Panama has almost 4 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 is mestizo, or a mix of Amerindians and Caucasians; 14% are of African descent; 10% are white and other immigrant races; and 6% Amerindian. About 30% of the population is under the age of 14. 

Panama is home to seven indigenous groups that have, to differing degrees, held onto their culture and languages, despite foreign influences and modern advancements. 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, wearing Western clothing and practicing 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.

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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.
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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 things still 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. 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 and inexpensive land, 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. For many years, foreign investors lured by get-rich-quick schemes were snapping up property in a real-estate boom that had many locals grumbling about the soaring value of land; this has slowed down a bit in the last couple of years, but prices have remained high for a relatively poor population.
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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 37% of the population is under the poverty level and lacks adequate housing, access to medical care, and proper nutrition.
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The current president of Panama, Juan Carlos Varela, a member of the right- leaning Panameñista Party, is the scion of one of Panama’s richest families and owner of a namesake rum distillery. Varela has a degree in engineering from the Georgia Institute of Technology in Atlanta and has promised to shake out corruption in the government.

In 2007, a $5.3-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. As the project winds down, the country is exploring another $16-billion expansion that would allow the canal to handle the world’s largest ships, which can carry up to 20,000 containers. If it happens, work could be ongoing for the next 15 or 20 years. 

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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.