Source: GIS Geography 

Panama was the first Spanish colony on the Pacific and is home to indigenous groups including the Guaymí, Kuna, and Chocó. The country is historically known for the Panama Canal, one of the world’s most used passages that cut down travel time between the Pacific Ocean and the Caribbean Sea. In 1903 Panama gained its independence from Colombia and became the independent Republic of Panama. 

Fact Sheet 

• Population: 4,404,108
• Capital: Panama City 
• System of governance: Presidential Republic 
• Head of state: President Laurentino “Nito” Cortizo Cohen
• Majority language: Spanish and mix of Indigenous languages including Ngäbere, Buglere, Kuna, Embera, Teribe, and more.
• Majority religion: Roman Catholic
• GDP per capita: $14,617.6 
• Global Freedom Score: 83 – Free
• GINI Index: 49.8

History of US-Panama Relations 

Following independence from Colombia in 1903, Panama and the US officially established relations when they signed the Bunau-Varilla Treaty, allowing the US to build and operate a canal vital to global trade and national security. The key location of Panama and the Panama Canal made it a critical partner to the US in battling illegal drug trade. The US would eventually give Panama control of the Canal zone in 1979 and control and responsibility for the Canal to Panama in 1999. 

Panama was strategically important to the United States during the Cold War, due to its proximity to the US, influence over the Panama Canal, and role in combating the illegal drug trade between North and South America. In 1968, a military coup took place and a new dictatorship came to power, led by General Omar Torrijos. The dictatorship was accused of numerous human rights violations and electoral fraud in subsequent elections. Initially, the US worked with the military dictatorship as a partner in the region. However, widespread protests began in 1988, and the US eventually invaded in 1989 to unseat the government, which was condemned by the international community. Many thousands of people were displaced by the conflict. 

A democratically-elected, coalition government came to power following the end of the invasion. The US and Panama have continued to cooperate since 1989.

US Strategic Interests 

Corruption: The US stepped up efforts in recent years to combat corruption especially when it affects business and trade with the U.S. and other international investors, and has found a partner in current President Laurentino Cortizo. Corruption in Panama affects the justice system and the highest levels of government. The US accused former President Martinelli of falsely awarding government contracts, and arrested Martinelli’s two sons in 2018 on US soil for their role in a massive bribery and money laundering case. The Biden administration has since unveiled the first national security strategy memorandum focused on corruption. The National Assembly rejected Cortizo’s proposed constitutional reform package which would have allowed the Attorney General to investigate judicial and legislative leaders.

Migration: Panama and the US recently signed a bilateral migration protection agreement with a focus on Panama’s southern border with Colombia. This border is a major pathway for irregular migration, with asylum seekers and migrants from South America crossing the border in an effort to reach Mexico or the United States. Cooperation on this front is twofold: the US aims to provide protection and resources for vulnerable migrants as well as support Panama’s border security efforts.

US-China Tensions: China began investments in Panama in 2013 as part of the Belt and Road Initiative (BRI). This has raised concerns that Chinese companies may try to gain influence over the Panama Canal’s operations. The Panama Canal is considered highly important to the US economy. Panama’s key geographic position created a stronger trade relationship with China than many other Latin American nations share. However, President Cortizo suspended or canceled multiple Chinese investment projects, generating uncertainty about the future of relations with China and causing some setbacks for Chinese projects.