Overview

The Basics

The Republic of Panama is situation in Central America and is bordered by the Caribbean Sea and the North Pacific Ocean. Panama is also bordered by Columbia to the west and Costa Rica to the east. The North Atlantic Ocean via the Caribbean Sea is linked with the North Pacific Ocean by the Panama Canal.

Panama has a total landmass of 75,990 square kilometers and a diverse topography. The area around the Caribbean coast is mountainous, while the Pacific side is mostly large plains dotted by small hills. The highest point in Panama is Volcan de Chirqui.

Panama has a tropical climate and two distinct seasons. The rainy season lasts between May and January and there is a short dry season from January to May.

Panama’s natural resources include minerals, especially copper, mahogany forests, and various types of seafood, especially shrimp.

Panama’s capital city is Panama City. The international airport in Panama is used by many international carriers and offers flights to most of the major cities throughout the world. Panama has two ports, Balboa and Cristobal.

As of July 2006, Panama was estimated to have a population of just over three million people, the majority of whom live in urban areas. In fact, over one million people reside in Panama City alone.

The official language of the Republic of Panama is Spanish, but English is commonly spoken and understood in well-developed cities.

More than 60 Indian tribes called Panama home in the early 1500s when Spain discovered the isthmus. In 1519, Panama City was founded and the King of Spain appointed a governor to rule the colony. During this time, Panama was used as a base for Spanish expansion along the Pacific coastlines of Central and South America.

Panama chose to ally itself with fellow Spanish colony Columbia during the independence wars of the Spanish colonies. Panama ended this alliance and re-asserted its independence in 1903 when it became the present Republic of Panama.

The United States of America built the Panama Canal over a ten-year period between 1904 and 1914. The canal was expanded to accommodate two Panamax-sized vessels to pass through at the same time during the later half of the twentieth century. In 2006, Panamanian voters approved plans to expand the canal even more.

Although there is evidence of the old colonial regime in both architecture and culture, Panama City is a thoroughly modern, sophisticated city.

The dominant religion of the Republic is still Roman Catholicism.

Government and Economy

The Republic of Panama is classified as an independent, sovereign state. It has a democratically elected government consisting of three branches. The Executive branch includes an independently elected President and two Vice-Presidents. Among other responsibilities, the Vice-Presidents are responsible for appointing a cabinet of twelve Ministers of State. The Legislative branch consists of a unicameral Assembly with 72 deputies. The Judicial system consists of a Supreme Court of Justice with nine judges, all appointed for 10-year terms, and two lower levels of courts.

The Panamanian economy was in serious trouble throughout the 1980s; however, since then, the economy has slowly improved. In 1996 a Brady-bond restructuring initiative addressed one of Panama’s most significant economic problems, incredibly high external debt that had culminated in Panama’s exclusion from world capital markets. At the same time the government was also aggressively pursuing a policy of trade and economic liberalization, which included the privatization of key assets. These efforts have begun to bear fruit.

Panama’s economy has traditionally been supported in large part by the trade of illegal drugs. This dependence is likely at least partially responsible for the economic disaster that was the ‘80s. Aside from drugs, Panama’s economy revolves around banking, mining, commerce, and tourism. Of course, the canal and shipping business also play important roles in the economy. The Panamanian government has introduced many investment incentives to increase the total value of the financial sector’s assets already valued at over $32 billion. Although copper mining only became economically significant recently, Panama is quickly emerging as one of the world’s largest producers.

Foreign Affairs

Panama is a member of the United Nations Security Council and the Latin Union.

Foreigners entering the Republic of Panama may either be classified as Tourists, Temporary Visitors, Special Temporary Visitors, Tourist-Pensioners, Immigrants, or Investors.

Short-stay visas are feely issued. Likewise, Tourist-pensioner visas are easily obtained provided applicants are able to demonstrate a particular monthly income from interest on time deposits in any Panamanian bank. Investor visas are available to people who invest their own capital into local business activity. Finally, immigrant visas can be obtained for working residents planning to stay over a longer period of time.

The Panamanian government regulates the employment market carefully through a variety of measuring including setting a maximum percentage of foreigners who may be employed at a business depending upon its sector. This figure is typically 5%, but it is usually possible for foreign companies to fill senior positions with expatriates, raising the maximum allowable percentage up to 12%. The Ministry of Labour, which grants work permits, may be willing to agree to a higher percentage.