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. An ambitious expansion project to more than double the Canal's capacity - by allowing for more Canal transits and larger ships - was carried out between 2007 and 2016.

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 with dissected, upland plains; coastal plains with rolling hills

highest point: Volcan Baru 3,475 m

copper, mahogany forests, shrimp, hydropower

arable land 7.3%; permanent crops 2.5%; permanent pasture 20.7%

321 sq km (2012)

population is concentrated towards the center of the country, particularly around the Canal, but a sizeable segment of the populace also lives in the far west around David; the eastern third of the country is sparsely inhabited

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

3,705,246 (July 2016 est.)

mestizo (mixed Amerindian and white) 65%, Native American 12.3% (Ngabe 7.6%, Kuna 2.4%, Embera 0.9%, Bugle 0.8%, other 0.4%, unspecified 0.2%), black or African descent 9.2%, mulatto 6.8%, white 6.7% (2010 est.)

Spanish (official), indigenous languages (including Ngabere (or Guaymi), Buglere, Kuna, Embera, Wounaan, Naso (or Teribe), and Bri Bri), Panamanian English Creole (similar to Jamaican English Creole; a mixture of English and Spanish with elements of Ngabere; also known as Guari Guari and Colon Creole), English, Chinese (Yue and Hakka), Arabic, French Creole, other (Yiddish, Hebrew, Korean, Japanese)

Roman Catholic 85%, Protestant 15%

Panama is a country of demographic and economic contrasts. It is in the midst of a demographic transition, characterized by steadily declining rates of fertility, mortality, and population growth, but disparities persist based on wealth, geography, and ethnicity. Panama has one of the fastest growing economies in Latin America and dedicates substantial funding to social programs, yet poverty and inequality remain prevalent. The indigenous population accounts for a growing share of Panama's poor and extreme poor, while the non-indigenous rural poor have been more successful at rising out of poverty through rural-to-urban labor migration. The government's large expenditures on untargeted, indirect subsidies for water, electricity, and fuel have been ineffective, but its conditional cash transfer program has shown some promise in helping to decrease extreme poverty among the indigenous population.

Panama has expanded access to education and clean water, but the availability of sanitation and, to a lesser extent, electricity remains poor. The increase in secondary schooling - led by female enrollment - is spreading to rural and indigenous areas, which probably will help to alleviate poverty if educational quality and the availability of skilled jobs improve. Inadequate access to sanitation contributes to a high incidence of diarrhea in Panama's children, which is one of the main causes of Panama's elevated chronic malnutrition rate, especially among indigenous communities.

1.3% (2016 est.)

18.1 births/1,000 population (2016 est.)

4.9 deaths/1,000 population (2016 est.)

-0.3 migrant(s)/1,000 population (2016 est.)

population is concentrated towards the center of the country, particularly around the Canal, but a sizeable segment of the populace also lives in the far west around David; the eastern third of the country is sparsely inhabited

PANAMA CITY (capital) 1.673 million (2015)

94 deaths/100,000 live births (2015 est.)

2.33 children born/woman (2016 est.)

52.2% (2009)

8% of GDP (2014)

1.65 physicians/1,000 population (2013)

2.2 beds/1,000 population (2011)

urban: 97.7% of population

rural: 86.6% of population

total: 94.7% of population

urban: 2.3% of population

rural: 11.4% of population

total: 5.3% of population (2015 est.)

urban: 83.5% of population

rural: 58% of population

total: 75% of population

urban: 16.5% of population

rural: 42% of population

total: 25% of population (2015 est.)

0.69% (2015 est.)

17,100 (2015 est.)

500 (2015 est.)

26.5% (2014)

3.9% (2008)

3.3% of GDP (2011)

presidential republic

10 provinces (provincias, singular - provincia) and 3 indigenous territories* (comarcas); Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Embera-Wounaan*, Herrera, Kuna Yala*, Los Santos, Ngobe-Bugle*, Panama, Panama Oeste, Veraguas

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

Independence Day, 3 November (1903)

several previous; latest effective 11 October 1972; amended several times, last in 2004 (2016)

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

accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction

18 years of age; universal

Democratic Change or CD [Ricardo MARTINELLI Berrocal]

Democratic Revolutionary Party or PRD [Carlos PEREZ Herrera]

Nationalist Republican Liberal Movement or MOLIRENA [Francisco "Pancho" ALEMAN]

Panamenista Party [Juan Carlos VARELA Rodriguez] (formerly the Arnulfista Party)

Popular Party or PP [Milton C. HENRIQUEZ] (formerly Christian Democratic Party or PDC)

Chamber of Commerce

Concertacion Nacional (mechanism for Government of Panama to formally dialogue with representatives of civil society)

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, CAN (observer), CD, CELAC, FAO, G-77, IADB, IAEA, IBRD, ICAO, ICC (national committees), ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC (NGOs), LAES, LAIA, MIGA, NAM, OAS, OPANAL, OPCW, Pacific Alliance (observer), PCA, SICA, UN, UNASUR (observer), UNCTAD, UNESCO, UNIDO, Union Latina, UNWTO, UPU, WCO, WFTU (NGOs), 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; the blue and red colors are those of the main political parties (Conservatives and Liberals respectively) and the white denotes peace between them; the blue star stands for the civic virtues of purity and honesty, the red star signifies authority and law

harpy eagle; national colors: blue, white, red

Panama's dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism. Panama's transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $32 billion in 2015 because of excessive government spending and public works projects. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012.

Growth will be bolstered by the Panama Canal expansion project that began in 2007 and is estimated to be completed by 2016 at a cost of $5.3 billion - about 10-15% of current GDP. The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are too large to traverse the existing canal. The US and China are the top users of the Canal. In 2014, Panama completed a metro system in Panama City, valued at $1.2 billion.

Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.

$93.12 billion (2016 est.)

$88.52 billion (2015 est.)

$83.69 billion (2014 est.)

$55.23 billion (2015 est.)

5.2% (2016 est.)

5.8% (2015 est.)

6.1% (2014 est.)

$22,800 (2016 est.)

$22,100 (2015 est.)

$21,300 (2014 est.)

41.7% of GDP (2016 est.)

41% of GDP (2015 est.)

37.3% of GDP (2014 est.)

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

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

4.8% (2016 est.)

1.611 million

4.5% (2016 est.)

4.5% (2015 est.)

26% (2012 est.)

51.9 (2010 est.)

56.1 (2003)

21.2% of GDP (2016 est.)

-1.3% of GDP (2016 est.)

39.3% of GDP (2016 est.)

38.8% of GDP (2015 est.)

calendar year

1% (2016 est.)

0.1% (2015 est.)

7.5% (31 December 2016 est.)

7.46% (31 December 2015 est.)

$8.845 billion (31 December 2016 est.)

$8.215 billion (31 December 2015 est.)

$38.97 billion (31 December 2016 est.)

$36.19 billion (31 December 2015 est.)

$46.85 billion (31 December 2016 est.)

$42.98 billion (31 December 2015 est.)

$12.54 billion (31 December 2012 est.)

$10.68 billion (31 December 2011 est.)

$8.348 billion (31 December 2010 est.)

-$3.029 billion (2016 est.)

-$3.377 billion (2015 est.)

$15.19 billion (2016 est.)

$15.92 billion (2015 est.)

fruit and nuts, fish, iron and steel waste, wood

US 19.7%, Germany 13.2%, Costa Rica 7.7%, China 5.9%, Netherlands 4.1% (2015)

$22.08 billion (2016 est.)

$22.48 billion (2015 est.)

fuels, machinery, vehicles, iron and steel rods, pharmaceuticals

US 25.9%, China 9.6%, Mexico 5.1% (2015)

$3.878 billion (31 December 2016 est.)

$3.378 billion (31 December 2015 est.)

$22.9 billion (31 December 2016 est.)

$21.03 billion (31 December 2015 est.)

$49.79 billion (31 December 2016 est.)

$45.28 billion (31 December 2015 est.)

$10.26 billion (31 December 2016 est.)

$9.755 billion (31 December 2015 est.)

balboas (PAB) per US dollar -

1 (2016 est.)

1 (2015 est.)

1 (2014 est.)

1 (2013 est.)

1 (2012 est.)

9 billion kWh (2014 est.)

7.8 billion kWh (2014 est.)

99 million kWh (2014 est.)

200 million kWh (2014 est.)

2.7 million kW (2014 est.)

38.7% of total installed capacity (2012 est.)

0% of total installed capacity (2012 est.)

61.3% of total installed capacity (2012 est.)

0% of total installed capacity (2012 est.)

0 bbl/day (2015 est.)

0 bbl/day (2013 est.)

0 bbl/day (2013 est.)

0 bbl (1 January 2010 es)

0 bbl/day (2013 est.)

136,000 bbl/day (2014 est.)

66.08 bbl/day (2013 est.)

127,000 bbl/day (2013 est.)

0 cu m (2013 est.)

0 cu m (2013 est.)

0 cu m (2013 est.)

0 cu m (2013 est.)

0 cu m (1 January 2014 es)

17 million Mt (2013 est.)

multiple privately owned TV networks and a government-owned educational TV station; multi-channel cable and satellite TV subscription services are available; more than 100 commercial radio stations (2007)

.pa

HP (2016)

117 (2013)

3 (2013)

oil 128 km (2013)

800 km (includes the 82-km Panama Canal that is being widened) (2011)

no regular military forces; Panamanian Public Security Forces (subordinate to the Ministry of Public Security), comprising the National Police (PNP), National Air-Naval Service (SENAN), National Border Service (SENAFRONT) (2013)

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