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North & Central America and Caribbean
Panama |
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Last reviewed: 4 August 2009 |
Country information
PANAMA TODAY
Country Facts
Area: 77,381 sq km; 29,762 sq miles.
Population: 3.4 million (2008 est.)
Capital City: Panama City (1 million, 2008 est)
People: Mostly of mixed descent, with sizeable communities of indigenous Indians, Afro-Caribbeans, Italians, Spanish, Arabs, Jews and Asians.
Languages: The official language is Spanish. English is widely understood by the middle-classes.
Religion(s): Roman Catholic 90%; Protestant groups, Judaism and Islam are also represented in the country.
Currency: US Dollar (referred to locally as the Balboa).
Political Parties: Panameñista Party (formally Arnulfista Party)
Partido Popular or Popular Party (PP)
Democratic Change (Cambio Democratico)
Democratic Revolutionary Party (PRD)
Nationalist Republican Liberal Movement (MOLIRENA)
Patriotic Union
Liberal Party
The Moral Vanguard Party
Government: Panama has three branches to its representative democracy: the executive (comprising the President and one Vice-President), the legislative - a 71 member single chamber assembly, and the judiciary. This comprises a nine-member Supreme Court of Justice (each appointed for a ten year period), five superior courts and a court of appeal. The President serves one term of 5 years. Elections for President and the single chamber legislative assembly are held at the same time.
Head of State: President Ricardo Martinelli
Prime Minister/Premier: Not applicable
First Vice President and Foreign Minister: Juan Carlos Varela
Membership of International Groups/Organisations: Panama is a member of the UN (and has served four terms on the Security Council); World Bank; Inter-American Development Bank; International monetary Fund; International bank for Reconstruction and Development; Rio Group (founder member); Union of Banana Export Countries (founder member); PARLACEN (Central American Parliament); SICA (Central American Grouping); CONCAUSA (Central American United States of America Joint Accord); International Atomic Energy Agency; G-77; Non-Aligned Movement; OAS; OPANAL; OPCW; WTO, IMO and WIPO.
HEALTH
It was estimated in 2008 that Panama had an HIV/AIDS population of 30,000. It is estimated that this figure will increase by 2,000 per year. There were nearly 1,200 deaths in the same year from this disease.
Life expectancy: Male: 69.97 years, Female: 74.79 years.
Infant mortality rate: 21.4 per 1,000 (20083 est)
ECONOMY
Basic Economic Facts
Nominal GDP: 18 billion US dollars (2008)
Nominal GDP per head: 5,453 US dollars (2008)
Annual growth: 9.2% (2008) GDP real growth rate
Inflation: 8.7% (2008)
Unemployment : 6.3% (as a % of labour force in 2008)
Major industries: Construction, light manufacturing, agriculture, financial services, cement, telecommunications, sugar mills and maritime services.
Export partners (2007 figures):
United States: US $388,855,880
Netherlands: US $114,639,537
China: US $68,032,101
Sweden: US $62,150,387
United Kingdom: US $61,239,025
Import partners (2007 figures):
United States: US $2,079,584,194
Curazao: US $489,155,923
Japan: US $328,944,578
Costa Rica: US $326,225,679
South Kores: US $267,671,127
Note: Import Partners of Panama take two forms, those exporting directly into Panama and those exporting to the Colon Free Zone (CLZ). The export partners mentioned are those exporting directly into Panama. Please bear in mind that as much as 11% of all imports into Panama come from the CLZ and are not broken down by country of origin.
Historically one of the most stable economies in Latin America, Panama has a well-developed services sector accounting for 80% of GDP. This is centred around the Canal, the related Colon Free Zone and the International Banking Centre. As a result average incomes are high by regional standards. However, income distribution is heavily skewed with 1 million citizens if not more (estimated at approximately 40% of the population) living at or below the poverty level, according to the UNDP. As a fully dollarised economy, heavily dependent on trade, the economy will always be vulnerable to external shocks. Fiscal deficits and growing public debt in recent years have increased this vulnerability. However, if managed correctly the Panama Canal expansion is expected to have a profound effect on the economy, with a boom predicted following an increase in oreign investment and employment in canal expansion and related projects.
HISTORY
1502 Spanish explorer, Rodrigo de Bastidas visits Panama
1503 Christopher Columbus visits
1513 Establishment of Spanish “Castilla de Oro” by King Ferdinand II the Catholic
1519 Panama City is founded
1698 Establishment of the Scottish Colony (New Caledonia) in the Darién led by William Paterson (founder of the Bank of England)
1700 Spanish forces surround the Scottish Colony and force the remnants to flee the isthmus and return to Scotland causing serious losses to Scottish treasury and business and influencing the Union between Scotland and England in 1706.
1821 Independence from Spain. Joined the confederacy of Gran Colombia (comprising Colombia, Venezuela, Ecuador, Peru, Bolivia)
1830 Collapse of Gran Colombia and assimilation into Colombia
1846 Treaty with USA for the building of a railway across the isthmus to serve the California Gold Rush miners.
1880 Ferdinand de Lesseps (France) attempted over a ten year period to build a canal between the Atlantic and Pacific oceans. Financial and management difficulties, climatic conditions, and deaths of more than 20,000 workers from tropical diseases finally destroyed the project. De Lesseps became a broken man and investors lost all their money. France was almost bankrupted.
1903 Panama achieves independence from Colombia, engineered by US President Theodore Roosevelt.
1903 Hay/Bunau-Varilla Treaty signed in Washington giving US rights over a zone of 10 miles width and 51 miles in length across the isthmus
1914 Construction of the Panama Canal completed by US Military Corps of Engineers.
1919 Canal, mothballed during the First World War, opened to commercial shipping.
1968 Election of Dr Arnulfo Arias Madrid as President followed 10 days later by National Guard coup. Led by Major Boris Martinez and Major Omar Torrijos
1977 Panama Canal Treaty and Neutrality Treaty signed by President Carter and General Torrijos on 7 September at OAS, Washington. Agreed handover of Canal in stages to Panama.
1983 General Manuel Noriega assumes control of National Guard and assumes power
1988 Noriega charged by US with drug smuggling and money-laundering.
1989 US invasion of Panama (Operation Just Cause). Noriega removed by US forces to Miami to stand trial, replaced by elected President Guillermo Endara
1991 Legislative Assembly approves constitutional reforms, abolishes armed forces.
1992 Noriega found guilty by US courts of drug smuggling and money-laundering, sentenced to 40 years imprisonment, to be served in a US prison.
1998 Referendum rejects constitutional amendment proposed by President Balladares, which would permit a second presidential term.
1999 Panama assumes full control of Panama Canal from US in handover ceremony attended by Panamanian President Mireya Moscoso. US Former President, Jimmy Carter, also attended the event.
2002 Panama removed from a list of uncooperative tax havens, drawn up by Organisation for Economic Cooperation and Development, after promising to make its tax system more transparent.
2004 (2 May)Presidential Elections. Martin Torrijos Espino, PRD, wins with 47% of the vote. (1 September) Inauguration of the new President, Martin Torrijos.
2006 (15 July) President Torrijos announced a referendum to decide on the proposed $5.25 billion expansion of the Panama Canal. (22 October) Referendum takes place with almost 80% of those who voted in favour of canal expansion.
2009 (3 May) Presidential Elections. Ricardo Martinelli, Democratic Change, wins with 59.97% of the vote. (1st July) Inauguration of the new President, Ricardo Martinelli.
INTERNATIONAL RELATIONS
Relations with the International Community
For historical, geographical and economic reasons, Panama has a very close relationship with the US. Under the 1977 Torrijos - Carter treaties, sovereignty of the Canal was handed back to Panama on 31 December 1999; the US withdrew all troops; and military installations were returned. The Neutrality Treaty, also signed in 1977 grants expeditious passage to US warships, and calls for US and Panama to defend the Canal from any threats. Threats to the Canal under the Neutrality Treaty where invoked by President Bush Senior to justify 1989 invasion of Panama. Unlike the Torrijos - Carter Treaties the Neutrality Treaty has no expiration date. The Treaty of Monteria signed in 1979 with Colombia and The San Jose Declaration, exempt government owned ships from Colombia and Costa Rica from payment of tolls.
Panama is one of the few countries to have diplomatic relations with Taiwan, which is an important source of aid, as are Japan, Spain and the EU. Panama and Taiwan signed a Free Trade Agreement (FTA) in 2003, which took effect from January 2004. The Panama –Singapore FTA of 2005 was one of the first bilateral FTAs signed by Singapore with a Latin American country. The Panama- Taiwan FTA was also Taiwan’s first with a Latin American country. Panama also has a FTA with El Salvador (2003). In the Americas, only Panama and Chile have negotiated a FTA bilaterally with the US. All other FTA’s negotiated by the US in the American continent have been multilateral. The Panama–US FTA, which was signed in Washington on 28 June 2007 is still pending US Congress ratification. Panama concluded FTA negotiations with Chile, Honduras, Costa Rica and Guatemala. The FTA between Panama and Nicaragua is pending ratification from the Panamanian National Assembly. Together with its neighbours, Panama also negotiated a Political Dialogue and Co-operation Agreement with the EU, which was signed in Rome on 15 December 2003.
Relations with Neighbours
Colombia
Links with Colombia are stretched from time to time with the presence on Panamanian territory of Colombian paramilitaries and guerrilla groups. Occasional skirmishes occur between the latter two and the Panama police force in the Darien region.
For the last two years Colombian Customs (CC) have unilaterally imposed restrictions on goods coming from the Colon Free Zone (CFZ). CC now requires that goods from CFZ enter Colombia only through the Port of Barranquilla if goods are shipped and only through Bogota if goods are transported by air. Other restrictions include list of goods and countries that are not subject to normal customs valuation procedure. Instead minimum prices and benchmarking valuation to local products are used. Panama considers measures inconsistent with Colombia’s WTO obligations, mainly MFN Treatment (Art II of GATT), Freedom of Transit (article V of GATT) and breach of the Customs Valuation Agreement.
Association Agreement with the EU
Panama has participated alongside the other five Central American countries in talks to reach an association agreement. In order to comply with the EU’s requirement to negotiate jointly with the rest of Central America, Panama will have to overcome two major obstacles in order to access the negotiations. First, it will have to sign the protocol of accession to SICA (Permanent Secretariat of the General Treaty on Central American Integration) and agree on a common customs union. However, the negotiations are moving slowly overall.
Relations with the UK
Recent Inward Visits
The Vice President of Panama, Samuel Lewis Navarro, made a successful visit to the UK in June 2006. The speaker of the Panamanian National Assembly, Elias Castillo, also visited in February 2006.
Recent Outward Visits
Mr Bill Rammell, then Parliamentary Under Secretary of State, FCO attended the inauguration of President Martin Torrijos on 1 September 2004.
In March 2005, a Ports & Logistics Trade Mission visited Panama
Lord Triesman, Parliamentary Under Secretary of State, visited Panama in April 2007
A UKTI led Ports & Maritime Trade Mission visited Panama in March 2007
Meg Munn, Parliamentary Under Secretary of State, visited Panama 11/13 September 2007
Climate Change Projects Office trade mission took place 24-25 September 2007
Sir Andrew Cahn, UK Trade & Investment CEO, visited Panama in February 2009
GEOGRAPHY
Panama lies along the narrow land bridge dividing North and South America, traversed by the 50-mile long ship canal built by the USA between 1904 and 1914. A mountain range runs through the centre of the country, with coastal plains of varying width on either side. The eastern region of Darién, adjacent to Colombia, is dominated by dense tropical rain forest. The main agricultural areas are in the west in Chiriqui province, bordering on Costa Rica.
TRADE AND INVESTMENT
Trade and Investment with the UK
According to UKTI, British trade in goods with Panama in 2008 was worth £148 million. That ranks Panama 10th in absolute numbers as an export destination for the whole of the American continent and the Caribbean. On a per capita basis, Panamanians bought an average of £46 per capita from the UK, ranking fourth behind Puerto Rico £65, Canada £110 and US £114. Emerging market Mexico managed less than £8 per capita. Brazil managed less than £9. The UK's principal exports to Panama are beverages (44%, notably Scotch whisky), medical and pharmaceutical (29%) and chemicals.Panamanian exports to the UK in 2008 were worth £12.1 million.
UK Trade & Investment Country Profile: Panama
UK Development Assistance
The Department for International Development does not have a programme in Panama. But the British Embassy in Panama City manages a number of small projects mostly dealing with climate change or the environment. Further information can be obtained from the Embassy. There is a large EU development assistance programme, including to the judicial authorities. The EU has financed the construction of over 20 small courthouses in rural areas and four of these were opened in August 2007.
POLITICS
Presidential and Legislative Assembly elections took place on 3 May 2009. Ricardo Martinelli won the election with 59.97% of the vote. The other contending parties secured the following percentage of votes: Balbina Herrera (Democratic Revolutionary Party, Governing Party) 37.7%; and Guillermo Endara (Moral Vanguard Party) 2.33%. Martinelli’s Democratic Change and supporting parties won 44 seats of the 71-seat National assembly.
In October 2004 Martin Torrijos' government approved a package of constitutional reforms. Key amendments included the reduction of the legislative assembly from 78 to 71 seats, shortening of the interval between elections and the installation of the new government from four months to two months and a reduction in the number of substitute legislators elected from two to one.
In July 2006, President Torrijos announced a referendum on the proposed US$5.25 billion expansion of the Panama Canal. On 22 October 2006 the referendum took place. Voter turnout was 43.5% of which almost 80% voted in favour of the expansion.
The expansion project is expected to begin in June 2007 and should be completed by 2014. The proposals include two new shipping channels and locks at either end of the canal as well as raising the water level of the Gatun Lake. The expansion will double the capacity from the current 14,000 ships per year which transit the canal. This represents 5% of global shipping. The enlarged canal will also be able to accommodate the largest container ships. Thousands of jobs will be generated in the construction phase of the project.
HUMAN RIGHTS
Panama has ratified the following international human rights treaties:
- International Covenant on Economic, Social and Cultural Rights;
- International Covenant on Civil and Political Rights;
- International Convention on the Elimination of all forms of Racial Discrimination;
- Convention on the Rights of the Child;
- Convention on the Elimination of all forms of Discrimination Against Women;
- Convention against Torture or other Cruel, Inhuman or Degrading Treatment or Punishment.
Panama is also a Party to the American Convention on Human Rights and has accepted the jurisdiction of the Inter-American Court of Human Rights based in San José.
UK Support for Human Rights
The UK contributes, through the EU, to a European Commission project for the modernisation of the Panamanian prison system, including improvements to prison welfare.
On a smaller scale, recent British Embassy assistance has included funding of a technical visit to the UK by a member of Panama’s Truth Commission, and support for a NGO-organised national seminar on disability and human rights.
Past Human Rights Abuses
Occurrences of human rights abuses were prevalent under the military regimes (1968-1989). The government of President Mireya Moscoso set up a panel in 2000 to examine cases of abuses and of crime committed during these years.
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Address:
Embassy of Panama
40 Hertford Street
London W1J 7SH
Telephone:
(020) 7493 4646
Fax:
(020) 7493 4333
Email: panama1@btconnect.com
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