Panama Facts From Top To Bottom
How much do you know about Panama? If you’re like many potential expats, your knowledge may be limited to the fact that it’s home to the Panama Canal and the birthplace of the Panama hat. And you’d be wrong about the latter. (They actually originated in Ecuador.)
If you’re considering visiting or relocating to this important international destination, or if you just want to brush up on your general knowledge of Central America, here are some Panama facts to educate you on some of the country’s highlights.
General Panama Facts
Panama is an isthmus that connects the Central American country of Costa Rica to Colombia in South America. Shaped like a sideways “S,” it runs from west to east and borders both the Caribbean Sea and the Pacific Ocean.
Its total area is around 29,150 square miles (slightly smaller than the state of South Carolina), and it has a population of about 3,595,490 (less than the city of Los Angeles). Many of the country’s residents (1,272,672 to be exact) live in or near the capital, Panama City.
The rugged terrain and lack of good roads can make accessing areas along the Caribbean coast more difficult. As a result, the population is also heavily concentrated on the southern, Pacific side of the country, where the Pan-American highway runs. Panama’s Darien province also contains the only break, known as the Darien Gap, in the entire highway system that connects the farthest tips of North and South America.
Panama enjoys a tropical climate, with temperatures ranging from 87 to 95 degrees Fahrenheit year round. Relief from the heat can be found at the higher elevations, where temps are generally in the 70s. Its only season variation is between its wet (April to December) and dry (January to April) seasons.
The Isthmus of Panama was discovered by Spanish explorers Rodrigo de Bastidas and Vasco Nunez de Balboa in 1501. In 1510 Santa Maria La Antigua del Darien became the first permanent settlement on the American mainland. The Pacific Ocean was reached on an expedition led by Balboa in 1513, and Pedro Arias Davila established Panama City on August 15, 1519, almost a hundred years before Jamestown, Virginia, was founded.
Panama remained a Spanish colony until 1821 when it became part of the Gran Colombia, under the rule of Simon Bolivar. It gained its independence from Colombia in 1903.
The People of Panama
Panama is comprised mostly of mestizos (68%), those of mixed Amerindian and European descent. The other categories include black and mulatto (10%) and white (15%). Amerindians (or American Indians, those indigenous to the region) account for another 6%.
Spanish is the official language. However, English is widely spoken. In fact, approximately 14% of the country speaks English. Several Indian languages are also used among native peoples.
The majority of the population (75-85%) identifies with the Roman Catholic church. However, freedom of religion is guaranteed by the nation’s Constitution. Protestantism, Judaism, Islam, Buddhism, and many other religions are also practiced in Panama.
Panama’s Structure and Government
Panama is divided into nine provinces and three Indian territories. It is a constitutional democracy whose representatives are elected by direct vote. The executive branch consists of a President and Vice President who are elected for a non-renewable five-year term. The 71 members of the National Assembly, the legislative body, are also elected every five years, often resulting in sudden, drastic changes in policy. Supreme Court justices are nominated by the executive branch and designated by Parliament.
The official currency of Panama is the Balboa. However, the U.S. dollar is also widely accepted and exchanges at a rate of 1:1, making it an easy place to live and invest. To further attract investors, a recent law was established to protect investments made in all economic sectors. Both natives and foreigners are free to do as they wish with the products and profits generated with Panamanian investments, up to and including trading or transferring them to other countries. It also establishes an arbitration provision, eliminating the danger of dealing with the Panamanian judicial system.
Its main industries include food processing, chemical manufacturing, textiles, and the manufacturing of machinery and metal products. Among its agriculture products are coffee, bananas, sugarcane, cotton, beef, and veal. Its largest exports are coffee, shrimp, lobster, cotton, tobacco, and bananas.
Other revenue producers include the banking and services industries, tourism, tax-free zones, and the Panama Canal. Panama’s economy has boomed in recent years, so much so that the country experienced a shortage of skilled workers. As a result, a new visa was introduced to attract foreign professionals and their families to live and work in Panama. The shortage also prompted large investments in Panama’s school system for a more long-term approach. The country has a high literacy rate at 93%.
Because its tax law is strictly applied to income produced within its territory, it is also considered something of a tax haven. All transactions made or executed in or affecting areas outside of Panama are exempt from income taxes. Property and other taxes are also quite favorable.
The Panama Canal
Among its most notable landmarks is the Panama Canal, a 48 mile ship canal that first opened in 1914 and took 33 years to build. The passageway was instrumental in opening up trade and travel to the west coast of the U.S. as well as nations in and around the Pacific Ocean.
The Canal was controlled by the U.S. until 1977 when a series of treaties made way for it to be handed over to Panama. Since 1999 it has been solely operated by the Panamanian government. Named one of the seven wonders of the modern world, it has been expanded many times with its third lane of locks slated to open in 2015.
Surprisingly, the canal itself only accounts for 4% of the country’s Gross Domestic Product (GDP). However, due to the multiplier effect, its impact is much more far-reaching. Its employees spend their income on consumer goods, which in turn fuels businesses like restaurants and grocery stores. As a result, it’s estimated that the canal indirectly accounts for closer to 30% of the nation’s GDP.
Panama has excellent infrastructure when compared to many of its Latin American neighbors. And recent investments into roads, airports, and other systems are literally paving the way for even more businesses and visitors to come to Panama. These include a $5.2 billion Canal expansion, airport renovations, five new highways, new hospitals, and $1.5 billion for a Metro line, Panama’s first subway system.
Panama is also a highly connected country, due in part to a longstanding U.S. military presence. In fact it ranked as the second best Latin American country for technology and internet penetration. Telephone service, high-speed internet, cable, and satellite service are also affordable and reliable.
Roughly a fifth of Panama’s entire land area is protected areas. This includes nature reserves, national parks, wilderness areas, and others. In addition to these land features, Panama is also home to three protected wetland sites.
Though not as naturally diverse as some of its Central American neighbors, Panama boasts a tremendous amount of flora and fauna that make it a nature lover’s paradise. Its forests are home to almost 10,000 species of plants, including 200 that are currently endangered. Panama’s resourceful natives have used many of these for centuries as medicine, food, and construction materials.
Panama also claims over 200 mammals, as well as many reptiles, amphibians, and fish. It also contains 10% of the world’s bird species, including the rare resplendent quetzal.
Traveling to Panama
Panama is five hours behind Greenwich Mean Time (GMT). It’s also one hour ahead of its Central American neighbors. It does not observe daylight savings time so, depending on the time of year, it corresponds with either the U.S.’s Eastern Standard Time or Central Standard Time. Most of its electrical outlets are 110 volts, although there are some areas with 220.
Entering Panama requires a passport (valid for at least 6 months) and the appropriate visa (90 or 180 days for tourists). You’ll also need to show proof of a return trip ticket or ticket to your next destination, as well as proof of financial solvency (e.g., bank statement or travelers checks) to guarantee you won’t be working while in the country.
Panama by the Numbers
Here are a few more Panama facts and figures:
GDP $36.253 billion
GDP per capita $9,526
GDP (PPP) $57.079 billion
GDP (PPP) per capita $15,616
Industrial production growth rate 15.7%
Unemployment rate 4.4%
Population below poverty line 26%
Revenues $9.07 billion
Expenditures $9.835 billion
Budget deficit -2.1% of GDP
Public debt 39.2% of GDP
Taxes and other revenues 25% of GDP
Inflation rate 5.7%
Commercial bank prime lending rate 6.91%
Current account balance -$4.191 billion
Exports $18.91 billion (includes the Colon Free Zone)
Imports $24.69 billion (includes the Colon Free Zone)
Reserves of foreign exchange and gold $3.303 billion
Debt – external $14.2 billion
If you still have questions about Panama, take a look at one of our many articles on various topics affecting those who are considering it as a retirement or vacation destination. Or, better yet, schedule a trip to the Latin tropics and check it out for yourself.
Map of Panama
Panama Fast Facts
- Population: 3.8 million
- Typical temperature: Temperature typically varies from 72°F to 91°F
- Nearest airport with U.S. flights: U.S. Bound flights leave daily from Tocumen International Airport
- Nearest U.S. consulate: Panama City
- Home of the Playa Burica adventure colony.