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. The entire Panama Canal the area supporting the Canal and remaining US military bases were turned over to Panama on 31 December 1999.

Geographic coordinates: 9 00 N, 80 00 W

Map reference: Central America and the Caribbean

Area
Total: 78,200 km²
Land: 75,990 km²
Water: 2,210 km²
Comparative: slightly smaller than South Carolina

Land boundaries
Total: 555 km
Border countries: (2) 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

Elevation
Extremes lowest point: Pacific Ocean 0 m
Extremes highest point: Volcan de Chiriqui 3,475 m

Natural resources: copper, mahogany forests, shrimp

Land use
Arable land: 7%
Permanent crops: 2%
Permanent pastures: 20%
Forests and woodland: 44%
Other: 27% (1993 est.)

Irrigated land: 320 km² (1993 est.)

Natural hazards: NA

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: 2,778,526 (July 1999 est.)
Growth rate: 1.53% (1999 est.)
Below poverty line: NA%

Nationality
Noun: Panamanian(s)
Adjective: Panamanian

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

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

Religions: Roman Catholic 85%, Protestant 15%

Age structure
0-14 years: 32% (male 446,792; female 429,811)
15-64 years: 63% (male 882,541; female 859,455)
65 years and over: 5% (male 76,648; female 83,279) (1999 est.)

Population growth rate: 1.53% (1999 est.)

Birth rate: 21.69 births/1000 population (1999 est.)

Death rate: 5.14 deaths/1000 population (1999 est.)

Net migration rate: -1.22 migrant(s)/1000 population (1999 est.)

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

Sex ratio
At birth: 1.04 male(s)/female
Under 15 years: 1.04 male(s)/female
15-64 years: 1.03 male(s)/female
65 years and over: 0.92 male(s)/female
Total population: 1.02 male(s)/female (1999 est.)

Infant mortality rate: 23.35 deaths/1000 live births (1999 est.)

Life expectancy at birth
Total population: 74.66 years
Male: 71.91 years
Female: 77.51 years (1999 est.)

Total fertility rate: 2.54 children born/woman (1999 est.)

Literacy
Definition: age 15 and over can read and write
Total population: 90.8%
Male: 91.4%
Female: 90.2% (1995 est.)

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 2 territories* (comarca; Bocas del Toro, Chiriqui, Cocle, Colon, Darien, Herrera, Los Santos, Panama, San Blas*, Veraguas, and a new, as yet unnamed territory* or comarca created 7 March 1997 when President PEREZ BALLADARES signed a bill designating a reserve stretched across three provinces

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: President Ernesto PEREZ BALLADARES (since 1 September 1994); First Vice President Tomas ALTAMIRANO Duque (since 1 September 1994); Second Vice President Felipe VIRZI (since 1 September 1994); note_the president is both the chief of state and head of government
Head of government: President Ernesto PEREZ BALLADARES (since 1 September 1994); First Vice President Tomas ALTAMIRANO Duque (since 1 September 1994); Second Vice President Felipe VIRZI (since 1 September 1994); note_the president is both the chief of state and head of government
Cabinet: Cabinet appointed by the president
Elections: president and vice presidents elected on the same ticket by popular vote for five-year terms; election last held 8 May 1994 (next to be held 2 May 1999)
Election results: Ernesto PEREZ BALLADARES elected president; percent of vote_Ernesto PEREZ BALLADARES (PRD) 33%, Mireya MOSCOSO DE GRUBER (PA) 29%, Ruben BLADES (MPE) 17%, Ruben Dario CARLES (MOLIRENA) 16%

Legislative branch: unicameral Legislative Assembly or Asamblea Legislativa (72 seats; members are elected by popular vote to serve five-year terms)
Elections: last held 8 May 1994 (next to be held 2 May 1999)
Election results: percent of vote by party_NA; seats by party_PRD 32, PS 4, PALA 1, PA 14, MPE 6, MOLIRENA 4, PLA 3, PRC 3, PLN 2, PDC 1, UDI 1, MORENA 1
Note: 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

Judicial branch: Supreme Court of Justice (Corte Suprema de Justicia), nine judges appointed for 10-year terms; five superior courts; three courts of appeal

International organization participation: CAN (associate), CCC, ECLAC, FAO, G-77, IADB, IAEA, IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Inmarsat, Intelsat, Interpol, IOC, IOM, ISO, ITU, LAES, LAIA (observer), NAM, OAS, OPANAL, OPCW, PCA, RG, UN, UNCTAD, UNESCO, UNIDO, UPU, WCL, WFTU, WHO, WIPO, WMO, WToO, WTrO

Diplomatic representation
In the us chief of mission: Ambassador Eloy ALFARO de Alba
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, Philadelphia, San Francisco, San Juan (Puerto Rico), Tampa
From the us chief of mission: Ambassador Simon FERRO
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] 227-1377
From the us FAX: [507] 227-1964

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. Since taking office in 1994, President PEREZ BALLADARES has advanced an economic reform program designed to liberalize the trade regime, attract foreign investment, privatize state-owned enterprises, institute fiscal reform, and encourage job creation through labor code reform. The government privatized its two remaining ports along the Panama Canal in 1997 and approved the sale of the railroad in early 1998. It also plans to sell other assets, including the electric company. Panama joined the World Trade Organization (WTrO) and approved a tariff reduction that will give the country the lowest average tariff rates in Latin America. A banking reform law was approved by the legislature in early 1998. The most important sectors driving growth have been the Panama Canal and other shipping and port activities.

Real gdp growth rate: 2.7% (1998 est.)

Real gdp per capita: purchasing power parity: $7,300 (1998 est.)

Gdp composition by sector of origin
Agriculture: 8%
Industry: 18%
Services: 74% (1997 est.)

Agriculture products: bananas, rice, corn, coffee, sugarcane, vegetables; livestock; shrimp

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

Industrial production growth rate: 0.4% (1995 est.)

Labor force: 1.044 million (1997 est.)
Note: shortage of skilled labor, but an oversupply of unskilled labor
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%

Unemployment rate: 13.1% (1997 est.)

Population below poverty line: NA%

Budget
Revenues: $2.4 billion
Expenditures: $2.4 billion, including capital expenditures of $341 million (1997 est.)

Fiscal year: calendar year

Exports: $6.68 billion (f.o.b., 1997)
Commodities: bananas 43%, shrimp 11%, sugar 4%, clothing 5%, coffee 2%
Partners: US 37%, EU, Central America and Caribbean

Imports: $7.38 billion (f.o.b., 1997)
Commodities: capital goods 21%, crude oil 11%, foodstuffs 9%, consumer goods, chemicals
Partners: US 48%, EU, Central America and Caribbean, Japan

Debt external: $7.26 billion (1996 est.)

Electricity
Production: 3.55 billion kWh (1996)
Production by source fossil fuel: 29.58%
Production by source hydro: 70.42%
Production by source nuclear: 0%
Production by source other: 0% (1996)
Consumption: 3.488 billion kWh (1996)
Exports: 157 million kWh (1996)
Imports: 95 million kWh (1996)

Telephones: 273,000 (1991 est.)

Telephone system: domestic and international facilities well developed
Domestic: NA
International: 1 coaxial submarine cable; satellite earth stations_2 Intelsat (Atlantic Ocean); connected to the Central American Microwave System

Military expenditures
Dollar figure: $132 million (1997)
Percent of gdp: 1.6% (1997)

Airports: 110 (1998 est.)
With paved runways total: 43
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: 22 (1998 est.)
With unpaved runways total: 67
With unpaved runways 914 to 1523 m: 17
With unpaved runways under 914 m: 50 (1998 est.)

Pipelines: crude oil 130 km

Railways
Total: 355 km
Broad gauge: 76 km 1.524-m gauge
Narrow gauge: 279 km 0.914-m gauge

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

Merchant marine
Total: 4,632 ships (1,000 GRT or over) totaling 98,433,972 GRT/149,800,820 DWT
Ships by type: bulk 1,335, cargo 1,028, chemical tanker 288, combination bulk 68, combination ore/oil 15, container 507, liquefied gas tanker 176, livestock carrier 9, multifunction large-load carrier 6, oil tanker 498, passenger 41, passenger-cargo 5, railcar carrier 2, refrigerated cargo 312, roll-on/roll-off cargo 102, short-sea passenger 40, specialized tanker 23, vehicle carrier 177
Note: a flag of convenience registry; includes ships from 71 countries among which are Japan 1,262, Greece 378, Hong Kong 244, South Korea 259, Taiwan 229, China 193, Singapore 103, US 116, Switzerland 78, and Indonesia 53 (1998 est.)

Disputes international: none

Illicit drugs: major cocaine transshipment point and major drug-money-laundering center; no recent signs of coca cultivation; monitoring of financial transactions is improving