Background: 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. On 7 September 1977 an agreement was signed for the complete transfer of the Canal from the US to Panama by 1999. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the intervening years. With US help dictator Manuel NORIEGA was deposed in 1989.

Map reference: Central America and the Caribbean

Area
Total area total: 78,200 km²
Land: 75,990 km²
Comparative: slightly smaller than South Carolina

Land boundaries: total 555 km, Colombia 225 km, Costa Rica 330 km

Coastline: 2,490 km

Maritime claims: territorial sea:200 nm

Climate: tropical; hot, humid, cloudy; prolonged rainy season (May to January), short dry season (January to May)

Terrain: interior mostly steep, rugged mountains and dissected, upland plains; coastal areas largely plains and rolling hills

Natural resources: copper, mahogany forests, shrimp

Land use
Arable land: 6%
Permanent crops: 2%
Meadows and pastures: 15%
Forest and woodland: 54%
Other: 23%

Irrigated land: 320 km² (1989 est.)

Geography
Note: 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

Population: 2,680,903 (July 1995 est.)
Growth rate: 1.9% (1995 est.)

Nationality
Noun: Panamanian(s)
Adjective: Panamanian

Ethnic groups: mestizo (mixed Indian and European ancestry) 70%, West Indian 14%, white 10%, Indian 6%

Languages: Spanish (official), English 14%
Note: many Panamanians bilingual

Religions: Roman Catholic 85%, Protestant 15%

Age structure
0-14 years: 34% (female 439,491; male 458,817)
15-64 years: 61% (female 812,876; male 823,124)
65 years and over: 5% (female 74,672; male 71,923) (July 1995 est.)

Population growth rate: 1.9% (1995 est.)

Birth rate: 24.12 births/1000 population (1995 est.)

Death rate: 4.79 deaths/1000 population (1995 est.)

Net migration rate: -0.36 migrant(s)/1000 population (1995 est.)

Environment
Current issues: water pollution from agricultural runoff threatens fishery resources; deforestation of tropical rain forest; land degradation
Current issues natural hazards: NA
Current issues international agreements: party to - Biodiversity, Endangered Species, Hazardous Wastes, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Wetlands; signed, but not ratified - Climate Change, Law of the Sea, Marine Life Conservation, Tropical Timber 94

Infant mortality rate: 15.8 deaths/1000 live births (1995 est.)

Life expectancy at birth
Total population: 75.2 years
Male: 72.57 years
Female: 77.97 years (1995 est.)

Total fertility rate: 2.8 children born/woman (1995 est.)

Literacy: age 15 and over can read and write (1990)
Total population: 89%
Male: 89%
Female: 88%

Country name
Conventional long form: Republic of Panama
Conventional short form: Panama
Local long form: Republica de Panama
Local short form: Panama

Government type: constitutional republic

Capital: Panama

Administrative divisions: 9 provinces (provincias, singular - provincia) and 1 territory* (comarca; Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Herrera, Los Santos, Panama, San Blas*, Veraguas

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

National holiday: Independence Day, 3 November (1903)

Constitution: 11 October 1972; major reforms adopted April 1983

Legal system: based on civil law system; judicial review of legislative acts in the Supreme Court of Justice; accepts compulsory ICJ jurisdiction, with reservations

Suffrage: 18 years of age; universal and compulsory

Executive branch
Chief of state and head of government: President Ernesto PEREZ BALLADARES Gonzalez Revilla (since 1 September 1994, elected 8 May 1994); First Vice President Tomas Gabriel ALTAMIRANO DUQUE (since 1 September 1994); Second Vice President Felipe Alejandro VIRZI Lopez (since 1 September 1994 election last held 8 May 1994 (next to be held 9 May 1999); results - Ernesto PEREZ BALLADARES (PRD) 33%, Mireya MOSCOSO DE GRUBER (PA) 29%, Ruben BLADES (MPE) 17%, Ruben Dario CARLES (MOLIRENA) 16%
Cabinet: Cabinet; appointed by the president

Legislative branch: unicameral
Legislative Assembly Asamblea Legislativa: legislators from outlying rural districts are chosen on a plurality basis while districts located in more populous towns and cities elect multiple legislators by means of a proportion-based formula; elections last held 8 May 1994 (next to be held 9 May 1999); results - percent of vote by party NA ; seats - (72 total) PRD 32, PS 4, PALA 1, PA 14, MPE 6, MOLIRENA 4, PLA 3, PRC 3, PL 2, PDC 1, UDI 1, MORENA 1

Judicial branch: Supreme Court of Justice (Corte Suprema de Justicia), 5 superior courts, 3 courts of appeal

International organization participation: AG (associate), CG, ECLAC, FAO, G-77, IADB, IAEA, IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, INMARSAT, INTELSAT, INTERPOL, IOC, IOM, ITU, LAES, LAIA (observer), NAM, OAS, OPANAL, PCA, UN, UNCTAD, UNESCO, UNIDO, UPU, WCL, WFTU, WHO, WIPO, WMO, WTO

Diplomatic representation
In the us chief of mission: Ambassador Ricardo Alberto ARIAS
In the us chancery: 2,862 McGill Terrace NW, Washington, DC 20,008
In the us telephone: [1] (202) 483-1407
In the us consulates general: Atlanta, Houston, Miami, New Orleans, New York, San Francisco, San Juan (Puerto Rico), Tampa
From the us chief of mission: (vacant); Charge d'Affaires Oliver P. GARZA
From the us embassy: Avenida Balboa and Calle 38, Apartado 6,959, Panama City 5
From the us mailing address: American Embassy Panama, Unit 0945; APO AA 34,002
From the us telephone: [507] 27-1777
From the us FAX: [507] 27-1964

Flag description: 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

Economy overview: Because of its key geographic location, Panama's economy is service-based, heavily weighted toward banking, commerce, and tourism. Trade and financial ties with the US are especially close. GDP grew at 3.6% in 1994, a respectable rate, yet below the 7.1% average of the early 1990s. Banking and financial services and trade through the Colon Free Zone continued to expand rapidly, with the industrial and agricultural sectors experiencing little growth. The new administration, inaugurated 1 September 1994, has launched an economic plan designed to reverse rising unemployment, attract foreign investment, cut back the size of government, and modernize the economy. The success of the plan in meeting its goals for 1995 and beyond depends largely on the success of the administration in reforming the labor code and instituting the reforms necessary to join the GATT.

Real gdp growth rate: 3.6% (1994 est.)

Real gdp per capita: $4,670 (1994 est.)

Agriculture products: accounts for 10% of GDP (1992 est.), crops - bananas, rice, corn, coffee, sugarcane; livestock; fishing; importer of food grain, vegetables

Industries: manufacturing and construction, petroleum refining, brewing, cement and other construction materials, sugar milling

Industrial production growth rate: 1.8% (1994 est.), accounts for about 9% of GDP

Labor force: 979,000 (1994 est.)
By occupation governmentandcommunityservices: 31.8%
By occupation agriculture hunting and fishing: 26.8%
By occupation commerce restaurants and hotels: 16.4%
By occupation manufacturing and mining: 9.4%
By occupation construction: 3.2%
By occupation transportationandcommunications: 6.2%
By occupation finance insurance andrealestate: 4.3%
Note: shortage of skilled labor, but an oversupply of unskilled labor

Unemployment rate: 12.9% (1994 est.)

Budget
Revenues: $1.93 billion
Expenditures: $1.93 billion, including capital expenditures of $NA (1994)

Fiscal year: calendar year

Exports: $520 million (f.o.b., 1994 est.)
Commodoties: bananas 43%, shrimp 11%, sugar 4%, clothing 5%, coffee 2%
Partners: US 45%, EU, Central America and Caribbean

Imports: $2.205 billion (c.i.f., 1994 est.)
Commodoties: capital goods 21%, crude oil 11%, foodstuffs 9%, consumer goods, chemicals
Partners: US 40%, EU, Central America and Caribbean, Japan

Debt external: $6.7 billion (yearend 1993 est.)

Exchange rates: balboas (B) per US$1 - 1.000 (fixed rate)

Electricity
Capacity: 960,000 kW
Production: 2.8 billion kWh
Production consumption per capita: 1,047 kWh (1993)

Telephone system: 220,000 telephones; domestic and international facilities well developed
Local: NA
Intercity: NA
International: 1 coaxial submarine cable; 2 INTELSAT (Atlantic Ocean) earth stations; connected to the Central American Microwave System

Military expenditures: expenditures for the Panamanian security forces amounted to $105 million, 1.0% of GDP (1993 est.)

Airports: 115
With paved runways over 3047 m: 1
With paved runways 2438 to 3047 m: 1
With paved runways 15-24 to 2437 m: 5
With paved runways 914 to 1523 m: 14
With paved runways under 914 m: 74
With unpaved runways 914 to 1523 m: 20

Pipelines: crude oil 130 km

Waterways: 800 km navigable by shallow draft vessels; 82 km Panama Canal

Merchant marine
Total: 3,526 ships (1,000 GRT or over) totaling 60,748,525 GRT/95,102,552 DWT
Ships by type: barge carrier 1, bulk 787, cargo 1,070, chemical tanker 175, combination bulk 33, combination ore/oil 25, container 259, liquefied gas tanker 125, livestock carrier 8, multifunction large-load carrier 6, oil tanker 465, passenger 24, passenger-cargo 3, refrigerated cargo 284, roll-on/roll-off cargo 81, short-sea passenger 34, specialized tanker 9, vehicle carrier 137
Note: a flag of convenience registry; includes 93 countries; the 10 major fleet flags are:Japan 1,171 ships, Greece 323, Hong Kong 276, US 212, Taiwan 184, Singapore 181, South Korea 172, China 145 ships, UK 102, and Norway 70

Disputes international: none

Illicit drugs: major cocaine transshipment point and drug money laundering center