Panama

I

Currency and Banking

Panama’s financial sector has more than 100 banks, with combined assets of more than $30 billion. This sector arose after a 1970 law permitted secret bank accounts and advantageous tax terms. Over the years, the banks have been alleged to handle illegal cash operations, a practice called laundering, on behalf of narcotics organizations in South America. The United States has pressured Panama into tightening rules regulating bank accounts and transfers. Panama has not given full access, arguing that the money would simply be moved to other protected havens, such as The Bahamas and Grand Cayman.

Panama’s official monetary unit is the balboa, whose value is fixed at one U.S. dollar. Panama has no paper currency of its own; the only paper money is the dollar. Fractional coins, based on 100 centesimos per balboa, are almost identical in denomination to U.S. coinage.

J

Transportation

Panama has a reasonably good transportation system, especially in the transit zone. Some 11,643 km (7,235 mi) of roads exist, and about 35 percent are paved; the remainder are finished in gravel and graded earth. Main thoroughfares include the Pan-American Highway and the Transístmica (Trans-Isthmian) Highway; the latter was built by U.S. troops during World War II (1939-1945). Other highways include the Corredor Sur, a 19-km (12-mi) toll road completed in 2000 to provide an alternate and less congested route between downtown Panama City and Tocumen International Airport.

The Panama Railroad, whose route parallels the canal, was run by the government from 1979 to 1996, but it lost money, and the government curtailed service. In 1996 it was leased to a private company, which planned to restore freight and passenger operations. Two longer narrow-gauge lines in the western provinces of Chiriquí and Bocas del Toro mostly serve the banana industry.

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Three of Panama’s busiest ports are located in Colón to serve the free zone: Cristóbal, Manzanillo, and Coco Solo. Balboa is the port at the Pacific end of the canal. Puerto Armuelles and Almirante handle banana exports. Shallow-draft vessels can navigate 800 km (500 mi) of inland rivers, not including the 82 km (50 mi) of the Panama Canal.

Tocumen International Airport, located on the outskirts of Panama City, serves as the country’s principal gateway for airline passengers and air freight. Many smaller airstrips exist, most built by the U.S. military for defense purposes. The largest national airline, COPA, provides international flights.

Panama has the largest merchant marine registry in the world, with 7,605 ships with a capacity of 168 million gross registered tons. Shipping firms from other countries prefer to register as Panamanian because Panama charges low fees, has lax regulation, and offers access to maritime services.

K

Communications

As a financial and transport nerve center, Panama has a well-developed system of communications. Its telephone company, INTEL, operates ground lines for hundreds of thousands of telephones and satellite connections to the rest of the world, including the Internet. Cellular telephone service is also available; some 418 of every 1,000 persons subscribed to this service in 2005.

The electronic media include four television broadcast stations and 18 cable stations. Virtually every urban household has a radio and a television, but phones are scarcer. In the capital, most businesses have become automated. The use of personal computers and Internet connections is becoming more common in middle- and upper-class homes and through schools, universities, and businesses.

The print media are dominated by daily newspapers, which have large circulations in the major cities. The largest are Panama America, Critica, La Prensa, La Estrella, and El Siglo, all published in Panama City, with combined daily circulations of more than 150,000.

L

Tourism

The nationalist and dictatorial regimes of the 1970s and 1980s made Panama unattractive to U.S. citizens and Europeans who could afford to travel there. More recently, however, the country has actively promoted tourism. The number of tourist arrivals more than doubled in the 1990s. In 2003, 566,000 tourists (not including stopover arrivals) visited Panama, generating $960 million in revenue. The construction of new hotels, tourist villas, and resorts has coincided with the growing tourism industry. The Panama Canal is the major tourist attraction within Panama, and many major cruise lines include a trip through the canal as part of their itinerary. In October 2000 the country inaugurated its first cruise-ship terminals, one at either end of the Panama Canal, to promote more stopover tourism.

V

Government

Panama has well-rooted democratic traditions dating back to independence from Spain in 1821. Panama adopted constitutions in 1903, 1946, and 1972. These have been amended to fit changing times, and major revisions were made in 1983. All citizens 18 years of age and above are required to vote in elections.

Despite Panama’s democratic traditions, the military has been heavily involved in politics since the 1930s and controlled government from 1968 to 1989. Panama officially had no army after granting the United States defense powers in 1903, but it has maintained a military police force called the National Police (1903-1953), the National Guard (1953-1983), the Panama Defense Forces (1983-1989), and the Public Forces (1990- ). By the late 1940s, the commander of the police, José Antonio Remón, effectively selected and removed presidents, and in 1952 Remón himself became president. Only after he was assassinated in 1955 did the police pull back from active involvement in government.

In 1968, however, two colonels led a coup that overthrew the president and initiated a 22-year dictatorship. The dominant figures were Omar Torrijos Herrera (1969-1981) and Manuel Noriega (1984-1989). A U.S. invasion in 1989 removed Noriega, disbanded the military, and restored civilian government.

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