Panama

Full name of country: Republic of Panama

Region: Central America and Caribbean

Official language: Spanish

Population: 4,470,241 (2024 est.)

Nationality: Panamanian(s) (noun), Panamanian (adjective)

Land area: 74,340 sq km (28,703 sq miles)

Water area: 1,080 sq km (417 sq miles)

Capital: Panama City

National anthem: "Himno Istmeno" (Isthmus Hymn), by Jeronimo De La Ossa/Santos A. Jorge

National holiday: Independence Day, November 3 (1903)

Population growth: 1.48% (2024 est.)

Time zone: UTC –5

Flag: The Panamanian flag is divided into four quarters. The top hoist-side quadrant is white with a centered blue star, while the upper-right quadrant is solid red. The bottom hoist-side quadrant is solid red and the lower right-hand quadrant is white with a centered red star. The stars and four quarters represent the rival political parties (blue for Conservatives and red for Liberals) and white symbolizes peace.

Motto: “Pro Mundi Beneficio” (For the Benefit of the World)

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

Government type: presidential republic

Suffrage: 18 years of age; universal and compulsory

Legal system: civil law system; judicial review of legislative acts in the Supreme Court of Justice

Panama is a small country in Central America bordered by Costa Rica to the west, Colombia to the east, the Caribbean Sea to the north, and the Pacific Ocean to the south. Panama is in fact an isthmus, or a connective piece of land between Central America and South America. Consequently, it has consistently functioned as an important location for trade during the past five hundred years, a function accelerated by the construction of the Panama Canal by the United States in 1914.

Panama was the initial point of departure for the Spanish conquest of the Inca. In fact, until the nineteenth century, Panama remained a shipping point of gold and silver to Spain. The country gained its independence from Colombia with US assistance in 1903, and its government weathered a string of military coups in the following decades. Panama remains an important international shipping hub.

Note: unless otherwise indicated, statistical data in this article is sourced from the CIA World Factbook, as cited in the bibliography.

People and Culture

Population: Panama has one of the smallest populations of any Latin American country. The majority of the population of Panama, about 65 percent as of the 2010 population census, is Mestizo, a mixture of Spanish and Indigenous ancestry. At the beginning of the twentieth century, many immigrants from the West Indies arrived in Panama to help construct the canal. The remainder of the population is made up of Indigenous peoples; the descendents of enslaved Africans brought to the country by the Spanish; people of Chinese descent; and a small White minority. The people of Panama are called Panamanians.

The country's official language is Spanish, though many Panamanians are bilingual, and English is spoken in the more urban areas near the canal. There are also at least seven Indigenous languages, many of which are spoken on the comarcas, which are similar to American Indian reservations in the United States.

Nearly 33.4 percent of the population is Roman Catholic. Some Panamanians also practice Santeria, a mixture of Catholic and West Indian religions. Approximately 55 percent of the population is evangelical Protestant, and there are also significant Jewish and Muslim minorities (2023 estimates).

Approximately 1.97 million people lived in Panama City in 2023. Colón is another major city and, together with Panama City, forms a corridor of industry in the center of the country. West Indians generally live in Panama City.

US citizens working in Panama generally live near the former Panama Canal Zone, a 16-kilometers (10-mile) wide stretch of land on either side of the canal. Until 1999, the zone was owned and run by the United States, as part of the provision for building and then securing the canal. The zone was officially abolished in 1979, and over the next twenty years, Panama and the United States shared responsibility for the canal. Panama took complete control in 1999.

An estimated one-third of the population lives in rural isolation and practices subsistence agriculture, often relocating to farm fresher plots of land.

Panama's HDI value for 2022 is 0.820— which put the country in the Very High human development category—positioning it at 57 out of 193 countries and territories.

Indigenous People: Panama was discovered in 1501 by Spanish explorer Rodrigo de Bastidas. Over the next several years, the Spanish settled in the isthmus and displaced the Indigenous Guaymi, Choco, and Kuna peoples, among others. The isthmus remained under Spanish control until 1821 when it became a state of neighboring New Grenada, now Colombia. Panama did not gain its independence from Colombia until 1903.

Panama is divided into ten provinces and three Indigenous zones, called comarcas (Emberá-Wounaan, Kuna Yala, and Ngöbe-Buglé). These zones are semi-autonomous areas governed by tribal leaders and home to most of Panama's Indigenous population.

Over the years, the Indigenous zones have been threatened by industrial growth in Panama, with industry encroaching on protected tribal territory. Taken together, Indigenous groups, including the Ngabe, Kuna, Embere, and Bugle, accounted for an estimated 12.3 percent of the total population as of the 2010 census.

Education: Primary education in Panama is free and compulsory for children beginning at the age of six. Primary school lasts for six years, and secondary school consists of two three-year cycles. The estimated average literacy rate in 2019 was 95.7 percent.

There are a handful of major universities in the country: the Universidad de Panamá and Universidad Autónoma de Chiriquí, both public universities, and the Universidad Católica Santa María la Antigua, Universidad Latina de Panamà, and Universidad Interamericana de Panamá, which are private. Most are located in Panama City. Technical colleges are also available, such as the Universidad Latinoamericana de Ciencia y Tecnología.

Health Care: Panama's health care system consists of hospitals, clinics, and rural health centers, funded primarily by the state. The quality of public health in Panama has not kept pace with the growth of industry. One of the major challenges has been ensuring proper sanitation and drinking water for Panama's rural population; by 2020, an estimated 88.1 percent of the rural population was using improved water sources.

The average life expectancy is 79.2 years—76.4 years for men and 82.2 years for women. The average infant mortality rate is 14.2 deaths per 1,000 live births (2024 estimates).

In the 1970s, the government began to establish rural health clinics. The quality of care in rural areas remains uneven, and the life expectancy and infant mortality rates reflect the disparity between urban and rural populations.

Food: Panama's cuisine relies upon the staple foods of rice, beans, and corn. There are a few dishes that share the same name as Mexican foods, such as tortillas and tamales, but are distinctly Panamanian. For instance, tortillas in Panama are much thicker (about a half inch), and are served with melted cheese and eggs for breakfast.

Common foods include plantains, large, banana-like fruits, that Panamanians sauté and fry; and yucca, a starchy root vegetable similar to the North American potato. Panama is also known for its wide variety of fish, such as corvina, or sea bass. This fish is central to Panamanian cuisine. Panamanians also produce their own beer and rum.

Arts & Entertainment: Given Panama's role as a crossroads between the continents of North and South America, its culture is a mixture of North American, Spanish, African, and Indigenous influences. Panama's Indigenous cultures are known for traditional folk songs and crafts. One such group, the Kuna, is known for its epic poetry.

One of Panama's most significant artistic contributions is its music. Like the population, Panamanian music is a mixture of styles and rhythms, including elements of salsa, Cuban son music, cumbia, reggae, soca, and calypso. The national dance is the tamborito ("little drum"). Unique instruments used in Panamanian music include the mejoranera, a five-stringed instrument similar to the guitar, and the rabel, a three-stringed violin.

Holidays: Since the majority of Panamanians are Catholic, the Christian holidays are an important part of the calendar. Another key holiday is Carnival, a festival celebrated before the Catholic season of Lent.

Panama observes two Independence Days: November 3 commemorates independence from Colombia, and November 28 celebrates independence from Spain. November 10 marks the anniversary of the uprising against the Spanish in the Villa de Los Santos. Other national holidays include New Year's Day (January 1), Martyr's Day (January 9), Labor Day (May 1), Colon Day (November 5), and Mother's Day (December 8).

Environment and Geography

Topography: Panama can be roughly divided into four quadrants; a spine of mountain ranges that run the course of the isthmus splits the north and the south, and the Panama Canal divides the country into the east and west. The southwest quadrant has the largest number of settlements, and not surprisingly, the area around the canal has the most commercial activity and the largest population density.

The Tabasará Mountains lie in the western part of the country, and the Cordillera de San Blas is in the east. The highest peak in the country is Barú, an inactive volcano that reaches an elevation of 11,401 feet (3,475 meters) above sea level. Most of the mountains in Panama are comprised of volcanic rock.

There is an area of depressed land in the center of the country; this eventually became the canal site. The lowland areas lie on top of a layer of slate and shale. There are also approximately 1,600 islands off the country's Pacific coast.

In addition to the canal, which is controlled by a system of locks and dams, Panama has many short, shallow rivers, as well as two main lakes, the Gatún and Alajuela.

Natural Resources: Panama's mineral production includes salt, gold, and cement. There are also deposits of copper that have not yet been mined. Much of Panama's electricity is generated by hydroelectric dams.

The country is also home to coral reefs, mahogany forests, and mangrove swamplands. By 2016, about one-fifth of the land was protected, largely devoted to national parks and reserves. These include the eastern Darién Province, as well as the international La Amistad National Park, created in 1988. The latter park lies next to Costa Rica's Talamanca Range. An estimated 61.9 percent of Panama's area remained forested according to 2016 estimates, though the wooded acreage has been cut in half since World War II.

Plants & Animals: Panama's wildlife population includes typically South American animals, such as sloths and anteaters, as well as tapirs, jaguars, and other traditionally North American species.

Common trees found in Panama's forests include cedar, mahogany, and cativo. Cacao trees grow in the hotter zones of Panama's mountain ranges, while coffee plants grow in the more temperate middle zones.

Climate: Panama's weather varies greatly between the Caribbean and Pacific coasts. Because of rainfall variations, the Caribbean side of the country features tropical rainforests, while the Pacific side contains the tropical savannas. The average temperature is fairly constant throughout Panama, usually ranging between 24 and 29 degrees Celsius (75 and 84 degrees Fahrenheit).

Economy

The gross domestic product (GDP, purchasing power parity) of Panama was an estimated $159.867 in 2023. Though Panama has been a trading center for centuries, it has only become industrialized since World War II, and prior to the 1990s, US activity in Panama accounted for 5 percent of gross domestic product (GDP). By 2023 the majority (roughly 67.9 percent) of Panama's GDP was generated by the service sector, especially banking. Agriculture accounted for 2.4% percent.

Industry: Panama processes a few goods, namely sugar, beverages, cement, and building materials. Most industrial activity is concentrated in Panama City and the Colón Free Zone. The free zone resembles the maquiladora districts of other Central American countries. It is essentially the central location for the production, warehousing, and export of manufactured goods.

Trade focuses on importing machinery and fossil fuels, mostly from the United States. Panama exports oil, coal tar, ships, bananas, and gold, among other items.. Activity related to the Panama Canal has been central to the nation's economy since the canal was completed. In 2007 a project to expand the canal was begun, and upon completion in 2016 the canal's capacity was more than doubled. Panama's largest trading partners include the United States, China, other Central American countries, and the Netherlands.

Panamanian industry received a boost in 1970 when the Panamanian government granted tax exempt status to international transactions as part of an effort to increase offshore banking. By the 1980s, a great deal of foreign capital was being invested in the country, and Panama became Latin America's biggest financial center, housing branches of banks from all over the world. The national Bank of Panama was formed in 1970 but was reformed in 1998 to discourage money laundering in relation to the drug trade. The country also became a popular tax haven, the extent of which was revealed to the world with the leak of the so-called Panama Papers in 2016. In response the government began an effort to promote transparency in the financial sector.

Panama also has a thriving illegal drug trade based largely on its imports of cocaine and heroin coming from nearby Colombia.

Agriculture: Panama's soil is rich in clay, and in many areas crops cannot be grown without fertilization. Roughly 7.3 percent of the land is arable. The most fertile soils in Panama are those found in the river valleys. Many subsistence farmers cultivate a tract of land until it is depleted and then abandon it in search of new land until the fertility returns.

The most common crops include sugarcane, bananas, corn, coffee, vegetables, and rice. The country also raises livestock, and large cattle farms are concentrated in the southwestern savannas. Some tropical rainforests have been cleared for cattle ranching.

Tourism: Panama's tourist trade is not as developed as in neighboring Costa Rica, but the country has its share of attractions. Visitors to Panama can explore the tropical rainforests and wildlife while also enjoying the shallow Pacific coast waters. The country's small size makes it easy for tourists to visit the beaches as well as the central mountains with little difficulty. However, Panama's border with Colombia has made the eastern part of the country relatively unsafe for foreign travelers.

Government

Panama is a constitutional democracy with a popularly elected representative government. The current constitution was adopted in 1972. Universal suffrage for citizens eighteen years and older has been in place since 1907.

The president and vice president are limited to a single five-year term. The unicameral legislative assembly is composed of seventy-one members, who retain their positions for five years and can be reelected. The president selects the executive cabinet and also appoints judges to the Supreme Court.

The country itself is divided into ten provinces. The provinces are run by governors, who are appointed by the president.

Since Panama gained its independence in 1903, it has experienced several coups. In 1968, the National Guard staged a coup led by General Omar Torrijos, who rewrote the constitution in 1972 to give himself dictatorial power.

Torrijos's successor, Manuel Noriega, continued the same puppet government. Noriega ruled from 1983 until 1989. After canceling an unsatisfactory presidential election and establishing himself as the country's chief executive, Noriega declared war with the United States, which had imposed economic sanctions against Panama the year before. In 1989, US forces invaded the country and imprisoned Noriega, paving the way for a gradual return to a representative democracy.

Interesting Facts

• The United States initially considered Nicaragua for the location of an Atlantic-Pacific canal before choosing Panama.
• Panamanian law requires that all workers receive an additional month's salary each year. It is called the décimo tercer mes, or "thirteenth month."
• The Republic of Panama boasted the Western Hemisphere's first Jewish president, Eric Arturo Delvalle, who served from 1985 until 1988.
• Coffeehouse chain Starbucks opened its first store in Panama in 2015.
• In June 2016 the first vessel came through the fully expanded Panama Canal.
• Droughts led to water shortages of more than 25 percent in the Panama Canal in 2019. It represented the driest dry season since the canal was opened.

Bibliography

"Countries: Panama." World Health Organization, 2022, www.who.int/countries/pan/en/. Accessed 28 Jun. 2022.

"Economic Impact Reports." World Travel and Tourism Council, 2020, wttc.org/Research/Economic-Impact. Accessed 28 Jun. 2022.

"Human Development Insights." Human Development Reports, 13 Mar 2024, United Nations Development Programme, 2022, hdr.undp.org/data-center/country-insights#/ranks. Accessed 10 Jan. 2025.

"Panama." The World Bank, 2022, data.worldbank.org/country/panama. Accessed 28 Jun. 2022.

"Panama." The World Factbook, Central Intelligence Agency, 2 Jan. 2024, www.cia.gov/the-world-factbook/countries/panama/. Accessed 10 Jan. 2025.

“Panama Exports, Imports, and Trade Partners.” OEC, Observatory of Economic Complexity, 2020, oec.world/en/profile/country/pan. Accessed 28 Jun. 2022.‌

“2019 Report on International Religious Freedom: Panama.” US Department of State, 2020, www.state.gov/reports/2019-report-on-international-religious-freedom/panama/. Accessed 28 Jun. 2022. ‌