republic, situated in the isthmus linking South America with Central and North America. The country, which is bisected by the Panama Canal, is bounded on the N by the Caribbean Sea, on the E by Colombia, on the S by the Pacific Ocean, and on the W by Costa Rica. Panama's coastline is about 685 km (about 425 mi) long on the Caribbean and about 1230 km (about 765 mi) long on the Pacific; the country's total area is 77,082 sq km (29,762 sq mi), including the canal region.

LAND AND RESOURCES

Panama is traversed lengthwise by two mountain systems. The loftier Serranía de Tabasará crosses into Panama from the W. The range averages 1525 m (5000 ft) in elevation, with its tallest peak, Barú, an extinct volcano, reaching 3475 m (11,401 ft). The Cordillera de San Blas and the Serranía del Darién, which form the lower range, average about 915 m (about 3000 ft) and are almost entirely situated within the country. The mountain ranges enclose fertile, well-drained valleys and plains.

The region between the two mountain systems consists of hills, ranging from about 90 to 460 m (about 300 to 1500 ft) in height, and valleys. It is thickly matted with forest and tangled undergrowth and is studded with ridges, crests, and occasional plains and high plateaus. The two mountain ranges are watersheds within which rise some 325 rivers and streams emptying into the Pacific and 150 descending to the Caribbean. The largest and most important river, the Tuira, flows into the Golfo de San Miguel on the Pacific coast. Another large river, the Chagres, rises in central Panama and is dammed into the artificial Gatún Lake that forms an important section of the Panama Canal.

Both of the Panamanian coasts are indented by lagoons, bays, and gulfs. The Gulf of Panama lies on the Pacific side and contains the Archipiélago de las Perlas (Pearl Islands), consisting of more than 100 islands of varying size with a total area of some 1165 sq km (some 450 sq mi).

Climate.

Panama has a tropical climate with average annual temperatures ranging from 23° to 27° C (73° to 81° F) in coastal areas. In the interior, at the higher altitudes, the average temperature is 19° C (66° F). The rainy season extends from April to December. On the Caribbean coast the average annual rainfall is about 2970 mm (about 117 in); on the Pacific side it is about 1650 mm (about 65 in).

Natural Resources.

Panama has been slow to develop its natural resources, which are primarily agricultural. Neither the rich forests nor mineral deposits of manganese, copper, iron, and molybdenum have been extensively exploited.

Plants and Animals.

The vegetation of Panama differs in variety and abundance according to the amount of local rainfall. The Caribbean side of the country and E Panama are covered by tropical rain forests underlaid with luxuriant growths of sedge, tropical flowers, and a variety of wild grasses. The Pacific slopes of the isthmus, because of the drier climate, are covered by a relatively sparse growth of deciduous trees and grassy plains called savannas. More than 2000 varieties of tropical plants flourish in Panama.

The animal life of Panama includes most of the mammalian species indigenous to South America; among these are the puma, armadillo, ocelot, anteater, spider monkey, sloth, and deer. Reptiles include the alligator, the crocodile, and a variety of snakes. Vividly colored tropical birds abound, as do ducks and other migratory birds familiar to North America. Many varieties of fish are also plentiful.

POPULATION

The population of Panama is mainly mestizo (mixed Indian and white ancestry) or mulatto (mixed white and black ancestry), and the remainder are of Indian, Asian, black African, or white descent. In the late 1990s about 56% of the population was urban.

Population Characteristics.

The population of Panama (1990 census) was 2,329,329. The population estimate for 2003 was 3,120,000, giving the country an overall population density of about 40 persons per sq km (about 105 per sq mi). A large proportion of the population is engaged in subsistence farming in the hinterlands. More than 40% of all Panamanians are concentrated in the two metropolitan areas, Panamá and Colón.

Political Divisions and Principal Cities.

Panama is divided into nine provinces—Bocas del Toro, Chiriquí, Coclé, Colón, Darién, Herrera, Los Santos, Panamá, and Veraguas—and one special territory, Comarca de San Blas.

The capital, Panamá (pop., 2001 est., 1,202,000), is the principal commercial and transportation center; San Miguelito (1995 est., 290,919) is a suburb of the capital. Other important cities are Colón (156,289), the N terminus of the Panama Canal, and David (113,527), a farming center near the Costa Rican border.

Language and Religion.

Spanish is the official and traditional language, and English is widely used. About 85% of the population is Roman Catholic. The constitution does not specifically provide for the separation of church and state, but freedom of religion is guaranteed.

Education.

Education in Panama is free and compulsory for children between the ages of 7 and 15. In the late 1990s about 371,250 pupils were enrolled in Panama's primary schools, which were staffed by some 14,000 teachers. Another 221,022 pupils attended the country's secondary schools. About 79,951 students were enrolled in Panama's three universities, among which are the University of Panama (1935) and Santa María La Antigua University (1965), both in the city of Panamá.

Culture.

Basically the culture of Panama is a mixture of Spanish, African, Indian, and North American traditions. The dances, music, and celebrations are colorful. During Carnival, the last four days before Lent, a variety of folk customs are discernible. The tamborito, danced to hand clapping and drums, dates from the 17th century; the cumbia is a dance of African origin.

The archaeological site of Coclé, situated SW of the Panama Canal near the Gulf of Panama, has yielded magnificent relics that have been dated from as early as 800. Gold jewelry (some inlaid with finely cut precious and semiprecious gems), helmets, and other artifacts believed to have originated at Coclé have been discovered as far N as the Yucatán Peninsula. The Museum of Panamanian Man, established in Panama City in 1976, houses a collection of archaeological and ethnographic materials.

ECONOMY

The country's major source of revenue is associated with the operation of the Panama Canal, over which Panama gained full control on Dec. 31, 1999. The economy, affected both by U.S. sanctions and by a U.S. invasion in December 1989, experienced little net growth during the 1980s, but expanded by more than 4 percent annually during the early and mid-'90s. The annual budget in the late 1990s totaled about $2.4 billion, and the gross national product stood at $3080 per capita.

Labor.

The wage labor force in Panama includes about 37% of the population. About 27% of this labor force is employed in agriculture, forestry, and fishing, and approximately 53% works in commerce, finance, and services. Approximately 11% of the work force belongs to labor unions.

Agriculture.

About 9% of Panama's land is under cultivation. The main crops are bananas, plantains, sugarcane, rice, maize, and coffee. The livestock population in the early 1990s included about 1.4 million cattle, 257,000 pigs, and approximately 9 million chickens.

Forestry and Fishing.

Forest products of Panama include a variety of woods, notably mahogany. Vast forest reserves are practically untouched because of a lack of transportation. In the early 1990s annual production of roundwood totaled about 1.9 million cu m (about 67 million cu ft).

Fishing is a leading industry; in the early 1990s about 106,000 metric tons of fish were caught annually, including more than 7500 metric tons of shrimp and prawns.

Mining and Manufacturing.

Gold and silver have been mined on a small scale in Panama, and salt is extracted on the Pacific coast; large deposits of copper and molybdenum await development. Most manufactured goods, such as cigarettes, clothing, soaps, processed foods, and beverages, are produced for local markets within the country. Petroleum products are refined primarily for export.

Energy.

In the early 1990s Panama had an installed electricity-generating capacity of about 958,000 kw. Annual production was some 2.9 billion kwh, of which about 30% was generated by thermal facilities and 70% by hydroelectric installations.

Currency and Foreign Trade.

In Panama, the balboa, which is divided into 100 centésimos, is the basic monetary unit (1 balboa equals U.S.$1; Sept. 2002). U.S. paper money and coinage are also accepted as legal currency, and no exchange control is exercised. The National Bank of Panama (1904) is the official bank.

The country's chief exports are bananas, shrimp, raw sugar, coffee, and petroleum products. The U.S. receives about 30% of Panama's exports. Imports, mostly from the U.S., Japan, Ecuador, and Costa Rica, consist primarily of mineral fuels, machinery, chemicals, transportation equipment, and basic manufactures. In the early 1990s Panama's annual exports earned $5.3 billion, and its imports cost $6.2 billion. Panama's thriving trade centers around the Colón Free Zone.

Transportation and Communications.

Panama has about 10,000 km (about 6210 mi) of roads, including a section of the Pan-American Highway. The country also is served by about 580 km (about 360 mi) of railroad. The main railway line crosses the isthmus and connects Cristóbal to Panamá. The Panama Canal links the Caribbean to the Pacific coast, and the country's main ports are Balboa, Cristóbal, Bocas del Toro, Almirante, and Puerto Armuelles. The Panamanian merchant fleet is one of the largest in the world, although many of the ships registered here are foreign-owned and maintain foreign crews. An international airport is located near the city of Panamá.

Panama's seven daily newspapers in the early 1990s were Crítica, La Estrella de Panamá, El Matutino, El Panamá América, La Prensa, La República, and El Siglo. The combined circulation of these dailies exceeded 160,000. The country had about 273,300 telephones, 552,000 radios, and 410,000 televisions.

GOVERNMENT

Panama is governed under a constitution adopted in 1972 and substantially revised in 1983.

Executive.

The head of state of Panama is a president, who is elected, along with two vice-presidents, by direct popular vote to a 5-year term. The president is assisted by a cabinet. During the 1980s the Panamanian Defense Force played a major role in the government, and the commander in chief had the dominant voice in executive decisions.

Legislature.

Panama's unicameral Legislative Assembly consists of 72 members directly elected to 5-year terms.

Judiciary.

The highest tribunal in Panama is the supreme court of justice, composed of nine judges appointed to 10-year terms. The country's judicial system also includes high courts, circuit courts, and municipal courts.

Local Government.

The nine provinces of Panama are divided into a total of 67 municipal districts and 510 subdistricts; each province is administered by a governor who is appointed by the country's president. The mayors and councillors of each district in Panama are elected for 5-year terms.

Political Parties.

From 1969 to 1978 political parties were not allowed to function in Panama. An opposition coalition including the Christian Democratic party won the elections of May 1989, but the results were annulled. Groups represented in the Legislative Assembly in the late 1990s included the Democratic Revolutionary party, the Arnulfista party, the Christian Democratic party, and the Solidarity party.

Health and Welfare.

The government operates a social security program, financed by contributions from employers and employees. In the early 1990s average life expectancy at birth was 75 years for women and 71 years for men. The infant mortality rate was 21 per 1000 live births.

Defense.

The Panamanian military, destroyed by the U.S. invasion in December 1989, was rebuilt with assistance from the U.S.; by 1993 it had 11,800 members, of whom 11,000 comprised the national police force. A referendum seeking to abolish the armed forces was defeated in 1992.

International Organizations.

Panama is a member of the United Nations, the Organization of American States (OAS), and the World Trade Organization.

HISTORY

The first European to land on what is now Panama was the Spanish explorer Rodrigo de Bastidas (1460–1526), who in 1501 went ashore at the site of Portobelo. A year later Christopher Columbus touched on the Panamanian coast. In 1508 King Ferdinand V of Castile assigned lands including Panama to the Spanish explorer Diego de Nicuesa (1465–1511). The region first assumed importance in 1513 when the Spanish explorer Vasco Núñez de Balboa first sighted the Pacific.

During the remainder of the 16th century the region was conquered by Spain. It became the staging area for the Spanish explorer Francisco Pizarro's conquest of Peru in the 1530s, and was subsequently attached to the viceroyalty of Peru. In 1718 it became part of the viceroyalty of New Granada. The isthmus became the route of most traffic to and from Peru and the neighboring colonies; treasure was shipped to the city of Panama, taken overland to Portobelo, and transferred to galleons bound for Spain. English mariners and buccaneers tried continually during the 16th and 17th centuries to cut the isthmus route, capture its terminals, or seize the shipments. The most notable of these were Sir Francis Drake and Sir Henry Morgan.

Colombian Rule.

Panama declared itself independent of Spain in 1821 and voluntarily became a part of Colombia. The union was never firm, however, because of the special position of Panama as an interoceanic trade route, and discontent with Colombian rule led to a series of revolts. The most important of these outbreaks was in 1840, when Panama briefly threw off Colombian rule, but in 1842 Colombia reestablished its authority.

By a treaty of 1846 the U.S. gained transportation rights across the Panamanian isthmus in return for its recognition of Colombian sovereignty in Panama. During the 1840s the isthmus was used as a land bridge by Americans migrating to Oregon and California from the east coast of the U.S. In 1848 an American company was granted rights to build a railroad across the isthmus; construction, begun in 1850, was completed in 1855. Panama won from Colombia a large measure of self-rule in 1855, and in 1863 a new Colombian constitution gave each of its provinces, including Panama, virtual independence. In 1866, however, direct control by Colombia was restored; subsequently, numerous unsuccessful revolts against Colombia took place, partly because of repressive and corrupt rule by Colombian officials and partly because many Panamanians were dissatisfied with the progress of negotiations for digging a canal across the isthmus.

Independence Won.

On Nov. 3, 1903, when the Colombian legislature failed to ratify a treaty with the U.S. concerning the canal, Panama proclaimed its independence and was immediately recognized by the U.S. On November 18 the U.S. and Panama signed a treaty giving the U.S. the right to dig the canal and the perpetual right to occupy and control a strip of land on either side. In return the U.S. paid Panama $10 million and agreed to pay $250,000 each year. The U.S. also guaranteed Panama's independence and was given the right to intervene in case of military disorder in the country. Nationalist political factions resented the last-named provision, which became an issue in Panamanian politics.

In 1904 a constituent assembly drafted the first Panamanian constitution. It provided for a democratically elected government with a president, two vice-presidents, a supreme court, and a unicameral legislature. Manuel Amador Guerrero (1833–1909), a nationalist leader and physician, was elected the first president of the republic. During construction of the Panama Canal from 1907 to 1914 and for years afterward, American troops repeatedly intervened to maintain peace in the country. The exigencies of World War I, which Panama entered on the Allied side in April 1917, intensified U.S. intervention.

The Panama Canal.

The opening of the Panama Canal, which was put into limited use in 1914 and formally inaugurated in 1920, marked the start of a new era of prosperity in the country. Internal political ferment continued throughout the 1920s, however, and nationalist agitation against the U.S. increased, despite a lessening of U.S. military and political activity in Panama.

A revolutionary group headed by Arnulfo Arias seized power in 1931, but the U.S. did not exercise its right to intervene. His brother Harmodio Arias (1886–1962) was elected president in 1932. Relations between the two nations improved during the next few years. In 1934, when the U.S. devalued the dollar, Panama refused the cheaper currency as payment of the annual $250,000 fee for the Canal Zone, thus precipitating a sharp controversy. Subsequent negotiations between the two countries resulted in 1936 in the settlement of this dispute in favor of Panama, and in a general revision of the 1903 agreement. By the terms of the new treaty, ratified by the U.S. Senate in 1939, the U.S. received the right to send troops into Panamanian territory in an emergency for the purpose of defending the canal. At the same time, the U.S. surrendered the right to intervene in the internal affairs of Panama, and the U.S. guarantee of Panamanian independence was not renewed. Panama obtained various commercial rights under the treaty.

Problems and Demands.

Arnulfo Arias, elected president in 1940, was ousted in 1941 because of his sympathies with the Axis powers. Panama entered World War II on the Allied side in 1942. During the war its economy boomed, partly because of U.S. bases established in the country. The bases were evacuated in 1948.

After the war Panama was plagued by inflation, debt, and unemployment, problems intensified by a rapid increase in population. These conditions contributed to a troubled political scene and to nationalist demands that the U.S. turn the profitable canal over to Panama. In 1949 police chief Col. José Antonio Remón (1908–55) helped Arnulfo Arias seize the presidency. In 1951, however, when Arias dissolved the national assembly and a strike broke out, Remón had him deposed. Elected himself in 1952, Remón was effecting reforms when he was assassinated in 1955.

Increasing Agitation.

During the term (1956–60) of Ernesto de la Guardia (1904–61) opposition groups agitated for an increase in U.S. payments for use of the Canal Zone, which had already been raised from $430,000 to $1.93 million in 1955. Extremists urged nationalization, especially after Egypt took over the Suez Canal in 1956. In mass demonstrations in 1959, U.S. flags were torn down, U.S. agencies were stoned, and repeated attempts were made to invade the Canal Zone. To allay resentment, U.S. President Dwight D. Eisenhower ordered the Panamanian flag to be flown alongside the American flag in the zone.

Continued anti-U.S. agitation in 1964 led to riots that had to be quelled by U.S. troops. President Marco Aurelio Robles (1905–90; president, 1964–68) opened talks for a new treaty. In 1967 the U.S. and Panama agreed on three draft treaties.

In 1968 Arnulfo Arias again became president, but after 11 days he was deposed by a junta led by Col. Omar Torrijos Herrera. Torrijos, as commander in chief of the National Guard, abolished all political parties. In 1972 a new assembly approved a constitution that provided for a president but gave full executive powers for six years to Torrijos as chief of government. He was responsible for domestic and foreign affairs and for appointing government, military, and judiciary officials. The economy continued to founder and was deeper in debt as a result of the increase in the price of imported oil in 1973. Antigovernment protests led to wage and price controls.

New Canal Treaties.

Meanwhile, pressure intensified over the canal question. In 1970 Torrijos had rejected U.S. revisions of the 1967 treaties, but in 1971 he reopened negotiations. In September 1977 the U.S. and Panama signed the Panama Canal Treaty, providing for continued U.S. operation, maintenance, and defense of the canal until Dec. 31, 1999, and giving Panama a percentage of the tolls. A companion document, the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, signed at the same time, stipulated that all nations would have access to the canal and that the U.S. would defend it indefinitely. Although some nationalist and leftist groups in Panama objected that the treaties did not go far enough, Panama ratified them by plebiscite in October 1977. Opposition was widespread in the U.S., where conservatives argued that the U.S. was giving away its rightful property and that, in Panamanian hands, the canal might be less efficiently run. After contentious debate, both treaties were ratified by the U.S. Senate in 1978 and took effect on Oct. 1, 1979.

Gen. Torrijos stepped down as chief of government in 1978; the newly elected president, Aristides Royo (1940–    ), was forced to resign in July 1982 and the military held de facto control until May 1984, when Nicolas Ardito Barletta (1938–    ) was elected president. He was succeeded in 1985 by Eric Arturo Delvalle (1937–    ).

Noriega and After.

Despite constitutional reforms, the military, led by Gen. Manuel Antonio Noriega, continued to wield power, even after February 1988, when a U.S. grand jury indicted Noriega for drug trafficking. When Delvalle attempted to dismiss Noriega, he arranged to have the president replaced. The U.S. then launched a campaign of economic and political pressure aimed at removing Noriega as chief of government. In May 1989, after U.S. observers reported that an opposition candidate, Guillermo Endara (1936–    ), had been elected president, the Noriega government nullified the vote.

Noriega suppressed a military coup attempt in October 1989, but two months later 24,000 U.S. troops invaded Panama and installed Endara as president. Captured and flown to the U.S. in January 1990, Noriega was convicted on drug and racketeering charges in April 1992. (His 40-year prison sentence was reduced to 30 years in 1999.) The U.S. promised Panama $1 billion to repair the damage caused by the invasion and by earlier economic sanctions. Unemployment stayed high, however, and the Endara administration was plagued by coup plots and by its own inability to maintain order and stop the drug trade. In November 1992 voters rejected constitutional changes backed by Endara, including one to abolish the army.

Ernesto Pérez Balladares (1946–    ), a former Noriega supporter, was elected president in May 1994. In 1999, with the canal handover less than eight months away, Panamanian voters elected the nation's first woman president, Mireya Elisa Moscoso (1946–    ), the widow of Arnulfo Arias; running as the candidate of the Arnulfista party, she defeated Martin Torrijos (1963–    ), son of Gen. Torrijos, who had signed the 1977 Panama Canal Treaty. Former U.S. President Jimmy Carter, his counterpart in the 1977 treaty, represented the U.S. at ceremonies in December that marked the transfer of the canal to full Panamanian control.

For further information on this topic, see the Bibliography, sections 1118. Central America, 1129. Panama, 1130. Panama Canal.