Panama
Standing at the crossroads of the North and South American continents and the Atlantic and Pacific oceans, Panama holds immense strategic importance, highlighted by U.S. intervention. 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 September 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by 1999. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the intervening years. In 1989, U.S. forces invaded Panama and deposed dictator and former ally Manuel Noriega. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were turned over to Panama on 31 December 1999. Panama is mulling plans to widen the canal, which is more than 90 years old and operating almost at full capacity, to allow it to handle more and larger vessels. The scheme would have to be backed by Panamanians in a referendum.
The canal, the country’s natural attractions of its pristine forests and coastlines, and a lively, modern capital are fuelling a growing tourism industry. Panama's services-based economy benefits from the Colon free trade zone, home to some 2,000 companies and the second largest in the world. Offshore finance, manufacturing and a shipping registry generate jobs and tax revenues. Bananas are the main cash crop, but the trade has been hit by disease and is vulnerable to tariff changes in the European export market.
Martin Torrijos, the son of former military leader Omar Torrijos, defeated his main rival, ex-president Guillermo Endara, to win May 2004's presidential elections. He took office in September of that year. He pledged to modernize the Panama Canal, to tackle corruption, and to investigate alleged human rights violations under the rule of his father. He is pursuing a free trade agreement with the US. He was forced to shelve plans to reform Panama's troubled social security system, including a proposal to raise the retirement age for public sector workers, after they met with stiff resistance from unions and the Catholic Church. The government says the system is heading for bankruptcy.
Social inequality remains a problem. Elite families of European descent control most of Panama's wealth and power, while about 40% of the population live below the poverty line.
There are currently no known specific threats to travelers or expatriate personnel in Panama.
Panama has a reputation as a major transit point for US-bound drugs and illegal immigrants, and as a haven for money-laundering.
Security is lacking in areas near the border with Colombia beyond a line drawn from Punta Carreto in the Comarca de San Blas Province on the Atlantic coast, through Yaviza in the eastern Darien Province, to Punta Pina on the Pacific coast. These areas may be dangerous due to the activities of arms merchants, drug traffickers, right-wing death squads, illegal immigrants traveling north, Colombian guerrillas, and Colombian paramilitary groups. As a result, there are many guns and little order in Darien Province, including parts of the Darien National Park, as well as privately-owned nature reserves and tourist resorts. While no incidents have occurred at these resorts, Colombian groups in the Darien have perpetrated kidnappings of residents and tourists.
While most demonstrations relate to labor disputes or other local issues and are typically non-violent, it is nonetheless a good security practice to avoid demonstrations. Exercise caution near the campus of the University of Panama, where members of radical, anti-U.S. student groups are active.
Boaters should steer clear of Coiba Island in the Pacific, which houses a penal colony, and be wary of vessels that may be transporting narcotics northward from Colombia. Ever since the 1999 departure of the U.S. military from Panama, local maritime search and rescue capabilities are greatly diminished.
