New Internationalist


December 1981

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COMMUNITY ACTION [image, unknown] Country profile: Panama

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Leader: President Aristedes Royo

Economy: GNP is $1,400 per person per year.
Debt service repayments as % of exports: 18.8%
Main exports: 40% of foreign exchange comes from the Canal tolls but there are also exports of bananas, sugar, coffee and meat. Copper will dominate when the Cerro Verde mine comes on stream.

People:1.8 million town dwellers:54%

Health: Child mortality (1-4 years) 0.3% (Sweden 0.1%)
Daily calorie availability: 101%
Access to clean water: 79%

Culture Religion: Majority Roman Catholic.
Ethnic Groups: The population is mostly a mixture of Spanish, black and Indian blood. Of the sixty or more pre-conquest Indian tribes only three survive: the Cunas of the San BIas Islands the Chocoes of the Darien jungle; and the largest group, the Guaymies of the western provinces. There are still some black communities of the British West Indians brought in to construct first the railways and then the Canal.
Language: Spanish, but some English among the blacks.
Previous colonising power: First the Spanish, then the Colombians until 1903. The United States currently administers the Canal Zone.

ANY BUS FROM Panama City’s Avenida Central is a mobile discotheque. Music thuds from stereo tapes and the passengers — black and white and every shade between — sway, stomp and sing along. The atmosphere, potent by day, is menacing by night.

Panama is the bazaar of the Americas; its city streets a tax-free electronics supermarket: every other shop you pass sports the bulging thighs of a cardboard Pele, foot on the ball, smiling and selling for Sony.

Past the shops and on to the Via Espana, and you’re in another tax haven — the International Financial Centre. Chase Manhattan, the Bank of Tokyo and a hundred others have flocked to Panama to establish ‘offshore’ shops in sleek new buildings. Liberal laws in a country without a currency of its own (it uses the US dollar) make this the ideal base for operations in Latin America.

But this is only the latest mutation in one of the Third World’s strangest economies.

The first distortion came in the shape of the Panama Canal, for which the province of Panama was effectively lopped off Colombia by the United States back in 1903. And the stately progress across the country of one hundred ships a day still provides around forty per cent of the country’s foreign exchange earnings. The Canal was to be American forever. But, following renegotiation of the Canal Treaty in 1977, it will now pass to Panama in the year 2000.

The separation of the Canal Zone from the rest of the country set the pattern for what has become a nation of isolated enclaves: the antiseptic suburb of Balboa, built for American occupation, with its neat gardens and Christian Science reading rooms, is just ten minutes away from the honky-tonk girly bars of the City.

The banana barons, too, have constructed a world of their own. United Brands near the Costa Rican border has its own railways, ports, electrical and telephone systems. And there is a special Free Trade Zone at the Caribbean end of the Canal at Colon housing over six hundred companies in just 94 acres — importing, exporting and sometimes assembling for distribution to the rest of Latin America — and barely touching Panama’s main economy.

But stay an hour or so on the bus till it reaches Rio Abajo and the real Panama takes over. Fragile clapboard shacks with rusting roofs almost smothered by lush greenery are home to the reserve army of unemployed that Panama’s service economy (60% of GNP) floats on. And they’re still arriving from the countryside. The populist government of the late General Omar Trujillo started an agricultural reform back in the l970’s that is now swinging into reverse as firms like Nestle and Borden buy up the land for fruit and cattle exports.

With the country now deeply in debt most hopes are placed on the new Cerro Verde copper mine to be exploited by Rio Tinto Zinc, which could become the biggest in the world.


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Richest 10% have 48% of national income.
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Country has highest per capita foreign debt in Latin America.
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Some women in government but a basically sexist society.
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[image, unknown] Effectively social-democratic one-party state.
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88% primary school enrolment. Literacy 73%.
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National Guard has been liberal but signs of tightening up.

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‘At 70 years is good. Extensive health service with usual urban bias.

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Front cover of New Internationalist magazine, issue 106 This feature was published in the December 1981 issue of New Internationalist. To read more, buy this issue or subscribe.

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This article was originally published in issue 106

New Internationalist Magazine issue 106
Issue 106

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