Country Overview | Key Property Facts

Currency:

Balboa/Dollar

Capital:

Panama City

Major Cities (by population size):

Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Herrera, Los Santos, Panama, San Blas*(Kuna Yala), and Veraguas.

Geography:

Panama is located on the narrowest and lowest part of the Isthmus of Panama that links North America and South America. This S-shaped part of the isthmus is situated between 7° and 10° north latitude and 77° and 83° west longitude. Slightly smaller than South Carolina, Panama encompasses approximately 77,082 square kilometers, is 772 kilometers in length, and is between 60 and 177 kilometers in width.

Panama's two coastlines are referred to as the Caribbean (or Atlantic) and Pacific, rather than the north and south coasts. To the east is Colombia and to the west Costa Rica. Because of the location and contour of the country, directions expressed in terms of the compass are often surprising. For example, a transit of the Panama Canal from the Pacific to the Caribbean involves travel not to the east but to the northwest, and in Panama City the sunrise is to the east over the Pacific.

The country is divided into nine provinces, plus the Comarca de San Blas, which for statistical purposes is treated as part of Colón Province in most official documents. The provincial borders have not changed since they were determined at independence in 1903. The provinces are divided into districts, which in turn are subdivided into sections called corregimientos. Configurations of the corregimientos are changed periodically to accommodate population changes as revealed in the census reports.

The country's two international boundaries, with Colombia and Costa Rica, have been clearly demarcated, and in the late 1980s there were no outstanding disputes. The country claims the seabed of the continental shelf, which has been defined by Panama to extend to the 500-meter submarine contour. In addition, a 1958 law asserts jurisdiction over 12 nautical miles from the coastlines, and in 1968 the government announced a claim to a 200-nautical-mile Exclusive Economic Zone.

Climate and Topography:

Nearly 500 rivers lace Panama's rugged landscape. Mostly unnavigable, many originate as swift highland streams, meander in valleys, and form coastal deltas. However, the Río Chepo and the Río Chagres are sources of hydroelectric power.

Panama has a tropical climate. Temperatures are uniformly high- -as is the relative humidity--and there is little seasonal variation. Diurnal ranges are low; on a typical dry-season day in the capital city, the early morning minimum may be 24°C and the afternoon maximum 29°C. The temperature seldom exceeds 32°C for more than a short time.

Temperatures on the Pacific side of the isthmus are somewhat lower than on the Caribbean, and breezes tend to rise after dusk in most parts of the country. Temperatures are markedly cooler in the higher parts of the mountain ranges, and frosts occur in the Cordillera de Talamanca in western Panama.

Panama's tropical environment supports an abundance of plants. Forests dominate, interrupted in places by grasslands, scrub, and crops. Although nearly 40 percent of Panama is still wooded, deforestation is a continuing threat to the rain-drenched woodlands. Tree cover has been reduced by more than 50 percent since the 1940s.

Subsistence farming, widely practiced from the northeastern jungles to the southwestern grasslands, consists largely of corn, bean, and tuber plots. Mangrove swamps occur along parts of both coasts, with banana plantations occupying deltas near Costa Rica. In many places, a multi-canopied rain forest abuts the swamp on one side of the country and extends to the lower reaches of slopes in the other.

Politics:

For most of the 20th century, Panama was a constitutional democracy. However, a coup in 1968 brought the military to power. During the 1980s, Panamanian General Manuel Noriega assumed control of the government. After diplomatic and economic pressure failed to remove Noriega, U.S. president George Bush used American troops to remove the dictator from power and restore democracy in 1991 in a military operation known as "Just Cause."

Panama is now a constitutional representative democracy. The government is divided into 3 branches: executive, legislative, and judicial. The executive branch is led by an elected president who serves as both the head of state and the head of the government. The president is elected for a 5-year term and appoints the national cabinet. There are also 2 elected vice-presidents who also serve 5-year terms. The legislative branch of government is made-up of a 1 chamber legislature. It has 71 members who are elected for 5-year terms. The judicial branch consists of a national supreme court, 5 superior courts and 3 courts of appeal. The judicial system is plagued by corruption and inefficiency.

The largest political party in Panama is the Democratic Revolutionary Party (PRD). The PRD is conservative on economic matters and appeals mainly to the country's young and urban poor. The Arnulfista Party (PA) is the party of the nation's current president and its base is among the Panama's rural population. The Popular Block is a coalition of former Christian Democrats and pro-business groups, as is the National Liberal Republican Movement and Democratic Change. These parties appeal to the middle and upper classes and tend to have strong ties to the business community.

Because of its history of military interference in the government, the nation adopted a constitutional amendment in 1994 which abolished the military. Security is now in the hands of the national police force, the coast guard, and a national air service. In 1997, the government spent 1.9 percent of the nation's GDP on security or about US$132 million. About 150,000 people work for the government in some capacity.

During the 1990s, the government was engaged in a variety of programs to liberalize the economy. It enacted reforms in banking, labor regulation, and taxes. In 1996, the government passed the first anti- monopoly laws. This legislation created 4 special commercial courts to hear cases related to patent, trademark, and anti-trust cases.

It also created a consumer protection agency known as the Free Competition and Consumer Affairs Commission. New laws levy fines against companies that engage in practices that are harmful to consumers, including the sale of expired products and price fixing. However, there remain a number of problems in Panamanian business law. For instance, there is no bankruptcy law that allows companies to restructure themselves rather than go out of business.

Economy:

Inflation rate (consumer prices): 2.6% (2006 est.)
GDP (official exchange rate): $16.47 billion (2006 est.)
GDP (purchasing power parity): $26.16 billion (2006 est.)
GDP (real) growth rate: 8.1% (2006 est.)
Foreign Direct Investment: Foreign direct investment (net inflow): -$2.6 billion

Panama's dollarized economy rests primarily on a well-developed services sector that accounts for three-fourths of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. A slump in the Colon Free Zone and agricultural exports, the global slowdown, and the withdrawal of US military forces held back economic growth in 2000-03; growth picked up in 2004-06 led by export-oriented services and a construction boom stimulated by tax incentives.

The government has implemented tax reforms, as well as social security reforms, and backs regional trade agreements and development of tourism. Unemployment remains high. In October 2006, voters passed a referendum to expand the Panama Canal to accommodate ships that are now too large to transverse the transoceanic crossway. 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.

Legal System:

Judicial authority rests with the Supreme Court, composed of nine magistrates and nine alternates, all appointed by the president (subject to approval by the Legislative Assembly) for 10-year terms. The Supreme Court magistrates appoint judges of the superior courts who in turn appoint circuit court judges in their respective jurisdictions. There are 4 superior courts, 18 circuit courts (one civil and one criminal court for each province), and at least one municipal court in each district.

At the local level, two types of administrative judges, "corregidores" and "night" (or "police") judges hear minor civil and criminal cases involving sentences under one year. Appointed by the municipal mayors, these judges are similar to Justices of the Peace. Their proceedings are not subject to the Code of Criminal Procedure and defendants lack procedural safeguards afforded in the regular courts.

The constitution guarantees a right to counsel for persons charged with crimes and requires the provision of public defenders for indigent criminal defendants. Trial by jury is afforded in some circumstances.

The 1996 amendment to the constitution abolished the standing military and contains a provision for the temporary formation of a "special police force" to protect the borders. The Judicial Technical Police perform criminal investigations in support of public prosecutors. The constitution also provides for an independent judiciary; however, the judiciary is susceptible to corruption.

The legal system is based on the civil law system. Panama accepts the compulsory jurisdiction of the International Court of Justice with reservation.

People:

In mid-1987, Panama's population was estimated at 2.3 million, when 40 percent of the population was under 15 years of age. This high proportion suggested continued pressure on the educational system to provide instruction and on the economy to create jobs in the next two decades. Population had increased more than 600 percent since the country's first census in 1911. The annual rate of increase ranged from less than 0.5 percent in the economically depressed 1920s to more than 3 percent in the decade from 1910 to 1920 and in the 1960s. Demographers projected an annual growth rate of 2.2 percent in the 1980s, declining to 1.9 percent by 1990-95.

Provincial growth rates in the 1970s ranged from a low of 0.5 percent in Los Santos to a high of 3.5 percent in Panamá. The population in Bocas del Toro, both in remote and rural areas, grew at an average annual rate of approximately 3.1 percent. This high growth rate was due to a significant influx of migrants in response to the development of the Cerro Colorado copper project in the eastern part of that province. Population density was seventy-five persons per square kilometer. The highest densities and the region of the most concentrated urbanization were located in the corridor along the former Canal Zone from Colón to Panama City.

The crude death rate was 5 persons per 1,000 in the mid-1980s, a decline of nearly 50 percent from the mid-1960s. The crude birth rate was 27 per 1,000, a drop of one-third during the same period. Organized family planning began in 1966 with the establishment of the Panamanian Family Planning Organization, a private group. By 1969 the Ministry of Health was actively involved in family planning; clinics, information, and instruction were becoming more available to the population as a whole. By the late 1970s and early 1980s, more than 60 percent of women of childbearing age were using some form of contraception.

Demographics:

The culture, customs, and language of the Panamanians are predominantly Caribbean and Spanish. Ethnically, the majority of the population is mestizo of mixed Amerindian, African, Spanish and aboriginal descent. Spanish is the official and dominant language; English is spoken widely on the Caribbean coast 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 recognizes 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%), Greek Orthodox (0.1%), 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 synagogues in Panama City, as well as two Jewish schools. Within Latin America, Panama has one of the largest Jewish communities in proportion to its population, surpassed only by Uruguay and Argentina. Panama is also the first country in Latin America to have a Jewish president, Max Del Valle. Panama's communities of Muslims, East Asians, and South Asians, are also among the largest.

Panama City hosts a Bahá'í House of Worship, one of only eight in the world. Completed in 1972, it is perched on a high hill facing the canal, and is constructed of local mud laid in a pattern reminiscent of Native American fabric designs.

There are seven indigenous peoples in Panama:

Country Ratings

Economist Intelligence Unit Quality of Life Index: 6.361, rank: 47^th(2005).
Heritage Foundation Index of Economic Freedom:
Rank 47, 65.9% free, Category: Moderately free.