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Summary Article: Panama
from The Hutchinson Unabridged Encyclopedia with Atlas and Weather Guide

Country in Central America, on a narrow isthmus between the Caribbean and the Pacific Ocean, bounded west by Costa Rica and east by Colombia.

Government Panama has a presidential political system. Under its 1972 constitution, as amended in 1983 and 2004, it has a single-chamber legislature, the National Assembly, of 71 members, elected in single-seat and multi-seat constituencies by universal suffrage for a five-year term. The president, similarly elected for a five-year term, is assisted by an elected vice-president and an appointed cabinet. The country is divided into nine provinces, each with its own governor, appointed by the president. There are also three Indian reservations, which enjoy a high degree of self-government.

History Panama was visited by Christopher Columbus in 1502. Vasco Núñez de Balboa found the Pacific from the Darien isthmus in 1513. Spanish settlements were sacked by Francis Drake 1572–95 and Henry Morgan 1668–71; Morgan destroyed the old city of Panama, which dated from 1519. Remains of Fort St Andrews, built by Scottish settlers 1698–1701, were discovered in 1976. Panama remained part of the viceroyalties of Peru and New Granada until 1821, when it gained independence from Spain; it joined Gran Colombia in 1822.

Independence Panama achieved full independence in 1903 with US support. At the same time the USA bought the rights to build the Panama Canal (opened in 1914) and was given control of a strip of territory 16 km/10 mi wide, known as the Canal Zone, in perpetuity. Panama was guaranteed US protection and an annuity. In 1939 Panama's protectorate status was ended by mutual agreement, and in 1974 the two countries agreed to negotiate an eventual transfer of the canal to Panama. In 1977 two treaties were signed by Gen Omar Torrijos Herrera, who was Panama's de facto leader 1968–81, and US president Carter. One transferred ownership of the canal to Panama (effective from 1990) and the other guaranteed its subsequent neutrality, with the conditions that only Panamanian forces would be stationed in the zone, and that the USA would have the right to use force to keep the canal open if it became obstructed.

Deterioration of economy The 1980s saw a deterioration in the state of Panama's economy, with opposition to the austerity measures that the government introduced to try to halt the decline. In the 1984 general election, after a close result, Dr Nicolás Ardito Barletta, the Democratic Revolutionary Party (PRD) candidate, was declared president, but in 1985 he resigned amid speculation that he had been forced to do so by the commander of the National Guard. Relations between Panama and the USA deteriorated with the departure of President Barletta, and the Reagan administration cut and later suspended its financial aid.

Barletta was succeeded by Eric Arturo del Valle, but the country was, from 1983, effectively ruled by the army commander-in-chief, Gen Manuel Noriega. Although the 1977 Torrijos–Carter Canal Treaties specified that US forces in Panama were present purely to defend the canal, Noriega cooperated in allowing the USA to use Panama as an intelligence, training, re-supply, and weapons base for the Reagan administration's campaigns in Nicaragua and El Salvador.

Accusations against Noriega In 1987 Noriega was accused of corruption, election rigging, involvement in the cocaine trade, and the murder of a political opponent. Noriega's forces were allegedly responsible for up to a dozen political killings between 1983 and 1989. Political parties, labour and student unions, and business groups united as the National Civic Crusade to campaign for his removal; demonstrations were suppressed by riot police. In July 1987 Noriega successfully resisted calls for his removal, despite the suspension of US military and economic aid. He declared the May 1989 assembly elections invalid and in September Francisco Rodríguez, with army backing, was made president. In the following month an attempted coup against Noriega was put down.

US invasion In December 1989, US President George H W Bush ordered an invasion of the country with the intention of arresting Noriega. Several hundred people were killed during the operation. Noriega sought refuge in the Vatican embassy but eventually surrendered and was taken to the USA, where he was convicted in 1992 of charges relating to drug trafficking. Noriega served 17 years in prison in the USA before being extradited to France where he was sentenced in July 2010 to seven years' imprisonment for money laundering, serving this in Panama from December 2011.

Guillermo Endara became president and worked to balance Panama's aims against pressures from the USA, its most important partner, in such areas as banking. In October 1991 an attempted antigovernment coup by former officers loyal to Noriega was thwarted. Constitutional amendments approved by the assembly in 1991 included abolition of the army and, although this was rejected in a referendum in 1992, in 1994 the army was formally banned as a constitutional entity. A withdrawal date of 1999 was set for US troops stationed in Panama since the 1989 invasion.

Civilian rule In May 1994 Ernesto Pérez Balladares of the centre-left Democratic Revolutionary Party (PRD) was elected president, with 33% of the vote. He followed a free-market economic programme, which involved privatization of the state electric and telephone companies, and Panama entered the World Trade Organization (WTO) in 1997.

In an August 1998 referendum, voters rejected a proposed change to the constitution that would have allowed President Balladares to run for a second consecutive term.

The May 1999 presidential elections were won by the populist Mireya Moscoso of the nationalist Arnulfista Party. She was the widow of former president Arnulfo Arias, who had been deposed as president by the military in 1968 and she had lost to Pérez Balladares in 1994. She finished ahead of the PRD candidate, Martin Torrijos, son of the former dictator Gen Omar Torrijos Herrera, to become Panama's first female president in September 1999. Inheriting an economy in recession, she pledged to tackle poverty, improve education, halt privatization, and raise tariffs to protect farmers.

Panama takes full control over the Panama Canal In December 1999, the USA closed its last military bases on the Panama Canal, in accordance with the 1977 agreement, and left the zone in January 2000, enabling Panama to take control of the canal formally.

In December 2000, President Moscoso announced formation of a Truth Commission to determine the fate of 150 people who disappeared between 1968 and 1989 under military regimes. Moscoso began her term in office amid a wave of hope and optimism, but this soon evaporated as a result of economic slowdown, rising crime and disorder, and corruption scandals, and she left office in 2000 with the lowest popularity rating, at 15%, of any Panamanian president.

Moscoso was succeeded as president in September 2004 by Martin Torrijos, who had won the May 2004 election with 47% of the vote. He carried out social security reforms, including increasing the retirement age, and in October 2006 a national referendum approved a project to double the capacity of the Panama Canal by 2014.

Panama Canal widened In July 2009 Ricardo Martinelli, a right-wing supermarket tycoon who had been minister for canal affairs 1999–2003, became president after winning 61% of the vote in the May 2009 elections. He led Democratic Change (CD), a member of the four-party opposition Alliance for Change, which also secured a majority in the May 2009 national assembly elections.

President Martinelli set out a $1 billion plan to build a metro system in the capital and pledged to push ahead with .a $5.25bn project to widen the Panama Canal and double its capacity in 2015, although the latter was to later run into a $1.6 billion cost overrun. He also sought to reverse a recent slowdown in economic growth through reducing levels of income tax and securing US ratification of a free-trade agreement: the latter was achieved in October 2011.

Varela is elected president In May 2014 vice-president Juan Carlos Varela, an ally of Martinelli who turned critic when sacked as foreign minister in 2011, secured a surprise victory in the presidential election, winning 39% of the vote to defeat the CD candidate José Domingo Arias. Varela, of the right-wing Panameñista Party, took over as president in July 2014 and pledged to give more focus on reducing economic inequality.

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Panama – A Country Study

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