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Panama has 3.2 million residents, and more than a third of them live in Panama City, Colón, and David, the country's three largest cities. The remaining population is concentrated mostly in small towns and villages in central Panama and the Azuero Peninsula. Officially roughly 70% of the population are mestizo, or a mix of Amerindians and Caucasians; 14% are African descent, 10% are white and other immigrant races, and 6% Amerindian. About 30% of the population are under the age of 14.

There are seven indigenous groups in Panama who, despite foreign influences and modern advancements, have, to differing degrees, held onto their culture and languages. Ethnic tribes such as the Kuna, who live along the central Caribbean coast, form a semiautonomous and insular society that has hardly changed over the last century. However, the eastern Kuna community, near the Darién, has adapted to modern society, wears Western clothing, and practices few native traditions. The Ngöbe-Buglé are two tribes that are culturally similar and collectively referred to as Guaymí. Ngöbe-Buglés live in the highlands of western Panama and eastern Costa Rica, and are the country's largest indigenous group; many travel nomadically and make their living in coffee production. Eastern Panama is home to two indigenous groups, the Emberá and the Wounaan -- several Emberá communities are close enough to Panama City to be visited for the day. Tiny populations of Teribe (also called Naso) and Bri Bri live scattered around mainland Bocas del Toro.

People of African descent first came to Panama as slaves of the Spanish during the 16th century, and many escaped into Darién Province where they settled and became known as cimarrones. In and around Portobelo and the eastern Caribbean coast, they call themselves Congos. During the 19th century, jobs in canal building and banana plantations lured immigrants from Jamaica, Barbados, and Colombia, who settled along the western Caribbean coast and are commonly referred to as Afro-Caribbeans or creoles.

One thing you'll find about Panamanians is that they are warm and outgoing people who are eager to help strangers. Panamanians no longer indulge in afternoon siestas, but you will notice that things move at a languid pace. Given this and the country's nascent tourism infrastructure, even well-respected tour companies and other tourism establishments can't always be relied upon for punctuality. If you are an impatient person, or in a hurry, you will not fare well in Panama -- so relax. You're on vacation, right?

Panama has a dollarized economy whose major natural resources are its rainforests, beaches, and oceans, making this country an irresistible draw for tourism -- though it hasn't really taken off yet. Panama's principal source of income is derived from the services sector, including the Panama Canal, the Colón Free Trade Zone, banking, and flagship registry among other "export" services, all of which account for about three-quarters of the country's GDP. The withdrawal of U.S. canal workers and military personnel in 2000 had a devastating effect on Panama City's local economy, but a growth explosion in the construction sector is currently underway thanks to juicy tax incentives, and glitzy skyscrapers seem to shoot up overnight along the city's shoreline. Panama has very effectively sold itself as a retirement haven, with its low cost of living, inexpensive land, and dollar-based economy, and many of those who were just passing through are now putting down stakes in gated communities or taking on new roles as hotel or restaurant owners. Foreign investors lured by get-rich-quick schemes are snapping up property in a real-estate boom that has many locals grumbling about the soaring value of land. On the legislative side, the Panamanian government has reformed its tax structure, opened its borders to free trade with key nations like the U.S., and implemented a social security overhaul. Yet money laundering, political corruption, and cocaine transshipment continue to be problems, as is widespread unemployment, with indigenous groups and Colón residents faring the worst. As the nation grows economically, the split between the rich and the poor widens. Today, about 40% of the population is under the poverty level and lacks adequate housing, access to medical care, and proper nutrition.

The current president of Panama is Martín Torrijos, a member of the center-left Democratic Revolutionary Party and son of the late populist dictator Omar Torrijos, but election season is underway and a new president will be elected in December of 2008. Torrijos maintains a political balance between free-trade economic incentives and fiscal responsibility on the one hand, and, on the other, embracing his father's populist past and reaching out to the poor. One week he's shaking hands with Fidel Castro, the next he's fishing with former U.S. president George H. W. Bush.

Recently, a $5.5 billion expansion of the Panama Canal got underway, a move that caused much controversy, but that ultimately promises to keep the Canal relevant. Worldwide tankers have grown too big to fit in the canal, and those ships that can fit must line up for hours to cross.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.