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Panama (11/07)For the most current version of this Note, see Background Notes A-Z.
PROFILE OFFICIAL NAME: Geography People Government Economy PEOPLE Panama is rich in folklore and popular traditions. Lively salsa--a mixture of Latin American popular music, rhythm and blues, jazz, and rock--is a Panamanian specialty, and Ruben Blades its best-known performer and Minister of Tourism since September 2004. Indigenous influences dominate handicrafts such as the famous Kuna textile molas. Artist Roberto Lewis' Presidential Palace murals and his restoration work and ceiling in the National Theater are widely admired. As of 2004, more than 92,500 Panamanian students attended the University of Panama, the Technological University, and the University of Santa Maria La Antigua, a private Catholic institution. Including smaller colleges, there are 88 institutions of higher education in Panama. The first six years of primary education are compulsory, and for the 2004/2005 school year there were about 430,000 students enrolled in grades one through six. The total enrollment in the six secondary grades for the same period was 253,900. More than 90% of Panamanians are literate. HISTORY Rodrigo de Bastidas, sailing westward from Venezuela in 1501 in search of gold, was the first European to explore the Isthmus of Panama. A year later, Christopher Columbus visited the Isthmus and established a short-lived settlement in the Darien. Vasco Nunez de Balboa's tortuous trek from the Atlantic to the Pacific in 1513 demonstrated that the Isthmus was, indeed, the path between the seas, and Panama quickly became the crossroads and marketplace of Spain's empire in the New World. Gold and silver were brought by ship from South America, hauled across the Isthmus, and loaded aboard ships for Spain. The route became known as the Camino Real, or Royal Road, although it was more commonly known as Camino de Cruces (Road of the Crosses) because of the abundance of gravesites along the way. Panama was part of the Spanish empire for 300 years (1538-1821). From the outset, Panamanian identity was based on a sense of "geographic destiny," and Panamanian fortunes fluctuated with the geopolitical importance of the Isthmus. The colonial experience also spawned Panamanian nationalism as well as a racially complex and highly stratified society, the source of internal conflicts that ran counter to the unifying force of nationalism. Building the Canal The treaty granted rights to the United States "as if it were sovereign" in a zone roughly 10 miles wide and 50 miles long. In that zone, the U.S. would build a canal, then administer, fortify, and defend it "in perpetuity." In 1914, the United States completed the existing 83-kilometer (52 mile) canal, which is one of the world's greatest feats of engineering. The early 1960s saw the beginning of sustained pressure in Panama for the renegotiation of this treaty. Military Coups and Coalitions Torrijos' death in 1981 altered the tone but not the direction of Panama's political evolution. Despite the 1983 constitutional amendments, which appeared to proscribe a political role for the military, the Panama Defense Forces (PDF), as they were then known, continued to dominate Panamanian political life behind a facade of civilian government. By this time, General Manuel Noriega was firmly in control of both the PDF and the civilian government. The United States froze economic and military assistance to Panama in the summer of 1987 in response to the domestic political crisis in Panama and an attack on the U.S. Embassy. In April 1988, President Reagan invoked the International Emergency Economic Powers Act, freezing Panamanian Government assets in all U.S. organizations. In May 1989 Panamanians voted overwhelmingly for the anti-Noriega candidates. The Noriega regime promptly annulled the election, and embarked on a new round of repression. By the fall of 1989 the regime was barely clinging to power, and the regime's paranoia made daily existence unsafe for American citizens. On December 20, 1989, President George H.W. Bush ordered the U.S. military into Panama to protect U.S. lives and property, to fulfill U.S. treaty responsibilities to operate and defend the Canal, to assist the Panamanian people in restoring democracy, and to bring Noriega to justice. The U.S. troops involved in Operation Just Cause achieved their primary objectives quickly, and Noriega eventually surrendered to U.S. authorities. He completed his sentence for drug trafficking charges in September 2007. In August 2007, a U.S. federal court in Miami found Noriega extraditable to France to serve a sentence imposed there after an in absentia conviction for money laundering. Noriega remains in custody pending the outcome of his legal challenges to the certificate of extraditability issued August 2007. Rebuilding Democracy During its 5-year term, the often-fractious Endara government struggled to meet the public's high expectations. Its new police force was a major improvement over its predecessor but was not fully able to deter crime. Ernesto Perez Balladares was sworn in as President on September 1, 1994, after an internationally monitored election campaign. Perez Balladares ran as the candidate for a three-party coalition dominated by the Democratic Revolutionary Party (PRD), the erstwhile political arm of military dictatorships. Perez Balladares worked skillfully during the campaign to rehabilitate the PRD's image, emphasizing the party's populist Torrijos roots rather than its association with Noriega. He won the election with only 33% of the vote when the major non-PRD forces splintered into competing factions. His administration carried out economic reforms and often worked closely with the U.S. on implementation of the Canal treaties. On September 1, 1999, Mireya Moscoso, the widow of former President Arnulfo Arias Madrid, took office after defeating PRD candidate Martin Torrijos, son of the late dictator, in a free and fair election. During her administration, Moscoso attempted to strengthen social programs, especially for child and youth development, protection, and general welfare. Moscoso's administration successfully handled the Panama Canal transfer and was effective in the administration of the Canal. The PRD's Martin Torrijos won the presidency and a legislative majority in the National Assembly in 2004. Torrijos ran his campaign on a platform of "zero tolerance" for corruption, a problem endemic to the Moscoso and Perez Balladares administrations. Since taking office, Torrijos has passed a number of laws making the government more transparent. He formed a National Anti-Corruption Council whose members represent the highest levels of government, as well as civil society, labor organizations, and religious leadership. In addition, many of his closest Cabinet ministers are non-political technocrats known for their support for the Torrijos government's anti-corruption aims. Despite the Torrijos administration's public stance on corruption, few high-profile cases, particularly involving political or business elites, have been acted upon. GOVERNMENT AND POLITICAL CONDITIONS NATIONAL SECURITY Law enforcement units that are separated from the PPF, such as the Technical Judicial Police (PTJ), also are directly subordinate to civilian authorities. The PPF budget, in contrast to the former PDF, is on public record and under the control of the executive. The lead criminal investigative entity is the PTJ. It is nominally under the direction of the autonomous Attorney General. Reforms are pending to re-organize and re-direct the PTJ. Principal Government Officials Panama maintains an embassy in the United States at 2862 McGill Terrace, NW, Washington, DC 20008 (tel: 202-483-1407), and consulates in Atlanta, Boston, Chicago, Honolulu, Houston, Los Angeles, Miami, New Orelans, New York, Philadelphia, San Juan, San Diego, San Francisco, and Tampa. ECONOMY In October 2006, Panamanians voted in favor of a $5.25 billion Canal expansion project to construct a third set of locks, which is expected to take eight to ten years to complete. The Government of Panama expects the project to be a transforming event for Panama that will provide 7,000-9,000 direct new jobs during the peak construction period of 2009-2011 and set the tone economically for years to come. The expansion is expected to be financed through a combination of increased tolls and debt. GDP growth in the first three months of 2007 was 9.4%, surpassing most private and government projections and the robust growth seen in 2006 and 2005, which was 8.1% and 6.9%, respectively. Growth has been fueled by the construction sector, transportation, port and Panama Canal-related activities, and tourism. Though Panama has the highest GDP per capita in Central America, about 40% of its population remains mired in poverty. Panama has bilateral free trade agreements with Chile, El Salvador, Taiwan, Singapore, Honduras, and Costa Rica. Panama is exploring free trade negotiations with Mexico and other Latin American countries. The U.S. and Panama signed a Trade Promotion Agreement (TPA) in June 2007. Panama ratified the agreement in July 2007; it still requires U.S. congressional approval to enter into force. This agreement will promote economic opportunity by eliminating tariffs and other barriers to trade of goods and services. FOREIGN RELATIONS Panama is a member of the Organization of American States and was a founding member of the Rio Group. Although it was suspended from the Latin American Economic System--known informally both as the Group of Eight and the Rio Group--in 1988 due to its internal political system under Noriega, Panama was readmitted in 1994 as an acknowledgment of its democratic credentials. Panama also is one of the founding members of the Union of Banana Exporting Countries and belongs to the Inter-American Tropical Tuna Commission. Panama is a member of the Central American Parliament as well as the Central American Integration System (SICA). Panama joined its six Central American neighbors at the 1994 Summit of the Americas in signing the Alliance for Sustainable Development, known as the Conjunta Centroamerica-USA or CONCAUSA, to promote sustainable economic development in the region. U.S.-PANAMANIAN RELATIONS Panama continues to fight against the illegal narcotics and arms trade. The country's proximity to major cocaine-producing nations and its role as a commercial and financial crossroads make it a country of special importance in this regard. The Panamanian Government has concluded agreements with the U.S. on maritime law enforcement, counter-terrorism, counter-narcotics, and stolen vehicles. A three-year investigation by the Drug Prosecutors Office (DPO), the PTJ, and several other law enforcement agencies in the region culminated in the May 2006 arrest in Brazil of Pablo Rayo Montano, a Colombian-born drug kingpin. Assets located in Panama belonging to his criminal cartel were among those seized by the Government of Panama following his indictment by a U.S. federal court in Miami. In March 2007 the U.S. Coast Guard in cooperation with the Government of Panama seized over 38,000 lbs. of cocaine off the coast of Panama, the largest drug seizure in the eastern Pacific. In the economic investment arena, the Panamanian Government has been successful in the enforcement of intellectual property rights and has concluded a Bilateral Investment Treaty Amendment with the United States and an agreement with the Overseas Private Investment Corporation. Although money laundering remains a problem, Panama passed significant reforms in 2000 intended to strengthen its cooperation against international financial crimes. In January 2005, Panama sent election supervisors to Iraq as part of the International Mission for Iraqi Elections to monitor the national elections. The Panama Canal Treaties The details of the arrangements for U.S. operation and defense of the Canal under the Panama Canal Treaty are spelled out in separate implementing agreements. The Canal Zone and its government ceased to exist when the treaties entered into force and Panama assumed jurisdiction over Canal Zone territories and functions, a process which was finalized on December 31, 1999. Principal U.S. Embassy Officials The U.S. Embassy in Panama is located at Edificio 783, Avenida Demetrio Basilio Lakas, Clayton, Panama City (tel: 507-207-7000). Personal and official mail for the embassy and members of the mission may be sent to: U.S. Embassy Panama, Unit 0945, APO AA 34002. E-mail: Panamaweb@state.gov Other Contact Information U.S. Department of State U.S. Department of Commerce |
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