Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With US backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the US allowing for the construction of a canal and US sovereignty over a strip of land on either side of the structure (the Panama Canal Zone). The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With US help, dictator Manuel NORIEGA was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999. In October 2006, Panamanians approved an ambitious plan (estimated to cost $5.3 billion) to expand the Canal. The project, which began in 2007 and could double the Canal's capacity, is expected to be completed in 2014-15.

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

9 00 N, 80 00 W

Central America and the Caribbean

slightly smaller than South Carolina

2,490 km

tropical maritime; hot, humid, cloudy; prolonged rainy season (May to January), short dry season (January to May)

interior mostly steep, rugged mountains and dissected, upland plains; coastal areas largely plains and rolling hills

copper, mahogany forests, shrimp, hydropower

430 sq km (2003)

148 cu km (2000)

occasional severe storms and forest fires in the Darien area

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

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

3,410,676 (July 2010 est.)

1.463% (2010 est.)

19.71 births/1,000 population (2010 est.)

4.62 deaths/1,000 population (July 2010 est.)

-0.46 migrant(s)/1,000 population (2010 est.)

2.48 children born/woman (2010 est.)

1% (2007 est.)

20,000 (2007 est.)

fewer than 1,000 (2007 est.)

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

Roman Catholic 85%, Protestant 15%

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

3.8% of GDP (2004)

constitutional democracy

11 provinces (provincias, singular - provincia) and 1 territory* (comarca); Bocas del Toro, Comarca Kuna Yala, Comarca Ngobe-Bugle, Chiriqui, Cocle, Colon, Darien, Herrera, Los Santos, Panama, San Blas* (Kuna Yala), and Veraguas

3 November 1903 (from Colombia; became independent from Spain 28 November 1821)

Independence Day, 3 November (1903)

11 October 1972; revised in 1978, 1983, 1994, and 2004

based on civil law system; judicial review of legislative acts in the Supreme Court of Justice; accepts compulsory ICJ jurisdiction with reservations

18 years of age; universal and compulsory

unicameral National Assembly or Asamblea Nacional (71 seats; members elected by popular vote to serve five-year terms)

Supreme Court of Justice or Corte Suprema de Justicia (nine judges appointed for 10-year terms); five superior courts; three courts of appeal

Democratic Change or CD [Ricardo MARTINELLI]; Democratic Revolutionary Party or PRD [Francisco SANCHEZ Cardenas]; Nationalist Republican Liberal Movement or MOLIRENA [Sergio GONZALEZ-Ruiz]; Panamenista Party [Juan Carlos VARELA Rodriguez] (formerly the Arnulfista Party); Patriotic Union Party or UP (combination of the Liberal National Party or PLN and the Solidarity Party or PS)[Guillermo "Billy" FORD and Anibal GALINDO]; Popular Party or PP [Rene ORILLAC] (formerly Christian Democratic Party or PDC)

Chamber of Commerce; National Civic Crusade; National Council of Organized Workers or CONATO; National Council of Private Enterprise or CONEP; National Union of Construction and Similar Workers (SUNTRACS); Panamanian Association of Business Executives or APEDE; Panamanian Industrialists Society or SIP; Workers Confederation of the Republic of Panama or CTRP

BCIE, CACM, CAN (observer), CSN (observer), FAO, G-77, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, LAES, LAIA (observer), MIGA, NAM, OAS, OPANAL, OPCW, PCA, RG, SICA, UN, UNASUR (observer), UNCTAD, UNESCO, UNIDO, Union Latina, UNWTO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO

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

Panama's dollarized economy rests primarily on a well-developed services sector that accounts for three-quarters of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and is scheduled to be completed by 2014 at a cost of $5.3 billion - about 25% of current GDP. The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway, and should help to reduce the high unemployment rate. The United States and China are the top users of the Canal, and while a lower volume of cargo is expected to transit the Canal with the global economic slowdown, higher transit fees will result in a net increase in revenues. Strong economic performance has not translated into broadly shared prosperity as Panama has the second worst income distribution in Latin America. About 30% of the population lives in poverty, however, during TORRIJOS's term poverty was reduced from 40% to 30% and unemployment dropped from 12% to 6%. In 2009, the world recession reduced the amount of revenues Panama earned through global shipping that transits the Canal. Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US, which, when implemented, will help promote the country's economic growth.

$40.32 billion (2009 est.)

$39.38 billion (2008 est.)

$36.06 billion (2007 est.)

$25.04 billion (2009 est.)

2.4% (2009 est.)

9.2% (2008 est.)

11.5% (2007 est.)

$11,900 (2009 est.)

$11,900 (2008 est.)

$11,100 (2007 est.)

1.423 million

7.1% (2009 est.)

5.6% (2008 est.)

28.6% (2006 est.)

56.1 (2003)

48.5 (1997)

26.7% of GDP (2009 est.)

49.5% of GDP (2009 est.)

45% of GDP (2008 est.)

2.3% (2009 est.)

8.8% (2008 est.)

8.16% (31 December 2008)

8.25% (31 December 2007)

$3.764 billion (31 December 2008)

$3.054 billion (31 December 2007)

$15.84 billion (31 December 2008)

$14.26 billion (31 December 2007)

$19.8 billion (31 December 2008)

$17.4 billion (31 December 2007)

$6.568 billion (31 December 2008)

$6.219 billion (31 December 2007)

$5.716 billion (31 December 2006)

bananas, rice, corn, coffee, sugarcane, vegetables; livestock; shrimp

construction, brewing, cement and other construction materials, sugar milling

-0.4% (2009 est.)

6.322 billion kWh (2007 est.)

5.17 billion kWh (2007 est.)

124.9 million kWh (2007 est.)

8.74 million kWh (2007 est.)

0 bbl/day (2008 est.)

94,000 bbl/day (2008 est.)

4,803 bbl/day (2007 est.)

87,100 bbl/day (2007 est.)

0 bbl (1 January 2009 est.)

0 cu m (2008 est.)

0 cu m (2008 est.)

0 cu m (2008 est.)

0 cu m (2008 est.)

0 cu m (1 January 2009 est.)

-$2.33 billion (2009 est.)

-$2.863 billion (2008 est.)

$11.41 billion (2009 est.)

$10.29 billion (2008 est.)

bananas, shrimp, sugar, coffee, clothing

US 39.2%, Netherlands 10.7%, Costa Rica 5.8%, Sweden 5.4%, UK 5.4%, Spain 5%, Taiwan 4.3%, China 4.1% (2008)

$13.62 billion (2009 est.)

$15 billion (2008 est.)

capital goods, foodstuffs, consumer goods, chemicals

US 29.6%, Costa Rica 5%, China 5%, Japan 4.2% (2008)

$1.803 billion (31 December 2009 est.)

$2.693 billion (31 December 2008 est.)

$12.04 billion (31 December 2009 est.)

$11.26 billion (31 December 2008 est.)

$NA

$NA

balboas (PAB) per US dollar - 1 (2009), 1 (2008), 1 (2007), 1 (2006), 1 (2005)

524,000 (2008)

3.915 million (2008)

AM 101, FM 134, shortwave 0 (1998)

38 (including repeaters) (1998)

.pa

8,067 (2009)

934,500 (2008)

117 (2009)

3 (2009)

800 km (includes 82 km Panama Canal) (2008)

Balboa, Colon, Cristobal

no regular military forces; Panamanian public forces include: Panamanian National Police (PNP), National Air-Naval Service (SENAN), National Border Service (SENAFRONT) (2010)

1% of GDP (2006)

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"

organized illegal narcotics operations in Colombia operate within the remote border region with Panama

major cocaine transshipment point and primary money-laundering center for narcotics revenue; money-laundering activity is especially heavy in the Colon Free Zone; offshore financial center; negligible signs of coca cultivation; monitoring of financial transactions is improving; official corruption remains a major problem