Map of Panama / Central Intelligence Agency / The World Factbook / Public Domain

Introduction

Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela – named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With US backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the US allowing for the construction of a canal and US sovereignty over a strip of land on either side of the structure (the Panama Canal Zone). The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With US help, dictator Manuel NORIEGA was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999. An ambitious expansion project to more than double the Canal’s capacity – by allowing for more Canal transits and larger ships – was carried out between 2007 and 2016.

Government

Executive Branch

chief of state: President Laurentino “Nito” CORTIZO Cohen (since 1 July 2019); Vice President Jose Gabriel CARRIZO Jaen (since 1 July 2019); note – the president is both chief of state and head of government

head of government: President Laurentino “Nito” CORTIZO Cohen (since 1 July 2019); Vice President Jose Gabriel CARRIZO Jaen (since 1 July 2019)

cabinet: Cabinet appointed by the president

elections/appointments: president and vice president directly elected on the same ballot by simple majority popular vote for a 5-year term; president eligible for a single non-consecutive term); election last held on 5 May 2019 (next to be held in 2024)

election results: Laurentino “Nito” CORTIZO Cohen elected president; percent of vote – Laurentino CORTIZO Cohen (PRD) 33.3%, Romulo ROUX (CD) 31%, Ricardo LOMBANA (independent) 18.8%, Jose BLANDON (Panamenista Party) 10.8%, Ana Matilde GOMEZ Ruiloba (independent) 4.8%, other 1.3%

Legislative Branch

description: unicameral National Assembly or Asamblea Nacional (71 seats; 45 members directly elected in multi-seat constituencies – populous towns and cities – by proportional representation vote and 26 directly elected in single-seat constituencies – outlying rural districts – by plurality vote; members serve 5-year terms)

elections: last held on 5 May 2019 (next to be held in May 2024)

election results: percent of vote by party – NA; seats by party – PRD 35, CD 18, Panamenista 8, MOLIRENA 5, independent 5; composition – men 55, women 16, percent of women 22.5%

Judicial Branch

highest courts: Supreme Court of Justice or Corte Suprema de Justicia (consists of 9 magistrates and 9 alternates and divided into civil, criminal, administrative, and general business chambers)

judge selection and term of office: magistrates appointed by the president for staggered 10-year terms

subordinate courts: appellate courts or Tribunal Superior; Labor Supreme Courts; Court of Audit; circuit courts or Tribunal Circuital (2 each in 9 of the 10 provinces); municipal courts; electoral, family, maritime, and adolescent courts

Political parties and leaders

  • Democratic Change or CD [Romulo ROUX]
  • Democratic Revolutionary Party or PRD [Benicio ROBINSON]
  • Nationalist Republican Liberal Movement or MOLIRENA [Francisco “Pancho” ALEMAN]
  • Panamenista Party [Jose Luis “Popi” VARELA Rodriguez] (formerly the Arnulfista Party)
  • Popular Party or PP [Juan Carlos ARANGO Reese] (formerly Christian Democratic Party or PDC)

Economy

Panama’s dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism and Panama is a center for offshore banking. Panama’s transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $37 billion in 2016 because of excessive government spending and public works projects. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012.

Future growth will be bolstered by the Panama Canal expansion project that began in 2007 and was completed in 2016 at a cost of $5.3 billion – about 10-15% of current GDP. The expansion project more than doubled the Canal’s capacity, enabling it to accommodate high-capacity vessels such as tankers and neopanamax vessels that are too large to traverse the existing canal. The US and China are the top users of the Canal.

Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.

Annual percentage GDP growth in Panama from 1961 to 2018 / World Bank / CC BY-4.0
GDP of Panama in current US dollars from 1960 to 2018 / World Bank / CC BY-4.0
Annual percentage growth of GDP per capita in Panama from 1961 to 2018 / World Bank / CC BY-4.0
GDP per capita in current US dollars in Panama from 1961 to 2018 / World Bank / CC BY-4.0
Annual percentage inflation (GDP deflator) in Panama from 1961 to 2018 / World Bank / CC BY-4.0

Unless otherwise specified, the information above comes from the Central Intelligence Agency’s The World Factbook. All photos and text reproduced here are in the public domain. Last updated on March 18, 2020.