The Republic of Panama: An Economic Analysis
23 Pages Posted: 10 Mar 2014
Date Written: March 9, 2014
Panama, officially Republic of Panama, is the southernmost country of Central America and the whole of North America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the west, Colombia to the southeast, the Caribbean to the north and the Pacific Ocean to the south. The capital is Panama City. Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Nueva Granada, Ecuador, and Venezuela, named the Republic of Gran Colombia. When Gran Colombia dissolved in 1831, Panama and Nueva Granada remained joined. Nueva Granada later became the Republic of Colombia. With the backing of the United States, Panama seceded from Colombia in 1903, allowing the Panama Canal to be built by the U.S. Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the United States to Panama by the end of the 20th century Panama's economy is one of the most stable in America. The main economic activities are financial, tourism and logistics, which represent 75% of the GDP (Gross Domestic Product). From 2003 to 2009 the GDP doubled, propelled by high foreign and domestic investment, coupled with the tourism and logistics industries. According to the Bank, the IMF and the UN, the country has the highest per capita income in Central America, which is about $13,090; it is also the largest exporter and importer at the regional level, according to ECLAC. The GDP has enjoyed a sustained growth for more than twenty years in a row (1989). The country is classified in the category of investment grade by these credit rating companies: Standard and Poor's, Moody's and Fitch Ratings.
Keywords: Republic of Panama, Panama Canal, Colón Free Trade Zone, Service Sector, Banking System
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