Republic of Panama and Panama Canal

Panama is located on the Central America mainland bridge between the Caribbean Sea and the Pacific. The two-part natural area consists of the volcanic Central Cordillera in the west and the lowlands of Darién in the east. Due to the tropical climate, large parts of the country are covered with tropical rainforests.

The country’s economy is based on a strongly export-oriented trade and service sector. One of the important foreign exchange earners has been the administration and operation of the Panama Canal since 2000. As one of the 10 countries starting with P according to COUNTRYAAH, Panama, which is about the size of Austria, extends over 650 km in an east-west direction and borders Costa Rica and Colombia.

The capital is named Panama.

Republic of Panama

Natural space

The surface of the country is divided into two parts: the part to the west of the capital is dominated by the volcanic Central Cordillera, which continues through all of Central America.

Near the border with Costa Rica, the highest volcanic cone in Panama rises at more than 3000 m. Almost the entire eastern half of the country is occupied by the Darién lowlands, which are open to the Pacific. There are only a few low mountain ranges along the Caribbean coast.

The whole of Panama has a tropical climate with consistently high temperatures (annual average temperature 27 °C) and high rainfall. The Caribbean coast and the lowlands in the east are therefore covered with evergreen tropical rainforest, which turns into cloud forest in the higher mountain regions.

The largely swampy coasts of the Caribbean and the Gulf of Panamá are lined with mangroves.

Important data about the country

Surface: 75,517 km²
Population: 3.2 million
Population density: 42 residents / km²
Growth of population: 1.8% / year
Life expectancy: 75 years
Form of government: Presidential Republic
Capital: Panama City
Population groups: Mestizo 64%, black and
mulatto 14%, whites and Creoles 10%, Indians 8%
Languages: Spanish as the official language, English as colloquial language, Indian dialects
Religions: Catholics 85%, Protestants 10%, Muslim minorities
Climate: tropical climate with high rainfall and high temperatures all year round
Land use: Forest 53.7%, pasture land 15.3%, arable land 7.7%
Main export goods: Bananas, coffee, sugar, fish, petroleum products
Gross domestic product: US $ 12,887 million (2003)
Economic sectors:
(share of GDP, 2003)
Industry 16%, Agriculture 7%, Services (Panama Canal Income) 76%
Gross National Product: US $ 4,060 / residents (2003)


The export-oriented trade and service sector dominates the country’s economic structure. Panama’s main sources of foreign exchange are income from canal traffic, from operating the transistor pipeline completed in 1982, from tourism and from major international banks. The Colón Free Zone, founded in 1948, is the largest hub for goods and capital in all of Central and South America.

In addition, there is the income from the business with the flag of convenience. The competitive pressure on shipping companies has meant that more and more ships from all over the world are flying the Panama flag.

The Panama Canal

The Panama Canal is one of the most important waterways in the world. Every year around 14,000 ships pass it on their route between the eastern and western hemisphere of the earth.

The 80 km long artificial shipping route between the Atlantic (Caribbean Sea) and the Pacific, opened in 1914, runs through the Isthmus of Panama (Fig. 2). Coming from the north, the canal leads to the Gatundamm at sea level. There the 26 meter high “ascent” of the ships to the artificially dammed Gatunsee takes place via three huge locks (Fig. 3).

The Panama Canal

The 13 km long Gaillard Cut, cut almost 100 m deep in the area of ​​the continental divide, leads to the lock of Pedro Miguel. This is where the “descent” of ocean liners begins to the Miraflores double lock at Pacific level.

A ship needs an average of 14 to 16 hours to cross the isthmus, of which 8 hours are needed to pass the actual canal between the locks. Since the canal is no longer passable for ships with a draft of more than 12 meters (around 60% of the world merchant fleet), a new building has long been considered.


The eventful history of Panama has been closely linked to the Panama Canal for more than 100 years. Because of its military strategic and economic importance, the disputes about its use began with the plan for construction. The USA and Great Britain agreed in 1850 to neutralize the Canal Zone in the event of war.

A French company, led by the builder of the Suez Canal, FERDINAND DE LESSEPS, began construction in 1879. But she had to declare bankruptcy because the costs for the difficult construction soon got out of hand.

It was not until 1901 that the USA secured the rights to build the canal: They caused the canal zone to be separated from Colombia, on the territory of which today’s Panama was located. In addition, the Free State of Panama was founded, which ceded the Canal Zone to the USA by 2000.

Construction began again in 1906 under the direction of the American engineer GEORGE W. GOETHALS. It was concluded with the inauguration of the canal on August 15, 1914.

It was not until 1977 that the USA and Panama signed two treaties that stipulated the joint administration of the canal and canal zone until 1999 and sole administration by Panama from 2000.