Source: MAPS IN MINUTES™ © RH Publications (1997)

A tropical country occupying the narrow isthmus linking Central and South America, bounded by Costa Rica to the west and Colombia to the east.

Physical

Along the length of the country runs a range of hills, through the centre of which was cut the pass, for the Panama Canal. The Canal gives access to shipping from the Caribbean in the north to the Pacific in the south. The land is fertile, supporting coffee on the higher ground and sugar cane on the coastal plains.

Economy

The economy is dominated by international financial services, maritime services associated with the Panama Canal, ship registration, and tourism. In 2016 a project to widen the Canal was completed, allowing it to accommodate larger ships and so more than double its capacity. The principal exports include gold, bananas and other fruit, shrimp from the coastal waters, sugar, and iron and steel waste.

History

Panama was visited in 1501 by the Spaniard Rodrigo de Bastidas. It was explored more thoroughly in 1513 by Vasco Núñez de Balboa, the first Spaniard to see the Pacific Ocean. Portobello on the Caribbean coast served as the principal port for the trade of the viceroyalty of Peru. In the 18th century, Panama became part of the viceroyalty of New Granada. In 1821 the country gained independence from Spain as a province of Gran Colombia. Despite nationalist insurrections against Colombia in the 19th century, the area only became independent as the republic of Panama in 1903 as a protectorate of the USA. The latter had aided Panama’s struggle in return for a Panamanian concession to build a canal across the isthmus and a lease of the zone around it to the USA. The volatile, élite-dominated politics which have characterized Panama during much of the 20th century have led to its occupation by US peacekeeping forces in 1908, 1912, 1918, and 1989. From 1968 to 1981, General Omar Torrijos controlled Panama, working to diversify the economy and reduce US sovereignty over the Canal Zone, an object of long-standing national resentment. In 1977 he signed the Panama Canal Treaties, but was killed in 1981. In 1988 General Manuel Noriega (1934–2017) seized power. A US military invasion in December 1989 deposed him and installed Guillermo Endara as President, placing Noriega on trial in the USA for drug trafficking; he was convicted in 1992. Widespread strikes took place against Endara’s government, which itself was accused of involvement with drug rings. In 1991 a new constitution abolished the armed forces. A general election in 1994 led to Ernesto Pérez Balladares becoming President and in 1999 Mireya Moscoso became Panama’s first female President. At the end of that year Panama assumed control of the Panama Canal. Martin Torrijos was elected President in 2004; he was succeeded in 2009 by Ricardo Martinelli , who led a centre-right coalition. The economy continued to grow but his authoritarian streak led to him sacking the foreign minister, Juan Carlos Varela, in 2011 and the collapse of the coalition. In the 2014 presidential elections, Varela swept to power defeating Martinelli’s candidate. In 2016, Panama’s role as a tax haven was exposed when 11 million documents were leaked from Mossack Fonseca, a legal firm, that showed how it set up countless tax saving schemes for wealthy customers from around the world.