The isthmus of Panama is the umbilical cord joining South and Central America. It borders Costa Rica to the west and Colombia to the east. Panama's arched shape reflects both its role as a bridge between continents and as a passageway between oceans. At its narrowest point, it is only 50km (30mi) wide, but it has a 1160km (720mi) Caribbean coastline on its northern shore and a 1690km (1048mi) Pacific coast to the south. The famous canal is 80km (50mi) long and effectively divides the country into eastern and western regions.
There are hundreds of islands near the Panamanian coasts. The two major archipelagos are the San Blas and Bocas del Toro chains in the Caribbean Sea, though the best snorkeling, diving and deep-sea fishing are to be found in the Pacific near Coiba Island and the Pearl Islands. Panama has flat coastal lowlands and two mountain chains running along its spine. The highest peak is Volcán Barú at 3475m (11,400ft).
Rainforests dominate the canal zone, the northwestern portion of the country and much of the eastern half. Although Costa Rica is widely known for its fantastic wildlife, Panama has, in fact, a greater number of flora and fauna species, more land set aside for preservation, and far fewer people wandering through the jungle looking for wildlife and inadvertently scaring it away. There's much truth in the Panamanian saying that in Costa Rica 20 tourists try to see one resplendent quetzal, while in Panama one person tries to see 20 of these exquisite birds.
The earliest known inhabitants of Panama were the Cuevas and the Coclé cultures, but they were decimated by disease and the sword when the Spanish arrived in the 16th century. After several forays along the country's Caribbean shore, the Spanish settlement of Nombre de Dios was established at the mouth of the Río Chagres on the Caribbean coast in 1510. Panama's Pacific coast later became the springboard for invasions of Peru and the wealth generated by these incursions was carried overland from the Pacific port of Panama (City) to Nombre de Dios. The transport of wealth attracted pirates and, by the 18th century, the Caribbean was so dangerous that Spanish ships began bypassing Panama and sailing directly from Peru around Cape Horn to reach Europe.
Panama went into decline, and became a province of Colombia when the South American nation received its independence in 1821. In 1846, Colombia signed a treaty permitting the USA to construct a railway across the isthmus and to defend it with military force. The idea of a canal across the isthmus had been mooted even in the 16th century, but a French attempt to build one in 1880 resulted in the death of 22,000 workers from malaria and yellow fever and bankruptcy for everyone involved. A Frenchman who stood to gain handsomely from a US buyout of the French rights to build a canal was named 'envoy extraordinary' by Washington and he negotiated and signed a canal treaty with the USA, despite the objections of the Colombian government. The financial and strategic interests of the US momentarily coincided with the sentiments of Panama's revolutionaries, and a revolutionary junta declared Panama independent on 3 November 1903, with the overt support of the USA.
The canal treaty granted the USA rights in perpetuity over land on both sides of the canal and a broad right of intervention in Panamanian affairs. The treaty led to friction between the two countries for decades, partly because it was clearly favorable to the USA at the expense of Panama and partly because Colombia refused to acknowledge Panama's independence until 1921 when the USA finally paid Colombia US$25 million in compensation. The USA began to build the canal again in 1904 and 10 years later the first ship negotiated the engineering marvel. The US intervened in Panama's affairs repeatedly up until 1936, when it relinquished its right to use troops outside the Canal Zone. The two countries continued to argue over the canal contract until a new treaty was signed in 1977. This treaty calls for the gradual withdrawl of US interests and complete Panamanian control of the canal by 1999.
General Manuel Noriega took control of the country in 1984. A former head of Panama's secret police and a CIA operative, Noriega became a demagogic bogeyman. Murdering political opponents, quashing democracy, drug trafficking and money laundering were his principal concerns during the 1980s, activities which eventually attracted US sanctions and freezing of Panamanian assets. When the winning candidate of the 1989 presidential election was beaten to a pulp on national TV and the election declared null and void, Noriega's regime became an international embarrassment. Noriega appointed himself head of government on 15 December 1989 and announced that Panama was at war with the USA. The following day an unarmed US soldier dressed in civilian clothes was killed by Panamanian soldiers - or so the Pentagon claimed. The Panamanian version of events was that the soldier was not only armed but that he had shot and injured three civilians before running a roadblock.
Since US forces had for months been itching for a pretext to attack, this was more than enough reason to call in 26,000 troops for 'Operation Just Cause.' The invasion, the intention of which was to bring Noriega to justice and create a democracy better suited to US interests, left more 2,000 civilians dead and thousands more homeless. Noriega escaped capture by US troops for six days by claiming asylum in the Vatican embassy. US forces surrounded the embassy and pressured the Vatican to release him. They memorably used that psychological tactic beloved of disgruntled teenagers, and bombarded the embassy with blaring, devilish, rock music to psychologically wear down those inside. It worked (as any parent knows); Noriega was sent to the US, where he was convicted on money laundering charges; he is currently serving a 40-year prison sentence in Florida.
Money & Costs
Currency: US dollar (known as 'Balboa')
Relative costs:
- Budget room: US$6-12
- Moderate hotel: US$12-18
- Top-end hotel: US$20 and upwards
- Budget meal: US$2-5
- Moderate restaurant meal: US$5-10
- Top-end restaurant meal: US$10 and upwards
Accommodation tends to be more expensive in Panama than in other parts of Central America; a hotel room that might cost US$6 in Nicaragua or Guatemala might cost US$12 here. If you're traveling on a budget, you'll pay at least US$15 per day for a room and three meals. A moderate budget will be in the range of US$17-30 a day.
Panama uses the US dollar as its currency. The official name for it is the Balboa, but it's exactly the same bill. Panamanian coins are of the same value, size and metal as US coins; both are used. In most of Central America, US dollars are the only currency exchanged. In Panama City, however, you can exchange currencies from almost anywhere in the world, due to the city's large international offshore banking industry.
Attractions on the fringes of the city include the Panama Canal, the 16th-century ruins of Panamá Viejo, the Summit Botanical Gardens and Zoo, the tropical rainforest of the Sobreranía National Park and the 265-hectare (655-acre) Parque Nacional Metropolitana.
Facts at a Glance
Environment
History
Economic Profile
Culture
Events
Facts for the Traveler
When to Go
Warning
Attractions
Off the record
Off the Beaten
Track
Activities
Getting There & Away
Getting Around
Recommended Reading
Lonely Planet Guides
Travelers' Reports
On-line Info
