by Sophie S Smith

Created on: September 22, 2009   Last Updated: August 10, 2011

Panama is a strategically an important country: it connects the South and North Americas, and the Panama Canal connects the Pacific Ocean to the Atlantic Ocean.

The Panama Canal, one of the world's most strategically significant waterways, was built by the US after Panama became independent from Colombia in 1903. The canal was completed in 1914, and the US controlled it until the end of 1999. The Panama Canal and related industries are extremely important to the Panama's economy. Hundreds of thousands of people travel on the canal every year.

Panama's land area is 75 517 square kilometres and its population is 3,4 million. Approximately two fifths of the population lives under the poverty line, while those of European ancestry form the powerful and wealthy elite. The main religion is Christianity. The full name of the country is the Republic of Panama, and the capital is Panama City. Panama's monetary unit is the balboa.

Spanish explorer Rodrigo de Bastidas came to Panama in 1502. Indigenous peoples living in the area at the time included Cuna, Choco and Guaymi. Panama became the Spanish Vice-Royalty of New Andalucia in 1519 and stayed in Spanish control until 1821, when it joined the confederacy of Gran Colombia together with Colombia, Venezuela, Ecuador, Peru and Bolivia. After the federation collapsed, Panama was a part of Colombia until independence in 1903.

Panama has the Western Hemisphere's largest rainforest outside the Amazon Basin. Panama's rainforests have a rich and diverse wildlife, and some of the animals, birds and plants found here are unique to the region. While Panama is not a major tourist attraction yet, tourism is a growing industry. Tourists are attracted by Panama's abundant wildlife, trekking in the rainforests and beautiful islands and beaches.

A former head of the secret police and a former CIA operative Manuel Antonio Noriega seized control of the National Guard in 1983. He renamed it Panama's Defence Forces, and increased its power in the country. Noriega was later accused of murdering his opponents, of fraudulent elections and of being involved in drug trafficking. The US imposed economic sanctions against Panama 1988, and two unsuccessful coup attempts tried to remove Noriega from power. Opposition won parliamentary elections in 1989, but Noriega declared the result invalid. After Noriega declared war on the US, US troops attacked Panama City in December 1989 and started an invasion that left 2000 people dead and tens of thousands homeless. Noriega eventually surrendered to the US and was sentenced to 40 years in a Florida prison for drug trafficking. The sentence was later reduced. While Noriega has finished his prison sentence in the US, France wants to prosecute him for money laundering, and Panama wants to prosecute him for murder.

While many Latin American countries have recently elected left-wing presidents, in Panama the Conservative candidate Ricardo Martinelli won the 2009 presidential election with a clear majority of the votes. His victory has been explained partly on his past as a businessman, as the recent worldwide downturn in economy has created fears of a slowdown in Panama's economic growth. Martinelli has promised to bring in foreign investors, and to promote free trade with the US.

Sources:

BBC

Lonely Planet

National Geographic

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