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Panama (09/03)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. Brightly colored national dress is worn during local festivals and the pre-Lenten carnival season, especially for traditional folk dances like the tamborito. 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. Indian 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 well known and admired. More than 65,000 Panamanian students attend the University of Panama, the Technological University, and the University of Santa Maria La Antigua, a private Catholic institution. Including smaller colleges, there are 14 institutions of higher education in Panama. The first 6 years of primary education are compulsory, and there are about 357,000 students currently enrolled in grades one through six. The total enrollment in the six secondary grades is about 207,000. Nearly 90% of Panamanians are literate. HISTORY 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 (50-mi.) lock canal, which today is one of the world's greatest engineering triumphs. The early 1960s saw the beginning of sustained pressure in Panama for the renegotiation of this treaty. (See discussion of U.S.-Panama relations and the 1977 Panama Canal Treaties below.) Military Coups and Coalitions Torrijos' death in 1981 altered the tone but not the direction of Panama's political evolution. Despite 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, Gen. 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 and an attack on the U.S. Embassy. General Noriega's February 1988 indictment in U.S. courts on drug trafficking charges sharpened tensions. In April 1988, President Reagan invoked the International Emergency Economic Powers Act, freezing Panamanian Government assets in U.S. banks and prohibiting payments by American agencies, firms, and individuals to the Noriega regime. When national elections were held in May 1989, Panamanians voted for the anti-Noriega candidates by a margin of over three-to-one. The Norieiga 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, President 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 troop withdrawal began on December 27. Norieiga eventually surrendered voluntarily to U.S. authorities. He is now serving a 40-year sentence for drug trafficking. Rebuilding Democracy President Endara took office as the head of a four-party minority government, pledging to foster Panama's economic recovery, transform the Panamanian military into a police force under civilian control, and strengthen democratic institutions. During its 5-year term, the Endara government struggled to meet the public's high expectations. Its new police force proved to be a major improvement in outlook and behavior over its thuggish 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 the military dictatorship during the Torrijos and Norieiga years. A long-time member of the PRD, 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, unable to agree on a joint candidate, 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 May 2, 1999, Mireya Moscoso, the widow of former President Arnulfo Arias Madrid, defeated PRD candidate Martin Torrijos, son of the late dictator. The elections were considered free and fair. Moscoso took office on September 1, 1999. She is term-limited to a single term in office. National elections will be held in May 2004. During her administration, Moscoso has attempted to strengthen social programs, especially for child and youth development, protection, and general welfare. Education programs also have been highlighted. More recently, Moscoso has focused on Panama’s desire for a free trade agreement (FTA) with the United States. Moscoso's administration successfully handled the Panama Canal transfer and has been effective in the administration of the canal. Panama's counternarcotics cooperation has been excellent, and the Panamanian Government has expanded money-laundering legislation and concluded with the U.S. a counternarcotics maritime agreement and a stolen vehicles agreement. The Panamanian Government also has been paying increasing attention to maritime security issues. In the economic investment arena, the Panamanian Government has been successful in the enforcement of intellectual property rights and has concluded with the U.S. a Bilateral Investment Treaty Amendment and an agreement with the Overseas Private Investment Corporation. The Moscoso administration has been very supportive of the United States in combating international terrorism. GOVERNMENT AND POLITICAL CONDITIONS NATIONAL SECURITY Law enforcement units that are separated from the PPF, such as the Technical Judicial Police, 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. Principal Government Officials Panama maintains an embassy in the United States at 2862 McGill Terrace, NW, Washington, DC 20008 (tel: 202-483-1407). ECONOMY A major challenge facing the current government under President Mireya Moscoso is turning to productive use the 70,000 acres of former U.S. military land and the more than 5,000 buildings that reverted to Panama at the end of 1999. Administratively, this job falls to the Panamanian Inter-Oceanic Regional Authority. GDP growth for 2002 was about 0.8% compared to 0.3% in 2001. Though Panama has the highest GDP per capita in Central America, about 40% of its population lives in poverty. The unemployment rate surpassed 14% in 2002. From March 2001 to February 2003, Panama served as host for the Free Trade Area of the Americas negotiations. Panama’s first free trade agreement, with El Salvador, entered into force in early 2003, and in August 2003 Panama concluded negotiations on an FTA with Taiwan. Panama also is negotiating FTAs with its Central American neighbors. 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 September 1994 as an acknowledgment of its present 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. 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. Although money laundering remains a problem, Panama passed significant reforms in 2000 intended to strengthen its cooperation against international financial crimes, and the conclusion of the Speed Joyeros case in April 2002 marked the dismantling of a major money-laundering network with scores of arrests in several countries. 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 Avenida Balboa y Calle 38, 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: sispan@pty.com Other Contact Information U.S. Department of State U.S. Department of Commerce |
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