Panama Facts

by countryaah · Published June 3, 2019 · Updated December 12, 2024

Panama, State of Central America; 77 100 km², 4.2 million residents (2019).Panama, which is located in the southernmost and narrowest part of Central America, borders Colombia in the east and Costa Rica in the west, and has coasts to the Caribbean Sea to the north and to the Pacific Ocean to the south. Panama is divided midway from the northwest to the southeast by the Panama Canal. The capital is Panama City (441,000 residents, 2012).

Country facts

Republic of Panama / Republic of Panama
Country abbreviation: PA
Area: 77 100 km²
Population (2019): 4.2 million residents
Capital: Panama City
Main language: Spanish
State: Republic
Head of State and Head of Government: Laurentino Cortizo (President)
Per capita GDP (2018): US $ 15 575
GNI per capita (2018): US $ 14,370
Currency unit: 1 balboa = 100 cents
Currency code: PAB
Country number (telephony): 507
Internet domain name: pa
Time difference compared to Sweden: −6
National Day: November 3 (Independence Day, 1903)

Nature

Land use: forest (44%), agricultural land (9%), other (47%)
Highest mountain: Barú (3,475 m asl)

Population

Population density (2019): 54 residents per km²
Natural population growth (2019): 1.4%; birth number 19 ‰, death number 5 ‰
Age structure (2019): 0-14 years (26%), 15-64 (66%), 65- (8%)
Average life expectancy (2019): men 75 years, women 81 years
Infant mortality (2019): 14 per 1,000 live births
Population forecast 2050: 6 million residents
HDI (2017): 0.789 (place 66 of 189)
Urbanization rate (2019): 69%
Most populous cities (2012): Panama City (441,000 residents), San Miguelito (355,300), Tocumen (107,600)

Business

Industry’s contribution to GDP (2017): agriculture (3%), industry (16%), service (81%)
Exports (2017): US $ 15,500 million
Main export products: bananas, fish and seafood
Main exporting countries: USA, Netherlands, China
Imports (2017): US $ 21,910 million
Main import products: fuel, medicine, vehicles
Main importing countries: USA, China, Mexico
Railway network (2014): 77 km

Geography of Panama

Location and Borders

Panama is located in the southernmost part of Central America, acting as a land bridge that connects North and South America. It shares borders with Costa Rica to the west and Colombia to the southeast. To the north, it faces the Caribbean Sea, while to the south, Panama has a coastline along the Pacific Ocean. This strategic positioning has historically made Panama an important crossroads for trade, culture, and transportation between the Atlantic and Pacific Oceans.

The country is narrow but long, stretching approximately 772 kilometers (480 miles) from the Caribbean Sea to the Pacific Ocean. Panama’s geographic position is especially significant due to the Panama Canal, which runs through the country, linking the Atlantic and Pacific Oceans and facilitating global trade.

Terrain and Landscape

Panama’s terrain is diverse, with mountains, flat plains, and a variety of ecosystems. The country is divided into three main geographical regions: the Caribbean coast, the central mountain ranges, and the Pacific coast. The central mountain ranges, which include the Cordillera Central and the Chiriquí Highlands, are the highest points in the country, with Mount Barú being the tallest at 3,474 meters (11,398 feet). The mountains create a natural barrier between the Atlantic and Pacific coasts, resulting in different climates and ecosystems on each side.

The country is also home to dense tropical rainforests, particularly in the Darién region, which is located on the border with Colombia. Panama’s rivers, such as the Chagres River and the Panamá Canal, play crucial roles in the country’s water resources, agriculture, and transportation. Along the Pacific coast, Panama is known for its long, sandy beaches, which are popular for both tourism and fishing.

Natural Resources

Panama’s natural resources include a mix of renewable and non-renewable assets. The country has rich biodiversity, particularly in the rainforests and coastal areas, which house a variety of plant and animal species. Panama also has valuable natural resources, including mineral deposits such as copper, gold, and silver. Agriculture is another critical sector, with the country producing crops like bananas, sugar, coffee, cocoa, and tropical fruits.

Additionally, Panama has significant hydroelectric resources, and the Chagres River is used to generate power, which supports the national grid. Although Panama has limited petroleum reserves, its location and infrastructure, including the Panama Canal, make it a hub for international shipping and trade, creating economic opportunities for the country beyond natural resource extraction.

Climate of Panama

General Climate Zones

Panama has a tropical climate, characterized by warm temperatures and high humidity throughout the year. The country experiences two main seasons: the rainy season and the dry season. The rainy season lasts from May to December, while the dry season runs from January to April. However, due to the varied geography of Panama, the climate can vary considerably across different regions.

Caribbean Coast and Rainforests: The Caribbean side of Panama, including the provinces of Bocas del Toro and the Guna Yala comarca, experiences a tropical rainforest climate. This region is characterized by high humidity and heavy rainfall year-round. The rainforests receive the most precipitation in Panama, especially during the rainy season.
Pacific Coast: On the Pacific side, the climate is also tropical, but the dry season tends to be more pronounced. Regions like Panama City and the Azuero Peninsula experience less rainfall during the dry months, although the region is still humid and warm throughout the year.
Highlands: The central mountain regions, particularly around Boquete and Cerro Punta, have a more temperate climate. These areas have cooler temperatures, especially at higher altitudes, and offer a relief from the heat of the lowlands. These regions are popular for agriculture, particularly coffee cultivation, due to the milder climate.

Temperature and Weather Patterns

In Panama, temperatures are consistently warm throughout the year, with average highs ranging from 29°C (84°F) to 32°C (90°F) along the coast. The highlands are cooler, with average temperatures in the mountains ranging from 18°C (64°F) to 24°C (75°F) depending on the elevation.

Rainfall is a defining feature of Panama’s climate, particularly in the Caribbean region and rainforests. The rainy season can bring torrential downpours, especially from September to November, which sometimes leads to flooding. The Pacific coast, on the other hand, has a more defined dry season that is crucial for the agricultural cycle, especially for crops like sugar and coffee.

Environmental Issues

Panama faces several environmental challenges, including deforestation, loss of biodiversity, and the impacts of climate change. The country’s rainforests, which are home to diverse ecosystems, are under threat from logging and agricultural expansion. Additionally, rising sea levels threaten coastal areas, particularly those around Panama City and the Panama Canal. The government has made efforts to address these issues through conservation programs and the creation of national parks, but the pressure on natural resources remains high.

People of Panama

Ethnic Composition

Panama is a racially and ethnically diverse country, with a population made up of various ethnic groups. The majority of Panamanians are mestizos, or people of mixed Indigenous and European ancestry. There are also significant populations of Afro-Panamanians, who are descendants of African slaves brought to the country during the colonial era. In addition, Panama has smaller communities of Indigenous peoples, including the Ngöbe, Buglé, Guna, and Kuna tribes, who primarily live in rural areas and the Guna Yala region.

There is also a sizable immigrant population, particularly from Colombia, the United States, and the Caribbean, which has contributed to Panama’s cosmopolitan society. Chinese and Jewish communities are also present, with Chinese immigrants historically contributing to the retail and trade sectors in Panama.

Language and Religion

The official language of Panama is Spanish, spoken by the vast majority of the population. English is also widely understood, particularly in urban areas and in the context of business and tourism, reflecting the influence of the U.S. during the construction and operation of the Panama Canal. Additionally, Indigenous languages are spoken in some rural areas, including Ngöbe-Buglé and Guna, but Spanish remains dominant.

Panama is predominantly a Christian country, with approximately 85% of the population identifying as Roman Catholic. Protestantism, particularly evangelical Christianity, is also practiced by a growing number of people, especially in urban areas. Indigenous communities often practice a mix of Catholicism and traditional beliefs. Religious festivals and events are important in Panama, with Catholic holidays such as Christmas, Easter, and the Carnival celebrated with great enthusiasm across the country.

Population and Demographics

Panama has an estimated population of around 4.5 million people, making it one of the smaller countries in Central America. The population is relatively young, with a median age of around 30 years. The urban population is concentrated in Panama City, the capital, which is the country’s economic, political, and cultural hub. Other major cities include Colón, David, and La Chorrera. Despite the concentration of population in urban areas, approximately 30% of Panamanians still live in rural regions, where agriculture remains a key part of the economy.

Panama has a growing middle class, but inequality remains a concern, particularly in rural areas where access to education, healthcare, and infrastructure is limited. The country also faces challenges related to urbanization, with informal settlements around Panama City growing rapidly due to migration from rural areas.

Economy of Panama

Services and Trade

Panama’s economy is heavily driven by the services sector, particularly through its strategic location as a hub for international trade and finance. The Panama Canal is one of the most important waterways in the world, facilitating global trade between the Atlantic and Pacific Oceans. The canal’s tolls and services generate substantial revenue for the country, and its continued expansion and modernization are critical to Panama’s economic success.

In addition to trade, Panama has become a financial center in Latin America, with a robust banking sector that serves both local and international clients. Panama’s banking laws and the dollarization of its economy (the U.S. dollar is the official currency) have contributed to its position as an important financial hub in the region. The country’s economy is also supported by tourism, particularly due to its beaches, biodiversity, and the Panama Canal, attracting visitors from all over the world.

Agriculture and Manufacturing

Agriculture has historically been an important part of Panama’s economy, with crops like bananas, coffee, sugar, and rice being grown primarily for export. While agriculture has become less dominant in terms of overall GDP, it continues to provide livelihoods for many in rural areas. Panama also produces a variety of tropical fruits, including pineapples and melons, as well as cocoa and corn.

Manufacturing is a smaller sector in Panama but has been growing steadily. Panama produces processed foods, textiles, construction materials, and chemicals. The Colon Free Trade Zone, located in the Caribbean coastal city of Colón, is one of the largest free trade zones in the world and acts as a major export and re-export center for goods entering Latin America. It also serves as a vital area for international commerce, contributing to Panama’s significant role in global trade.

Economic Challenges and Opportunities

Despite its strong services sector and strategic position, Panama faces several economic challenges, particularly related to inequality and poverty. While the country has a growing middle class, rural areas often lack adequate infrastructure and access to services like healthcare and education. There is also concern over corruption, particularly in public contracts and the management of resources.

The country has great potential for further growth, particularly in areas such as renewable energy, infrastructure development, and digital economy. The Panama Canal’s expansion has led to increased demand for logistics and shipping services, which provides opportunities for further development in the country’s transportation and logistics sectors. The tourism industry also offers growth potential, especially as Panama positions itself as a regional hub for medical tourism and business tourism.

Government of Panama

Political Structure

Panama is a democratic republic with a presidential system of government. The president is both the head of state and the head of government and is elected for a five-year term. The president is responsible for overseeing the executive branch, setting policy, and ensuring the implementation of laws. The National Assembly is the legislative body, and it consists of 71 deputies who are elected for five-year terms. The Assembly is responsible for passing laws, approving the national budget, and overseeing the executive.

The judicial system in Panama is independent and is composed of several levels, including the Supreme Court of Justice, which is the highest judicial authority. Panama’s legal system is based on civil law, with significant influences from Spanish legal traditions.

Political History

Panama’s history is marked by periods of political instability, especially in the early 20th century, when military and civilian governments alternated in power. The country was a part of Colombia until 1903, when it declared independence with the assistance of the United States, which sought control over the construction of the Panama Canal. After the canal was completed, Panama became a sovereign nation but remained heavily influenced by the U.S. for much of the 20th century.

The most significant political shift occurred in 1989 when Manuel Noriega, the military leader of Panama, was ousted by a U.S. invasion. The country returned to democratic governance, and Panama has since seen peaceful transitions of power. However, political corruption and inequality remain persistent issues, with several administrations facing corruption scandals over the years.

Culture of Panama

Traditional Arts and Crafts

Panamanian culture is a fusion of Indigenous, Afro-descendant, and European traditions. The country’s folk art reflects this blend, with vibrant traditional crafts, music, and dance. Panama’s indigenous groups, such as the Guna and Ngöbe, have long traditions of weaving, beadwork, and pottery, while Afro-Panamanian culture has contributed significantly to the country’s music, dance, and culinary traditions.

One of the most famous forms of traditional art is the mola, a textile art form created by the Guna people, consisting of intricate designs made by layering and cutting fabric. The mola is used to decorate clothing, and it has become a symbol of the country’s rich cultural heritage.

Music and Dance

Music is a key part of Panamanian culture, and the country has a rich musical tradition that includes styles like salsa, reggae, and folklore music. Panama’s Afro-descendant population has influenced the development of music genres such as sancocho, a traditional rhythm that blends African rhythms with Latin American influences.

The tamborito, a traditional folk dance, is another key aspect of Panama’s cultural identity, often performed during festivals and celebrations. Panama’s vibrant carnival celebrations, particularly in the capital, feature colorful parades, dancing, and music, reflecting the country’s lively culture and love for celebration.

Cuisine

Panamanian cuisine is diverse, with influences from Indigenous, African, and European cuisines. Rice, corn, beans, and meats like chicken, pork, and beef are staples of the diet. One of the most iconic dishes is sancocho, a hearty chicken soup made with corn, potatoes, and vegetables. Other popular dishes include arroz con pollo (rice with chicken), tamales (cornmeal dough filled with meats or vegetables), and empanadas (fried or baked pastry filled with various fillings).

The country is also known for its tropical fruits, such as pineapples, papayas, and mangoes, which are often used in beverages and desserts. Panama’s culinary scene is reflective of its multicultural history, blending flavors and techniques from its diverse population.

Festivals and Holidays

Panama celebrates a variety of national and religious holidays, many of which showcase its cultural diversity. Carnival is the largest and most widely celebrated festival, particularly in Panama City and Las Tablas. It is marked by parades, music, dancing, and large street parties. Independence Day, celebrated on November 3rd, commemorates Panama’s separation from Colombia and is marked by military parades and civic celebrations.

Religious holidays such as Christmas, Easter, and the Day of the Virgin are also important in Panama. The country’s religious and cultural festivals reflect the deep-rooted traditions and a sense of national pride that permeate daily life in Panama.

History of Panama

Early History and Colonization

Before European colonization, Panama was inhabited by various Indigenous groups, including the Ngöbe, Buglé, and the Guna people. These groups had their own complex societies, based on agriculture, hunting, and trade. The first European contact came in 1501, when Spanish explorers, including Vasco Núñez de Balboa, arrived on the shores of what is now Panama. Balboa famously crossed the Isthmus of Panama in 1513 and was the first European to see the Pacific Ocean.

Panama became a crucial point for Spanish colonial trade due to its location along the route between the Atlantic and Pacific Oceans. The Spanish built forts and settlements, particularly in Panama City, which was founded in 1519. The city became an important hub for gold and silver exports from South America to Europe.

The Canal and Separation from Colombia

Panama was part of Colombia after the Spanish empire collapsed. In the early 20th century, Panama became a key focus for U.S. interests due to its potential as a site for a transcontinental canal. The construction of the Panama Canal, completed in 1914, was a monumental engineering feat that revolutionized global shipping. The U.S. took control of the canal zone in 1904 under the Hay-Bunau-Varilla Treaty, despite opposition from the Panamanian people.

In 1903, Panama declared independence from Colombia with the help of the United States, which was eager to secure control of the canal project. Panama became a sovereign state, though its political and economic system remained heavily influenced by the U.S. for much of the 20th century.

Modern Political History

In the late 20th century, Panama experienced significant political upheaval. In the 1980s, Manuel Noriega, a military leader, controlled the country with an authoritarian regime. In 1989, Noriega was overthrown by a U.S. military invasion, which restored democratic rule. Since then, Panama has undergone a transition to a stable democracy, although political corruption and inequality remain persistent issues.

Today, Panama continues to rely on the Panama Canal, along with banking, trade, and tourism, as key pillars of its economy. The country has experienced steady economic growth and has become an important hub for international commerce, finance, and transportation in Latin America. However, issues such as poverty, infrastructure challenges, and corruption persist as the country works to build on its successes and address its remaining challenges.