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 the end of 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 by or 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: 12 nm
Contiguous zone: 24 nm
Exclusive economic zone: 200 nm

Climate: tropical maritime; 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 hydropower

Land use
Arable land: 7.36%
Permanent crops: 1.98%
Other: 90.66% (2001)

Irrigated land: 320 km² (1998 est.)

Natural hazards: occasional severe storms and forest fires in the Darien area

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: 3,039,150 (July 2005 est.)
Growth rate: 1.26% (2005 est.)
Below poverty line: 37% (1999 est.)

Nationality
Noun: Panamanian
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: 29.8% (male 460,840/female 443,359)
15-64 years: 63.9% (male 984,558/female 956,748)
65 years and over: 6.4% (male 91,383/female 102,262) (2005 est.)

Median age
Total: 26.18 years
Male: 25.89 years
Female: 26.48 years (2005 est.)

Population growth rate: 1.26% (2005 est.)

Birth rate: 19.96 births/1000 population (2005 est.)

Death rate: 6.54 deaths/1000 population (2005 est.)

Net migration rate: -0.86 migrant(s)/1000 population (2005 est.)

Environment
Current issues: 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
International agreements party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, 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/female
Under 15 years: 1.04 male/female
15-64 years: 1.03 male/female
65 years and over: 0.89 male/female
Total population: 1.02 male/female (2005 est.)

Infant mortality rate
Total: 20.47 deaths/1000 live births
Male: 22.59 deaths/1000 live births
Female: 18.26 deaths/1000 live births (2005 est.)

Life expectancy at birth
Total population: 75.25 years
Male: 72.68 years
Female: 77.93 years (2005 est.)

Total fertility rate: 2.45 children born/woman (2005 est.)

Hivaids
Adult prevalence rate: 0.9% (2003 est.)
People living with hivaids: 16,000 (2003 est.)
Deaths: less than 500 (2003 est.)

Literacy
Definition: age 15 and over can read and write
Total population: 92.6%
Male: 93.2%
Female: 91.9% (2003 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 democracy

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*(Kuna Yala) and 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 1978 1983 1994 and 2004

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 Martin TORRIJOS Espino (since 1 September 2004); First Vice President Samuel LEWIS Navarro (since 1 September 2004); Second Vice President Ruben AROSEMENA Valdes (since 1 September 2004); note - the president is both the chief of state and head of government
Head of government: President Martin TORRIJOS Espino (since 1 September 2004); First Vice President Samuel LEWIS Navarro (since 1 September 2004); Second Vice President Ruben AROSEMENA Valdes (since 1 September 2004); 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 2 May 2004 (next to be held 3 May 2009); note - beginning in 2009, Panama will have only one vice president.
Election results: Martin TORRIJOS Espino elected president; percent of vote - Martin TORRIJOS Espino 47.5%, Guillermo ENDARA Galimany 30.6%, Jose Miguel ALEMAN 17%, Ricardo MARTINELLI 4.9%
Note: government coalition - PRD (Democratic Revolutionary Party), PP (Popular Party)

Legislative branch
Elections: last held 2 May 2004 (next to be held 3 May 2009)
Election results: percent of vote by party - NA%; seats by party - PRD 40, PA 17, PS 8, MOLIRENA 3, CD 2, PP 2, PLN 1, other 5
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 or Corte Suprema de Justicia (nine judges appointed for 10-year terms); five superior courts; three courts of appeal

Political parties and leaders: Democratic Change or CD [Ricardo MARTINELLI]; Democratic Revolutionary Party or PRD [Martin TORRIJOS]; National Liberal Party or PLN [Anibal GALINDO]; Nationalist Republican Liberal Movement or MOLIRENA [Jesus ROSAS]; Panamenista Party or PA (formerly the Arnulfista Party) [Mireya Elisa MOSCOSO Rodriguez]; Popular Party or PP (formerly Christian Democratic Party or PDC) [Ruben AROSEMENA]; Solidarity Party or PS [Jose Raul MULINO]

International organization participation: FAO G-77 IADB IAEA IBRD ICAO ICC ICCt ICFTU ICRM IDA IFAD IFC IFRCS ILO IMF IMO Interpol IOC IOM ISO ITU LAES LAIA (observer) MIGA NAM OAS OPANAL OPCW PCA RG UN UNCTAD UNESCO UNIDO UPU WCL WCO WFTU WHO WIPO WMO WToO WTO

Diplomatic representation
In the us chief of mission: Ambassador Federico HUMBERT 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 fax: [1] (202) 483-8,416
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 Linda Ellen WATT
From the us embassy: Avenida Balboa and Calle 37, Apartado Postal 0816-2,561, Zona 5, Panama City 5
From the us mailing address: American Embassy Panama, Unit 0945, APO AA 34,002
From the us telephone: [507] 207-7,000
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: Panama's dollarised economy rests primarily on a well-developed services sector that accounts for four-fifths of GDP. Services include operating the Panama Canal banking the Colon Free Zone insurance container ports flagship registry and tourism. A slump in Colon Free Zone and agricultural exports the global slowdown and the withdrawal of US military forces held back economic growth in 2000-03; growth picked up in 2004 led by export-oriented services and a construction boom stimulated by tax incentives. The government has been backing tax reforms reform of the social security program new regional trade agreements and development of tourism. Unemployment remains high.

Real gdp purchasing power parity: $20.57 billion (2004 est.)

Real gdp growth rate: 6% (2004 est.)

Real gdp per capita: purchasing power parity - $6,900 (2004 est.)

Gdp composition by sector of origin
Agriculture: 7.2%
Industry: 13%
Services: 79.8% (2004 est.)

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

Industries: construction brewing cement and other construction materials sugar milling

Industrial production growth rate: 5.4% (2004 est.)

Labor force
Note: shortage of skilled labor, but an oversupply of unskilled labor (2004 est.)
By occupation agriculture: 20.8%
By occupation industry: 18%
By occupation services: 61.2% (1995 est.)

Unemployment rate: 12.6% (2004 est.)

Population below poverty line: 37% (1999 est.)

Household income or consumption by percentage share
Lowest 10: 1.2%
Highest 10: 35.7% (1997)

Distribution of family income gini index: 48.5 (1997)

Budget
Revenues: $3.095 billion
Expenditures: $3.737 billion, including capital expenditures of $471 million (2004 est.)

Public debt: 69.2% of GDP (2004 est.)

Fiscal year: calendar year

Inflation rate consumer prices: 2% (2004 est.)

Current account balance: $-469.6 million (2004 est.)

Exports: $5.699 billion f.o.b. (includes the Colon Free Zone) (2004 est.)
Commodities: bananas shrimp sugar coffee clothing (1999)
Partners: US 50.5% Sweden 6.6% Spain 5.1% Netherlands 4.4% Costa Rica 4.2% (2004)

Imports: $7.164 billion f.o.b. (includes the Colon Free Zone) (2004 est.)
Commodities: capital goods foodstuffs consumer goods chemicals
Partners: US 33.3% Netherlands Antilles 8.1% Japan 6% Costa Rica 5.7% Mexico 4.6% Colombia 4.2% (2004)

Reserves of foreign exchange and gold: $1.076 billion (2004 est.)

Debt external: $8.78 billion (2004 est.)

Exchange rates: balboas per US dollar - 1 (2004) 1 (2003) 1 (2002) 1 (2001) 1 (2000)

Electricity
Production: 4.873 billion kWh (2002)
Consumption: 4.473 billion kWh (2002)
Exports: 120 million kWh (2002)
Imports: 61 million kWh (2002)

Telephones
Main lines in use: 386,900 (2002)
Mobile cellular: 834,000 (2003)

Telephone system
General assessment: domestic and international facilities well developed
Domestic: NA
International: country code - 507; 1 coaxial submarine cable; satellite earth stations - 2 Intelsat (Atlantic Ocean); connected to the Central American Microwave System

Internet
Country code: .pa
Hosts: 7,129 (2003)
Users: 120,000 (2002)

Military expenditures
Dollar figure: $147 million (2004)
Percent of gdp: 1.1% (2004)

Airports: 105 (2004 est.)
With paved runways total: 44
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: 15
With paved runways under 914 m: 22 (2004 est.)
With unpaved runways total: 61
With unpaved runways 914 to 1523 m: 12
With unpaved runways under 914 m: 49 (2004 est.)

Railways
Total: 355 km
Standard gauge: 76 km 1.435-m gauge
Narrow gauge: 279 km 0.914-m gauge (2004)

Waterways: 800 km (includes 82 km Panama Canal) (2004)

Merchant marine
Total: 5,005 ships (1,000 GRT or over) 122,960,929 GRT/183,615,337 DWT
By type: barge carrier 1, bulk carrier 1,548, cargo 886, chemical tanker 465, combination ore/oil 13, container 605, liquefied gas 183, livestock carrier 8, passenger 42, passenger/cargo 77, petroleum tanker 521, refrigerated cargo 298, roll on/roll off 97, specialized tanker 5, vehicle carrier 256
Foreign owned: 4,388 (Andorra 1, Argentina 9, Australia 3, Bahamas 1, Belgium 14, Brazil 1, Canada 1, Chile 14, China 310, Colombia 5, Croatia 1, Cuba 9, Cyprus 7, Denmark 13, Egypt 15, France 7, Germany 23, Greece 546, Hong Kong 159, India 8, Indonesia 46, Ireland 1, Isle of Man 2, Israel 3, Italy 8, Japan 1814, Jordan 9, Latvia 2, Lithuania 5, Malaysia 11, Maldives 1, Malta 1, Mexico 4, Monaco 8, Netherlands 22, New Zealand 1, Nigeria 6, Norway 66, Pakistan 1, Peru 13, Philippines 15, Poland 19, Portugal 8, Romania 13, Russia 4, Saudi Arabia 4, Singapore 54, South Africa 3, South Korea 292, Spain 41, Sri Lanka 1, Sudan 1, Sweden 4, Switzerland 188, Syria 7, Taiwan 301, Thailand 10, Trinidad & Tobago 1, Tunisia 1, Turkey 18, Ukraine 9, UAE 83, United Kingdom 29, United States 88, Venezuela 20, Vietnam 2, Yemen 1) (2005)

Disputes international: organized illegal narcotics operations in Colombia operate within the border region with Panama

Illicit drugs: 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