Noted these days as an easygoing land of picturesque coastline, Panama has the fastest growing rate of tourism in Latin America. Indeed, it’s not at all difficult to understand why it’s swiftly becoming one of the most attractive destinations in the Americas: intensely interesting historical sites, tasty octopus, hospitable people, imposing natural beauty, world-renowned sailing, diving, and fishing, and a friendly year-round climate.

According to statistics by the Panama Tourism Bureau, the tourism industry contributed $1.45 billion to the nation’s economy, representing 9.5 percent of Panama’s total Gross Domestic Product (GDP), making it the largest single industry in the country. Rated the number one place in the Americas for retirement by Modern Maturity magazine of the American Association of Retired Persons, Panama has a relatively stable, dollar-based economy, and a notoriously secretive banking system attracting plenty of funny money (it’s the third most popular off-shore banking destination in the world behind Switzerland and the Cayman Islands).

Free of ferocious hurricanes and political discord, Panama is growing rapidly. Circumstances which haven’t been lost on skyscraper manufacturer Donald Trump: Panama City is the largest Trump property in the world. Scheduled to open in 2010, the $400 million dollar ostentation will be one of the most exaggerated displays of insularity in the world, featuring 627 condo residences, 369 hotel/condo units and penthouse units ranging in price from $300,000 to over $2 million. In typical Trump fashion, property owners will have little or no contact with local cultures or ordinary citizenry, except for the ones working in the beauty salon, flower shop, or gourmet restaurants inside the “luxurious, cosmopolitan waterfront property in the electrifying and growing Punta Pacifica.”

Today’s Panama is at least in the mind of your average first-world foreigner who spends less than ample time outside the confines of gated Gringoland, is a warm, loving, and safe place, rife with opportunities to party, relax, and self-enliven. While abundant opportunities certainly exist to stimulate the senses of thy self, below the surface, a legacy of political dissatisfaction, militarism, social tension and unrest endures.

Panama City was the first European city on the Pacific Ocean and is the oldest Spanish settlement on the Pacific coast of America. It was founded on August 15, 1519, by Pedro Arias de Avila, who was exceedingly bloodthirsty, responsible for the deaths of many of the Isthmus’s indigenous people as well as the execution of his rival Balboa on a spurious charge of treason.

More than 150 years later, the famous pirate Henry Morgan (known today as the caricature and namesake of a rum product), after having taken the Caribbean-side Spanish fort of San Lorenzo, led his band of Welsh buccaneers on a brutal trek across the Isthmus to sack Panama City. Built primarily of wood, the city burned to the ground during a savage battle between the buccaneers and the Spaniards on January 28, 1671. After Morgan’s rampage, the Spaniards decided to rebuild the city on a more easily protected spot, less than 10 kilometers to the west. The entire new city, bordered by a thick wall and other fortifications, was inaugurated on January 21, 1673. Despite the fact that it was deemed by some to be inadequately sheltered from marauding pirates, the city was never raided again.

History of the Panama Canal

For 400 years, cutting a strait through the mountains and jungles of Panama to link the Pacific and Atlantic oceans had been the tantalizing vision of Europeans. (The canal is a short cut between the Pacific and Atlantic oceans and saves ships a long haul around the southern tip of South America.)

 

The United States had wanted to build an Isthmian route since the 1840s to facilitate the massive migration spurred by the California Gold Rush. But they weren’t the first country to actually try doing so: The French-backed Compagnie Universelle Pour le Canal Interoceanic was founded to build the Panama Canal in the mid-1880s. Costing $240 million (twice the cost of the Suez Canal), it was the greatest human undertaking ever attempted. Crucial engineering mistakes, along with the ravages of tuberculosis, yellow fever and malaria (two out of every three workers had been killed or seriously debilitated by illness), delayed the project to the point of bankruptcy. By 1889, the project was officially discontinued.

New York lawyer William Nelson Cromwell went to Washington in December 1898, to convince President William McKinley to build the Panama Canal, but at that time, public and political sentiment had been in favor of a Nicaraguan Canal, which would be known as the product of the American people. Following McKinley’s assassination, vice president Theodore Roosevelt became the man in charge, and he was determined to have the Panama Canal as part of his expansionist legacy. Panama was the property of Colombia at the time, and Roosevelt threatened to support full-scale Panamanian independence through secession, if the Columbian Congress failed to ratify the newly signed Panama Canal Treaty, an agreement made much to the president’s liking and the United States’ economic and political interests.

Panamanians intended that if the U.S. supported secession, the country would make a more advantageous treaty with the United States, “giving the foreign government the equivalent of absolute sovereignty over the Canal Zone.” Roosevelt said that, if Columbia balked at the U.S. offer, he would sponsor Panama’s independence and promptly recognize the new country’s government.

When Columbia rejected the treaty, made without their consent, signed by pro-independence minded members of a protectorate, Wall Street syndicate J.P. Morgan (who was part of a scheme that would make millions buying the rights to the Canal for $3.5 million and reselling them to the United States at $40 million) in collusion with President Roosevelt, planned, instigated, and manufactured a revolution in Panama. Columbian military officers invaded Panama, where they were met with the quintessential gruffness of gunboat diplomacy. With nary a shot fired, the United States wrested away Panama from Columbia, transforming a luckless province into an independent country, and signing a new treaty which granted the U.S. “in perpetuity the use, occupation, authority and control of the Panama Canal Zone.”

“This is why Panama is a byproduct of Latin culture and American presence,” explained Eduardo Herrera, 24, of upper echelon Spanish-Panamanian stock, whose aunt is the owner of the Sierra Llorona lodge, a birdwatcher’s rainforest paradise, 90 miles west of Panama City. Upbeat, well-spoken, and acutely aware of U.S. political, social, and economic life, Eduardo quickly has become more than just a guide, but a friend. Most of my 12 day stay here is spent with him, catching and eating octopus, talking nonstop about our two countries, dodging traffic in a massive sport utility vehicle, with an engine mysteriously lacking even the slightest bit of power. Merry, unaffected, shrewd and likeable, Eduardo offers his views on life in a carefully reasoned, philosophic fashion which affords instant proof that there is not only plenty of intelligence inside his head but that that intelligence has undergone careful cultivation.

“We’ve adopted many of your same behaviors. Many Panamanians change cars every two years and buy the latest consumer based toys and products. We are consumerists, just like you.”

Panama – U.S. Tensions

Problems between Panama and the United States – stemming mostly from Panamanian dislike of the overbearing presence of the U.S. military – erupted continuously throughout much of the 20th century. Because of the logistic and economic vitality of first the Panama Railroad and later the Panama Canal, the U.S. had insisted, treaty after treaty, on reserving the right to play a role in the future of the Isthmus. Multiple times, especially in the fledgling days of the republic, the United States intervened in Panama’s domestic life.

“Panamanians are like any other people,” explains Eduardo, as we drive a byway known as Camino Real, a bumpy swatch of asphalt constructed by the U.S. military during World War II, intended as an alternative supply line in case of Japanese invasion – its dense canopy obscures the road from helicopter sight.

“We do not want a foreign country setting up a military base, off-limits to locals, dividing the country in two. But, it’s our legacy now. It’s what we are known for throughout the world. It was a gift in many ways. If the U.S. didn’t set up here, we would be plagued by the problems of Columbia. We would be Columbia.”

The most infamous incident of emerging Panamanian nationalism took place during the Flag Riots of 1964, when a group of college students attempted to lower the U.S. flag in the Canal Zone, and raise their county’s flag in its place. Four students were fatally wounded by the U.S. military, and days of rebellion, looting, and destruction followed.

In 1983, following the death of president Omar Torrijos Herrera in an airplane crash, General Manuel Antonio Noriega, a former darling of the CIA and its director George H.W. Bush, seized firm control of the military and the entire country. Through the decade, Noriega’s behavior became increasingly unstable and violent; he had been implicated in the murders of political opponents and was deeply involved with international drug smuggling.

“Pineapple face, that’s what we called him,” says Eduardo. “He was crazy. He challenged the United States to a fight, holding a machete in his hands. No right thinking person wants that man anywhere near this country again.”

Periodic violent clashes between Noriega’s Panama Defense Forces and U.S. military personnel traveling outside the Canal Zone reached a lethal point on December 17, 1989, when a U.S. Marine Corps lieutenant, was shot dead in Panama City. Three days later, on December 20, 1989, President Bush ordered an invasion of Panama, dubbed Just Cause. Around 1,000 to 4,000 civilians were killed. Noriega, who had long been a CIA asset, surrendered on January 3, 1990, and was flown to Florida. (His prison sentence for drug running was completed only months ago, and where he goes upon release from U.S. custody is still being determined. The French wish to extradite and charge him with a bevy of additional drug-related charges.)

“It’s a shame that so many Panamanians were killed in the invasion,” says Eduardo, walking with me through the ruins of Inglesia y Convento de los Jesuitas, a stone church built by a small Jesuit community in 1607.

“You can watch the videos of it on You Tube. U.S. soldiers burned down and bombed many buildings. The hard part of it is, American intervention was, in many ways, a gift. I couldn’t imagine life in Panama under Noriega. He was a madman.”

Panama Canal 2008 

Once large enough to handle and process most of the world’s freight, the mighty Panama Canal has gotten a little too close for comfort in the eyes of the world’s shipping industry. Wracked by concerns of its two locks being insufficiently narrow, engineers are working on improving the Canal to accommodate greater width. The centerpiece of the project will be the creation of a third set of locks that will allow the canal to handle ships carrying up to 12,000 shipping containers at a time; these ships do not fit in the canal today.

The expansion began in September 2007 and is scheduled to be completed in time for the centenary of the canal’s opening in 2014. The new locks of this parallel canal are going to be large enough to accommodate vessels more than 160 feet wide and 1,200 feet long.

The Panama Canal has been getting some press of a wholly different variety lately, too: Just weeks ago, 2008 Republican presidential candidate John McCain was disparaged by claims that his birth outside the United States legally prevented him from running for president. A February New York Times article raised the question as to whether McCain satisfied the necessary constitutional prerequisites, but since the Panama Canal Zone was a U.S.-run military territory when he was born the controversy has quickly died down.

McCain was born in 1936 on the Coco Solo submarine base where his father was a Navy officer. According to the NY Times, “his family returned to the United States within three months of his birth and he has no other connection to Panama.”

“Your next president may be a Panamanian,” laughs Eduardo, once informed of the possibility. Quickly, he adds his own personal spin – or selection, really – regarding the 2008 U.S. presidential election, an event, he says, closely being monitored by all Latin Americans.

“Almost all Panamanians want Obama to win,” he says, with a self-effacing grin liberally stretched out across his plump face. “Many are more interested in your election than ours in 2009. Bush wasn’t for his people, but his own interests. Your country stands for freedom, but Bush was acting against American ideals and the rest of the world, terrorizing others. Obama, I think, would be fairer.”

The Columbian Border, Crime in Colon

Given one of the highest rankings for tourist safety from the Pinkerton Intelligence Agency, Panama is probably less dangerous than any large North American city. But, as with any travel abroad, it’s inadvisable to walk around the streets flaunting your money clip, digital camera, credit card, or valuable belongings. Moreover, a recent regional study on crime in Latin American found Panama with a lesser crime rate than Costa Rica, which is typically thought of as the safest of Latin American countries.

Some economically and socially woeful neighborhoods of Panama City such as El Chorrillo, San Miguel or San Felipe – scarred by Dickensian poverty and desperation – are not safe at any time of the day. But, a place to be avoided at all costs is Colon – a shanty jumble of overcrowded hotels and boardinghouses, inhabited by squatters and sleazebags – ranking first in Panama in terms of chronic impoverishment, unemployment, and crime, earning an international reputation as a treacherous place.

Indeed, every article written since the advent of the guidebook advises tourists to avoid this city, inhabited mostly by descendants of Jamaicans and Barbadians brought to Panama as menial labor by the French and the Americans to work constructing their canals. Created in 1947, La Zona Libre, a walled compound within Colon, is the world’s second largest free trade zone, after Hong Kong. Despite the fact that it rakes in ten billion US dollars each year, Colon, the largest city on the Caribbean coast, remains an abjectly vile, Dantean vision of purgatory, with sewage and refuse scattering in all directions and often flowing beneath your feet.

Out of grotesque curiosity Eduardo and I drove through the teeming tenements of Colon – a dangerous place appearing as if it hadn’t been visited by a breath of fresh air or a drop of cleansing water in decades – one of the most depressing places in the Western Hemisphere, replete with weary junkies, roaming thieves, and wanton gangs, all condensed in living conditions so pitiable as to make one pinch themselves with zeal hoping to awake but anywhere else.

“I never take tourists here,” warns Eduardo. “But I’ve made an exception, because I have a good sense of what you want to see, and who you are. You don’t seem satisfied with me talking about it. I’m used to seeing it.”

“Eduardo, this is what I’d imagine the crowded horrors of a slave ship to be like.”

When the last of the U.S. troops assigned to the Panama Canal Zone left the country in 1999 as part of the handover of control of the Panama Canal to local authorities, all foreign military bases were repurposed to shelter the local populace. Along with Costa Rica, Panama today is one of the two hemispheric countries without a standing army; for its domestic security it relies upon a national police force. With an area of 78,200 square kilometers and a population of slightly over three million, Panama features a 225-kilometer long boundary with Colombia. The recent Revolutionary Armed Forces of Colombia (FARC) threat to kidnap Panamanian politicians and police officers if its self-proclaimed, Marxist-Leninist, revolutionary guerrilla comrades are not hastily returned, should not be taken without alarm.

In recent years, as in other Central American Isthmus countries, there has been an intense increase in the volume of gang warfare in Panama. MS-13 - or Mara Salvatrucha - is the biggest and fastest-growing of the Latin American street gangs, with up to 60,000 maras active in El Salvador, Honduras, Guatemala, Mexico and, thanks to our porous and neglectful immigration policies, in more than 40 U.S. States.

The Future: Prosperity or Instability?

Panama is a beautiful country brimming with bright and personable positivity, a claim not subject to argument. Furthermore, it has the lowest inflation rate and the most stable economy in Latin America. Although only a little more than 30,000 square miles – roughly the size of South Carolina – Panama has plenty of faraway, remote spaces. Approximately 35% of the country is sheltered by National Parks and protected areas. Unlike more touristy eco-destinations in Mexico or Costa Rica, a traveler here often finds himself among the few visitors to even the most popular sites. Its fabulous, exotic beauty certainly has enough luster and excitement to keep beach bums, water sports enthusiasts, and eco-tourists smiling, but similar to other Latin American countries, the realistic grittiness and destitution of the daily life of the citizenry may shock. Before you visit do keep abreast of political happenings, as Panama’s future dangles precariously between visions of sublime Costa Rican prosperousness and problematic El Salvadoran volatility. Hopefully with ample external help from rich friends, including the U.S., and the constant influence of internal advocates of peaceful progressiveness, its road to economic and cultural prosperity will be unswerving.

At the Panama City airport, shortly before my departure, Eduardo seemed to best summarize the promise of Panama, with two sentences which struck me as strangely sentimental, if not beautiful, a blend of optimism and realism, blithe assumption and deeply embedded pessimism.

“Corruption and tyranny and war are the cancers of Latin America. War delights quarrelsome peoples, while God wastes his time creating stars and flowers.”