Early History

Little is known about the ancient cultures that inhabited Panama before the arrival of the Spanish. The pre-Columbian cultures in this region did not build large cities or develop an advanced culture like the Mayans or the Incas did, and much of what was left behind has been stolen by looters or engulfed in jungle. We know that the most advanced cultures came from Central Panama, such as the Monagrillo (2500–1700 b.c.), who were one of the first pre- Columbian societies in the Americas to produce ceramics. Excavation of sites such as Conte, near Natá, have unearthed elaborate burial pits with huacas (ceremonial figurines) and jewelry, which demonstrates an early introduction to metallurgy during the first century, as well as trade with Colombia and even Mexico. What little remains of Panama’s prized artifacts can be viewed at the Museo Antropológico Reina Torres de Araúz in Panama City. 

The first of many Spanish explorers to reach Panama was Rodrigo de Bastidas, who sailed from Venezuela along Panama’s Caribbean coast in 1501 in search of gold. His first mate was Vasco Nuñez de Balboa, who would return later and seal his fate as one of Panama’s most important historical figures. A year later, Christopher Columbus, on his fourth and final voyage to the New World, sailed into Bocas del Toro and stopped at various points along the isthmus, one of which he named Puerto Bello, now known as Portobelo. Estimates vary, but historians believe that between 1 and 2 million indigenous people were in Panama at that time. Groups such as the Kuna, the Chocó, and the Guaymí lived in small communities and were highly skilled in pottery making, stonecutting, and metallurgy. Because they frequently wore gold ornaments, Spanish explorers during the following years would be further convinced of the existence of fabled El Dorado, the city of gold. Columbus attempted to establish a colony, Santa María de Belen, near Río Belen, but was forced out after a raid by local Indians. 


Meanwhile, Balboa had settled in the Dominican Republic but had racked up huge debts. In 1510, he escaped his creditors by hiding out as a stowaway on a boat bound for Panama. In the years since Columbus’s failed attempt, many other Spaniards had tried to colonize the coast but were thwarted by disease and indigenous raids. Balboa suggested settling at Antigua de Darién, where he became a tough but successful administrator who both subjugated Indians as well as befriended conquered tribes. Having listened to stories by Indians about another sea, Balboa set out in 1513 with Francisco Pizarro and a band of Indian slaves and hacked his way through perilous jungle for 25 days until he arrived at the Pacific Coast, where he claimed the sea and all its shores for the king of Spain. Balboa was later beheaded by a jealous new governor, Pedro Arias de Avila (Pedrarias the Cruel), on a trumped-up charge of treason. 

In 1519, Pedrarias settled a fishing village called Panama, which meant “plenty of fish” in the local language, and resettled Nombre de Dios on the Atlantic to create a passageway for transporting Peruvian gold and riches from the Pacific to Spanish galleons in the Caribbean Sea. The trail was called the Camino Real, or Royal Trail, but later a faster and easier route was established, called the Camino de las Cruces. The land portion of this trail was two-thirds shorter and met with the Chagres River, which could be sailed out to the Caribbean Sea. This trail can be walked today, and portions of the stone-inlaid path still exist. 

With Incan gold nearly exhausted, the Spanish turned their interests to the immense supply of silver found in Peruvian mines, and in 1537 they held their first trading fair, which would grow into one of the most important fairs in the world. With so much wealth changing hands on the isthmus, pirate attacks became increasingly common, and ports like Nombre de Dios declined in importance after having been raided by the English pirate Sir Francis Drake twice in 1572 and 1573. Portobelo was refortified and became the main port of trade. Panama City, on the other side of the isthmus, flourished with trade profits and was considered one of the wealthiest cities in the Americas. 


By the mid-17th century, dwindling supplies of silver and gold from the Peruvian mines and ongoing pirate attacks precipitated a severe decline in the amount of precious metals being transported to Spain. In 1671, the notorious Welsh buccaneer Henry Morgan sailed up the Chagres River, crossed the isthmus, and overpowered Panama City, sacking the city and leaving it in flames. Those who escaped the attack rebuilt Panama City 2 years later at what is now known as Casco Viejo. 

Spain finally abandoned the isthmus crossing and Portobelo after the city was attacked by the British admiral Edward Vernon, and returned to sailing around Cape Horn to reach Peru. 

Independence from Spain & the Gold Rush 


Spain granted independence to its Central America colonies in 1821, and Panama was absorbed into “Gran Colombia,” a union led by liberator Simón Bolívar that included Colombia, Venezuela, and Ecuador. Panama attempted to split from Colombia three times during the 19th century, but wouldn’t be successful until the U.S.–backed attempt in 1903. 

Having been a colonial backwater since the pullout of the Spanish in the late 17th century, Panama was restored to prosperity from 1848 to 1869 during the height of the California Gold Rush. Given that crossing the U.S. from the Atlantic to the Pacific was a long, arduous journey by wagon and prone to Indian attacks and other pitfalls, gold seekers chose to sail to Panama, cross the Las Cruces trail, and sail on to California. In 1855, an American group of financiers built the Panama Railroad, greatly reducing the travel time between coasts. In 20 years, a total of 600,000 people crossed the isthmus, and both Colón and Panama City benefitted enormously from the business earned in hotels, restaurants, and other services. 

The Panama Canal 


The history of the canal dates back to 1539, when King Charles I of Spain dispatched a survey team to study the feasibility of a canal, but the team deemed such a pursuit impossible. The first real attempt at construction of a canal was begun in 1880 by the French, led by Ferdinand de Lesseps, the charismatic architect of the Suez Canal. De Lesseps had been convinced that a sea-level canal was the only option. Once workers broke ground, however, engineers soon saw the impracticality of a sea-level canal but were unable to convince the stubborn de Lesseps, and for years rumors flew, financial debts mounted, and nearly 20,000 workers perished before the endeavor collapsed. Few had anticipated the enormous challenge presented by the Panamanian jungle, with its mucky swamps, torrential downpours, landslides, floods, and, most debilitating of all, mosquito-borne diseases such as malaria and yellow fever. 

Meanwhile, Panama was embroiled in political strife and a nonstop pursuit to separate itself from Colombia. Following the French failure with the canal, the U.S. expressed interest in taking over construction but was rebuffed by the Colombian government. In response, the U.S. backed a growing independence movement in Panama that declared its separation from Colombia on November 3, 1903. The U.S. officially recognized Panama and sent its battleships to protect the new nation from Colombian troops, who turned back home after a few days. 

A French canal engineer on the de Lesseps project, Philippe Bunau-Varilla, a major shareholder of the abandoned canal project, had been grudgingly given negotiating-envoy status by the Panamanian government for the new U.S.–built canal. His controversial Hay-Bunau-Varilla Treaty gave the U.S. overly generous rights that included the use, occupation, and sovereign control of a 16km-wide (10-mile) swath of land across the isthmus, and was entitled to annex more land if necessary to operate the canal. The U.S. would also be allowed to intervene in Panama’s affairs. 


The French had excavated 2⁄5 of the canal, built hospitals, and left behind machinery and the operating railway, as well as a sizeable workforce of Afro-Caribbeans. For the next 10 years, the U.S., having essentially eradicated tropical disease, pulled off what seemed impossible in terms of engineering: carving out a path through the Continental Divide, constructing an elevated canal system, and making the largest man-made lake in the world. 

The 20th Century to the Present 

A stormy political climate ensued in Panama for the following decades, with frequent changes of administration. Presidents and other political figures were typically rabiblancos, or wealthy, white elites loathed by the generally poor and dark-skinned public. One especially controversial character in the political scene was Arnulfo Arias, a racist yet populist, one-time sympathizer of the fascist movement who would be voted into and thrown out of the presidency three times. Increasingly, Panamanians were discontented with the U.S. presence and, in particular, its control of the canal. In 1964, several U.S. high-school students in the Canal Zone raised the American flag at their school, igniting protests by Panamanian college students. The protests culminated in the deaths of more than two dozen Panamanians, an event that is now called “Día de los Mártires,” or Martyrs Day. 


By 1974, the U.S. had begun to consider transferring the canal to Panama. Arias was once again voted into power, and after strong-arming the National Guard, he was deposed in a military coup led by Omar Torrijos Herrera, a National Guard colonel. Torrijos was an authoritarian leader but a champion of the poor who espoused land redistribution and social programs—a “dictatorship with a heart,” as he called it. His most popular achievement came in 1977, with the signing of a treaty with then-president Jimmy Carter that relinquished control of the canal to Panama on December 31, 1999. Also part of the treaty was the closing of U.S. military bases and the U.S. right to intervene only if it perceived a threat against the security of the canal. On July 31, 1981, Torrijos died in a plane accident. 

By 1983, the National Guard, now renamed the Panamanian Defense Forces (PDF), was firmly controlled by Colonel Manuel Antonio Noriega and continued to dominate political and everyday life in Panama. Noriega created the so-called Dignity Battalions that aimed to stifle citizen dissent through force and terrorize anyone who opposed the PDF. For the next 6 years, Noriega kept the Panamanian public in a state of virtual fear, running the country through presidents he had placed in power via rigged elections, killing and torturing his opponents, and involving himself in drug trafficking. 

The U.S. imposed tough economic sanctions on Panama that included freezing government assets in U.S. banks and withholding canal fees, spurring widespread protests against Noriega across Panama City. In 1989, a fresh set of presidential elections pitted the Noriega-picked candidate against Guillermo Endara. When Endara won, Noriega annulled the election amid wide- spread claims by foreign observers of fraud on the part of the Noriega regime. 


With Panama veering out of control, the U.S. began sending troops to bases in the Canal Zone. On December 20, 1989, the U.S. launched Operation Just Cause, led by 25,000 soldiers who pounded the city for 6 days, leaving anywhere from 500 to 7,000 dead, depending on whom you asked. Noriega fled and hid in the offices of the Vatican nuncio, where he asked for asylum. He later surrendered and was flown to the U.S., where he was tried, charged, and sentenced to 40 years in prison, which was later reduced. In 2010, he was extradited to France, where he was charged with money-laundering, and then sent to Panama a year later, where he is serving a 20-year sentence. 

In the wake of Noriega’s extradition, Guillermo Endara was sworn in as president, where he presided over a country racked by instability. In 1994, a former Torrijos associate, Ernesto Pérez Balladares, was sworn in as president. Balladares instituted sweeping economic reforms and worked to rebuild Panama’s relationship with the U.S., which still had control of the canal. The same year, the constitution was changed to ban the U.S. military in Panama. 

Balladares was followed by Mireya Moscoso in 1999, the ex-wife of Arias and Panama’s first female president. During her 5 years in power, her approval ratings dropped to less than 30%; she was generally viewed as grossly incompetent and prone to cronyism and corruption. Moscoso also oversaw the much-anticipated handover of the canal. 


Despite decades of protest against the U.S. presence, in the end many Panamanians expressed ambivalence about the pullout when faced with the economic impact on businesses and the loss of jobs. Still, the handover has defied everyone’s expectations, and the canal is run today as well, if not better, than before. 

After a successful run from 2009 to 2014, billionaire ex-banker Ricardo Martinelli was displaced by Panama’s current president, Juan Carlos Varela. Martinelli, despite helping Panama transition into the robust economy that it is today, has since been accused of alleged phone-tapping and corruption scandals. Varela has promised to help fight against corruption and poverty as Martinelli lives exiled in Miami, literally holed up in the luxury condo in which the film Scarface was filmed. 


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.