Panama
The land between the seas, where the canal connects worlds.
Panama, officially the Republic of Panama, is a country located at the southern end of Central America in North America, bordering South America. It is bordered by Costa Rica to the west, Colombia to the southeast, the Caribbean Sea to the north, and the Pacific Ocean to the south. Its capital and largest city is Panama City, whose metropolitan area is home to nearly half of the country's over inhabitants.
Quick Facts
- Capital
- Panama City
- Location
- Central America (Isthmus connecting North and South)
- Official language
- Spanish
- Currency
- Balboa; United States Dollar
- Notable feature
- Panama Canal
Lore & Background
Before the arrival of Spanish colonists in the 16th century, Panama was inhabited by a number of different Indigenous peoples. It broke away from Spain in 1821 and joined the Republic of Gran Colombia, a union of Nueva Granada, Ecuador, and Venezuela. After Gran Colombia dissolved in 1831, Panama and Nueva Granada eventually became the Republic of Colombia. With the backing of the United States, Panama seceded from Colombia in 1903, allowing the construction of the Panama Canal to be completed by the United States Army Corps of Engineers between 1904 and 1914. The 1977 Torrijos–Carter Treaties agreed to transfer the canal from the United States to Panama on December 31, 1999. The surrounding territory was returned first, in 1979.
Reader's Guide
Revenue from canal tolls has continued to represent a significant portion of Panama's GDP, especially after the Panama Canal expansion project (finished in 2016) doubled its capacity. Commerce, banking, and tourism are major sectors. Panama is regarded as having a high-income economy. In 2019, Panama ranked 57th in the world in terms of the Human Development Index.
In 2018, Panama was ranked the seventh-most competitive economy in Latin America, according to the World Economic Forum's Global Competitiveness Index. Panama was ranked 82nd in the Global Innovation Index in 2025. Covering around 40 percent of its land area, Panama's jungles are home to an abundance of tropical plants and animals – some of them found nowhere else on Earth. Panama is a founding member of the United Nations and other international organizations such as the Organization of American States, Latin America Integration Association, Group of 77, World Health Organization, and Non-Aligned Movement.
Did You Know?
- The exact origin of the name 'Panama' remains uncertain, with several theories proposed.
- One theory suggests the name derives from the Sterculia apetala tree, declared the national tree of Panama in 1969.
- Another hypothesis is that 'Panama' is a Castilianization of the Guna word 'bannaba,' meaning 'distant' or 'far away.'
- A legend holds that 'Panamá' was the name of a fishing village encountered by Spanish colonists, purportedly meaning 'abundance of fish.'
- The earliest discovered artifacts of indigenous peoples in Panama include Paleo-Indian projectile points.
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