Background: Explored and settled by the Spanish in the 16th century Panama broke with Spain in 1821 and joined a union of Colombia Venezuela and Ecuador - named the Republic of Gran Colombia. When the latter dissolved in 1830 Panama remained part of Colombia. 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. In 1977 an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. 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 transferred to Panama by the end of 1999. In October 2006 Panamanians approved an ambitious plan to expand the Canal. The project which is to begin in 2006 and could double the Canal's capacity is expected to be completed in 2014-15.

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 or edge of continental margin

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 Baru 3,475 m

Natural resources: copper mahogany forests shrimp hydropower

Land use
Arable land: 7.26%
Permanent crops: 1.95%
Other: 90.79% (2005)

Irrigated land: 430 km² (2003)

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: 3,242,173 (July 2006 est.)
Growth rate: 1.564% (2006 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: 30% (male 496,195/female 476,508)
15-64 years: 63.6% (male 1,044,139/female 1,016,805)
65 years and over: 6.4% (male 97,365/female 111,161) (2006 est.)

Median age
Total: 26.4 years
Male: 26 years
Female: 26.7 years (2006 est.)

Population growth rate: 1.564% (2006 est.)

Birth rate: 21.45 births/1000 population (2006 est.)

Death rate: 5.44 deaths/1000 population (2006 est.)

Net migration rate: -0.37 migrant(s)/1000 population (2006 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: 1.05 male/female
Under 15 years: 1.041 male/female
15-64 years: 1.027 male/female
65 years and over: 0.876 male/female
Total population: 1.021 male/female (2006 est.)

Infant mortality rate
Total: 15.96 deaths/1000 live births
Male: 17.33 deaths/1000 live births
Female: 14.54 deaths/1000 live births (2006 est.)

Life expectancy at birth
Total population: 75.19 years
Male: 72.69 years
Female: 77.8 years (2006 est.)

Total fertility rate: 2.66 children born/woman (2006 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: 91.9%
Male: 92.5%
Female: 91.2% (2000 census)

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
Name: Panama
Geographic coordinates: 8 58 N, 79 32 W
Time difference: UTC-5 (same time as Washington, DC during Standard Time)

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)
Cabinet: Cabinet appointed by the president
Elections: president and vice presidents elected on the same ticket by popular vote for five-year terms (eligible for two more terms); election last held 2 May 2004 (next to be held on 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 41, PA 17, PS 9, MOLIRENA 4, CD 3, PLN 3, PP 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 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 [Hugo GUIRAUD]; Liberal Party or PLN [Joaquin F. Franco VASQUEZ]; Nationalist Republican Liberal Movement or MOLIRENA [Gisela CHUNG]; Panamenista Party or PA [Juan Carlos VARELA] (formerly the Arnulfista Party); Patriotic Union Party or PUP [Jose Raul MULINO and Anibal GALINDO]; Popular Party or PP [Rene ORILLAC] (formerly Christian Democratic Party or PDC); Solidarity Party or PS

International organization participation: CAN (observer) CSN (observer) FAO G-77 IADB IAEA IBRD ICAO ICC ICCt ICRM IDA IFAD IFC IFRCS ILO IMF IMO IMSO Interpol IOC IOM IPU ISO ITSO ITU ITUC LAES LAIA (observer) MIGA NAM OAS OPANAL OPCW PCA RG UN UNCTAD UNESCO UNIDO Union Latina UNWTO UPU WCL WCO WFTU WHO WIPO WMO 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 William A. EATON
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 dollarized economy rests primarily on a well-developed services sector that accounts for three-fourths of GDP. Services include operating the Panama Canal banking the Colon Free Zone insurance container ports flagship registry and tourism. A slump in the 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 2004-06 led by export-oriented services and a construction boom stimulated by tax incentives. The government has implemented tax reforms as well as social security reforms and backs regional trade agreements and development of tourism. Unemployment remains high. In October 2006 voters passed a referendum to expand the Panama Canal to accommodate ships that are now too large to transverse the transoceanic crossway. Not a CAFTA signatory Panama in December 2006 independently negotiated a free trade agreement with the US which when implemented will help promote the country's economic growth.

Real gdp purchasing power parity: $26.16 billion (2006 est.)

Real gdp growth rate: 8.1% (2006 est.)

Real gdp per capita: $8,200 (2006 est.)

Gdp composition by sector of origin
Agriculture: 7.3%
Industry: 16.5%
Services: 76.3% (2006 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: 3% (2006 est.)

Labor force
Note: shortage of skilled labor, but an oversupply of unskilled labor (2006 est.)
By occupation agriculture: 20.8%
By occupation industry: 18%
By occupation services: 61.2% (1995 est.)

Unemployment rate: 8.8% (2006 est.)

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

Household income or consumption by percentage share
Lowest 10: 0.7%
Highest 10: 43% (2003)

Distribution of family income gini index: 56.1 (2003)

Budget
Revenues: $4.283 billion
Expenditures: $4.195 billion (2006 est.)

Public debt: 58.4% of GDP (2006 est.)

Fiscal year: calendar year

Inflation rate consumer prices: 1.1% (2006 est.)

Market value of publicly traded shares: $5.074 billion (2005)

Current account balance: $-378.2 million (2006 est.)

Exports: $8.509 billion f.o.b.; note - includes the Colon Free Zone (2006 est.)
Commodities: bananas shrimp sugar coffee clothing
Partners: US 39.8% Spain 8.1% Netherlands 6.7% Sweden 5.6% Costa Rica 4.5% (2006)

Imports: $10.31 billion f.o.b. (includes the Colon Free Zone) (2006 est.)
Commodities: capital goods foodstuffs consumer goods chemicals
Partners: US 27% Netherlands Antilles 10.1% Costa Rica 5.1% Japan 4.7% (2006)

Reserves of foreign exchange and gold: $1.335 billion (2006 est.)

Debt external: $9.972 billion (2006 est.)

Stock of direct foreign investment at home: $NA

Stock of direct foreign investment abroad: $NA

Exchange rates: balboas per US dollar - 1 (2006) 1 (2005) 1 (2004) 1 (2003) 1 (2002)

Electricity
Production: 5.661 billion kWh (2005)
Consumption: 4.735 billion kWh (2005)
Exports: 51 million kWh (2005)
Imports: 55 million kWh (2005)

Natural gas
Production: 0 m³ (2005 est.)
Consumption: 0 m³ (2005 est.)

Telephones
Main lines in use: 432,900 (2006)
Mobile cellular: 1.694 million (2005)

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: 7,078 (2006)
Users: 220,000 (2006)

Military expenditures
Percent of gdp: 1% (2006)

Airports: 116 (2006)
With paved runways total: 54
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: 18
With paved runways under 914 m: 29 (2006)
With unpaved runways total: 62
With unpaved runways 15-24 to 2437 m: 1
With unpaved runways 914 to 1523 m: 11
With unpaved runways under 914 m: 50 (2006)

Heliports: 2 (2006)

Railways
Total: 355 km
Standard gauge: 77 km 1.435-m gauge
Narrow gauge: 278 km 0.914-m gauge (2006)

Roadways
Total: 11,643 km
Paved: 4,028 km
Unpaved: 7,615 km (2000)

Waterways: 800 km (includes 82 km Panama Canal) (2006)

Merchant marine
Total: 5,764 ships (1000 GRT or over) 159,649,801 GRT/240,190,316 DWT
By type: barge carrier 2, bulk carrier 1,940, cargo 1,034, carrier 3, chemical tanker 507, combination ore/oil 6, container 710, liquefied gas 191, livestock carrier 7, passenger 46, passenger/cargo 72, petroleum tanker 522, refrigerated cargo 288, roll on/roll off 129, specialized tanker 22, vehicle carrier 285
Foreign owned: 4,949 (Albania 1, Argentina 8, Australia 4, Bahamas 2, Bangladesh 1, Belgium 11, Bulgaria 1, Canada 17, Chile 8, China 473, Colombia 4, Croatia 6, Cuba 11, Cyprus 15, Denmark 32, Dominican Republic 1, Ecuador 2, Egypt 13, Estonia 3, France 15, Gabon 1, Germany 38, Greece 505, Hong Kong 137, India 25, Indonesia 37, Iran 4, Ireland 1, Israel 2, Italy 10, Jamaica 1, Japan 2,151, Jordan 11, South Korea 316, Kuwait 1, Latvia 5, Lebanon 3, Lithuania 5, Malaysia 14, Maldives 1, Malta 2, Mexico 4, Monaco 11, Netherlands 14, Nigeria 6, Norway 60, Oman 1, Pakistan 5, Peru 15, Philippines 12, Poland 15, Portugal 9, Qatar 1, Romania 8, Russia 9, Saudi Arabia 14, Singapore 83, Spain 61, Sri Lanka 3, Sweden 9, Switzerland 26, Syria 24, Taiwan 306, Thailand 10, Turkey 53, Turks and Caicos Islands 1, Ukraine 8, UAE 108, UK 35, US 115, Venezuela 10, Vietnam 10, Yemen 5)
Registered in other countries: 1 (Venezuela 1) (2006)

Ports and terminals: Balboa Colon Cristobal

Disputes international: organized illegal narcotics operations in Colombia operate within the remote 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