Panama is a Central American state that enjoys a particularly strategic geographical location. Located on the isthmus that connects Central and South America, it connects two subcontinents and two oceans, as it is crossed by the artificial channel that connects the Atlantic to the Pacific Ocean.
According to itypeusa, the Republic of Panama became independent from Colombia in November 1903, when a tug-of-war between Colombia itself and the USA over the management of the Panamanian isthmus and the possibility of building a transoceanic canal prompted the Americans to intervene militarily. in Panama. The US victory ushered in a period of protectorate in which Panama maintained formal independence. On November 18, 1903 Washington managed to conclude an advantageous agreement with the newborn republic (known as the Hay-Bunau-Varilla Treaty), which allowed the USA not only the right to build the canal, but also to administer it for an indefinite period. Since 1914, the year the canal was opened, the treaty has often been the subject of diplomatic dispute and tension between the two countries. In particular, on January 9, 1964, since then known as’ Martyrs’ Day ‘, tensions between Panamanian students and American soldiers, stationed in the so-called’ Panamá Canal Zone ‘in accordance with the provisions of the treaty, resulted in violent and bloody clashes. The memory of this episode and of the victims, recalled every year as a national anniversary in the small Central American republic, was one of the reasons that prompted the US to review its position on the Panamanian question and to initiate the renegotiation of the prerogatives on the canal. The trial ended in 1977 with two new agreements. The new treaties, signed by then US President Jimmy Carter and Panamanian dictator Omar Torrijos, they established a definitive timetable (set for December 31, 1999) for the return to Panamanian hands both of the management of the canal and of the sovereignty over the areas adjacent to it. The change took place on time.
Panama is a presidential republic in which legislative functions are entrusted to a government, led by the president, and to a single-chamber parliament (National Assembly): the current president is Juan Carlos Varela, elected in May 2014 with 39% of the votes. Varela’s election marked the handover at the top from the center-right Democratic Change party to the Panamanian Party, an exponent of the ‘Third Way’.
The history of Panama is marked by some coups and dictatorial military regimes. In 1984, General Manuel Noriega took power by imposing an authoritarian regime, characterized by the suppression of civil liberties, the repression of political opposition and involvement in money laundering and drug trafficking. General Noriega was deposed and captured by US forces, which intervened in 1989 as part of the so-called ‘Just Cause’ operation. Since then, the US has once again been the country’s largest trading and political partner. In 2007 they signed a major free trade agreement (approved by the US Congress in 2011). The agreement signed by Panama with the USA is part of the government’s strategy to improve ties with the most important trading partners, such as the European Union and some countries of Asia. Panama is targeting Asian markets by aspiring to membership of the Pacific Alliance (PA), the economic group made up of four states in South America, whose purpose is precisely to expand trade routes to Asia. A step forward for access to the PA was taken on 20 September 2013, with the signing of a free trade agreement with one of the member countries, Colombia: the two nations already have annual trade relations for a value of 2, 8 billion dollars. With the EU, on the other hand, Panama, together with other Central American countries, signed an association agreement in 2012 that favors the opening to the markets of goods, public procurement, services and investments for all partners.
The country’s economy is naturally connected to the canal and depends on the tolls earned by the thousands of ships that pass through it every year and on the related services sector. In general, the Panamanian economy is based on a well-developed service sector, which makes up over three-quarters of the GD Panama Services include the operation and logistics of the canal, as well as the ‘Panamá Canal Zone’, insurance, tourism and the banking sector. Low taxation and meager measures to control financial transactions have made Panama a ‘tax haven’, which is why the country was placed on the OECD ‘gray list’. The state, however, demonstrates a growing commitment to exchanging tax information with other jurisdictions, with the aim of meeting the standards set by the Global Forum. The last decade has coincided with a significant growth in the Panamanian economy, whose GDP has increased at an average annual rate of about 5.5%. Development was also driven by massive infrastructure projects and foreign investments, equal to 10% of GDP both in 2011 and 2012. However, the strong growth has not translated into shared wealth: Panama is still the country of America Latina with the second worst figure in the distribution of income. About 30% of the population lives in poverty. On the other hand, between 2006 and 2012 this phenomenon was reduced by 10 percentage points and unemployment fell from 12% to 4.5%. Development was also driven by massive infrastructure projects and foreign investments, equal to 10% of GDP both in 2011 and 2012. However, the strong growth has not translated into shared wealth: Panama is still the country of America Latina with the second worst figure in the distribution of income. About 30% of the population lives in poverty. On the other hand, between 2006 and 2012 this phenomenon was reduced by 10 percentage points and unemployment fell from 12% to 4.5%. Development was also driven by massive infrastructure projects and foreign investments, equal to 10% of GDP both in 2011 and 2012. However, the strong growth has not translated into shared wealth: Panama is still the country of America Latina with the second worst figure in the distribution of income. About 30% of the population lives in poverty. On the other hand, between 2006 and 2012 this phenomenon was reduced by 10 percentage points and unemployment fell from 12% to 4.5%.
A further boost to the economy is expected for the benefits deriving from the ambitious project approved in 2006 (costing 5.3 billion dollars) which involves the construction of a third group of locks for the canal. The expansion works, which are expected to be completed in April 2016, are expected to double the transit capacity and flow rate of the canal. This would allow not only to increase the number of ships crossing it, but would also open transit to those with higher tonnages, such as the largest container ships and oil tankers in circulation, significantly classified under the name of ‘Post-Panamax’ since they cannot transit. for the channel. Significant increases in revenue are thus expected in Panamanian coffers, especially in consideration of the huge freight traffic coming from East Asia.
