The Republic of Panama is the southernmost country in Central America. Topography is varied and the climate is tropical with a prolonged rainy season from May to December.

Panama is an independent, sovereign state. The government has three branches: the Executive branch consists of a democratically elected President and two Vice-Presidents who appoint a cabinet of twelve Ministers of State. The unicameral Legislative Assembly is made up of 72 deputies; the Supreme Court has nine judges appointed for 10-year terms.

The unit of currency used in Panama is the Balboa (PAB), which is pegged at parity to the dollar. Panama is the oldest dollarised economy and as such does not print its own paper currency--the US dollar is accepted everywhere. Consequently, inflation follows the US dollar, rising at about 1% since 1999. Panama has become a safe haven for international investment with sufficient economic strength, political stability, and infrastructure to support projects of all shapes and sizes.

Travel throughout the country is relatively easy and efficient. Panama's strategic maritime location and the canal, make it a "global crossroads" for goods of all kinds. Two international airports connect the country to the rest of the world.

The economy of Panama stands on three legs: the banking industry, the canal, and the shipping business with tourism and agriculture playing a secondary role. The canal was built between 1904 and 1914 by the United States but was transferred to Panama at the end of 1999. Near the canal, the city of Colon houses the free zone which contains well over 1,000 companies shipping in excess of $9 billion in goods annually and accounting for over 10% of the GDP. Under Panamanian law, manufacturing and processing companies that export most of their product are exempt from most direct taxes and from import duties on machinery and equipment. There are no exchange controls in Panama and there is no Central Bank. Foreign investment may be freely repatriated and corporate privacy is protected, to great extent, by the constitution.


The Panama Canal
The canal was built between 1904 and 1914 by the US. It spans 81.3 km between the Pacific Ocean and the Caribbean Sea. In 1996, the Canal Commission Board of Directors initiated a $1 billion modernization and improvement program designed to expand capacity. One of the key programs was the widening of the narrow Gaillard Cut, an 8-mile incision through the rock and shale of the continental divide. Before expansion, the passage was only large enough for one Panamax-sized ship to pass through at a time. In August 2002, after five years of operations, expansion of the Galliard Cut was completed, allowing two Panamax-sized vessels to pass through simultaneously.

On October 26, 2006, a referendum was approved by almost 80% of Panamanians who voted to expand the Panama Canal even further. The proposed expansion will cost an estimated 5.3 billion and create approx. 40,000 new jobs. Preliminary analysis predicts that the expansion will double transport capacity and the preliminary engineering reports project favorable economics. There are also plans to upgrade existing canal crossings with several new bridge and tunnel projects. Currently, the Panama Canal handles an estimated 5% of world trade. The main goods shipped are oil products, grain and con
Traffic between Asia and the east coast of the US accounts for more than 40% of shipping.

In addition to the canal itself, the Panamanian ship registry is the largest in the world. Its container ports are currently valued at US$4.5 billion and along with the canal and the Transisthmian railroad move an estimated 3 million containers per year.

For the preliminary engineering report on the new canal expansion program click here: www.pancanal.com/eng/plan/documentos/propuesta/acp-expansion-proposal.pdf