Background: Explored and settled by the Spanish in the 16th century Panama broke with Spain in 1821 and joined a union of Colombia Ecuador and Venezuela - 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 began in 2007 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)

Total renewable water resources: 148 km³ (2000)

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: 3,309,679 (July 2008 est.)
Growth rate: 1.544% (2008 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: 29.6% (male 499,254/female 479,242)
15-64 years: 63.8% (male 1,066,915/female 1,043,499)
65 years and over: 6.7% (male 102,937/female 117,832) (2008 est.)

Median age
Total: 26.7 years
Male: 26.3 years
Female: 27.1 years (2008 est.)

Population growth rate: 1.544% (2008 est.)

Birth rate: 20.68 births/1000 population (2008 est.)

Death rate: 4.71 deaths/1000 population (2008 est.)

Net migration rate: -0.53 migrant(s)/1000 population (2008 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: 1.02 male/female
65 years and over: 0.87 male/female
Total population: 1.02 male/female (2008 est.)

Infant mortality rate
Total: 13.4 deaths/1000 live births
Male: 14.35 deaths/1000 live births
Female: 12.42 deaths/1000 live births (2008 est.)

Life expectancy at birth
Total population: 76.88 years
Male: 74.08 years
Female: 79.81 years (2008 est.)

Total fertility rate: 2.57 children born/woman (2008 est.)

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

Major infectious diseases
Degree of risk: intermediate
Food or waterborne diseases: bacterial diarrhea and hepatitis A
Vectorborne disease: dengue fever and malaria
Water contact disease: leptospirosis (2008)

Education expenditures: 3.8% of GDP (2004)

Literacy
Definition: age 15 and over can read and write
Total population: 91.9%
Male: 92.5%
Female: 91.2% (2000 census)

School life expectancy primary to tertiary education
Total: 13 years
Male: 13 years
Female: 14 years (2006)

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: 11 provinces (provincias singular - provincia) and 1 territory* (comarca); Bocas del Toro Comarca Kuna Yala Comarca Ngobe-Bugle 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 (not eligible for immediate reelection; president and vice presidents must sit out two additional terms (10 years) before becoming eligible for reelection); 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]; Nationalist Republican Liberal Movement or MOLIRENA [Gisela CHUNG]; Panamenista Party or PA [Juan Carlos VARELA] (formerly the Arnulfista Party); Patriotic Union Party or PU (combination of the Liberal National Party or PLN and the Solidarity Party or PS)[Jose Raul MULINO and Anibal GALINDO]; Popular Party or PP [Rene ORILLAC] (formerly Christian Democratic Party or PDC)

International organization participation: BCIE 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 UN Security Council (temporary) 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, Honolulu, Houston, Miami, New Orleans, New York, Philadelphia, San Diego, San Francisco, San Juan (Puerto Rico), Tampa
From the us chief of mission: Ambassador William A. EATON
From the us embassy: Edificio 783, Avenida Demetrio Basilio Lakas Panama, Apartado Postal 0816-2,561, Zona 5, Panama City
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] 317-5,568

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 two-thirds of GDP. Services include operating the Panama Canal banking the Colon Free Zone insurance container ports flagship registry and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and should be completed by 2014 at a cost of $5.3 billion (about 30% of current GDP). The expansion project will more than double the Canal's capacity enabling it to accommodate ships that are now too large to transverse the transoceanic crossway and should help to reduce the high unemployment rate. The government has implemented tax reforms as well as social security reforms and backs regional trade agreements and development of tourism. 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: $34.81 billion (2007 est.)

Real gdp growth rate: 11.2% (2007 est.)

Real gdp per capita: $10,700 (2007 est.)

Gdp composition by sector of origin
Agriculture: 6.6%
Industry: 16.4%
Services: 77% (2007 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: 10.5% (2007 est.)

Labor force
Note: shortage of skilled labor, but an oversupply of unskilled labor (2007 est.)
By occupation agriculture: 15%
By occupation industry: 18%
By occupation services: 67% (2006)

Unemployment rate: 6.4% (2007 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: $5.505 billion
Expenditures: $4.822 billion (2007 est.)

Public debt: 53% of GDP (2007 est.)

Inflation rate consumer prices: 4.2% (2007 est.)

Commercial bank prime lending rate: 8.25% (31 December 2007)

Stock of domestic credit: $17.4 billion (31 December 2007)

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

Current account balance: -$1.577 billion (2007 est.)

Exports: $9.312 billion f.o.b.; note - includes the Colon Free Zone (2007 est.)
Commodities: bananas shrimp sugar coffee clothing
Partners: US 35.6% Netherlands 10.2% China 6% Sweden 5.5% UK 5.4% Costa Rica 5.1% Spain 5% (2007)

Imports
Note: includes the Colon Free Zone (2007 est.)
Commodities: capital goods foodstuffs consumer goods chemicals
Partners: US 32.8% Netherlands Antilles 7.6% China 5.6% Japan 5.1% Costa Rica 5.1% South Korea 4.1% (2007)

Reserves of foreign exchange and gold: $1.935 billion (31 December 2007 est.)

Debt external: $10.45 billion (31 December 2007 est.)

Stock of direct foreign investment at home: $NA

Stock of direct foreign investment abroad: $NA

Exchange rates: balboas (PAB) per US dollar - 1 (2007) 1 (2006) 1 (2005) 1 (2004) 1 (2003)

Electricity
Production: 5.805 billion kWh (2006 est.)
Consumption: 4.768 billion kWh (2006 est.)
Exports: 124.9 million kWh (2007 est.)
Imports: 8.74 million kWh (2007 est.)

Natural gas
Production: 0 m³ (2007 est.)
Consumption: 0 m³ (2007 est.)
Exports: 0 m³ (2007 est.)
Imports: 0 m³ (2007 est.)
Proven reserves: 0 m³ (1 January 2006 est.)

Telephones
Main lines in use: 491,900 (2007)
Mobile cellular: 2.392 million (2007)

Telephone system
General assessment: domestic and international facilities well developed
Domestic: combined fixed-line and mobile-cellular teledensity is approaching 90 per 100 persons
International: country code - 507; landing point for the Americas Region Caribbean Ring System (ARCOS-1), the MAYA-1, and PAN-AM submarine cable systems that together provide links to the US and parts of the Caribbean, Central America, and South America; satellite earth stations - 2 Intelsat (Atlantic Ocean); connected to the Central American Microwave System (2007)

Internet
Country code: .pa
Hosts: 7,858 (2008)
Users: 525,200 (2007)

Military expenditures: 1% of GDP (2006)

Airports: 116 (2007)
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 (2007)
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 (2007)

Heliports: 2 (2007)

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

Roadways
Total: 11,978 km
Paved: 4,300 km
Unpaved: 7,343 km (2002)

Waterways: 800 km (includes 82 km Panama Canal) (2007)

Merchant marine
Total: 6,323
By type: barge carrier 2, bulk carrier 2,143, cargo 1,208, carrier 13, chemical tanker 565, combination ore/oil 6, container 790, liquefied gas 189, passenger 44, passenger/cargo 71, petroleum tanker 557, refrigerated cargo 265, roll on/roll off 128, specialized tanker 29, vehicle carrier 313
Foreign owned: 5,394 (Albania 2, Argentina 8, Australia 4, Azerbaijan 1, Bahamas 9, Bangladesh 2, Belgium 2, British Virgin Islands 1, Bulgaria 3, Burma 1, Canada 18, Chile 12, China 532, Colombia 4, Croatia 3, Cuba 10, Cyprus 19, Denmark 40, Dominican Republic 1, Ecuador 4, Egypt 17, Estonia 5, Finland 2, France 5, Gabon 1, Germany 44, Gibraltar 1, Greece 510, Hong Kong 130, India 27, Indonesia 31, Iran 7, Israel 3, Italy 28, Japan 2,335, Jordan 13, North Korea 1, South Korea 303, Kuwait 2, Latvia 8, Lebanon 5, Lithuania 7, Malaysia 12, Maldives 1, Malta 3, Mexico 2, Monaco 16, Netherlands 14, Nigeria 10, Norway 89, Oman 2, Pakistan 9, Peru 16, Philippines 7, Poland 11, Portugal 9, Qatar 1, Romania 7, Russia 18, Saudi Arabia 16, Singapore 100, Spain 50, Sri Lanka 1, Sweden 6, Switzerland 25, Syria 32, Taiwan 320, Thailand 10, Tunisia 1, Turkey 94, Turks and Caicos Islands 1, Ukraine 10, UAE 109, UK 59, US 126, Venezuela 10, Vietnam 30, Yemen 6)
Registered in other countries: 3 (Marshall Islands 1, Sierra Leone 1, Venezuela 1) (2008)

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