Panama

The isthmus was a crossing point long before the canal. Balboa reached the Pacific across it in 1513, and Panama City, founded in 1519, became the funnel through which Peruvian silver flowed to Spain, drawing pirate raids and Henry Morgan's 1671 sacking of the city. Panama won independence from Spain in 1821 as part of Gran Colombia, then remained a province of Colombia. Its transit value only grew — a US-built railway for the 1849 Gold Rush, then a French attempt at a canal in the 1880s that collapsed into bankruptcy, scandal, and the deaths of some 22,000 workers from disease and accidents.

In 1903, backed by US warships, Panama seceded from Colombia, and a treaty handed the United States a perpetual Canal Zone. The Americans built the canal between 1904 and 1914, a feat of engineering and of mosquito control, and the Zone spent the next decades as a US enclave splitting the country — a running nationalist grievance that turned deadly in the 1964 Flag Riots.

Military rule came in 1968, first under the populist Omar Torrijos, who negotiated the 1977 treaties to return the canal, then under the dictator Manuel Noriega, a former CIA asset turned drug-trafficking pariah, removed by a US invasion in December 1989 that killed hundreds and burned a Panama City neighbourhood. Democracy has held since 1990; the canal was handed to Panama on the last day of 1999 and has been run efficiently and profitably ever since, with a major expansion opening in 2016. Recent strains include the 2016 Panama Papers scandal; the protests of October and November 2023, after which the Supreme Court struck down the contract for a giant copper mine that has stayed shut ever since; the droughts of 2023 and 2024, which cut daily canal transits from the usual 36 to as few as 22 and prompted plans for a new reservoir on the Río Indio, with transits limited again in 2026 as an El Niño event cut rainfall; a migration surge through the Darién Gap; and Donald Trump's assertion in December 2024 that the United States should retake the canal. Since the war between the United States and Israel and Iran began in February 2026, Panama-flagged ships have also been caught up in it, in incidents in the Gulf of Oman and in Iraqi waters.

Panama's culture blends Spanish-colonial, Afro-Caribbean, Afro-colonial, Indigenous, and North American strands. The Afro-colonial Congo tradition of the Caribbean coast — drumming, dance, and devil masks re-enacting resistance to slavery — is kept alive in the festivals of devils and Congos at Portobelo, and the pollera, the elaborate embroidered national dress that can cost thousands of dollars and take a year to make, is worn at Carnival and at Las Tablas.

Music runs from accordion-driven típico folk to the brass of Carnival and, in the cities, reggaeton and Spanish-language reggae, which Panama helped invent. Baseball is the traditional national sport, though football has gained ground since the team's first World Cup in 2018, and Panama qualified again for 2026. The Guna of Guna Yala are known for their mola appliqué textiles and for running one of the most autonomous Indigenous territories in the Americas.

Family, Catholicism with a growing evangelical minority, and a relaxed, Caribbean-tinged pace shape daily life, alongside the outsized influence of the canal and a century of US presence.

Panama City, a fast-grown skyline of glass towers on the Pacific bay, holds close to half the country's people and most of its money — banking, the canal, the Colón Free Zone across the isthmus, logistics, and a construction boom served by a modern metro. The interior — the cattle country of the Azuero peninsula, the coffee highlands of Chiriquí, the Caribbean coast — is far poorer and more traditional, and the Indigenous comarcas poorer still.

The economy has been among Latin America's fastest-growing for two decades on the strength of the canal, finance, trade, and, until 2023, copper, but inequality is high and many workers are informal. The country runs on the US dollar and uses North American brands and habits heavily.

Two pressures now define the national conversation: a canal short of the freshwater it needs after the droughts of 2023 and 2024 and renewed limits in 2026, and the roadless Darién jungle, which became a migration corridor toward the United States — more than 520,000 people crossed it in 2023 and about 300,000 in 2024.

Panamanian home cooking is simple and starchy, built on rice, beans, plantain, and maize. Sancocho, a chicken, yam, and culantro soup, is the comfort dish; arroz con pollo and stewed beans are everyday staples; and fried things abound — hojaldras at breakfast, carimañolas stuffed with meat, empanadas, and twice-fried patacones.

The Caribbean coast adds coconut, in coconut rice and the seafood stew rondón, while ceviche of corvina is a Pacific favourite, sold by the cup at the Panama City fish market. Street and festival food includes raspao shaved ice and the sweet corn drink chicheme.

Panama also grows some of the world's most prized coffee — the Geisha variety from Boquete sets auction records — and the local beers are Balboa, Atlas, and Panamá.

The canal is the headline: ships can be watched rising and falling at the Miraflores and Agua Clara visitor centres, or you can transit part of it on a tour boat. Panama City pairs the restored colonial quarter of Casco Viejo — plazas, churches, rooftop bars, and the ruins of the older Panamá Viejo across the bay — with a Miami-like financial district and the Amador Causeway, built from canal spoil.

Inland, the Chiriquí highlands around Boquete offer coffee farms, cloud-forest birding, hot springs, whitewater, and the pre-dawn climb of Volcán Barú, the country's highest point, from which both oceans can be seen on a clear day.

The Caribbean side has the laid-back Bocas del Toro archipelago of over-water cabins and reefs, and the Spanish silver-era forts of Portobelo and San Lorenzo. Guna Yala (San Blas) is a string of hundreds of tiny palm islands run by the Guna, and Coiba, a former prison island turned national park, protects some of the richest marine life in the eastern Pacific.