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Panama joins two oceans and two continents. With Costa Rica to the west and Colombia to the east, it forms a narrow neck of land connecting Central to South America, while the Panama Canal links the Atlantic Ocean to the Pacific. The first proposal for a canal was made by the Spanish in the early sixteenth century. Later, at the time of the Californian Gold Rush, the USA began to press for action. In 1881 work began on a design prepared by de Lesseps, who was the builder of the Suez Canal, but malaria and yellow fever killed so many workers on the project that it had to be abandoned. Control of these diseases was one of the achievements of the later American builders, who eventually completed the canal in 1914.
Part of Colombia until 1903, Panama has been closely linked with the USA since the construction of the canal gave the latter rights over a 16 km (10 mile) wide Canal Zone. These rights run out in the year 2000. A major upheaval took place in Panama during 1989 when the USA invaded and removed the country's self-proclaimed "maximum leader" General Manuel Noriega in order that he face drug charges in Miami. Electoral democracy was restored in the country, and Noriega was jailed, but the laundering of large amounts of drug money in association with cartels in neighboring Colombia continues to be a problem.
The 3,000 m (9,850 ft) tall mountains of the Serrania de Tabasara (Cordillera Central) run west of the canal along the isthmus, and are separated from the southern Peninsula de Azuera by a long stretch of plain. East of the canal two more ranges of mountains form arcs running parallel to the Pacific and Caribbean coasts. Most of the country, however, including 750 offshore islands, lies below 700 m (2,300 ft) and swelters in tropical heat and high humidity. Rainforests are extensive, and those of the Darien National Park, with their abundant wildlife, are among the wildest areas left in the whole of the Americas. Most Panamanians live within 20 km (12 miles) of the Canal Zone, a quarter of them in the capital itself.
Panama's economy is based on services, and is heavily weighted toward banking, commerce, and tourism. The country has the largest open-registry merchant fleet in the world. Along with the export of bananas (43 % of total exports) and shrimp (11 %), plus income derived from the USA's military installation, Panama has the highest standard of living in Central America. However, the country's commercial debt is also one of the highest in the world in per capita terms, and during the mid-1990s the country experienced an economic slow-down. Despite the presence of a degree of nationalist fervor, with the termination of the US Canal Zone, approximately 75 % of Panamanians now favor a continuing US presence in the country to help preserve stability.
Fact File
OFFICIAL NAME: Republic of Panama FORM OF GOVERNMENT: Republic with single legislative body (Legislative Assembly)
CAPITAL: Panama AREA: 78,200 sq km (30,193 sq miles) TIME ZONE GMT: - 5 hours POPULATION: 2,778,526 PROJECTED POPULATION: 2005 3,030,173 POPULATION DENSITY: 35.5 per sq km (92 per sq mile) LIFE EXPECTANCY: 74.7 INFANT MORTALITY: (PER 1,000) 23.4 OFFICIAL LANGUAGE: Spanish OTHER LANGUAGE: English LITERACY RATE: 90.5% RELIGIONS: Roman Catholic 85%, Protestant 15% ETHNIC GROUPS: Mixed indigenous-European 70%, African 14%, European 10%, Indigenous 6%
CURRENCY: Balboa
ECONOMY: Services 60%, agriculture 27%, industry 13% GNP PER CAPITA: US$2,750 CLIMATE: Tropical, with long wet season May to January HIGHEST POINT: Volcan Baru 3,475 m (11,401 ft)
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