Panama

Over the last 15 years, the Republic of Panama has emerged as one of the most stable economies and political environments in Latin America.

Panama has always been, so to speak, at the center of world trade. Even in colonial times it served as a shipping point between North and South America. The services sector, including commerce, banking and tourism, accounts for two-thirds of Panama's GDP, which grew 8% in 2007. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) forecasts growth of 7.5% for 2007-08, the highest in Latin America. Foreign direct investment added over US$2.4 billion to the Panamanian economy.

In 2007 Panama began work on the $5.3 billion expansion of the Panama Canal, which will allow larger ships to pass, and create more jobs in the canal zone. The port city of Colon--on the Atlantic side--is the second largest free-trade zone in the world after Hong Kong. Additionally, in 2006 Panama negotiated a free trade agreement with the US that will promote economic growth.

Since the removal of Manuel Noriega in ’89, Panama has carried out four peaceful presidential elections. Its current President,

Martin Torrijos Espinosa, has implemented a number of programs to reform fiscal policy and reduce poverty.

Panama is rapidly rising to contend with Costa Rica as a preferred location for retiring Baby Boomers. Real estate development has skyrocketed, as evidenced by Donald Trump’s large real estate investment projects in Panama City. Foreign investors are buying rugged coastal areas along the Atlantic and Pacific and developing prime beachfront property.

Panama is ethnically diverse, with mestizo (mixed ancestry), Spanish, descendants of African slaves, and five indigenous tribes making up the largest groups. Chinese and American populations are also on the rise in business and urban areas.

Rural poverty is still a persistent problem in Panama. As wealth grows in the city thanks to increased trading and banking services, less attention is paid to the rural, small scale farmers living on a few dollars a day. Access to secondary education (middle-high school) is still limited and costly for most rural families, and many communities lack basic services such as electricity and running water.