panama flag red white blue star

Panama Country Profile

In Countries by Continental StaffLeave a Comment

Located at the southernmost tip of Central America, Panama has long held a special place in the world thanks to its eponymous canal…but there’s a lot more to this fascinating nation if you look closely.

Want to learn more about Panama?

Travel Guide | Currency

  • Capital (and Largest City): Panama City
  • Population (2016): 3,814,672 (129th)
  • Total Area: 75,417 km² (116th)
  • Official Language: Spanish
  • Currencies: Panamanian balboa (B/.) (PAB) & US dollar ($) (USD)

panama jesuit architecture building colonial

History of Panama

Pre-Columbian Era

Prior to the arrival of the Spanish, the Cuevas and Coclé tribes were the main inhabitants of the region. Estimates vary widely on how many actually lived in what is now Panama, though it could be anywhere between 200,000 and 2 million (looks like someone forgot or added a 0) depending on who you ask. When Europeans arrived in the 16th century, the native population began to decline rapidly due mostly to disease.

Spanish Colonization

Starting in 1538, Panama was a Spanish colony for nearly 300 years. Overseen from Peru, Panamanians and Panama did nonetheless retain a degree of national consciousness and independence. However, the situation was trick for the Spanish since they had a fairly small degree of actual control of the colony. This left the land open to attacks from pirates and foreign powers (or one and the same, in the case of Sir Francis Drake and Henry Morgan). The former famously raided the colony in the 1570’s, while the latter sacked the city of Panama itself. Though the colony remained important for shipping routes for a time (cargo would be unloaded, moved, and reloaded on the other side), maritime advancement made sailing around the southern tip of South America possible, and diminished Panama’s importance to the modern world.

19th Century, Independence, and the Canal

Though the Spanish were driven out in 1821, Panama became a department of neighbouring Colombia for the next 80 years. Though there were several independence movements, it wasn’t proclaimed until 1903 with the support of the United States (who had a vested interest in the matter). As part of a newly signed treaty with the US, the latter was granted rights for the land upon which a canal was intended to be built. Finished in 1914, the 83 kilometre long canal revolutionized maritime trade by negating the need for expensive and time-consuming unloaded/reloading or sailing all the way around Cape Horn.

20th Century and Invasion

The early part of the century was characterized by a constitutional democracy (though a small oligarchy dominated the country). Things shifted in 1968, when the elected president was removed during a National Guard coup – led by Omar Torrijos. He was given unlimited power, however his 1981 death in a plane crash led to the rise of General Manuel Noriega (in both the army and civilian spheres).

The dictatorship was violent and though Noriega had the support of the US for a time (he was a hugely important CIA informant), he also took in revenue from his support of drug smuggling. Once the brutality could no longer be ignored, the US began freezing aid and instituting sanctions against the regime. This culminated in the 1989 Operation Just Cause – a military invasion to combat drug smuggling, among other things. Though some condemned the action, many Panamanians supported the intervention. Despite this, there was widespread economic hurt and destruction following the conflict.

Modern Era

After the intervention, civilian government was quickly restored. Though it hasn’t always been smooth, subsequent governments have stabilized the country and overseen the transition of the canal to Panamanian sovereignty. Despite the recent shaky past, Panama now appears to be on steady ground.

panama canal ship container boat trade

Panamanian Culture

Much of Panamanian culture is based on age-old Spanish traditions, while a healthy mix of African and indigenous culture remains. Dance, music, crafts, and festivities are some of the preeminent expressions of Panama’s culture today. The cuisine is a mix of all of the above influences and, while using similar ingredients to other Caribbean and Central American countries, is usually less spicy.

Flag of Panama

The flag consists of two white squares (with a red and a blue star inside) alongside a red and a blue one. The red represents the Liberals while the blue represents the conservatives, with white denoting the peace shared between them.

Sports in Panama

Sports in Panama are predominantly influenced by the United States. Baseball is the national sport and is the most popular throughout the country. Other games such as soccer and boxing have also developed widespread followings throughout the country.

panama forest jungle tropical nature trees

Panamanian Currency

Thought the official currency of Panama is the Panamanian balboa, only the coins are used (few if any notes remain). Instead the balboa is fixed on a 1:1 rate with the US dollar. The notes from the latter are legal tender and are used throughout the country; but the dollar is the most widely used currency in Panama.

Geography of Panama

Panama is a long, narrow isthmus (a narrow strip of land with sea on either side, forming a link between two larger areas of land) located at the tip of Central America. There is a spine of mountains and hills that dominates the terrain of the country, while dense jungles are home to a wide array of wildlife and plant species. Panama also enjoys a long coastline on the Pacific Ocean and Caribbean Sea. While there are many natural waterways (namely rivers) throughout the country, the most famous is the man made Panama Canal.

Cities in Panama

The largest city in Panama is by far Panama City (also the capital). Located where the Pacific meets the Canal, the population as a whole numbers over 800,000. It is one of the most important cities in Central America for transport, finance, and trade.

panama city night lights skyline harbor

Facts about Panama

  • There is a rain forest within Panama City
  • The country assumed control of the Canal in 1999
  • The Panama Railroad is the world’s most expensive rail system
  • At its most narrow point, only 80 kilometres separates the Pacific from the Atlantic
  • The Canal counts for around 1/3 of the country’s economy
  • It has the most diverse wildlife in Central America
  • The rainy season is 9 months long
  • Getting through the canal takes 6-8 hours

panama beach hut water ocean sand sea

Last Word

Though conflicts are not long past, Panama has proven to be much more than just home to one of the world’s most important waterways.


There’s a whole world out there! Explore it with Continental’s Countries. Learn all about Panama’s currency with our USD Spotlight and explore the country’s best destinations with our Travel Guide.

Stay informed. Stay Current.