Panama, officially the Republic of Panama (Spanish: República de Panamá; IPA [re'puβlika ðe pana'ma]), is the southernmost country of Central America. A transcontinental country, its isthmus constitutes the southernmost part of a natural land bridge between the subcontinents of North America and South America. It borders Costa Rica to the northwest, Colombia to the east, the Atlantic Ocean to the north and the Pacific Ocean to the south.
Much of Panama's domestic politics and international diplomacy in the twentieth century was tied to the Panama Canal and the foreign policy of the United States. At the turn of the twentieth century, Theodore Roosevelt pursued United States diplomatic efforts to facilitate a deal with Colombia that would allow it to take over French canal operations started by Ferdinand de Lesseps. In November 1903, the United States supported a covert Separatist Junta consisting of a small number of wealthy Panamanian landowners and led by Dr. Manuel Amador Guerrero to secede from Colombia.
On 3 November, 1903, Panama declared its independence from Colombia. The President of the Municipal Council, Demetrio H. Brid, highest authority at the time, became its de facto President, appointing a Provisional Government on November 4 to run the affairs of the new republic. The United States, as the first country to recognize the new Republic of Panama, sent troops to protect its economic interests. The 1904 Constituent Assembly elected Dr. Manuel Amador Guerrero, a prominent member of the Conservative political party, as the first constitutional President of the Republic of Panama.
In December 1903, representatives of the republic signed the Hay-Bunau Varilla Treaty which granted rights to the United States to build and administer indefinitely the Panama Canal, which was opened in 1914. This treaty became a contentious diplomatic issue between the two countries, reaching a boiling point on Martyr's Day (9 January 1964). The issues were resolved with the signing of the Torrijos-Carter Treaties in 1977.
The original intent of the founding fathers was to bring harmony between the two major political parties (Conservatives and Liberals). The Panamanian government went through periods of political instability and corruption, however, and at various times in its history, the mandate of an elected president terminated prematurely. In 1968, a coup toppled the government of the recently elected Arnulfo Arias Madrid. General Omar Torrijos eventually became the leading power in the governing military junta, and later became an autocratic strong man until his death in an apparent airplane accident in 1981. After Torrijos's death, power was eventually concentrated in the hands of General Manuel Antonio Noriega, a former head of Panama's secret police and an ex-member of the CIA. Noriega was implicated in drug trafficking by the United States, resulting in difficult relations by the end of the 1980s.
On December 20, 1989, twenty-five thousand US personnel invaded Panama in order to remove Noriega. A few hours after the invasion, in a ceremony that took place inside a U.S. military base in the former Panama Canal Zone, Guillermo Endara (winner of the May 1989 elections) was sworn in as the new president of Panama. The invasion occurred ten years before the Panama Canal administration was to be turned over to Panamanian control, according to the timetable set up by the Torrijos-Carter Treaties. After the invasion, Noriega sought asylum in the Vatican diplomatic mission represented by Monsignor Jose S. Laboa. To induce Noriega's surrender, US forces played loud music outside the embassy. After a few days, Noriega surrendered to the American military, and was taken to Florida to be formally arrested and charged by U.S. federal authorities. He will be eligible for parole in 2007.
Under the Torrijos-Carter Treaties, the United States returned all canal-related lands to Panama on December 31, 1999, but reserves the right to military intervention in the interest of its national security. Panama also gained control of canal-related buildings and infrastructure as well as full administration of the canal.
The people of Panama have already approved the widening of the canal which, after completion, will allow for post-Panamax vessels to travel through it, increasing the number of ships that currently use the canal.
Panama's politics takes place in a framework of a presidential representative democratic republic, whereby the President of Panama is both head of state and head of government, and of a pluriform multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The Judiciary is independent of the executive and the legislature.
Administratively, Panama's major divisions are nine provinces and three indigenous territories (comarcas indígenas). There are also two subprovincial comarcas, Kuna de Madugandí and Kuna de Wargandí, that form part of the Panamá and Darién provinces, respectively.
Panama is located in Central America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica. Its location on the eastern end of the isthmus forming a landbridge connecting Central and South America is strategic. By 1999, Panama controlled the Panama Canal that links the North Atlantic Ocean via the Caribbean Sea with the North Pacific Ocean.
A nearly impenetrable jungle forms the Darien Gap between Panama and Colombia. It creates a break in the Pan-American Highway, which otherwise forms a complete road from Alaska to Chile.
Panama's economy is service-based, heavily weighted toward banking, commerce, and tourism, due to its key geographic location. The handover of the canal and military installations by the US has given rise to new construction projects. The Martín Torrijos administration has undertaken controversial structural reforms, such as a fiscal reform and a very difficult Social Security Reform. Furthermore, a Referendum regarding the building of a third set of locks for the Panama Canal was approved overwhelmingly (though with low voter turnout) on 22 October 2006. The official estimate of the building of the third set of locks is US$5.25 Billion.
The Panamanian currency is the balboa, fixed at parity with the United States dollar.
The high levels of Panamanian trade are in large part due to the Colón Free Trade Zone, the largest free trade zone in the Western Hemisphere. Last year the zone accounted for 92 percent of Panama's exports and 65 percent of its imports, according to an analysis of figures from the Colon zone management and estimates of Panama's trade by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
Panama did decently in tourism receipts and foreign direct investment as a percent of GDP (the fourth-highest in Latin America in both categories) and Internet penetration (eighth-highest rate in Latin America).
Panama, long a bastion of low inflation, will get the honor of having the region's lowest inflation in 2007, according to the IMF. The rate is predicted at 2.3 percent, compared to 2.8 percent estimated for 2006.
Panama City has seen a race between two rival projects aimed at becoming the tallest building in Latin America. The 104-story residential and hotel building, Ice Tower, is slated to be completed in 2010.
The Palacio de la Bahia project has been cancelled by the Spanish promoter Olloqui. The two projects were originally smaller, but subsequently started adding floors to obtain status at the tallest building in the region.
Grupo Mall, another Spanish developer, is building a multitower center of apartments, hotel and commercial mall. The project is scheduled for partial completion in 2009
Apart from the existing demand, future developments will also be helped by such factors as the planned expansion of the Panama Canal, a possible refinery by U.S. oil giant Oxy and a new container port near the Pacific entrance of the canal.
The culture, customs, and language of the Panamanians are predominantly Caribbean Spanish. Ethnically, the majority of the population is mestizo or mixed Spanish, Chinese , Amerindian, and African descent. Spanish is the official and dominant language; English is a common second language spoken by the West Indians and by many in business and professional fields. More than half the population lives in the Panama City–Colón metropolitan corridor.
The overwhelming majority of Panamanians are Roman Catholic, accounting for almost 80% of the population. Although the Constitution recognises Catholicism as the religion of the great majority, Panama has no official religion. Minority religions in Panama include Protestantism (12%), Islam (4.4%), the Bahá'í Faith (1.2%), Buddhism (at least 1%), Judaism (0.4%), and Hinduism (0.3%). The Jewish community in Panama, with over 10,000 members, is by far the biggest in the region (including Central America, Colombia and the Caribbean). Jewish immigration began in the late 19th Century, and at present there are three synagogues in Panama City, as well as five Jewish schools. Within Latin America, Panama has one of the largest Jewish communities in proportion to its population, surpassed by Uruguay and Argentina. Panama's communities of Muslims, East Asians, and South Asians, are also among the largest.
Panama City hosts one of only seven Bahá'í Houses of Worship in the world. Completed in 1972, it is perched on a high cliff overlooking the canal, and is constructed of local stone laid in a pattern reminiscent of Native American fabric designs.
Panama, because of its historical reliance on commerce, is above all a melting pot. This is shown, for instance, by its considerable population of Chinese origin (see Panama section in Chinatowns in Latin America). Many Chinese immigrated to Panama to help build the Panama Railroad. A term for "corner store" in Panamanian Spanish is el chino, reflecting the fact that many corner stores are owned and run by Chinese immigrants. (Other countries have similar social patterns, for instance, the "Arab" corner store of France.)
There are seven indigenous peoples in Panama:
The country is also the smallest in Spanish-speaking Latin America in terms of population, with Uruguay as the second smallest (by almost 400,000). However, since Panama has a higher birth rate, it is likely that in the coming years its population will surpass Uruguay's.