Martín Torrijos

      Panamanian Pres. Martín Torrijos began 2005 with his approval ratings above 60% and ended the year with his ratings below 20%. The fall was among the fastest seen by any Panamanian president since democracy was restored to the country in 1989 and shattered any honeymoon the president might have enjoyed since coming to office in September 2004. The decline was due in part to increasing evidence of government corruption, particularly in the judicial branch, and a series of massive protests against reform legislation proposed by Torrijos to overhaul the social security and tax systems.

      Charges of corruption swirled around the Supreme Court. Several of the justices were accused of receiving bribes in exchange for favourable rulings toward drug traffickers and money launderers. Amid the controversy, Torrijos appointed a State Commission for Justice to investigate corruption in the judiciary and to develop possible judicial reforms.

      In early 2005 Torrijos proposed a sweeping tax-reform initiative that would close many tax loopholes, but he was forced to revise his proposal after intense protests from leading business groups. More troubling for Torrijos was the reaction to his proposed changes to the social security system. The reforms were aimed at dealing with a $3 billion deficit in the Social Security Fund. The proposed changes, which included a gradual raise in the retirement age and an increase in pension contributions by both employers and workers, sparked violent protests in early May. Despite the protests, the National Assembly approved the reforms on June 1. This led the National Front for the Defense of Social Security, an organization created to oppose the reforms, to escalate the demonstrations, paralyzing the streets of Panama City for several weeks. Bowing to popular pressure, the president on June 21 announced the opening of a “national dialogue” to propose changes to the new social security law.

      U.S. Pres. George W. Bush visited Panama on November 6–7. The visit by Bush was the first by a sitting U.S. president since Pres. George H.W. Bush visited Panama in 1992. Bush's visit to Panama in November reciprocated Torrijos's April 28 visit to the U.S. The talks between the two leaders centred on negotiations for a bilateral free-trade agreement and enhanced security cooperation.

Orlando J. Pérez

▪ 2005

75,040 sq km (28,973 sq mi)
(2004 est.): 3,172,000
Panama City
Head of state and government:
Presidents Mireya Moscoso and, from September 1, Martín Torrijos

      The national elections of May 2, 2004, and the transition from one administration to another dominated Panamanian politics in 2004. The outgoing administration of Pres. Mireya Moscoso had been accused of being one of the most corrupt in Panamanian history, with charges ranging from nepotism to buying votes in the Legislative Assembly. In the event, Martín Torrijos, son of former military strongman Gen. Omar Torrijos and candidate of the main opposition Democratic Revolutionary Party (PRD), won more than 47% of the vote and easily defeated the second-place finisher, former president Guillermo Endara, who received 31% of the vote and represented the Solidarity Party. In the final tally the PRD controlled 42 seats, which gave it a majority in the Legislative Assembly.

      During the summer Torrijos and his allies in the Legislative Assembly proposed a series of controversial constitutional amendments. The reforms included reducing the number of legislators, increasing the autonomy of the Electoral Tribunal, changing the manner in which a national constitutional convention could be called, and reducing the time for the presidential transition. The amendments awaited the approval of the new Legislative Assembly sworn in on September 1.

      In the realm of foreign policy, Panama and the U.S. held a series of meetings to negotiate a bilateral free-trade agreement. Ranching and agricultural interests could lose significant government protection if Panama's market was opened to U.S. agricultural products. In its report on international trafficking in humans, the U.S. Department of State alleged that “Panama is a transit and destination country for women and girls, primarily from Colombia and the Dominican Republic, trafficked for sexual exploitation.” Panamanian government officials vehemently questioned the veracity of the report.

      Although several former officials connected with the Moscoso administration were denied U.S. entry visas, Panama continued to cooperate with the U.S. on the defense of the Panama Canal.

Orlando J. Pérez

▪ 2004

74,979 sq km (28,950 sq mi)
(2003 est.): 3,116,000
Panama City
Head of state and government:
President Mireya Moscoso

      The year 2003 marked the 100th anniversary of Panama's independence from Colombia. The event was celebrated throughout the year with musical concerts, academic conferences, and a massive parade in Panama City on November 3.

      Electoral campaigning began in preparation for the May 2004 general elections. Three candidates emerged as the leading contenders: Martin Torrijos, who represented the Democratic Revolutionary Party, the main opposition force; former president Guillermo Endara, who would run under the banner of the Solidarity Party; and José Miguel Alemán, the ruling-party candidate.

      Corruption continued to plague the government. One of the most notorious cases involved the legislative assembly and accusations that votes had been bought both in the approval of Supreme Court justices and in a multimodal transportation and industrial development project. An investigation into the matter was stalled. The Transparency International corruption index listed Panama as the 67th most corrupt country of 133 surveyed. To complicate matters, Pres. Mireya Moscoso vetoed legislation to stiffen penalties for embezzlement, bankruptcy fraud, the destruction of certain business records, and a host of other financial crimes. Given the continued charges of corruption and a weak economy, it was not surprising that Moscoso's approval rating was the lowest for any national leader since the 1989 U.S. invasion that ousted Manuel Noriega.

      In international affairs Panama agreed to move four police border outposts that the Colombian government said encroached on its territory. Problems concerning the movement of the Revolutionary Armed Forces of Colombia guerrillas and right-wing paramilitary forces across the Colombian–Panamanian border continued to be a major source of contention.

      On June 24–26 President Moscoso met with U.S. Pres. George W. Bush in Washington, D.C., where discussions centred on the establishment of a free-trade area, the situation in Colombia, and the possibilities of seaborne terrorist attacks on U.S. ports by ship bombs passing through the Panama Canal. Moscoso signed legislation that provided a 20-year prison term for any person who participated in, financed, or otherwise materially supported acts of terrorism. Panama also agreed to send Americans accused of genocide or war crimes to the U.S. rather than handing them over to the International Criminal Court in The Hague.

Orlando J. Pérez

▪ 2003

74,979 sq km (28,950 sq mi)
(2002 est.): 2,915,000
Panama City
Head of state and government:
President Mireya Moscoso

      The year 2002 saw increasing attention to corruption involving all three branches of the Panamanian government. Pres. Mireya Moscoso was repeatedly accused of nepotism for appointing to government offices relatives and members of various prominent families who supported her political party. The legislative assembly was embroiled in a major scandal involving accusations of vote buying in the approval of Supreme Court justices and of a transportation and industrial development project known as CEMIS. The investigation against members of the legislature, however, had been thwarted by their immunity from legal prosecution. A battle to remove their immunity ensued, with no resolution by year's end. The attorney general refused to investigate the allegations fully until the immunity issue had been resolved. Public opinion polls indicated that more than 90% of Panamanians opposed legislative immunity.

      Panama's first significant transparency law came into effect during the year. The law gave individuals the right to see most public documents but contained exceptions to protect individuals' privacy and other specified sensitive data. A controversial provision restricted requests for information to those who were “personally and immediately affected” by the information. The provision had been used to deny a series of requests by various groups for information regarding expenditures in the executive and legislative branches.

      The governments of Panama and the U.S. announced agreement on an amendment to an existing antidrug accord that would allow U.S. military forces and law-enforcement agencies to pursue and arrest drug traffickers in Panamanian territory. Moscoso put Panama's National Police on heightened alert after peace negotiations between Colombia's government and guerilla groups broke down.

Orlando J. Pérez

▪ 2002

74,979 sq km (28,950 sq mi)
(2001 est.): 2,903,000
Panama City
Head of state and government:
President Mireya Moscoso

      The year 2001 marked the second anniversary of Panamanian Pres. Mireya Moscoso's administration. Four issues dominated the domestic agenda: the slowing economy, the reorganization of the state-owned water company, growing charges of corruption, and problems stemming from an effort to modernize public transportation.

      Panama's economy continued a downward trend during the year. The finance minister was forced to admit that economic growth would not exceed 2%. Economists attributed the downturn in the economy to a slowdown in activity in the Colón Free Trade Zone and reduced foreign investment. In addition, the government announced that the September 11 terrorist attacks in the U.S. would depress Panama's tourism sector.

      Throughout the year a battle ensued between the president and the Legislative Assembly over the reorganization of the state-owned water and sewer company IDAAN. During the presidential campaign, Moscoso had promised that she would never privatize IDAAN. Once in office, however, she was faced with the company's massive operating deficit. Initially, she sought to pump $150 million from the Fiduciary Fund into IDAAN. The opposition-controlled Congress refused to support the idea without a major overhaul of the way the company was run. Efforts to reach a compromise were under way.

      The media and opposition party leaders highlighted charges of nepotism and misuse of public funds. A leading adviser to Moscoso quit the administration, alleging that “crooks disguised as businessmen” surrounded the president. Additional problems surfaced when Moscoso commuted the sentence of a known drug trafficker whose brother worked at the Ministry of the Presidency. Moscoso later rescinded the commutation.

      Mass protests were sparked by a 67% transit hike that had been part of a government effort to modernize public transportation. The demonstrations, which blocked many key streets in Panama City, led the education minister to temporarily close down all public schools in the city and the adjoining district of San Miguelito. Under pressure, the government formed a negotiating commission and in the end backed away from the hike.

Orlando J. Pérez

▪ 2001

75,517 sq km (29,157 sq mi)
(2000 est.): 2,823,000
Panama City
Head of state and government:
President Mireya Moscoso

      Among the objectives of the government of Panama in 2000 were the efficient management of the Panama Canal, the strengthening of national security, and the reversal of an economic slowdown.

      Before control of the canal was returned to Panama on Dec. 31, 1999, many observers had expressed doubts about the Panamanian government's ability to keep party politics out of canal management. Although Pres. Mireya Moscoso either fired or forced the resignation of every major officeholder appointed by the previous administration, the Panama Canal Authority—the agency responsible for the operation of the waterway—remained largely autonomous and fulfilled its mission to run the canal in an orderly manner. Alberto Alemán Zubieta, who had served as administrator of the Panama Canal since 1994, continued to spearhead efforts to modernize the waterway.

      In response to the withdrawal of U.S. troops from the isthmus, the government—with the support of the two leading opposition parties—signed a document called Fundamentals of Panamanian Security Policy. The agreement allowed, in case of external threat, for the creation of temporary special police units. Additionally, it established mechanisms whereby Panama could request the assistance of the UN and the Organization of American States to safeguard the Panama Canal.

      On September 1 Moscoso admitted to an economic “deceleration.” Gross domestic product (GDP) had increased only 3.2% in 1999, which marked the second straight year of slower growth. During the first three months of 2000, GDP grew at a 2.6% rate—an indication that the economy continued to slow. The president of the National Chamber of Commerce predicted that GDP growth would not exceed 2.5% for the entire year. Meanwhile, the unemployment rate remained in double digits. In June the government signed a letter of intent with the International Monetary Fund outlining policies Panama agreed to implement in order to win financial support from the IMF. Panama's commitments included broadening the tax base, outsourcing water company services, revamping the social security system, restructuring two state-owned banks, and freezing government employment.

      At a summit meeting in Panama of 79 Latin American countries and Spain and Portugal, four people were arrested after Cuban Pres. Fidel Castro charged that a Cuban exile group was plotting to kill him

Orlando J. Pérez

▪ 2000

75,517 sq km (29,157 sq mi)
(1999 est.): 2,809,280
Panama City
Head of state and government:
Presidents Ernesto Pérez Balladares and, from September 1, Mireya Moscoso

      The year 1999 was without doubt the most significant in Panama's young life as an independent nation. On December 31, Panamanians assumed control of the nation's most valuable resource, the Panama Canal. The transfer was carried out under the terms of a treaty signed in 1977 by Panamanian strongman Gen. Omar Torrijos and U.S. Pres. Jimmy Carter. In addition the U.S. completed the handover of all military bases in the Canal area. Panama and the U.S. nevertheless continued to pursue negotiations intended to provide U.S. military forces with the ability to use certain airstrips in the country as operating bases in the fight against drug trafficking.

      Under the Panamanian constitution, the canal was to be administered by a Panama Canal Authority headed by an 11-member board of directors appointed jointly by the president and the legislature to nine-year terms. The day-to-day operations would be handled by an administrator appointed by the board of directors. Additionally, the constitution established the Panama Canal Authority as an autonomous agency, and operation of the waterway—especially the control of its budget—would be handled in a nonpartisan manner. Concern remained, however, regarding the ability of the Panamanian government to keep party politics out of canal management.

      The May 2 presidential election demonstrated that Panama had made significant strides in consolidating a democratic government since the U.S. invasion ended the nation's military regime in 1989. The leading candidates in the election were Martin Torrijos and Mireya Moscoso. Torrijos represented the ruling Democratic Revolutionary Party and Moscoso the opposition Arnulfista Party. The third candidate, Alberto Vallarino, was supported primarily by the Christian Democratic Party. The unpopular economic policies of outgoing Pres. Ernesto Pérez Balladares doomed the candidacy of Torrijos, and Moscoso became the first woman in the history of Panama to win the presidency. (See Biographies (Moscoso de Gruber, Mireya Elisa ).) Moscoso received 44.8% of the votes, Torrijos 37.8%, and Vallarino 17.4%. Moscoso was sworn in as president on September 1.

Orlando J. Pérez

▪ 1999

      Area: 75,517 sq km (29,157 sq mi)

      Population (1998 est.): 2,767,000

      Capital: Panama City

      Head of state and government: President Ernesto Pérez Balladares

      Almost two-thirds of those who voted in a referendum in August 1998 rejected the proposal to change the Panamanian constitution and permit Pres. Ernesto Pérez Balladares to run for reelection in May 1999. The president desired a second five-year term to continue economic reforms and to be in charge when the U.S. surrendered complete control of the Panama Canal on Dec. 31, 1999. The ruling Democratic Revolutionary Party (PRD) was divided over the reelection issue, but the electorate's decision did not guarantee victory for the opposition parties in the 1999 elections. Pérez Balladares's harsh economic policies were cited as one of the reasons for his defeat and for further splits in the PRD.

      In September the U.S. and Panama abandoned negotiations on the establishment of an international antinarcotics centre. Disagreements over the terms of the project led to an impasse that prompted the U.S. to announce in July that it was considering other locations for the centre. Opinion polls indicated that a majority of Panamanians were in favour of the centre, but some opposed any American presence on Panamanian soil after December 1999.

      During the first half of the year, drought caused by El Niño lowered the Panama Canal's water reserves to such an extent that draft restrictions were introduced for shipping. Having been increased by 8.2% in January 1997, tolls were raised again, by 7.5%, in January 1998. The transit fee for small vessels was raised to $1,500 in May. These measures, designed to finance expansion of the canal as it approached maximum capacity and also to minimize delays, led to concern about the rising cost of using the canal. In addition, plans to reactivate the transisthmus railway and to establish other Central American trade corridors raised further doubts about the canal's future.


▪ 1998

      Area: 75,517 sq km (29,157 sq mi)

      Population (1997 est.): 2,719,000

      Capital: Panama City

      Head of state and government: President Ernesto Pérez Balladares

      The imminent U.S. handover in 1999 of the Panama Canal to Panama raised a number of issues during 1997. Among them was the approval by the Panamanian legislature of a new, autonomous and financially independent Panama Canal Authority. The body would assume responsibility for the waterway after Dec. 31, 1999, and would succeed the Panama Canal Commission, which would oversee the transition. In September attendees at a Universal Congress of the Panama Canal discussed concerns about international shipping and tariff policy, efficiency, and the need to improve the canal's infrastructure in order to accommodate larger vessels.

      On December 24 agreement was reached that U.S. troops could remain in Panama after the handover of the canal. The Panamanian government proposed the establishment of a multinational antidrug centre at Howard Air Force Base. Although some potential members of such a centre worried that U.S. involvement would take on a military rather than a civilian role, their concerns could not be addressed until the matter was put before the Panamanian electorate in a referendum.

      Another contentious issue was the proposal by the ruling Revolutionary Democratic Party to amend the constitution so that Pres. Ernesto Pérez Balladares could run for reelection in 1999 to ensure continuity for the canal handover and the economy. Any constitutional change, however, would have to be submitted to a referendum.

      After gaining entry into the World Trade Organization in September, Panama was involved in international trade agreements with Pacific, Latin-American, and European partners. The banking centre shed its image as a money launderer and was host to a conference on techniques to eradicate this crime. Although economic performance improved as a result of an influx of foreign investment from privatizations, growth in the Colón Free Zone, and a boom in construction, serious problems persisted, including a 14% unemployment rate.

      This article updates Panama, history of (Panama).

▪ 1997

      A republic of Central America, Panama lies between the Caribbean Sea and the Pacific Ocean on the Isthmus of Panama. Area: 75,517 sq km (29,157 sq mi). Pop. (1996 est.): 2,674,000. Cap.: Panama City. Monetary unit: balboa, at par with the U.S. dollar, with a free rate (Oct. 11, 1996) of 1.58 balboas to £ 1 sterling. President in 1996, Ernesto Pérez Balladares.

      Although the 1977 Panama Canal Treaty calls for the handing over to Panama of all U.S.-held property in the Canal by the end of 1999, opinion polls in 1996 showed that the majority of Panamanians wanted some form of U.S. presence to remain. In July, Pres. Ernesto Pérez Balladares announced that the Howard Air Force Base would continue to be used by the U.S. to monitor the movements of drug traffickers. The statement was made after it was revealed that Pérez Balladares's 1994 election campaign had received $51,000 from a suspected money launderer associated with the Cali drug cartel. The president admitted that the money had been received but denied all personal knowledge of the contribution. He instigated a judicial review and the scrutiny of funding of all future election campaigns. The scandal came to light following the enforced closing in April of the Agro-Industrial and Commercial Bank of Panama (Banaico) because of its excessive debts and its involvement in the laundering of narcotics money. Fort Amador, at the Pacific end of the Canal, was handed over to Panama by the U.S. on October 1. Plans were drawn up for converting it into a cruise ship terminal. (BEN BOX)

      This article updates Panama, history of (Panama).

▪ 1996

      A republic of Central America, Panama lies between the Caribbean Sea and the Pacific Ocean on the Isthmus of Panama. Area: 75,517 sq km (29,157 sq mi). Pop. (1995 est.): 2,631,000. Cap.: Panama City. Monetary unit: balboa, at par with the U.S. dollar, with a free rate (Oct. 6, 1995) of 1.58 balboas to £ 1 sterling. President in 1995, Ernesto Pérez Balladares.

      An alleged plot to assassinate Pres. Ernesto Pérez Balladares and several members of his Cabinet was uncovered on Jan. 11, 1995. Ten members of the National Police were arrested for conspiracy to overthrow the government and install a civilian-military junta. The investigation into the alleged plot was closed one month later, however, owing to lack of evidence.

      Panama's location on the arms- and drugs-trafficking routes was emphasized in February. When port officials at Cristóbal opened a crate for drug inspection, it exploded, killing 3 and wounding 25. The contents—explosives, grenades, and ammunition—were being sent to Ecuador and were believed to be destined for South American guerrillas. Two caches of arms were also discovered in Panama City on property belonging to a Colombian. There was evidence that Colombian drug traffickers were using Panama's financial system and business sector for illicit operations.

      Labour stoppages and unrest erupted into violence during the year because of the government's controversial labour-code reform. Trade unions were worried that the reforms, designed to attract foreign investment, would reduce job security, end wage guarantees, and restrict collective bargaining and the freedom to organize. Clashes between striking workers, students, and police on August 4 left 4 people dead, an estimated 86 wounded, and up to 300 in prison. However, the reform package was approved by the Legislative Assembly on August 12 and signed into law by President Balladares two days later. The defeated workers returned to work.

      Panama and the U.S. held exploratory talks on the future U.S. military role in Panama after the transfer of the canal to Panamanian sovereignty in 1999. It was agreed that Howard Air Force Base and the naval base should remain. This would provide an economic cushion for Panama, as the U.S. military injected about $400 million a year into the economy and provided 18,000 jobs. (SARAH CAMERON)

      This updates the article Panama, history of (Panama).

▪ 1995

      A republic of Central America, Panama lies between the Caribbean Sea and the Pacific Ocean on the Isthmus of Panama. Area: 75,517 sq km (29,157 sq mi). Pop. (1994 est.): 2,583,000. Cap.: Panama City. Monetary unit: balboa, at par with the U.S. dollar, with a free rate (Oct. 7, 1994) of 1.59 balboas to £ 1 sterling. Presidents in 1994, Guillermo Endara Galimany and, from September 1, Ernesto Pérez Balladares.

      Watched by 2,000 local and international observers, the May 1994 general elections were largely incident-free and were praised for their openness. The winner of the presidency was Ernesto Pérez Balladares of the Democratic Revolutionary Party, whose campaign invoked memories of the party's founder, Omar Torrijos, and successfully avoided links with its more recent, now discredited, leader, Manuel Noriega. In second place was Mireya Moscoso de Gruber of the Arnulfista Party, led by the outgoing president, Guillermo Endara Galimany. Third was salsa star and actor Rubén Blades (see BIOGRAPHIES (Blades, Ruben )), whose party, Papa Egoró (Mother Earth), in its electoral debut, won six seats in the legislature.

      Despite economic improvements (rising international reserves, a forecast 4.6% growth of gross domestic product in 1994, and declining unemployment), Endara's administration failed to reduce poverty and an annual debt-service bill of about $900 million. Endara also failed to eliminate drug trafficking and corruption, accusations of which tainted his last days in office. Pérez Balladares pledged to end Panama's key role in the narcotics and money-laundering network.

      Under the 1977 Panama Canal Treaty, the first U.S. Southern Command troops left Panama in June. Pérez Balladares, who met with U.S. Pres. Bill Clinton in July, said that Panama would consult with the U.S. to ensure the best management of the canal up to and after the year 2000.

      On October 13 former Haitian junta leaders Lieut. Gen. Raoul Cédras and Brig. Gen. Philippe Biamby and their families arrived in Panama. At the request of the U.S., Panama had granted them asylum to help restore democracy in Haiti. They were given modest quarters near the airport, but some accused Pérez Balladares of complying with a U.S. request not in Panama's best interest. (BEN BOX)

      This updates the article Panama, history of (Panama).

▪ 1994

      A republic of Central America, Panama lies between the Caribbean Sea and the Pacific Ocean on the Isthmus of Panama. Area: 75,517 sq km (29,157 sq mi). Pop. (1993 est.): 2,563,000. Cap.: Panama City. Monetary unit: balboa, at par with the U.S. dollar, with a free rate (Oct. 4, 1993) of 1.52 balboas to £ 1 sterling. President in 1993, Guillermo Endara Galimany.

      As political parties geared up for presidential elections in May 1994, opinion polls in late 1993 indicated that the front-runner was Ruben Blades, the U.S.-based performer of salsa music. His party, Papa Egoró ("Mother Earth" in an indigenous language), aimed to provide an alternative to traditional Panamanian oligarchies. Support for Blades underlined general dissatisfaction with Panamanian society. The polls also suggested a high level of indecision, despite the fact that the elections would be fully democratic for the first time in 25 years.

      At the end of 1992, accusations and counteraccusations of drug-related corruption were exchanged between several senior government officials. Involved were the director general of customs, Rodrigo Arosemena; the attorney general, Rogelio Cruz; and his deputy, Ariel Alvarado. All three were arrested, but they were released for lack of evidence.

      On February 19 Pres. Guillermo Endara Galimany signed the Belize Declaration, designed to limit the trafficking and consumption of narcotics in Central America. Since the U.S. overthrow of Gen. Manuel Noriega in 1989, Panama's role as a centre for money laundering and the transshipment, production, and use of drugs had grown rather than diminished. Related to this was an increase in crime, especially among minors. In January politicians demanded stronger measures to combat armed robbery and murder, but the police claimed that they had inadequate resources for tackling the problem.

      In September seven people accused of the 1985 murder of Hugo Spadafora, a former guerrilla and opponent of Noriega, were acquitted. The trial's outcome inspired five days of protests. In October, however, Noriega and two former soldiers were found guilty of the crime. Earlier, in April, a proposed amnesty bill for political prisoners, mostly from 1989, exposed deep political divisions. The government faced popular protests during the year from six indigenous groups demanding title to their land, as well as strikes by transport, banana, and public-sector workers and by teachers. (BEN BOX)

      This updates the article Panama, history of (Panama).

* * *

Panama, flag of   country of Central America located on the Isthmus of Panama (Panama, Isthmus of), the narrow bridge of land that connects North and South America. Embracing the isthmus and more than 1,600 islands off its Atlantic and Pacific coasts, the tropical nation is renowned as the site of the Panama Canal, which cuts through its midsection. It is equally well known for its natural beauty, for its diverse plant and animal life, including hundreds of bird and tree species, and for its vibrant music and culture.

      The home of several Native American peoples, such as the Kuna and Chocó, Panama became the first Spanish colony on the Pacific. Celebrated as “the door to the seas and key to the universe,” it served in the 1530s as the staging point for the Spanish conquest of the Inca empire, and until the 19th century it was a transshipment point for gold and silver destined for Spain. With the independence of Colombia, which once controlled Panama, from Spain, Panama came to serve as another staging point, this time for oceangoing migrants to the gold fields of California. Since 1914 the 51-mile- (82-km-) long Panama Canal, which connects the Atlantic and Pacific Oceans, has afforded a long-sought shortcut for shipping and assures the country's standing as one of the most strategic transportation hubs of the world. The canal also secures Panama's ongoing role in international affairs and world commerce. The United States relinquished jurisdiction of the Panama Canal on Dec. 31, 1999, marking an unprecedented shift in Panamanian society. For the first time in nearly a century as an independent nation, Panama controlled the entirety of its national territory.

      Panama enjoys a lively mix of cultural influences, expressed in the country's cuisine, artwork, music, and literature. Its capital, Panama City, is located on the Pacific coast just east of the canal. A cosmopolitan city where skyscrapers tower above whitewashed bungalows, it enjoys a handsome setting and a growing importance as a commercial and financial services centre for the region. However, its economic progress has been hampered periodically by environmental problems and political turmoil.


Relief (Panama)
 Panama is bounded to the north by the Caribbean Sea (an extension of the Atlantic Ocean) and to the south by the Pacific Ocean. It has an elongated S shape, with its Caribbean coastline stretching some 800 miles (1,290 km) and the Pacific coast some 1,060 miles (1,700 km); however, a line drawn from the Costa Rican frontier in the west to the Colombian border in the east would extend only 480 miles (770 km). The shortest distance across the isthmus is 31 miles (50 km), from the mouth of the Nergalá (Necategua) River, which flows into the Gulf of San Blas on the Caribbean shore, to the mouth of the Chepo River on the Pacific coast.

      A central spine of mountain ranges extends almost the entire length of Panama, dividing the country into Atlantic- and Pacific-facing slopes. The two principal ranges, the Tabasará Mountains (Cordillera Central) in the west and the Cordillera de San Blas in the east, are separated near the centre of the country by a saddle of lower land. This depression (the Panama Canal site) divides the country again—roughly into western and eastern halves. Of the four quadrants thus formed, the southwestern has the largest number of settlements; however, the environs of the canal account for most of Panama's population and commerce. The country's highest peak is an inactive volcano, Barú (Chiriquí), which reaches an elevation of 11,401 feet (3,475 metres).

      Paralleling the principal mountain chains, a lower mountain arc extends along Panama's southern coast. It appears only in well-separated segments—for example, on Azuero Peninsula as the Canajagua Massif and in eastern Panama as the Sierra de Jungurudó, Sapo Mountains, and the Majé Mountains. The highlands and mountains are made up primarily of igneous (volcanic) rocks.

      The lowlands include the plains of Panamá and Chiriquí provinces, the plains and hills of Colón province, the Chepo and Chucunaque river basins in the east, and the narrow northeastern plains of the Caribbean region. Sedimentary rocks such as slates and shales underlie most of the lowland zones.

      The Pacific coastline is extended by the Azuero Peninsula and the Gulf of Panama and by numerous headlands and bays, whereas the largest embayment on the Caribbean side is Chiriquí Lagoon. The Pacific coastline is more indented and irregular, and its continental shelf is much wider than that on the Atlantic side. In addition, most of the republic's more than 1,600 islands lie off its Pacific coast; they include the Perlas Archipelago (Pearl Islands) and the islands of Taboga, Cébaco, Parida, Jicarón, and Coiba, the largest. The principal archipelagoes off the Caribbean coast are those of Bocas del Toro and San Blas.

Drainage and soils
      Of Panama's many short rivers, those that flow to the Caribbean include the Sixaola, Changuinola, Indio, Cricamola, La Miel, and Chagres. Rivers (Chagres River) flowing to the Pacific include the Chiriquí Viejo, Santa María, Chepo, Chucunaque, and Tuira. During the rainy season the Tuira is navigable for some 40 miles (60 km) and the Chepo for 20 miles (30 km). Water in the Panama Canal does not flow from coast to coast; rather, it is released from the rain-fed Gatún and Alajuela (Madden) lakes in the central highlands. In effect, the water flows to both coasts simultaneously via the canal's system of locks and dams. For details on the engineering and operation of the waterway, see Panama Canal.

      Soils are commonly reddish to brown and rich in clay. They vary in fertility, and in many areas crops can be grown continuously only if fertilizers are applied. On poorer soils, a shifting subsistence agriculture is practiced. Under this system small plots are cleared, cropped for a few years, then abandoned until their natural fertility is restored—a practice called roza in Panama.

      Areas of alluvial soils (which develop from clay, silt, sand, and gravel deposited by streams) are especially fertile but are limited to the lower parts of river valleys. The commercial banana plantations around Puerto Armuelles and in western Bocas del Toro province are mainly on alluvial soils. Some of the soils along the inland edges of coastal mangrove swamps have also proved productive. In some areas, exceptionally fertile soils have developed from volcanic ash.

      Climatic conditions are markedly different on the Atlantic and Pacific sides of western Panama, especially in the amount and seasonal distribution of rainfall. On the Caribbean slopes of the Tabasará Mountains, which face the rain-bearing trade winds, average rainfall is approximately twice as heavy as on the leeward Pacific slopes. The Caribbean coast receives 60–140 inches (1,500–3,550 mm) per year, while the more populated Pacific region receives 45–90 inches (1,140–2,290 mm). Furthermore, on the Caribbean side rain falls almost throughout the year, while on the Pacific side there is more seasonal variation—in Chiriquí province, for example, there is a pronounced dry season lasting from January to April, and March is usually the driest month. In accordance with this rainfall pattern, tropical rainforests are typical on Caribbean slopes, whereas savannas (tropical grasslands) are more common southward in the seasonally dry areas between the Tabasará Mountains and the Pacific shoreline. Toward the Colombian border both sides of the isthmus have year-round rainfall.

      Because of Panama's tropical location, the mean temperature of the coldest month seldom drops below 78 °F (26 °C) on either coast. The Panamanian mountain slopes create three climatic zones: a low, hot zone, lying at elevations below 2,300 feet (700 metres), which makes up nearly nine-tenths of the country's territory; a temperate zone, at elevations ranging from 2,300 to 4,900 feet (700 to 1,500 metres), which accounts for most of the rest of the land; and a tiny cold zone, lying above 4,900 feet. Each zone has its characteristic plant growth and crops; cacao and bananas are produced mainly in the hot lowlands, whereas coffee is grown in the temperate zone.

Plant and animal life
      In spite of its relatively small area, Panama has a great variety of landscapes and habitats: tropical rainforests, savannas, cool montane forests, tidal lands covered by stilted mangrove trees, coral reefs, and beaches. Because of its ancient role as a land bridge over which species have migrated between the continents, the isthmus is home to a rich intermixture of plant and animal life. As a result of this interchange, Panama's wildlife includes such mammals as sloths, anteaters, and armadillos—which derive from South America—as well as jaguars, tapirs, and deer—which came originally from North America. Also among Panama's rich fauna are several species of giant sea turtle, which lay their eggs on the beaches. Few comparable areas have a larger number of bird species, both resident and migratory.

      National parks and reserves occupy about one-sixth of the nation's land area. Panama's parks are known for their lush tropical rainforests and abundance of wildlife. The Darién region of eastern Panama is the site of a national park created in 1980 and added to UNESCO's World Heritage List (World Heritage site) the following year. La Amistad National Park was established in 1988 alongside Costa Rica's protected Talamanca Range–La Amistad region; the two zones were designated a transboundary World Heritage site in 1990. Among other national parks are Chagres (1984), Portobelo (1976), and Coiba (1991).

People (Panama)

Ethnic groups
      In the 16th century, when the Spaniards came to the isthmus, it was occupied by Kuna (Cuna), Guaymí, Chocó, and other American Indian groups. The population soon included persons of mixed Spanish and Indian ancestry, termed mestizos (mestizo). During colonial times people from Africa were brought to the isthmus as slaves, and still other mixed ethnic types developed as the Africans were incorporated into the society. During the 19th century, with the construction of the Panama City–Colón railroad, new groups arrived (human migration)—North Americans (primarily from the United States), French, and Chinese. Large numbers of West Indians (mainly from British Barbados and Jamaica, as well as Martinique) came to Panama as labourers during the construction of the canal, and additional U.S. nationals, Spaniards, Italians, and Greeks also arrived.

      Although they are but a small fraction of the total population, Indians (Central American and northern Andean Indian) are found scattered over a considerable area, often in rainforests on rough terrain. The most numerous of the Indian groups are the Guaymí, who live in the western provinces of Chiriquí, Bocas del Toro, and Veraguas. Next in numbers are the Kuna, who are found primarily in the San Blas Archipelago and on the coast nearby. The Chocó live mainly in the province of Darién. Although most are engaged largely in subsistence agriculture, fishing, and hunting, some Kuna are traders, sailors, or mechanics or work in other occupations. Many Guaymí work on the banana plantations of western Panama.

      Mestizos are the largest population group in Panama. They predominate in the savannas to the west of the canal and in the central provinces of Panamá and Colón, where they have intermarried with people of West Indian and African ancestry.

      People of African descent are settled throughout much of Panama—for example, in the hot lowlands of the Chagres River basin, in the eastern province of Darién, and in the Caribbean lowlands. Peoples from the British West Indies are more recent arrivals and make up only a small minority. They live primarily in Panama City and in Bocas del Toro province.

      The United States has influenced both the economy and the culture of Panama. U.S. citizens live primarily in the canal area and in Panama City. Other significant minorities in Panama are Chinese, East Indians, and Middle Easterners, all of whom play an important role in commerce and industry and who participate in the country's political and professional life. There is a sizable Jewish community, founded when Spanish and Portuguese Jews fleeing the Inquisition began to settle in Panama. They initially were forced to practice their religion in secret. The population was increased by Jewish immigrants from the West Indies (notably from Curaçao) in the mid-19th century. Panama had the Western Hemisphere's first Jewish president, Eric Arturo Delvalle (del Valle), who served in the 1980s.

      Spanish is the official language of Panama and is spoken by the vast majority of the people. Although fewer than one-tenth of the people speak American Indian languages, all of Panama's Indian groups preserve their native tongues, and many Indians also speak Spanish. Most Panamanians from West Indian backgrounds speak English, which is also commonly taught in schools.

      Roman Catholicism is the religion of four-fifths of Panamanians. The number of Protestants grew rapidly in the late 20th century, especially among Pentecostal churches. There is also a long-standing Protestant tradition within the African population of Bocas del Toro province and among Indian groups and West Indian immigrants. Three synagogues serve the Jewish population. Some Panamanians practice the syncretic religion Santería, a combination of Roman Catholic and traditional West African beliefs and customs. Panama's constitution guarantees freedom of worship.

Settlement patterns
      The most densely settled part of Panama is in the vicinity of the canal, on a broad coast-to-coast strip of land that crosses the country where it is at its lowest and narrowest. This area, partly drained by the Chagres River, is known as the Chagres, or Route, region. It includes the cities of Panama City and Colón, the urban district of San Miguelito, and the towns of Balboa, La Chorrera, Gamboa, and Cristóbal. Panama City, situated on the Pacific coast overlooking the Bay of Panama, is the dominant population centre and the focus of Panama's industrial, commercial, political, and cultural activities. San Miguelito is the second largest urban centre, and Colón the third largest.

      The densest rural population is found in the broad area of plains and low hills lying between the Azuero Peninsula and the Tabasará Mountains. The least densely settled areas are in the eastern third of the country, especially in the large province of Darién, and on the Atlantic slopes of the Tabasará Mountains.

Demographic trends
      The 1911 census enumerated 336,000 persons in Panama. By the late 1990s the population had increased more than eightfold. Panama's rate of natural increase was about average among Latin American countries. During World War II many immigrant labourers arrived, but they were later repatriated.

      The proportion of the population living in cities grew rapidly in the late 20th century; Panamanians are now predominantly urban, although the nation remains less urban than most Latin American countries. Some two-fifths of its people live in hamlets or isolated dwellings, and many engage in subsistence agriculture. There was much internal migration from the mid-20th century, when increasing numbers of people began moving to urban areas—especially to Panama City and Colón—in search of better living and economic conditions. In addition, because many rural inhabitants practice shifting agriculture, they have tended to move to new zones in order to obtain land for farming and herding.

      Nearly three-fourths of Panama's gross domestic product (GDP) is generated by the service sector—a greater proportion than in any other Latin American country—and services employ the majority of the workforce. Services have grown mainly because of offshore banking and canal traffic; public administration and other services are also important. Agriculture and fishing account for less than one-tenth of the GDP but nearly one-fifth of the workforce.

      Prior to the 1990s U.S. forces stationed in Panama supported approximately 5 percent of the GDP. The Panamanian government, recognizing that the U.S. troop withdrawal would remove hundreds of millions of dollars from the national economy, has attempted to compensate by redeveloping formerly U.S.-controlled properties, including prime real estate in Panama City. The government has also promoted ecotourism and the repair of rail and road systems. In recent years large investments from China, Latin America, and the Middle East, as well as from the United States, have helped boost economic growth.

Agriculture, forestry, and fishing
      Seminomadic and subsistence agriculture exists alongside large, modern commercial enterprises. Since the enactment of a land tenure system in 1962, some small farmers have acquired land, but by late in the 20th century fewer than one-third of all farms were owned by the people working them.

      The most common agricultural products are sugarcane, bananas, rice, plantains, corn (maize), and oranges, and the commercial cultivation of these and other crops increased considerably during the 20th century. Livestock raising (cattle, pigs, and poultry) is an important and long-established economic activity, and beef and hides are exported. The country's largest cattle-raising farms are in the southwestern savannas—in Chiriquí, Los Santos, and Veraguas provinces. The provinces of Panamá, Los Santos, Chiriquí, and Veraguas raise the most pigs, whereas Panamá, Coclé, and Colón are the largest centres for poultry and egg production.

      Considering Panama's abundant and valuable forest resources, there has been little use of the country's native trees for industrial purposes. Mahogany, tropical cedar, cativo (a large tree belonging to the legume family), and other woods supply domestic sawmills, and some logs are exported. Large tracts of Panama's rainforests have been felled, burned, and replaced by pastures for the cattle industry.

      Fishing has developed rapidly as a commercial venture. Shrimp and lobsters are among Panama's most important exports, with several thousand tons of shrimp caught yearly. The shrimp and fish (mainly anchovy and herring) catch is taken mostly from the shallow waters of the continental shelf in the Gulf of Panama. Lobsters are caught mainly off Bocas del Toro and San Blas on the Atlantic side. Aquaculture has also been successfully developed.

Resources and power
      Clay, limestone, and salt are the leading mineral products, and gold, ferrous sand, and manganese have been mined on a small scale. There are commercially significant but largely unexploited deposits of copper, including the Cerro Colorado find in Chiriquí province. Deposits of bauxite, phosphates, and coal have been minimally exploited, as have various construction materials such as stone and gravel. Petroleum reserves have been found off the Pacific and Caribbean shores.

      Electricity was long distributed by the state-run Institute of Hydraulic Resources and Electrification before it was privatized in 1998. Much of Panama's electricity is generated by hydroelectric dams. The first plants were opened in 1975 at La Yeguada in Veraguas province and in 1976 on the Chepo River; the largest, at La Fortuna, opened in 1984.

      Although there has long been a considerable international trade based on the country's key location as a crossroads, modern industrial development began mainly after World War II. The leading industries are food processing (notably fish, sugar, bananas, and cacao), oil refining (near Colón), and the production of natural gas and electricity. Other major products include clothing, shoes and leather goods, alcoholic beverages, paper, chemicals, cement (in the limestone areas near the Trans-Isthmian Highway), and tobacco products. The main manufacturing centres are Panama City and the Colón Free Zone, and there is some industry at Colón and David.

Finance, trade, and services
      Finance and trade are the cornerstones of the Panamanian service sector, which is, in turn, the basis of the national economy.

      In 1970 the Panamanian government began to promote offshore banking by giving international transactions tax-exempt status; it also removed other forms of regulation. As a result, Panama attracted great amounts of foreign capital, and by the 1980s it had become Latin America's largest financial centre. Several major Latin American, North American, and European banks have branch offices in Panama City. Some of these also operate branches in the provinces and provide loans for industrial, agricultural, and cattle-raising ventures.

      The National Bank of Panama (1970) oversees the banking system, which was partly reformed in 1998 to discourage money-laundering schemes connected to narcotics trafficking. The national currency, the balboa, is issued only in coins. The balboa is at par with the U.S. dollar, and U.S. paper currency is freely circulated. The Stock Exchange of Panama (1960) is the main stock exchange.

      Panama's principal imports are machinery, fossil fuels, transportation equipment, and chemicals and chemical products. Two-fifths of the imports are from the United States, and smaller amounts are from Ecuador, Japan, and Mexico. Exports include food products such as bananas, shrimp, and coffee, as well as clothing. The United States takes the largest share of these exports, followed by Germany and Costa Rica.

      The Colón Free Zone, established in the mid-20th century at the northern end of the canal, has become increasingly important as a manufacturing, warehousing, and reexport centre similar to the maquiladora districts of other Central American countries and Mexico. The Free Zone's several hundred factories produce chemical products, textiles and clothing, machinery, and transportation equipment. Raw materials or semifinished products come from Hong Kong, the United States, Japan, Italy, South Korea, and elsewhere. Finished products are sent largely to Colombia, Ecuador, Brazil, and other countries of Central and South America, but some are used domestically.

      Since the colonial era, contraband trade has been significant in Panama among those wishing to avoid duties or other government controls. In the late 20th century Panama became a major transshipment centre for smuggling narcotics (drug abuse) such as Colombian cocaine and heroin. Until 1999 the U.S. military directed a regional drug interdiction program from Panama, but narcotics traffic was only partly abated, and the rate of drug consumption among Panamanians soared in the 1990s. Cocaine and heroin continue to traverse Panama en route to destinations in North America, Europe, and elsewhere.

      Restaurants and entertainment, real estate, government, tourism, insurance, and miscellaneous other services are also important to the Panamanian economy.

      Tourism contributes nearly one-fourth as much to the Panamanian economy as the finance and real estate sector. In addition to the unique attraction of the Panama Canal, tourists are drawn to the thousand miles of beaches on both the Atlantic and Pacific coasts as well as the myriad of offshore islands and the mix of colonial and contemporary life in Panama City, which also boasts a lively night life. The mild climate affords year-round opportunities for tennis, golf, fishing, boating, and diving and other water sports. The San Blas islands draw visitors to the traditional culture of the Kuna. Panama's abundant and varied flora and fauna on both land and sea draw ecotourists, who have their choice of habitats to explore, including richly diverse cloud forests and coral reefs. Much of the potential in this area, however, remains underdeveloped.

Labour and taxation
      About two-thirds of Panama's labour force works in the broadly defined service sector. Workers in the private sector and most government workers have the right to form unions and to bargain collectively, but only about one-tenth of workers are union members. The Labour Code establishes guidelines for worker's rights and regulates the terms of employment. Women are guaranteed equal pay and maternity benefits, and more than one-third of women are employed outside the home. Underemployment and unemployment have been a problem since the recession of the 1970s, with the rate of job creation consistently lagging behind the rate of new entrants into the labour market. About one-seventh of Panamanian workers were unemployed in the late 1990s.

      Panamanian workers and businesses pay a progressive income tax. Other levies include value-added tax, property tax, payroll tax, tax on the manufacture or importation of consumer goods, and various other fees. Taxes comprise seven-tenths of the national revenue.

Transportation and telecommunications
 Since prehistoric and ancient times the Isthmus of Panama has been an intercontinental passageway for migration. Today, Panama links the oceans as well, via the Panama Canal, an interoceanic highway, a railroad, and an oil pipeline.

Panama Canal and coastal ports
      The Panama Canal, built by the United States and operated continuously since its opening in 1914, has fortified Panama's role as an international shipping and trade centre. From 1903 until 1979 a strip of land 10 miles (16 km) wide lying on either side of the canal, the Canal Zone, was controlled by the United States. By treaties signed between the two countries in 1977, the Canal Zone was abolished in 1979, and Panama reasserted its sovereignty over the Canal Zone, with Panama and the United States sharing in the operation and defense of the canal itself until the end of 1999, when Panama assumed full control.

      The Panamanian coastline has many natural harbours that are excellent for sheltering vessels, but the best ports are those at either end of the canal—Cristóbal, near Colón, and Balboa, near Panama City. Other important ports, primarily serving the banana trade, include Almirante and Puerto Armuelles. Coastal shipping is important for Panamanian agriculture.

Land and air transportation
      The country has some 7,000 miles (11,000 km) of roads, one-third of which are paved. The main routes extend from the capital to the central provinces (Coclé, Herrera, Los Santos, and Veraguas) and to the western section of the country (Veraguas and Chiriquí provinces). The principal highways include the Trans-Isthmian Highway, running across the isthmus from Panama City to Colón, and the Inter-American Highway, which is the Panamanian section of the Pan-American Highway; the latter has been completed from the Costa Rican border eastward, through Panama City, to a point near Yaviza in Darién province, some 25 miles (40 km) from the Colombian border. Completion of the final segment of the highway has been delayed because of concerns about the impact of road construction and usage on the sensitive ecology of the area.

      In 1982 an interoceanic oil pipeline was built in western Panama, connecting the Pacific and the Atlantic coasts. The line extends some 80 miles (130 km) from Puerto Armuelles over the Tabasará Mountains to Chiriquí Lagoon. A road was built through the mountains paralleling the pipeline.

      A 49-mile (79-km) transcontinental railroad, the Panama-Colón line (now the Panama Canal Railway), was completed in 1855 by a U.S. company. The Chiriquí National Railroad operates both passenger and freight service between La Concepción and Puerto Armuelles and freight service between David and Pedregal on the Pacific. A railroad in Bocas del Toro province serves the banana-growing area.

      Tocumen International Airport, Panama's major airport, is located 16 miles (26 km) from the capital and is served by several airlines. There are regular flights between Panama City airports, notably the former Albrook Air Force Station, and more than 100 airfields throughout the country. Panama has both domestic and international airlines.

      In 1996 legislation established a regulatory commission for public utility companies. A major move toward privatization was taken in 1997, when 49 percent of the national telecommunications monopoly INTEL, which provided basic telecommunications services, was sold to a British firm. Additional privatizations were also planned, and some services, such as cellular, paging, and satellite communications, were fully privatized by the early 21st century. Panama leads the countries of Central America in both standard and cellular telephones per capita. A full range of business and Internet services is expanding rapidly, though still small in scale.

Government and society

Constitutional framework
      Panama has a popularly elected, representative system of government with executive, legislative, and judicial branches. Universal suffrage was instituted in 1907, and Panamanians 18 years of age and older are eligible to vote.

      After a coup by the National Guard in 1968, the national legislature was suspended, and Panama was administered by a provisional government led by Gen. Omar Torrijos (Torrijos, Omar). A new constitution in 1972, the fourth in Panama's history, gave Torrijos virtually complete control over the government but also established an elected body, the National Assembly of Municipal Representatives. The constitution was amended in 1978 to provide for a gradual return to democratic government within six years. Further constitutional amendments were approved in 1983, but democracy did not return to Panama until 1990, following the removal of Torrijos's successor, Gen. Manuel Antonio Noriega Morena (Noriega, Manuel).

      Under the constitutional revision of 1983, executive power is exercised by a president and two vice presidents, each of whom is popularly elected for a nonrenewable five-year term. The president appoints a cabinet. A unicameral Legislative Assembly consists of 78 members, who are elected for five-year terms and are eligible for reelection. The assembly initiates legislation, rules on international treaties, approves the budget, and establishes political divisions. After the 1999 election nearly one-tenth of the seats were held by women.

Local government
      The country is divided into nine provincias and four comarcas indígenas (indigenous sectors)—Kuna Yala ( San Blas), Emberá (Emberá-Wounaan), Madungandí (Madugandí), and Ngobe Buglé (Guaymí). The provincias are divided into distritos municipales (municipal districts), which are subdivided into corregimientos (magistracies). The head of each provincia is the governor, appointed by the president. The comarcas are semiautonomous reserves governed by tribal leaders (caciques), but their status under the law has been disputed. In the late 1990s indigenous protestors in some comarcas clashed with the national police while opposing the expansion of industrial sites and roads on the reserves. In addition, some Kuna have attempted to control tourism in the San Blas islands.

      Judicial power rests with a Supreme Court, the nine members of which are appointed for 10-year terms by the president with the approval of the Legislative Assembly. The Supreme Court is composed of separate divisions for civil, penal, and administrative cases. The justice system also includes several types of lower courts.

Political process
      Politics in Panama has tended to follow a practice called personalismo, where the primary loyalty is to a strong leader, in some cases extended through allegiance to a spouse or second generation. When elections were resumed in Panama in the 1990s, the traditional liberal and conservative parties gave way to a more varied group, requiring the formation of coalition governments. At the turn of the 21st century the dominant parties were the Democratic Revolutionary Party and the Arnulfista Party. Coalitions have been formed for most elections, including that of 2004, but they often break down during a presidential term.

      Military and police forces in Panama have often been synonymous. For several periods during the 20th century, the Panamanian police (or military) took control of the government and oversaw internal security. In addition, prior to 1999 U.S. soldiers intervened occasionally to quell Panamanian civil disturbances. Panama in the 1950s created a paramilitary organization (the National Guard) as the de facto police force, but the guard gradually took on more military roles, and in 1983 it was renamed the Panama Defense Force (PDF). Under the rule of Noriega in the 1980s, various subordinate police agencies and paramilitary organizations operated. The government first created a secret (undercover) police force in 1909, expanded its responsibilities in 1941, and reorganized it in 1960 as the National Department of Investigations (Departamento Nacional de Investigaciones; DENI). In 1989 U.S. troops defeated the PDF (see Invasion of Panama (Panama)), and afterward both the PDF and DENI were disbanded.

      The national police organizations are now under civilian control and include the Public Force (PF) and the Technical Judicial Police, a special investigative unit. National defense is also entrusted to the PF, which has limited combat capabilities but some military components, including air and naval units. In the late 1990s concern was raised that Panama needed greater resources to secure its border with Colombia (the Darién region), which had become notorious for incursions by Colombian rebels, paramilitary groups, and narcotics smugglers. Panama also lacks resources to control other land, air, and sea frontiers. These issues remain unresolved.

Health and welfare
      State-funded hospitals and hospital clinics are supplemented by regional health centres and by mobile medical units. Most permanent employees are eligible for benefits from the social security administration, which maintains hospitals and clinics in Panama City, Colón, and elsewhere. There are some private hospitals.

      A social security system, financed by employers' and workers' contributions, was established in 1941. It provides old-age, disability, and survivors' pensions and maternity and medical benefits for workers and their dependents. Its funding is a growing source of political debate.

      The vast majority of the working population is protected by a minimum wage law, but salaries and wages may fluctuate widely. By law all workers receive an annual bonus in the form of an extra month's salary called the décimo tercer mes (“13th month”).

      Panamanians live in housing types that vary greatly according to socioeconomic status. Housing in Panama City ranges from fashionable high-rise condominiums to slum and squatter settlements ringing the city and filling in some of the central districts, where two-story frame houses and low-rise apartment buildings have become tenements. However, conditions in many squatter settlements have gradually improved, as public utilities have been provided and higher-quality building materials employed in individual homes. Wood is increasingly being replaced by concrete in construction in urban areas.(

      Panama's Ministry of Housing provides grants and building materials to low-income families, including indigenous groups. The ministry also works with commercial banks to encourage the use of mortgages among middle-class families. In the early 21st century the government promoted residential developments in some of the formerly U.S.-controlled areas near the Panama Canal.

      Elementary education is compulsory and free for children between ages 6 and 15. One-third of Panamanians age 25 and older have not completed primary school, yet it is estimated that nine-tenths of the adult population (age 15 and older) is literate. The institutions of higher education include the state-run University of Panamá (founded 1935) and the privately operated University of Santa María la Antigua (1965), both in Panama City; the University of Panamá also has branches in several provinces. A polytechnic university was founded in Panama City in 1981. In addition, some U.S. and other foreign universities offer branch programs in Panama.

Cultural life
      Panama's culture is a blend of African, American Indian, North American, and Spanish influences, which are expressed in its traditional arts and crafts, music, religion, sports, and cuisine. Panamanian music is popular throughout Latin America, and the country is known as well for its many festivals. Other aspects of traditional culture are well preserved, especially by the country's Indian peoples. Panama is a cultural melting pot, adapting elements from a wide variety of sources and valuing innovation as much as the good things of the past.

Cultural milieu
      The cosmopolitan urban culture near the canal contrasts with the rural culture of the savannas. The latter area, with its cattle ranches and horsemanship, is a centre of Hispanic tradition. Old folk songs and handicrafts are preserved there—for example, around the towns of Chitré and Las Tablas. Also culturally distinctive are the territories of the various Indian groups, each with its language and handicrafts, such as the bright smocks (molas) decorated with reverse appliqué panels worn by Kuna women and the netted carrying bags made by the Guaymí. The Kuna have a strong tradition of storytelling (oral literature), including epic poetry that—when written— can extend for hundreds or thousands of lines. Other areas of cultural interest include the Caribbean islands of Almirante Bay, with their Antillean customs.

      Panama City's Historic District is known for its colonial architecture, which dates to the 17th century. In 1997 the district was designated a World Heritage site, as were the old Caribbean coastal fortifications of Portobelo and San Lorenzo in 1980.

Daily life and social customs
      Panama has adopted elements of food and culture from South and Central America, the Caribbean (including African influences), North America, Asia, and the Middle East. This is especially true in the areas near the canal where more than half the population lives. Caribbean influence is strongest along the northern coast and among the Afro-Panamanian population, many of whom are descended from English-speaking Caribbean families who came to build the canal. U.S. influence is strongest among the urban middle and upper classes; these groups typically speak English as well as Spanish, increasingly use the Internet and cell phones, have greater opportunities to travel abroad, and consume expensive goods brought in from abroad and sold in some of Latin America's best-appointed shopping centres. Major economic and social inequalities persist, and most Panamanians in isolated rural areas continue to be poor and to have traditional lifestyles.

      Panamanian food reflects the nation's cosmopolitan background, particularly its Colombian, U.S., and Caribbean influences. Rice, beans, and corn are basic staples, and good use is made of seafood and tropical fruits and vegetables. Arroz con pollo and sancocho, two chicken dishes, are considered national favourites. Chiles and the herb culantro flavour many dishes. Also widespread are Panamanian versions of the seviche, tamales, and empanadas found throughout Latin America. Locally produced beers and rum are the most popular alcoholic beverages, but North American brands dominate the soft drink industry.

      Popular entertainment is also a result of Panama's multicultural heritage. Caribbean rhythms and North American rock are more popular than traditional Hispanic music. Mexican and Venezuelan telenovelas (soap operas) compete with American productions for the television audience.

The arts
      Anthropologists and folklorists have published many Kuna stories and poems, in the process creating one of the best-documented bodies of Native American literature. Apart from Panama's indigenous arts and oral traditions, few artistic achievements were produced in the region prior to independence in 1903. The themes of earlier works were mostly European or church-related. Some progress has been made in national expression since that time—by poets and fiction writers such as Gaspar Octavio Hernández, Ricardo Miró, and Gloria Guardia, among others—and there has been some international recognition of Panamanian artists. Panama's larger cities are often visited by international musical and theatrical groups and by poets, sculptors, and other artists.

      Music in Panama is a lively blend of many styles, including salsa, Cuban son, Colombian cumbia, Argentine tango, and Caribbean island ska, reggae, and soca. Common instruments are drums, castanets, bells, mejoranas (five-stringed guitarlike instruments), and flutes. One of Latin America's best-known musicians is the Panamanian-born salsa singer and actor Rubén Blades (Blades, Rubén), who ran unsuccessfully for the presidency in 1994. The national dance, the tamborito (“little drum”), features couples moving to a combination of drumbeats.

Cultural institutions
      Among the country's cultural institutions are the Panamanian Art Institute (Panarte), the National Institute of Music, the National School of Music, the National School of Plastic Art, the National School of Dance, and the National School of Theatre. Also of note are the National Commission on Archaeology and Historic Monuments, the National Museum of Panama, and the Panamanian Academy of History. The National Institute of Culture promotes many types of events, including concerts, theatre, and art expositions.

Sports and recreation
      The U.S. influence in Panama can be seen in the country's sports. Basketball is extremely popular, and there are regional teams as well as a squad that competes internationally. Baseball also is played throughout the nation, and many Panamanians have played on professional teams in the United States, including Rod Carew, who was one of the game's greatest hitters, and Mariano Rivera, a much-praised pitcher. Among Panama's more prominent boxers are Roberto Durán, who won world titles in four weight classes, and Eusebio Pedroza, who was the featherweight champion for more than seven years (1978–85). Horse racing, cycling, and tennis also are popular. The Panamanian sprinter Lloyd LaBeach won two bronze medals at the 1948 Olympic Games.

      Panama features numerous attractive beaches, and snorkelers and scuba divers enjoy its coastal waters (especially around the Perlas and Coiba islands) and the Panama Canal, which contains boat wrecks and discarded equipment used in the waterway's construction. Surfers frequent Santa Catalina Beach on the Azuero Peninsula, and deep-sea sport fishers are attracted to Piña Bay, which has yielded record catches. Bird-watching is popular in the national parks.

      The Panamanian government's tourism bureau encourages the preservation of traditional holidays, folk music, and folk dances. Panama is known for its joyful, music-rich religious festivals and for boisterous holidays such as its pre-Lenten Carnival, marked by dancing, drinking, and casting away care. Several municipalities sponsor Semana Santa (Holy Week) festivals, notably the small town of Villa de los Santos. Portobelo, a town on the Caribbean coast whose inhabitants are predominantly of mixed African and European ancestry, observes a festival called Cristo Negro (Black Christ). The town of Guararé sponsors the Mejorana festival, dedicated to the folklife of Panama's rural provinces.

Media and publishing
      La Prensa, Crítica Libre, El Panamá Américan, and other major newspapers are published in Panama City. Panama has many radio stations, half of which are located in Panama City. There are three television networks, with several stations. Even when Panama has been under civilian democratic rule, its press has had less freedom than in most Latin American countries, because its defamation laws have effectively shielded prominent figures from stringent criticism. Many politicians have sued Panamanian journalists, and a Peruvian journalist was threatened with expulsion in the late 1990s; however, shortly after the inauguration of Mireya Moscoso Rodríguez to the presidency in 1999, the more stringent libel laws were repealed.

Burton L. Gordon Richard L. Millett


Exploration, conquest, and settlement
      In 1501 the Spaniard Rodrigo de Bastidas, in the company of Juan de la Cosa and Vasco Núñez de Balboa (Balboa, Vasco Núñez de), was the first European to explore the Atlantic coast of the Isthmus of Panama. In 1510 Diego de Nicuesa, another Spanish explorer, established the settlement of Nombre de Dios at the mouth of the Chagres River, and to the southwest, Alonso de Ojeda founded San Sebastian de Urabá. The colony (colonialism, Western), facing fierce resistance from local Indian tribes, was moved at the instigation of Balboa. The new site was to the northeast, across the Atrato River, and was named Santa María de la Antigua del Darién. It became the first permanent settlement on the isthmus and the focus of jealous intrigues centring around Balboa.

      As head of the colony, Balboa, by the use of persuasion and force, brought most of the Indians (Central American and northern Andean Indian) under submission. Some of them revealed to him that a large sea and a gold-rich empire existed to the south, which perhaps was that of the Inca. In September 1513, Balboa reached the sea and claimed the Pacific Ocean for his king. Returning to Santa María in January 1514, he encountered much resistance from the Indians. Five years afterward Balboa was executed for insurrection on orders of the new governor, Pedro Arias de Ávila (Arias Dávila, Pedro), known as Pedrarias Dávila, “the Cruel,” who had distrusted Balboa and feared his rivalry.

      In 1519 the population of Santa María moved to the new town of Panama (the first European settlement on the west coast of the hemisphere), which became the centre of commercial activity and the springboard for the conquest of Peru. The colony became an important part of Spain's mercantile system, attaining the rank of audiencia in 1538. Nombre de Dios, which was resettled and linked to Panama town by road, was renowned for its ferias (grand markets, or trade fairs). With the final destruction of Nombre de Dios in the late 16th century by the Englishman Francis Drake, commercial activity was moved to the hamlet of Portobelo, overlooking the calm bay recorded by Christopher Columbus in 1502. Portobelo then became a centre of Spanish commerce in the New World and the site of great ferias.

      Panama town and Portobelo continued to attract the attention of English (England) raiders, however, and disastrous consequences befell both settlements. Henry Morgan destroyed Panama town in 1671, and Admiral Edward Vernon razed Portobelo in 1739. In the year of Vernon's raid, the colony was reduced in status when Spain abolished the Audiencia of Panama and placed its territory within the Viceroyalty of New Granada. Portobelo was rebuilt in 1751, but by then the Spanish galleons had begun to use the route around Cape Horn, accelerating the city's decline through loss of trade. In 1673 the town of Panama was rebuilt a few miles west of the old town. By 1793 it was the principal town on the isthmus, with more than one-tenth of Panama's civilian population of 71,888.

Secession from Spain and union with Gran Colombia
      As the agitation for independence grew elsewhere in Spanish America, Panama, dependent on seaborne trade and relatively isolated from mutinous colonies, did not join the insurrection. The viceroy moved his headquarters from Quito (now in Ecuador) to Panama town, which sent deputies to the Cortes (parliament) in Cádiz, Spain, during the Napoleonic Wars. When the Spanish merchants secured the revocation of the royal decree authorizing foreign trade, Panama changed sides. In the autumn of 1821 the colony seceded from Spain and joined the Gran Colombia union. For a time Panama enjoyed the right to elect its own governor, but in 1843 a new constitution returned that power to officials in Bogotá. Soon afterward Panama became a state within Colombia and, despite numerous efforts to break away, remained so for the rest of the century.

Transcontinental railroad and canal projects
      In 1847 the Colombian government negotiated the building of a transcontinental railroad by investors in the United States, but political and health problems kept it from becoming operational until 1855. The Bidlack-Mallarino Treaty (Bidlack Treaty) of 1846 had granted the United States a right-of-way through the isthmus and thus the right to intervene to protect the line and free transit across the continent. Political turmoil raged while construction was under way. Panama inaugurated and discarded 20 governors (also called presidents), while New Granada (now Colombia) elected, substituted, or deposed 7 in Bogotá.

      The railroad helped the gold rushers destined for California, U.S., after 1848, but it also encouraged canal planners. Ultimately Colombia awarded the rights to build the canal (Panama Canal) to the French diplomat Ferdinand de Lesseps (Lesseps, Ferdinand, vicomte de) (who had been instrumental in building the Suez Canal in Egypt) and his Universal Interocean Canal Company; construction began in 1880. By 1889 disease, chicanery, and financial scandals in France and Bogotá ruined the corporation.

 By 1892 Philippe Bunau-Varilla (Bunau-Varilla, Philippe-Jean), a French former chief engineer of the canal works, had formed a new canal company, which acquired the assets of the defunct one. After considerable debate, the United States decided to build a canal through Panama rather than Nicaragua, and the U.S. Congress's Spooner Act of 1902 authorized the U.S. president to buy the assets of the French company. Following up on this, Bunau-Varilla pressured Colombia to negotiate the Hay-Herrán Treaty of 1903, which would have allowed the United States to control a strip of land surrounding the projected canal. The Colombian senate, however, rejected the treaty.

      Bunau-Varilla then turned to a group of Panamanian revolutionaries who were uniting in opposition to the Colombian government's rejection of the canal treaty, its requisitions of property, and its impressment of Panamanian men during a civil war. On November 3, 1903, a revolutionary junta proclaimed Panamanian independence. Colombian forces were sent to crush the rebellion, but they were mired at Colón because the U.S.-administered railroad had strategically removed its trains from the northern terminus. U.S. naval forces also deterred reinforcements that were sent from Bogotá by land. The secessionist junta appointed Bunau-Varilla minister to Washington, D.C., with full powers to negotiate treaties. On November 18, 1903, he and U.S. Secretary of State John Hay signed the Hay–Bunau-Varilla Treaty. By this treaty the United States obtained, in perpetuity, the exclusive use, occupation, and control of the Canal Zone, a strip 10 miles (16 km) wide (5 miles on each side of the waterway). Formal acquisition of the lands took place on May 4, 1904. Construction of the canal resumed that summer, and it was opened on August 15, 1914.

The Republic of Panama
Early years
      The new constitution authorized the United States to intervene militarily in Panama in order to quell disturbances. It also provided for a centralized government headed by a president who had the authority to appoint and dismiss provincial governors. Manuel Amador Guerrero became the first president, and universal suffrage was adopted in June 1907. As had been the case under Colombian government, traditional Liberal and Conservative parties dominated politics, but personalities and family ties proved more important than ideology in most contests. Political and economic unrest brought bloodless military interventions by the United States in 1908, 1912, 1918, and 1925.

      In January 1931 the government of Florencio Harmodio Arosemena was overthrown in a bloody coup led by Arnulfo Arias Madrid (Arias, Arnulfo), a charismatic populist unconnected to the traditional political elites. The United States acquiesced and promptly recognized as president the minister to Washington, Ricardo Alfaro, who presided over orderly elections in 1932, when Harmodio Arias Madrid (brother of Arnulfo) was the winner.

      The new president persuaded the United States to relinquish its rights of intervention and of seizing lands for canal-related purposes, and the Hay–Bunau-Varilla Treaty was thus modified in 1936 by the Hull-Alfaro Treaty. In addition, the United States increased the annuity paid for the use of the Canal Zone and agreed to build a transisthmian highway. The Arias brothers soon fell out, however, and Arnulfo began his own quest for the presidency, which he won in June 1940. He then changed the constitution to extend the length of his term.

World War II and mid-century intrigues
      Before the United States became embroiled in World War II, it requested defense sites outside the Canal Zone for landing fields, roads, antiaircraft batteries, and warning stations. Arias, who openly sympathized with fascism, demanded compensation in the form of cash and the transfer to Panama of various properties. While in Havana, Cuba, on a private visit, he was removed from office by the national police (Panama had no army) in October 1941, and Ricardo Adolfo de la Guardia became president. After the Japanese attack on Pearl Harbor, Hawaii, on December 7, 1941, Panama transferred the defense sites to the United States, and tens of thousands of U.S. troops were stationed there to guarantee the security of the canal. While the waterway was never actually attacked, Japan had planned to do so, intending to use aircraft launched from submarines; however, the war ended before this effort could be mounted.

      During and after the war the United States eventually returned 98 defense sites to Panama but continued negotiations on 36 others. The Panamanian government finally agreed to lease the sites, but the Panamanian National Assembly, influenced by the threat of mob violence, rejected the proposals. The United States abandoned the additional bases in 1947.

      In 1945 the National Assembly put an end to the regime of de la Guardia, sent him into exile, and selected the ambassador to Washington, Enrique A. Jiménez, as president. In the presidential elections of 1948 Domingo Díaz Arosemena was declared the winner by the National Jury of Elections, depriving Arnulfo Arias of a victory. Díaz died in office in 1949, and, under a mountain of popular protests, his two vice presidents first accepted and then refused office. This action cleared the way for a bizarre maneuver by the election jury, which declared that, after a recount, Arias had won the presidency in 1948. Politics throughout this period were dominated by Colonel José Antonio Remón Cantera, commander of the increasingly militarized police, which became known as the National Guard.

      In 1951 former president de la Guardia returned from exile and began to challenge the government. In May there was a run on the Federal Trust Company savings bank, which was subsequently closed; de la Guardia protested the closing and was therefore arrested. Then on May 10 Colonel Remón turned against Arias, who was overthrown, and Vice President Alcibíades Arosemena assumed power the following day. Remón won the presidential election of 1952 but was assassinated in January 1955.

      The year 1955 was also notable for the flow of capital into Panama, including a loan from the World Bank that supported work on the Inter-American Highway and on local roads. But martial law was imposed in 1958 following student riots against the regime of Ernesto de la Guardia (elected in 1956) and against the United States. There were more disturbances during the first four months of 1959, and on Independence Day men said to have been students marched into the Canal Zone to raise the Panamanian flag. The police turned them back.

      In the presidential election of 1960, Roberto F. Chiari emerged victorious. Despite a national debt of about $83 million and a budget deficit of some $10 million, he plunged into a vast program of slum clearance, housing, hospital construction, and health service. Arnulfo Arias (Arias, Arnulfo) also championed those efforts, and he became a front-runner in the presidential election of 1964; however, the National Guard intimidated voters who wished to support Arias, and the former secretary to the National Guard, Marco A. Robles, was declared the winner. Under Robles the economy of Panama was uneven. In January 1964 anti-U.S. riots were sparked when high school students in the Canal Zone used force to prevent the display of the Panamanian flag. In response to this action, Panama broke relations with the United States and attempted to take the dispute to the United Nations (UN) Security Council. These events led to reduced income from the Canal Zone and worried foreign investors, and unemployment became a serious problem. Eventually the United States agreed to renegotiate the Canal treaties, including setting a date for Panama to assume control over the canal and the adjacent Canal Zone. There were additional disorders in March and May 1968, when Arias, a presidential candidate, with his followers in control of the National Assembly, unsuccessfully attempted to impeach Robles.

      Arias won the election, but after 11 days in office he was removed from power by the National Guard, which took control of the government. A ruling junta then instituted censorship of the press, suspended constitutional guarantees, and dissolved the National Assembly.

Rule by Torrijos and Noriega
      By degrees, Colonel (later General) Omar Torrijos Herrera (Torrijos, Omar) emerged as the leader of Panama. The constitution was again changed to strengthen and enlarge his powers. In 1972 a new national assembly, whose members were selected by Torrijos, gave him full executive powers and allowed him to rule as a dictator. Torrijos, behind a facade of popular government, transformed the appearance of Panama City through spectacular public works programs. The cost of these programs, however, plunged the country into heavy debt, and by 1977 an economic crisis loomed. Meanwhile, the dictatorship appointed and dismissed puppet presidents at will. In mid-1978 Torrijos obtained U.S. approval for the Panama Canal treaties (see Treaty relations with the United States), and this apparent triumph seemed to promise economic respite. He also agreed to U.S. requests to allow the exiled shah of Iran to enter Panama.

      On July 31, 1981, Torrijos was killed in a plane crash, and a succession of colonels took command of the National Guard. In March 1982 Colonel Rubén D. Paredes became commander of the guard. When he resigned in September 1983 to pursue the presidency, control of the military and ultimately the country went to Colonel Manuel Antonio Noriega Morena (Noriega, Manuel), former head of intelligence.

      Noriega renamed the National Guard the Panama Defense Force (PDF) and consolidated the dictatorship of Torrijos. He increased the size of the armed forces, harassed journalists, and ultimately created a paramilitary force to intimidate his opponents. The military retained control of customhouses, post offices, the Colón Free Zone, and other state-run enterprises. Also ominous was Noriega's reported involvement in the narcotics (drug abuse) traffic in collusion with Colombian drug cartels.

      In 1984 Noriega permitted the first presidential elections in 16 years. Arias was the apparent winner, but after many delays in the vote count and suspected tampering, Nicolás Ardito Barletta, Noriega's candidate, was proclaimed president. Eleven months later, Noriega deposed Barletta, who had dared to disagree with him, and replaced him with the first vice president, Eric Arturo Delvalle. In June 1987 riots erupted when the second in command of the PDF, Colonel Roberto Díaz Herrera, publicly accused Noriega of drug-related activities, murdering opponents, and rigging elections. In February 1988 Delvalle attempted to dismiss Noriega, who was being publicly condemned by factions within and outside the country. In the United States, Noriega was indicted in the same month on counts of drug trafficking and racketeering. Delvalle's action resulted in his own dismissal, by orders of the Noriega-dominated National Assembly, and he was forced to take refuge on a U.S. military base, from where he continued to claim that he was the legal president.

      U.S. President Ronald Reagan (Reagan, Ronald W.) refused to recognize Delvalle's successor, and in March 1988 he imposed sanctions, including the elimination of preferential trade for Panama and the withholding of canal fees. On March 16 an attempted military coup failed to overthrow Noriega, and paramilitary groups intensified their repression of antigovernment demonstrators.

Invasion of Panama
      In the presidential election of May 1989, Guillermo Endara Galimany and his two vice presidents won by a wide margin, but their supporters then suffered brutal physical assaults by Noriega's forces, an event widely reported by the international press. Noriega canceled the election results. This only exacerbated popular and international discontent with the dictatorship, but Noriega remained impervious to criticism. On September 1, 1989, he installed a classmate as president, but his desire to remain in power seemed to intensify in October, after he foiled another coup attempt. On December 15, 1989, Noriega sought and was given by the legislature the title of chief executive officer of the government. The Noriega-led assembly declared that a state of war with the United States existed. The next day Panamanian soldiers killed an unarmed U.S. Marine officer dressed in civilian clothes.

      Retaliation by the United States was quick and decisive. On December 17, U.S. President George Bush (Bush, George) ordered troops to Panama, with the subsequently announced aims of seizing Noriega to face drug charges in the United States, protecting American lives and property, and restoring Panamanian liberties. The initial attack took place in darkness on the morning of December 20 and was focused primarily on Noriega's headquarters in Panama City. U.S. forces quickly overcame most organized resistance, but in the following days numerous Panamanian soldiers and civilians looted shops in Panama City and Colón, and some 2,000 U.S. reinforcements were flown in to help establish order. The number of Panamanians killed in the operation was estimated at 200–300 combatants (soldiers and paramilitaries) and more than 300 civilians; 23 U.S. soldiers also were killed. Hundreds from both nations were wounded.

      On the first day of the invasion, Endara and his two vice presidents were sworn in to head the government of Panama. Noriega took refuge in the Vatican nunciature (embassy) in Panama, until he surrendered to U.S. authorities on January 3, 1990, and was then transported to Miami, Florida. There he stood trial, was convicted on a host of charges, and was sentenced to a U.S. prison. In Panama and also France, Noriega was charged with various crimes, including murder, but no enduring efforts were made to have him extradited.

Transitions to democracy and sovereignty
      The new Endara government began as a broad coalition, but it soon broke up with the expulsion of the largest party, the Christian Democrats (Partido Demócrata Cristiano; PDC), led by Vice President Ricardo Arias Calderón. This left the administration without a legislative majority and allowed the remnants of Noriega's Democratic Revolutionary Party (Partido Revolucionario Democrático; PRD) to regain some political power. As a result, accomplishments were meagre at best. A package of reforms, including constitutional amendments, was defeated in a referendum, as unemployment soared and corruption remained widespread. The administration succeeded in abolishing the PDF and replacing it with a new national police known as the Public Force, and it amended the constitution to prohibit the creation of a regular military; the amendment was ratified in October 1994.

      The 1994 presidential and legislative elections produced a proliferation of candidates, opening the door for a return to power by the PRD. Led by Ernesto Pérez Balladares, a former cabinet member, the PRD distanced itself from Noriega, and Pérez Balladares won by a plurality. In the assembly the Christian Democrats, who had been the largest bloc, were reduced to a single seat.

      The Pérez Balladares administration worked to maintain relations with the United States and to reform the economy. It privatized several government enterprises, including the telephone system, reduced trade barriers, and encouraged private investment. In addition, it reduced unemployment and crime rates and began an ambitious program of highway construction. Pérez Balladares also accepted refugees held by the United States who could not be housed in existing U.S. military facilities at Guantánamo Bay, Cuba. But he had difficulties regarding the reversion of U.S. military bases and the canal to Panama at the end of 1999. Contracts in these areas were controversial, with charges of corruption and of excessive Chinese influence. Relations with the United States deteriorated when the two nations failed to establish a new drug interdiction headquarters, which would have kept some U.S. troops in Panama. The spread of conflict across the border from Colombia also raised concerns about the ability of a demilitarized Panama to control its land, sea, and air frontiers. In 1998 a referendum was defeated that would have allowed Pérez Balladares to seek reelection. This opened the door to Mireya Moscoso Rodríguez (Moscoso, Mireya), widow of Arnulfo Arias, and to the Arnulfista Party's successful campaign in the 1999 elections. Taking office in September 1999, Panama's first woman president pledged nonpartisan administration of the canal, continued prohibition against regular military forces, and greater attention to the needs of the poor, especially in rural areas. Her administration, however, was characterized more by corruption and favouritism than by any positive accomplishments, and its popularity plummeted. In 2004 the PRD again returned to power, this time with the support of the remnants of the Christian Democratic Party, now known as the Popular Party (Partido Popular). The newly elected president was Martin Torrijos, the illegitimate son of the former military dictator. Under his administration Panama experienced high levels of economic growth, and voters approved a referendum to expand the canal. But issues of public security, corruption, and government inefficiency remained and continued to generate both domestic and international concern.

Treaty relations with the United States
      Throughout the years of Panama's independent existence, treaty relations with the United States have been subjected to several major changes. By the protocol of 1936, the United States yielded its right to seize additional land for its administration or defense of the canal. At the same time, the United States was pressured to pay a higher annuity for the canal because of the worldwide economic depression of the 1930s and the U.S. departure from the gold standard. In 1953 the annuity was again raised and U.S. landholdings decreased, opening the door for Panamanians to build roads across the isthmus and to manage sanitation. Panamanian security forces began patrolling the canal's dams and watersheds in the 1940s.

      In 1958 the U.S. Congress appropriated funds for a bridge across the canal, and an instrument of transfer was signed that conveyed to Panama real estate with a value of about $25 million. In 1958–59 there were serious disorders and demands to fly the Panamanian flag in the Canal Zone, leading U.S. President Dwight D. Eisenhower (Eisenhower, Dwight D.) to declare that titular sovereignty over the zone resided with Panama; he also ordered that flags of both nations be displayed at specified places in the zone.

      In January 1964, U.S. and Panamanian schoolboys engaged in a scuffle over flying their national flags at Balboa High School, which was inside the Canal Zone. Several thousand people turned the melee into a riot that killed more than 20 people and brought injuries to scores of others. Panama blamed the Americans, severed relations, and demanded reparations. The United States, in turn, rejected the accusations and charged Panama with inciting the riot. An International Commission of Jurists later upheld (with a minor exception) the U.S. contentions.

      Negotiations between the United States and Panama during the first part of the Robles administration led to three new protocols, signed in June 1967. The first protocol abrogated the accord of 1903, reduced the size of the Canal Zone, and provided for joint operation of the canal. The second protocol continued the responsibility of the United States for the Canal Zone's defense, and the third protocol provided for a possible sea-level canal. These proposals were not ratified, because they aroused objections from many affected quarters.

      In September 1970 Torrijos (Torrijos, Omar) formally notified the United States of his rejection of the agreements of 1967, but seven months later he moved to resume negotiations. Panama succeeded to one of the two hemispheric seats on the UN Security Council, and its delegate in March 1973 introduced a resolution urging continued negotiation under the auspices of the UN. The United States vetoed the resolution. The Panamanians continued to press their cause in negotiations that resulted in a set of principles (1974) to serve as guidelines for a new treaty; one of these was that U.S. control over the canal and zone would be limited in duration.

      The U.S. Congress in 1974 and 1975 was hostile to the proposed ultimate transfer, but Torrijos was able to apply pressure in various ways. If there was not a peaceful settlement, he declared, then there would be violence; this produced in Congress the abhorrent spectre of “another Vietnam.” To further intimidate the opposition, Torrijos, with a considerable entourage, paid a visit to the Cuban leader Fidel Castro in January 1976.

      The U.S. presidential elections of 1976 delayed the treaty conversations, but after the election of Jimmy Carter (Carter, Jimmy) progress was rapid. Agreement was announced in August 1977, and Carter and Torrijos signed the documents the next month. The treaty did not have popular support in the United States, but the Senate ratified it in March 1978. The new basic treaty provided for gradual transfer of the operations of the canal to Panamanians, the phasing out of U.S. military bases, and reversion of lands and waters used in the management of the canal. Similarly, Panama was to assume jurisdiction over the zone by degrees and take over most tasks related to its security. A second pact promised an open and neutral canal for all nations, both in times of peace and war.

      The transfer was to be completed by December 31, 1999, but, in ratifying the treaties in March and April 1978, the Senate attached reservations that extended U.S. rights to defend the canal beyond that date and to maintain limited rights to intervene. Panama had approved the treaties in a national plebiscite in October 1977, and the signing ceremonies were observed on June 16, 1978, in Panama City. The U.S. Congress passed legislation to implement the treaties in September 1979, and the treaties went into effect on October 1. In the 1990s, after negotiations failed to permit a continued U.S. military presence in Panama after the turnover date, the United States began a rapid withdrawal, returning to Panama vast tracts of territory. By late 1999 all U.S. troops were withdrawn. Symbolic transfer ceremonies were held on December 14, and on the last day of the year Panama assumed full control of the canal.

Gustavo Anguizola Richard L. Millett

Additional Reading

Sandra W. Meditz and Dennis M. Hanratty (eds.), Panama: A Country Study, 4th ed. (1989), comments on all aspects of the country. Tom Barry et al., Inside Panama (1995), gives more up-to-date information. Physical geography is covered by Robert A. Terry, A Geological Reconnaissance of Panama (1956). Instituto Geográfico Nacional “Tommy Guardia,” Atlas nacional de la República de Panamá, 3rd ed. (1988), graphically presents information on the geography, resources, economy, social conditions, and administrative and political divisions. Brief overviews and thorough statistics are provided in Dirección de Estadística y Censo, Panamá en cifras: años 1993–1997 (1998), a publication of the Panamanian government.Stanley Heckadon-Moreno, Naturalistas del Istmo de Panamá (1998), traces the development of scientific studies of Panama's wildlife and vegetation. William C. Merrill et al., Panama's Economic Development (1975), presents the role of agriculture in the country's economy. Burton L. Gordon, A Panama Forest and Shore: Natural History and the Amerindian Culture in Bocas del Toro (1982), is a useful examination of the Bocas del Toro area. James Howe, A People Who Would Not Kneel (1998), is the best study of the modern Kuna. Ronald R. Smith, “Panama,” in The Garland Encyclopedia of World Music, vol. 2 (1998), pp. 770–785, surveys isthmian music within the cultural context.

Christopher Ward, Imperial Panama (1993), chronicles Panama's history until 1800. David McCullough, The Path Between the Seas (1977), is the classic study of the building of the Panama Canal. John Major, Prize Possession (1993), covers U.S. administration of the Canal Zone and U.S. relations with Panama. The fall 1993 issue of the Journal of Interamerican Studies and World Affairs examines the future of the canal and related issues. Mark Falcoff, Panama's Canal (1998), covers contemporary politics and relations with the United States. Margaret E. Scranton, The Noriega Years (1991), is the most reliable account of that period. Thomas L. Pearcy, We Answer Only to God (1998), reflects on Panama's military and political history. Michael L. Coniff, Panama and the United States: The Forced Alliance, 2nd ed. (2001), considers the vital relationship between those two countries; and Orlando Pérez (ed.), Post-Invasion Panama: The Challenges of Democratization in the New World Order (2000), details more recent developments.Richard L. Millett

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Universalium. 2010.

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