Panama

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# A Brief History

In November 1903 Panama proclaimed its independence and concluded the Hay–Bunau-Varilla Treaty with the United States. The treaty granted rights to the United States "as if it were sovereign" in a zone roughly 16 km (10 mi) wide and 80 km (50 mi) long. In that zone, the U.S. would build a canal, then administer, fortify, and defend it "in perpetuity". In 1914, the United States completed the existing 83 km (52 mi) canal.

From 1903 until 1968, Panama was a constitutional democracy dominated by a commercially oriented oligarchy. During the 1950s, the Panamanian military began to challenge the oligarchy's political hegemony. Following the 1968 elections, Arias Madrid took office as president of Panama, promising to lead a government of "national union" that would end the reigning corruption and pave the way for a new Panama. A week and a half later, on October 11, 1968, the National Guard (Guardia Nacional) ousted Arias and initiated the downward spiral that would culminate with the United States' invasion in 1989.

On December 20, 1989 the US commenced "Operation Just Cause" justified as necessary to safeguard the lives of U.S. citizens in Panama, defend democracy and human rights, combat drug trafficking, and secure the neutrality of the Canal. Although described as a surgical maneuver, the action led to civilian deaths whose estimated numbers range upwards to 4,000 during the two weeks of armed activities.

Following this incursion Panama's Electoral Tribunal moved quickly to restore the civilian constitutional government, reinstated the results of the May 1989 election on December 27, 1989. The current President, Juan Carlos Varela won the 2014 presidential election with over 39% of the votes, against the party of his former political partner Ricardo Martinelli, Cambio Democrático, and their candidate José Domingo Arias. He was sworn in on 1 July 2014.

It is important to note that as of the year 2000 Panama alone controls operates and benefits from the revenue of the canal.

# Economy

Revenue from canal tolls represent a significant portion of Panama's GDP, although commerce, banking, and tourism are major and growing sectors. Panama has the second largest economy in Central America and is also the fastest growing economy and largest per capita consumer in Central America. In 2013, Panama ranked 5th among Latin American countries in terms of the Human Development Index, and 59th in the world. As of 2012 Panama had an unemployment rate of 2.7%.

Since Panama took over operation of the Canal it has played a key role in economic properity of the country. In 2012 approximately 15 000 ship passed through the canal each year, generating 2.5 Billion USD, this figure has since increased.

Tourism in Panama is rapidly growing. It has maintained its growth over the past five years due to government tax and price discounts to foreign guests and retirees. These economic incentives have caused Panama to be regarded as a relatively good place to retire in the world. Real estate developers in Panama have increased the number of tourism destinations in the past five years because of the interest for these visitor incentives. Latest figures from 2012 estimate 2,200,000 tourists in that year alone and accounted for 9.5% of gross domestic product in the country, surpassing other productive sectors.

The high levels of Panamanian trade are in large part from the Colón Free Trade Zone, the largest free trade zone in the Western Hemisphere. In 2014 the zone accounted for 92% of Panama's exports and 64% of its imports, according to an analysis of figures from the Colon zone management.

For more information go the the page on International Trade in Panama

# Military

Panama is the second country in Latin America (the other being Costa Rica) to permanently abolish standing armies. The small paramilitary force that remains is referred to as the Panamanian Public Forces. Panama does however maintain air and maritime forces. They are tasked with law enforcement and can perform limited military actions. This is a direct result of a U.S. invasion that overthrew a military dictatorship which ruled Panama from 1968 to 1989.

The protection of the Canal is the sole responsibility of Panama and the Navy. However under the The Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal commonly known as the "Neutrality Treaty" the U.S. retained the permanent right to defend the canal from any threat that might interfere with its continued neutral service to ships of all nations.

Internally 40% of Panama is covered by dense jungle it provides a haven to both guerrilla and cartel activity providing cover for smuggling operations and and other illegal activity. The Panamanian government have not made many public statements regarding this activity and the public forces do not have the resources to halt these operations so long as they remain a small paramilitary force. These conditions are not set to improve as Panamanian government fears a military coup far more than smuggling activity that for the most part does not effect them or their population.

# Foreign Relations

Due to the strategic importance of the Canal and commercial necessity foreign nations have a generally favorable opinion of Panama. Panama has served on the UN security council

Panama has well established relations with Canada, Taiwan, India, Mexico, Russia, South Korea, Spain and the United States.

Panama is the first country in Central America where India established a resident embassy in 1973. Bilateral commercial and trade relations are steadily growing between India and Panama, with Panama seen as the gateway for expansion into Latin America

The United States currently cooperates with the Panamanian government in promoting economic, political, security, and social development through U.S. and international agencies. Cultural ties between the two countries are strong, and many Panamanians go to the United States for higher education and advanced training.