History: Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela—named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With U.S. backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the U.S. allowing for the construction of a canal and U.S. sovereignty over a strip of land on either side of the structure (the Panama Canal Zone).

The Panama Canal was built by the U.S. Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the U.S. to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With U.S. help, dictator Manuel Noriega was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining U.S. military bases were transferred to Panama by the end of 1999.

In October 2006, Panamanians approved an ambitious plan to expand the Canal. The project, which began in 2007 and could double the Canal’s capacity, is expected to be completed in 2014-15.

Location: Central America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica.

Area: 29,119 square miles (75,420 square kilometers)

Population: 3,559,408 (July 2013 est.)

Men: 1.67 million

Women: 1.65 million

Over 60: approx 11%

Capital: Panama City

Geography: Panama is located on the narrowest and lowest part of the Isthmus of Panama that links North America and South America. Panama’s two coastlines are referred to as the Caribbean (or Atlantic) and Pacific, rather than the north and south coasts.

To the east is Colombia and to the west Costa Rica. Because of the location and contour of the country, directions expressed in terms of the compass are often surprising. For example, a transit of the Panama Canal from the Pacific to the Caribbean involves travel not to the east but to the northwest, and in Panama City the sunrise is to the east over the Pacific.

The Caribbean coastline is marked by several good natural harbors. However, Cristóbal, at the Caribbean terminus of the canal, had the only important port facilities in the late 1980s. The numerous islands of the Archipiélago de Bocas del Toro, near the Costa Rican border, provide an extensive natural roadstead and shield the banana port of Almirante. The over 350 San Blas Islands, near Colombia, are strung out for more than 160 kilometers (100 miles) along the sheltered Caribbean coastline.

The major port on the Pacific coastline is Balboa. The principal islands are those of the Archipiélago de lasPerlas in the middle of the Gulf of Panama, the penal colony on the Isla de Coiba in the Golfo de Chiriquí, and the decorative island of Taboga, a tourist attraction that can be seen from Panama City. In all, there are some 1,000 islands off the Pacific coast.

Climate: Panama has a tropical climate. Temperatures are uniformly high—as is the relative humidity—and there is little seasonal variation. Diurnal ranges are low; on a typical dry-season day in the capital city, the early morning minimum may be 75° F and the afternoon maximum 84° F. The temperature seldom exceeds 90° F for more than a short time. Temperatures on the Pacific side of the isthmus are somewhat lower than on the Caribbean, and breezes tend to rise after dusk in most parts of the country. Temperatures are markedly cooler in the higher parts of the mountain ranges, and frosts occur in the Cordillera de Talamanca in western Panama.

Climatic regions are determined less on the basis of temperature than on rainfall, which varies regionally from less than 4-10 feet per year. Almost all of the rain falls during the rainy season, which is usually from April to December, but varies in length from seven to nine months. In general, rainfall is much heavier on the Caribbean than on the Pacific side of the continental divide. The annual average in Panama City is little more than half of that in Colón. Although rainy-season thunderstorms are common, the country is outside the hurricane belt.

Government: Constitutional democracy.

Head of State & Government: President Ricardo Martinelli since July 1, 2009.

Language: Spanish (official); English is taught in all schools and many Panamanian executives are fully bilingual

Religion: Roman Catholic 85%; Protestant 15%

Time Zone: GMT-5 (same time as Washington, DC during Standard Time).

Electricity: 120 volts AC, 60Hz. Plugs are the flat two-pin American type.

Police: If you are robbed or otherwise become the victim of a crime, you should report it immediately to the local police station, particularly if you will later be making an insurance claim. If treated respectfully, Panamanian police are generally honest and helpful. In Panama City the tourist police (policia de turismo) are better prepared to deal with foreign travelers and more likely to speak English – they wear white armbands and are often mounted on bicycles.

Emergency numbers: Police 104; Fire 103; Tourist Police 226 7000 ext. 280 or 269 8011

Tipping: 10 to 15 per cent is customary in hotels (where it is not added automatically) and restaurants. Taxi drivers do not expect tips, and rates should be arranged before the trip.

Smoking: There are non-smoking rooms in hotels, and non-smoking areas in restaurants.

National Holidays: Independence Day, Nov. 3

Life Expectancy at Birth: Men: 74, Women: 78

Economy: Panama’s dollarized economy rests primarily on a well-developed services sector that accounts for three-fourths of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism

Exports: $12.52 billion (2010 est.)

Imports: $16.05 billion (2010 est.)

Gross Domestic Product (Purchasing Power Parity): $44.36 billion (2010 est.)

GDP per Capita: $13,000 (2010 est.)

Inflation Rate: 3.5% (2010 est.)