Americas · Central America
Panama
Republic of Panama
Geography and territory
Panama occupies the southeastern tip of Central America, forming the narrowest link between the Atlantic and Pacific Oceans. Covering 75,417 square kilometers, this land bridge connecting North and South America holds a geographic position that has shaped its entire history and its enduring role in global trade. The country borders Costa Rica to the west, Colombia to the east, the Caribbean Sea to the north, and the Pacific Ocean to the south.
Panama’s terrain is dominated by the Cordillera Central, which runs from Costa Rica into the heart of the country and reaches its highest point at Barú Volcano, standing 3,475 meters tall. Low coastal plains along both shorelines offer tropical beaches and mangrove forests, while the mountainous interior harbors cloud forests of extraordinary biological richness. Panama counts more than 1,600 islands within its territory, most notably the Bocas del Toro archipelago in the Caribbean, the San Blas Islands (Guna Yala), and the Pearl Islands in the Pacific.
Panama’s biodiversity is exceptional, with more than 10,000 plant species, 1,000 bird species, and 230 mammal species recorded within its borders. Darién National Park, a UNESCO World Heritage site and biosphere reserve, protects one of the most extensive and impenetrable stretches of rainforest on the continent, forming the Darién Gap, the sole break in the Pan-American Highway along its entire route from Alaska to Patagonia. This convergence of North and South American ecosystems at a single narrow crossing point makes Panama a natural land bridge for wildlife migration as well as human trade, a phenomenon biologists call the Great American Biotic Interchange.
History
Panama’s history is inseparable from its geography as a crossing point between oceans and continents. In pre-Hispanic times the isthmus served as a corridor for migration and trade among indigenous peoples such as the Guna, the Emberá, and the Ngäbe-Buglé. In 1501, Rodrigo de Bastidas became the first European to explore Panama’s Caribbean coast, and in 1513 Vasco Núñez de Balboa crossed the isthmus and sighted the Pacific Ocean, a discovery that reshaped Europe’s understanding of world geography.
During the colonial period, Panama served as the principal route for Spanish trade between South America and Europe, via the Camino de Cruces and the trading fairs of Portobelo, through which the riches of Peru passed on their way to Spain. Panama gained independence from Spain in 1821 and voluntarily joined Simón Bolívar’s Gran Colombia. After that union dissolved, Panama remained a department of Colombia until, with the support of the United States, it declared independence on November 3, 1903.
An earlier, failed French attempt to build a sea-level canal in the 1880s, led by Ferdinand de Lesseps, cost tens of thousands of lives to tropical disease before the effort collapsed, paving the way for the later American project. The construction of the Panama Canal, completed in 1914, ranks among the most ambitious engineering feats in human history, overcoming yellow fever, malaria, and the formidable terrain of the isthmus. Initially administered by the United States, the canal was transferred to full Panamanian sovereignty on December 31, 1999, in fulfillment of the 1977 Torrijos-Carter Treaties. That handover marked a defining moment in Panama’s history and cemented national control over its most strategically vital asset.
Culture and society
Panamanian culture is a rich blend of indigenous, Spanish, African, Caribbean, Chinese, and other immigrant influences that have shaped the country’s social fabric. The pollera, the traditional women’s dress, is regarded as one of the most elaborate and beautiful national costumes in the world, hand-sewn with lace, embroidery, and gold ornaments that can take months of skilled craftsmanship to complete. Tembleques, delicate hair ornaments made from pearls and wire, complete the ensemble for formal occasions.
Carnival is Panama’s largest celebration, spanning four days of parades, music, dance troupes, and the traditional mojaderas and culecos, water-soaked street parties that cool participants under the tropical sun. Panamanian music is known for típico, a folk genre built around accordion, guitar, and drums, as well as for reggaeton, a genre Panama helped originate alongside Puerto Rico and that has produced internationally recognized artists.
Panama’s indigenous communities, particularly the Guna people of the Guna Yala comarca, maintain a notable degree of cultural and political autonomy, along with the Emberá, Ngäbe-Buglé, and other groups who preserve distinct languages and customs across the country’s rural interior. Guna molas, multilayered textile panels featuring vivid geometric and figurative designs, are recognized as one of the world’s most original forms of textile art. Baseball is the country’s most popular sport, and Panama has produced numerous Major League Baseball players, including the legendary Mariano Rivera, while boxing has also produced several world champions who are celebrated as national heroes.
Economy
Panama has one of the most dynamic and open economies in Latin America, with a gross domestic product of roughly $90.5 billion and growth rates that have ranked among the region’s highest over the past two decades. The Panama Canal remains the economic centerpiece, generating substantial toll revenue and positioning the country as a global logistics hub. The canal’s expansion, completed in 2016 with a third set of locks, opened the waterway to larger Neopanamax vessels.
The financial and services sector forms another pillar of the economy, anchored by Panama’s International Banking Center, one of the most significant in Latin America. The Colón Free Trade Zone, the world’s second-largest free trade zone after Hong Kong, facilitates re-export trade across the region. Real estate and construction have transformed Panama City’s skyline, which now rivals that of major global metropolises.
Tourism has grown substantially, drawn by the country’s natural diversity, cultural heritage, duty-free shopping, and status as a regional air hub centered on Tocumen International Airport. Agriculture, particularly the production of bananas, coffee, sugarcane, and cattle, remains important in rural areas, while life expectancy of nearly 79 years reflects the country’s advances in human development. Panama uses the US dollar alongside its own balboa, which is pegged one-to-one with the dollar and exists mainly in coin form, a monetary arrangement that has helped keep inflation low and reinforced the country’s role as a regional financial and trading center.
Food and cuisine
Panamanian cuisine reflects the country’s cultural diversity, blending Caribbean, Spanish, indigenous, and Afro-colonial flavors. Sancocho, considered the national dish, is a comforting broth of native hen simmered with yam, cassava, corn, cilantro, and oregano, served in humble homes and elegant restaurants alike. Carimañolas, fried cassava croquettes filled with meat, and flour empanadas are staples of Panamanian street food.
Arroz con pollo, prepared with olives, capers, and vegetables, is the classic celebratory dish for family gatherings and social events. Panamanian tamales, wrapped in bijao leaves, combine corn masa with pork or chicken and are especially popular around Christmas and New Year. Ropa vieja, a shredded beef stew in tomato sauce, and rice with pigeon peas are staples of everyday cooking.
Seafood holds a privileged place in Panamanian cuisine, particularly corvina ceviche, prepared with lime, onion, chili, and cilantro. Caribbean coastal cooking, shaped by Afro-Antillean tradition, offers dishes such as seafood rondón, simmered in coconut milk with plantain. Raspados, shaved ice topped with fruit syrup, chicha made from rice and vanilla, and coconut and milk-based sweets round out a culinary landscape as diverse as the country itself.
Tourism and landmarks
The Panama Canal is the country’s most iconic attraction and one of the most impressive feats of engineering ever built. The Miraflores Locks Visitor Center offers a close-up view of ships transiting the locks alongside an interactive museum recounting the canal’s remarkable construction history. The Casco Antiguo, Panama City’s historic quarter and a UNESCO World Heritage site, blends Spanish colonial, art deco, and modern architecture in a revitalized neighborhood of restaurants, galleries, and nightlife.
Bocas del Toro, on Panama’s Caribbean coast, is an archipelago of tropical islands with clear waters, coral reefs, and a laid-back atmosphere that draws travelers from around the world. The Guna Yala comarca (San Blas) offers a singular experience: more than 365 sand-and-palm islands administered by the Guna people, where tourism operates on a community-based and sustainable model. The Pearl Islands, in the Gulf of Panama, combine exclusive beaches with a storied history that includes the discovery of the famous Peregrina Pearl.
Darién National Park, a UNESCO World Heritage site, safeguards an expanse of virgin rainforest home to extraordinary biodiversity, from jaguars to harpy eagles. El Valle de Antón, a town nestled inside the crater of an extinct volcano, offers cool weather, hot springs, and a well-known crafts market. Boquete, in the highlands of Chiriquí, is Panama’s coffee capital and a destination for hiking, bird-watching, and wellness tourism that has drawn retirees from around the world. The Panama Canal Railway, running alongside the waterway between the Pacific and Caribbean coasts, offers a scenic alternative route through the rainforest for travelers tracing the country’s narrowest point.
Fun facts about Panama
- The Panama Canal handles roughly 6 percent of global maritime trade and has been transited by more than one million ships since it opened in 1914.
- Panama is the only place in the world where, due to the isthmus’s orientation, one can watch the sun rise over the Pacific Ocean and set over the Atlantic.
- The Panama hat is not actually from Panama but from Ecuador; it earned its name after becoming popular among workers building the canal.
- Panama hosts more bird species than the United States and Canada combined.
- Panama City is the only capital city in Latin America with a tropical rainforest inside its urban limits, at Metropolitan Natural Park.
- Panama’s national tree, the Panama tree (Sterculia apetala), can grow to more than 35 meters in height.
Bordering countries of Panama
Frequently asked questions about Panama
What is the capital of Panama?
The capital of Panama is Panama City.
What is the population of Panama?
Panama has a population of approximately 4,571,189 people (4.6 million).
What language is spoken in Panama?
The official language of Panama is Spanish.
What currency is used in Panama?
The currency of Panama is the Balboa (PAB) and United States Dollar (USD).
How big is Panama?
Panama covers an area of 75,417 km².
What type of government does Panama have?
Panama is a presidential republic.
Which countries border Panama?
Panama shares land borders with Costa Rica, Colombia.
What is the highest point in Panama?
The highest point in Panama is Barú Volcano (3,475 m).
