Political Rights: 1
Civil Liberties: 2
Status: Free
Population: 3,200,000
GNI/Capita: $4,060
Life Expectancy: 75
Religious Groups: Roman Catholic (85 percent), Protestant (15 percent)
Ethnic Groups: Mestizo (70 percent), West Indian (14 percent), European (10 percent), Amerindian (6 percent)
Capital: Panama City


The first year of President Martin Torrijos's administration was marked by confrontations with civic and labor groups frustrated by Panama's economic conditions. Protests and strikes in 2005 stalled Torrijos's attempts at reforming the country's social security system, while his larger national agenda was sidetracked by corruption scandals.

Panama was part of Colombia until 1903, when a U.S.-supported revolt resulted in the proclamation of an independent republic. A period of weak civilian rule ended with a 1968 military coup that brought General Omar Torrijos to power. After the signing of the 1977 canal treaties with the United States, Torrijos promised democratization; the 1972 constitution was revised to provide for the direct election of the president and National Assembly for five years. However, a real transition to democracy would not come for another dozen years.

After Torrijos's death in 1981, General Manuel Noriega emerged as Panamanian Defense Force (PDF) chief. He rigged the 1984 election that brought to power the Democratic Revolutionary Party (PRD), which was then the political arm of the PDF. The Democratic Alliance of Civic Opposition (ADOC) won the 1989 election, but Noriega annulled the vote and declared himself head of state. He was removed during a U.S. military invasion, and ADOC's Guillermo Endara became president.

Both the PRD and the Arnulfista Party (PA, named after President Arnulfo Arias, who was president three times before the era of dictatorship) won elections in the 1990s. Presidential and legislative elections in May 2004 returned the PRD to power, with Martin Torrijos, the son of former strongman Omar Torrijos, defeating a number of presidential candidates from various parties; former president Guillermo Endara of the Solidarity Party (PS) was his closest challenger. The PRD also won a majority of 42 seats in the 78-seat National Assembly, followed by the PA with only 17 seats; several other parties captured fewer than 10 seats each.

The fallout from the elections continued to affect Panama's political parties in 2005. Endara broke with the PS to form a new political party, the Moral Vanguard of the Fatherland (MVP). The PS formed a four-party coalition with a variety of minor parties to create the leading legislative opposition to the PRD; the new opposition coalition is known as the Coordinated National Opposition (CNO). The PA forced out its founder, former president Mireya Moscoso, and the party changed its name to the Panamenista Party (PP). Leaders of the PP blamed Moscoso and her corrupt administration for the PA's poor showing at the polls in 2004, which reduced the party to a minor force in the National Assembly. The party's new name was reflective of Panama's history. Former president Arias had led the PP until he formally broke with the party in the 1980s when some of the party leaders became supportive of the Noriega dictatorship. Without Arias, the PP faded away; however, the name was resurrected to re-label what once was his widow's party.

Martin Torrijos put social security reform at the top of his agenda, and the PRD used its legislative majority to further the president's initiative. The law would increase the amount of social security taxes and the minimum amount a person must contribute to get benefits from the system and would increase the retirement age. A series of strikes by tens of thousands of construction workers, teachers, and other trade unionists in May and June 2005 brought developments to a halt, however; the unions, as well as the Catholic Church, strongly opposed the new law. Police struck back at the demonstrators by arresting hundreds. Torrijos was forced to suspend the law and to open talks with the unions and opposition groups as a way to avoid further debilitating strikes.

The demonstrations revealed widespread public dissatisfaction with the country's economic conditions, including rising fuel prices and endemic poverty. At least 40 percent of Panamanians live below the official poverty line, 14 percent are considered unemployed, and an additional 4 percent are listed by the government as underemployed. Talks to restructure the social security system collapsed when the unions accused the government of not being transparent and honest in its negotiations. Torrijos left open the possibility of submitting the reforms to a national referendum.

Violence from the drug war continued to be a concern for Panamanians. Armed groups from Colombia crossed Panama's southern border with impunity, while drug gangs and street thugs raised the level of violence in urban centers. In reaction, the head of the national police announced plans in 2005 to open a new academy to teach elements of the police various military tactics. (Panama has no military and instead relies on the police to provide both internal security and defense of its borders; the Panamanian military was disbanded following the U.S. invasion to remove Noriega.) Endara condemned the plans for a new military-style academy as a way to remilitarize Panama.

Political Rights and Civil Liberties

Citizens of Panama can change their government democratically. The 2004 national elections were considered free and fair by international observers. The president and deputies to the 78-seat unicameral National Assembly are elected by popular vote for five-year terms. The constitution guarantees freedom of political organizations. The PP holds 16 seats in the National Assembly, the CNO has 19 seats, and the PRD holds 42 seats.

In early 1999, Panama's largest political parties agreed to ban anonymous campaign contributions in an effort to stem the infiltration of drug money into the political process. Nevertheless, widespread corruption of the governmental apparatus indicates the difficulty in enforcing any such bans. The administration of President Martin Torrijos established a special commission to deal with corruption scandals from the administration of Mireya Moscoso and to uncover new abuses. On taking office, Torrijos implemented a Transparency Law that had been suspended by former president Moscoso. However, since that initiative, he has worked to limit the scope of the law, including keeping the minutes of cabinet meetings private and keeping the disclosure of assets by public officials from public view. Panama was ranked 65 out of 159 countries surveyed in the Transparency International's 2005 Corruption Perceptions Index.

All of the country's media outlets are privately owned with the exception of one state-owned television network and a network operated by the Catholic Church. However, there is a considerable concentration of media ownership by relatives and associates of former president Ernesto Perez Balladares of the PRD. There are five national dailies and four private television networks.

Panama is notable for its harsh legal environment for journalists. Moscoso had promised that she would work to repeal restrictive gag laws that Omar Torrijos had pushed into Panama's 1972 constitution. However, Moscoso never invested much political capital in the repeal effort. Before she left office, Moscoso did pardon more than 80 journalists who had been accused of criminal libel. When Martin Torrijos came into office, international journalism groups criticized the son of the former dictator because his government professed no plans to repeal the gag laws or the tough criminal libel statutes. Despite those restrictive laws, there is free access to the internet. Freedom of religion is respected, and academic freedom is generally honored.

Freedom of assembly is generally recognized, and nongovernmental organizations are free to organize. Although only about 10 percent of the labor force is in labor unions, the unions are well organized and powerful, as demonstrated by their ability to block Torrijos's social security reform initiative. The government has issued decrees that do not allow union organization in export processing zones.

The judicial system, headed by the Supreme Court, was revamped in 1990. However, it remains overworked and its administration is inefficient, politicized, and prone to corruption. An unwieldy criminal code and a surge in cases, many against former soldiers and officials of the military period, complicate the judicial process. In 2005, a corruption scandal involving members of the country's Supreme Court emerged. Various members of the court accused each other of corruption and filed complaints with the National Assembly. Trying to avert a judicial crisis, Torrijos appointed a special commission to look into the issue of judicial corruption and judicial reform. The commission was asked to prepare a special report for the National Assembly. Torrijos did not push for further investigation or the impeachment of justices, partially because the charges and countercharges included members of his party. At year's end, Torrijos's initiatives for judicial reform appeared to be stalled. About two-thirds of prisoners face delays of about 18 months in having their cases heard. The penal system is marked by violent disturbances in decrepit facilities that are severely overcrowded.

The Panamanian Defense Force (PDF) was dismantled after 1989, and the military was formally abolished in 1994. However, the civilian-run Panamanian Public Forces (the national police) that replaced the PDF, although accountable to civilian authorities through a publicly disclosed budget, are poorly disciplined and corrupt. There are four components of the force: the Panamanian National Police, the National Maritime Service, the National Air Service, and the Institutional Protection Service. Criminal investigations are the responsibility of a semiautonomous Judicial Technical Police. Like the country's prison guards, officers frequently use excessive force.

Discrimination against darker-skinned Panamanians is widespread. The country's Asian, Middle Eastern, and indigenous Indian populations are similarly singled out. The living conditions of the indigenous Indian populations, who often do not speak Spanish, are significantly lower than those of the general population, and these groups face significant discrimination in employment. Since 1993, indigenous groups have protested the encroachment of illegal settlers on Indian lands and delays by the government in formally demarcating the boundaries of those lands. Indian communities do, however, enjoy a large degree of autonomy and self-government.

Violence against women and children is widespread and common. Panama is both a destination and a transit point for human trafficking.

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