Republic of Panama
Area: 78,200 sq. km. (30,193 sq. mi.); slightly
smaller than South Carolina. Panama occupies the
southeastern end of the isthmus forming the land
bridge between North and South America.
Cities: Capital--Panama City (1.1
million). Other cities--Colon (193,263),
Terrain: Mountainous (highest elevation Cerro
Volcan, 3,475 m.--11,468 ft.); coastline 2,857
km. (1,786 mi.).
Climate: Tropical, with average daily rainfall
28 mm. (1 in.) in winter.
Nationality: Noun and adjective--Panamanian(s).
Population (2004 estimate): 3.2 million.
Annual growth rate: 1.7%.
Ethnic groups: Mestizo (mixed
Amerindian and European ancestry) 70%,
Amerindian and mixed (West Indian) 14%,
Caucasian 10%, Amerindian 6%.
Religions: Roman Catholic 84%, Protestant 15%,
Languages: Spanish (official); 14% speak English
as their native tongue; various indigenous
languages. Many Panamanians are bilingual.
Education: Years compulsory--6.
Attendance--95% for primary school-age
children, 60% for secondary. Literacy--92.6%
overall: urban 94%, rural 62%.
Health: Infant mortality rate--15.2/1,000.
Life expectancy--75.0 yrs.
Work force (1.4 million): Commerce (wholesale
and retail)--19.1%; agriculture, cattle,
hunting, silviculture--14%; industries
transportation, storage, communications--7.2%;
public and defense administration--6.9%; other
community and social activities--5.8%; hotels
and restaurants--3.7%; financial
Type: Constitutional democracy.
Independence: November 3, 1903.
Constitution: October 11, 1972; amended 1983 and
1994 and reformed in 2004.
Branches: Executive--president (chief of
state), two vice presidents. Legislative--Legislative
Assembly (unicameral, 78 members). Judicial--Supreme
Subdivisions: Nine provinces and five
Political parties: Former President Mireya
Moscoso belonged to the Arnulfista Party
(PA--now known as the Panamenista Party). The PA
in coalition with smaller parties held a slim
majority in the Legislative Assembly. The
Democratic Revolutionary Party (PRD) was the
primary opposition. Represented by its
presidential candidate, Martin Torrijos, the PRD
on May 2, 2004 won the presidency and a
legislative majority and took power on September
Suffrage: Universal at 18.
GDP (2004): $13.83 billion (nominal).
Annual growth rate (2004): 6.2%.
Per capita GDP (2004): $4,360.
Natural resources: Timber, seafood, copper.
Services (80% of GDP): Finance, insurance,
health and medical, transportation,
telecommunications, the Canal and maritime
services, tourism, Colon Free Zone, public
administration, and general commerce.
Agriculture (6% of GDP): Products--bananas
and other fruit, corn, sugar, rice, coffee,
shrimp, timber, vegetables, livestock.
Industry/Manufacturing (14% of GDP): Types--food
and drink processing, petroleum products,
chemicals, paper and paper products, printing,
mining, refined sugar, clothing, furniture,
Trade (2004 figures do not include the Colon
Free Zone or CFZ): Exports--$884.4
million: bananas, petroleum products, shrimp,
sugar, coffee, and clothing. Major markets--U.S.
50.4%. Imports--$3.52 billion: capital
goods, crude oil, foodstuffs, chemicals, other
consumer and intermediate goods. Major
suppliers--U.S. 34.1%. 2004 U.S. goods
exports to Panama: $1.9 billion. 2004 U.S. goods
imports to Panama: $316 million.
Panamanians’ culture, customs, and language are
predominantly Caribbean Spanish. The majority of
the population is ethnically mestizo or
mixed Spanish, Indigenous, Chinese, and West
Indian. Spanish is the official and dominant
language; English is a common second language
spoken by the West Indians and by many
businesspeople and professionals. More than half
the population lives in the Panama City-Colon
Panama is rich in folklore and popular
traditions. Lively salsa--a mixture of Latin
American popular music, rhythm and blues, jazz,
and rock--is a Panamanian specialty, and Ruben
Blades its best-known performer. Indigenous
influences dominate handicrafts such as the
famous Kuna textile molas. Artist
Roberto Lewis' Presidential Palace murals and
his restoration work and ceiling in the National
Theater are well known and admired.
More than 65,000 Panamanian students attend
the University of Panama, the Technological
University, and the University of Santa Maria La
Antigua, a private Catholic institution.
Including smaller colleges, there are 14
institutions of higher education in Panama. The
first six years of primary education are
compulsory, and there are about 357,000 students
currently enrolled in grades one through six.
The total enrollment in the six secondary grades
is about 207,000. More than 90% of Panamanians
Panama's history has been shaped by the
evolution of the world economy and the ambitions
of great powers. Rodrigo de Bastidas, sailing
westward from Venezuela in 1501 in search of
gold, was the first European to explore the
Isthmus of Panama. A year later, Christopher
Columbus visited the Isthmus and established a
short-lived settlement in the Darien. Vasco
Nunez de Balboa's tortuous trek from the
Atlantic to the Pacific in 1513 demonstrated
that the Isthmus was, indeed, the path between
the seas, and Panama quickly became the
crossroads and marketplace of Spain's empire in
the New World. Gold and silver were brought by
ship from South America, hauled across the
Isthmus, and loaded aboard ships for Spain. The
route became known as the Camino Real, or Royal
Road, although it was more commonly known as
Camino de Cruces (Road of the Crosses)
because of the abundance of gravesites along the
Panama was part of the Spanish empire for 300
years (1538-1821). From the outset, Panamanian
identity was based on a sense of "geographic
destiny," and Panamanian fortunes fluctuated
with the geopolitical importance of the Isthmus.
The colonial experience also spawned Panamanian
nationalism as well as a racially complex and
highly stratified society, the source of
internal conflicts that ran counter to the
unifying force of nationalism.
Building the Canal
Modern Panamanian history has been shaped by its
transisthmian canal, which had been a dream
since the beginning of Spanish colonization.
From 1880 to 1890, a French company under
Ferdinand de Lesseps attempted unsuccessfully to
construct a sea-level canal on the site of the
present Panama Canal. In November 1903, with
U.S. encouragement, Panama proclaimed its
independence and concluded the Hay/Bunau-Varilla
Treaty with the United States.
The treaty granted rights to the United
States "as if it were sovereign" in a zone
roughly 10 miles wide and 50 miles long. In that
zone, the U.S. would build a canal, then
administer, fortify, and defend it "in
perpetuity." In 1914, the United States
completed the existing 83-kilometer (52 mile)
lock canal, which today is one of the world's
greatest engineering triumphs. The early 1960s
saw the beginning of sustained pressure in
Panama for the renegotiation of this treaty.
Military Coups and Coalitions
From 1903 until 1968, Panama was a
constitutional democracy dominated by a
commercially oriented oligarchy. During the
1950s, the Panamanian military began to
challenge the oligarchy's political hegemony. In
October 1968, Dr. Arnulfo Arias Madrid, twice
elected president and twice ousted by the
Panamanian military, was ousted for a third time
as president by the National Guard after only 10
days in office. A military government was
established, and the commander of the National
Guard, Brigadier General Omar Torrijos, soon
emerged as the principal power in Panamanian
political life. Torrijos' regime was harsh and
corrupt, but his charisma, populist domestic
programs, and nationalist (anti-U.S.) foreign
policy appealed to the rural and urban
constituencies largely ignored by the oligarchy.
Torrijos' death in 1981 altered the tone but
not the direction of Panama's political
evolution. Despite the 1983 constitutional
amendments, which appeared to proscribe a
political role for the military, the Panama
Defense Forces (PDF), as they were then known,
continued to dominate Panamanian political life
behind a facade of civilian government. By this
time, General Manuel Noriega was firmly in
control of both the PDF and the civilian
The United States froze economic and military
assistance to Panama in the summer of 1987 in
response to the domestic political crisis in
Panama and an attack on the U.S. Embassy.
General Noriega's February 1988 indictment in
U.S. courts on drug trafficking charges
sharpened tensions. In April 1988, President
Reagan invoked the International Emergency
Economic Powers Act, freezing Panamanian
Government assets in U.S. banks and prohibiting
payments by American agencies, firms, and
individuals to the Noriega regime. When national
elections were held in May 1989, Panamanians
voted for the anti-Noriega candidates by a
margin of over three-to-one. The Noriega regime
promptly annulled the election and embarked on a
new round of repression. By the fall of 1989 the
regime was barely clinging to power, and the
regime's paranoia made daily existence unsafe
for American citizens.
On December 20, 1989, President George H.W.
Bush ordered the U.S. military into Panama to
protect U.S. lives and property, to fulfill U.S.
treaty responsibilities to operate and defend
the Canal, to assist the Panamanian people in
restoring democracy, and to bring Noriega to
justice. The U.S. troops involved in Operation
Just Cause achieved their primary objectives
quickly, and troop withdrawal began on December
27, 1989. Noriega eventually surrendered
voluntarily to U.S. authorities. He is now
serving a 40-year sentence for drug trafficking
Panamanians moved quickly to rebuild their
civilian constitutional government. On December
27, 1989, Panama's Electoral Tribunal reinstated
the results of the May 1989 election and
confirmed the victory of opposition candidates
under the leadership of President Guillermo
Endara and Vice Presidents Guillermo Ford and
Ricardo Arias Calderon.
During its 5-year term, the often-fractious
Endara government struggled to meet the public's
high expectations. Its new police force proved
to be a major improvement in outlook and
behavior over its thuggish predecessor but was
not fully able to deter crime. Ernesto Perez
Balladares was sworn in as President on
September 1, 1994, after an internationally
monitored election campaign.
Perez Balladares ran as the candidate for a
three-party coalition dominated by the
Democratic Revolutionary Party (PRD), the
erstwhile political arm of the military
dictatorship during the Torrijos and Noriega
years. A long-time member of the PRD, Perez
Balladares worked skillfully during the campaign
to rehabilitate the PRD's image, emphasizing the
party's populist Torrijos roots rather than its
association with Noriega. He won the election
with only 33% of the vote when the major non-PRD
forces, unable to agree on a joint candidate,
splintered into competing factions. His
administration carried out economic reforms and
often worked closely with the U.S. on
implementation of the Canal treaties.
On May 2, 1999, Mireya Moscoso, the widow of
former President Arnulfo Arias Madrid, defeated
PRD candidate Martin Torrijos, son of the late
dictator. The elections were considered free and
fair. Moscoso took office on September 1, 1999.
During her administration, Moscoso attempted to
strengthen social programs, especially for child
and youth development, protection, and general
welfare. Education programs also were
highlighted. Moscoso's administration
successfully handled the Panama Canal transfer
and was effective in the administration of the
National elections were held again on May 2,
2004. The PRD’s Martin Torrijos won the
presidency and a PRD legislative majority in the
National Assembly. Torrijos was inaugurated on
September 1, 2004. Torrijos ran his campaign on
a platform of "zero tolerance" for corruption, a
problem endemic to the Moscoso and Perez
Balladares administrations. Since taking office,
Martin Torrijos has passed a number of laws
making the government more transparent. He
formed a National Anti-Corruption Council whose
members represent the highest levels of
government, as well as civil society, labor
organizations, and religious leadership. In
addition, many of his closest Cabinet ministers
are non-political technocrats known for their
support for the Torrijos government’s
GOVERNMENT AND POLITICAL CONDITIONS
Panama is a representative democracy with three
branches of government: executive and
legislative branches elected by direct vote for
5-year terms, and an independently appointed
judiciary. The executive branch includes a
president and two vice presidents. The
legislative branch consists of a 78-member
unicameral National Assembly. The Constitution
was changed in 2004, however, and beginning with
national elections in 2009, the executive branch
will have only one vice president, and the
membership of the National Assembly will be
capped at 71. The judicial branch is organized
under a nine-member Supreme Court and includes
all tribunals and municipal courts. An
autonomous Electoral Tribunal supervises voter
registration, the election process, and the
activities of political parties. Anyone over the
age of 18 may vote.
The Government has converted the former PDF into
the Panamanian Public Force (PPF), a "law
enforcement focused" force that is subordinate
to civilian authority, composed of four
independent organizations: the Panamanian
National Police (Policia Nacional de Panamá or
PNP), National Maritime Service (Servicio
Maritimo Nacional or SMN), the National Air
Service (Servicio Aéreo Nacional or SAN), and
the Institutional Protectional Service (Servicio
de Protección Institucional or SPI). A
constitutional amendment passed in 1994
permanently abolished the military.
Law enforcement units that are separated from
the PPF, such as the Technical Judicial Police,
also are directly subordinate to civilian
authorities. The PPF budget, in contrast to the
former PDF, is on public record and under the
control of the executive.
Principal Government Officials
First Vice President--Samuel LEWIS Navarro
Second Vice President--Rubén AROSEMENA
Ministry of Foreign Affairs--Samuel LEWIS
Ambassador to the United States--Federico
António HUMBERT Arias
Ambassador to the United Nations--Ricardo
Ambassador to the Organization of American
Panama maintains an embassy in the United
States at 2862 McGill Terrace, NW, Washington,
DC 20008 (tel: 202-483-1407).
Panama's economy is based primarily on a
well-developed services sector that accounts for
nearly 80% of GDP. Services include the Panama
Canal, banking, the Colon Free Zone, insurance,
container ports, flagship registry, medical and
health, and other business.
A major challenge facing the government under
former President Mireya Moscoso was turning to
productive use the 70,000 acres of former U.S.
military land and the more than 5,000 buildings
that reverted to Panama at the end of 1999. The
Government of Panama is also seriously
considering undertaking a major $6-8 billion
expansion of the Panama Canal, but a national
referendum, required by Panama’s Constitution,
has not yet been scheduled.
GDP growth for 2004 was 6.2%, compared to
4.3% in 2003. Though Panama has the highest GDP
per capita in Central America, about 40% of its
population lives in poverty.
Panama has bilateral free trade agreements
with El Salvador, Taiwan, and Singapore. Panama
is exploring free trade negotiations with Mexico
and other Latin American countries. Panama is
negotiating bilateral free trade agreements with
the United States and Chile. From March 2001 to
February 2003, Panama served as host for the
Free Trade Area of the Americas negotiations.
Panama is a member of the UN General Assembly
and most major UN agencies and has served three
terms as a member of the UN Security Council. It
maintains membership in several international
financial institutions, including the World
Bank, the Inter-American Development Bank, and
the International Monetary Fund.
Panama is a member of the Organization of
American States and was a founding member of the
Rio Group. Although it was suspended from the
Latin American Economic System--known informally
both as the Group of Eight and the Rio Group--in
1988 due to its internal political system under
Noriega, Panama was readmitted in September 1994
as an acknowledgment of its democratic
Panama also is one of the founding members of
the Union of Banana Exporting Countries and
belongs to the Inter-American Tropical Tuna
Commission. Panama is a member of the Central
American Parliament as well as the Central
American Integration System. Panama joined its
six Central American neighbors at the 1994
Summit of the Americas in signing the Alliance
for Sustainable Development known as the
Conjunta Centroamerica-USA or CONCAUSA to
promote sustainable economic development in the
The United States cooperates with the Panamanian
Government in promoting economic, political,
security, and social development through U.S.
and international agencies. Cultural ties
between the two countries are strong, and many
Panamanians come to the United States for higher
education and advanced training. About 25,000
American citizens reside in Panama, many
retirees from the Panama Canal Commission and
individuals who hold dual nationality. There is
also a rapidly growing enclave of American
retirees in the Chiriqui Province in western
Panama continues to fight against the illegal
narcotics and arms trade. The country's
proximity to major cocaine-producing nations and
its role as a commercial and financial
crossroads make it a country of special
importance in this regard. The Panamanian
Government has concluded with the U.S. maritime
agreements on counter terrorism and counter
narcotics, and a stolen vehicles agreement. The
Panamanian Government also has been paying
increasing attention to other maritime security
issues. In the economic investment arena, the
Panamanian Government has been successful in the
enforcement of intellectual property rights and
has concluded a Bilateral Investment Treaty
Amendment with the United States and an
agreement with the Overseas Private Investment
Corporation. Although money laundering remains a
problem, Panama passed significant reforms in
2000 intended to strengthen its cooperation
against international financial crimes, and the
conclusion of the Speed Joyeros case in April
2002 marked the dismantling of a major
money-laundering network with scores of arrests
in several countries.
President Martin Torrijos has continued in
the footsteps of his predecessor, Mireya Moscoso,
in supporting the U.S. in the fight against
international terrorism. In January 2005, Panama
sent election supervisors to Iraq as part of the
International Mission for Iraqi Elections to
monitor the national elections.
The Panama Canal Treaties
The 1977 Panama Canal Treaties entered into
force on October 1, 1979. They replaced the 1903
Hay/Bunau-Varilla Treaty between the United
States and Panama (modified in 1936 and 1955),
and all other U.S.-Panama agreements concerning
the Panama Canal, which were in force on that
date. The treaties comprise a basic treaty
governing the operation and defense of the Canal
from October 1, 1979 to December 31, 1999
(Panama Canal Treaty) and a treaty guaranteeing
the permanent neutrality of the Canal
The details of the arrangements for U.S.
operation and defense of the Canal under the
Panama Canal Treaty are spelled out in separate
implementing agreements. The Canal Zone and its
government ceased to exist when the treaties
entered into force and Panama assumed
jurisdiction over Canal Zone territories and
functions, a process, which was finalized on
December 31, 1999.
Principal U.S. Embassy Officials
Deputy Chief of Mission--Luis Arreaga-Rodas
Counselor for Political Affairs--Richard S.
Counselor for Economic Affairs--Timothy P.
Counselor for Public Affairs--Eugene C. Santoro
Counselor for Management--David J. Savastuk
Consul General--Susan Alexander
U.S. Embassy in Panama is located at Avenida
Balboa y Calle 38, Panama City (tel:
507-207-7000). Personal and official mail for
the embassy and members of the mission may be
sent to: U.S. Embassy Panama, Unit 0945, APO AA