Overview
Panama’s place in modern history has primarily
been tied to the fact that at one of its narrowest points,
only 50 miles separated the Atlantic and Pacific Oceans
and that construction of a canal here would realign
maritime commerce.
It was in 1914 that the United States completed the
canal. The rest is history.
Despite the fact that the U.S. relinquished authority
of the canal in 1999, Panama has yet to fuse its considerable
modern sector with its traditional rural sector into
a strong national economy. As a result, it remains a
country where income is highly skewed between the “haves”
and the “have nots”.
While 80 percent of the Gross Domestic Product (the
highest in Central America) is based on a well developed
service sector, nearly 40 percent of its population
lives in poverty – 12 percent in extreme poverty.
Panama’s prospects are lifted by its constitutional
prohibition of an army and the creation of a spirited,
competitive political system. The elections of Mireya
Moscoso as President (widow of former President Arnulfo
Arias Madrid) in 1999 and the subsequent election this
year of Martin Torrijos, son of the late dictator Brig.
Gen. Omar Torrijos, suggests that its politics still
intertwine with its historical roots.
Panama commenced free trade negotiations with the U.S.
in 2004 that are expected to conclude later this year.
Panama is expected to either enter into a separate free
trade agreement with the US or be incorporated into
the CAFTA.
The USAID Program -- USAID plans to
fund $8.3 million in programs in 2004 that are primarily
aimed at protecting its southern regions against the
near daily spillover of violence and refugees from the
Colombian narco-terrorist conflict and to support stability
in Panama's Darien province. The assistance comes primarily
in the form of small grants, technical support, and
training directly to communities to fortify local government
and nongovernmental organizations in Darien, and to
raise the economic and social well-being of the population
in selected communities.
Plans are underway to fund the protection of the Panama
Canal Watershed from further deterioration from massive
deforestation and erosion.
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