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Panama
The Isthmus of Panama is the umbilical cord joining South and Central America. It borders Costa Rica to the west and Colombia to the east. Panama's arched shape reflects both its role as a bridge between continents and as a passageway between oceans. At its narrowest point, it is only 50km (30mi) wide, but it has a 1160km (720mi) Caribbean coastline on its northern shore and a 1690km (1048mi) Pacific coast to the south. The famous canal is 80km (50mi) long and effectively divides the country into eastern and western regions.
Population
Panama's population is currently at approximately 2,778,440 according to the national census of May 14, 2000. The population is a mix of many different races: about 14 percent African descent, 10 percent Spanish descent, five percent Indian and 62 percent "Mestizo" (IPAT, 1998). The population growth rate is estimated at 1.53% (1999). The life expectancy at birth for the total population is 74.66 years.
Languages
Spanish (official), English 14% (note: many Panamanians are bilingual). 
Standard/Cost of Living
In Latin America, Panama ranks as one of the best places to live, according to a 1998 business survey of 192 cities worldwide by the Corporate Resources Group. Panama ranked among the top three cities in which to live in Latin America next to Buenos Aires and Montevideo. The survey takes into account transportation, crime rate, arts and entertainment. In executive living expenses, recreation and entertainment costs and prices of basic goods, Panama ranks well below Buenos Aries, Sao Paulo, Santiago and Caracas (EIU, Worldwide Cost of Living Survey). Telecommunications costs are also below those in Argentina, Chile, Mexico, Brazil and Venezuela (Source: Latin Trade, May 1999).
Currency
1 balboa (B) = 100 centesimos
Exchange rates
Balboas (B) per US$1-1.000 (fixed rate)
Economy
Because of its key geographic location, Panama's economy is service-based, heavily weighted toward banking, commerce, and tourism. Panama joined the World Trade Organization (WTO) and approved a tariff reduction that will give the country the lowest average tariff rates in Latin America. A banking reform law was approved by the legislature in early 1998 and has helped solidify the nation as one of the largest international banking centers in the world. The most important sectors driving growth have been the Panama Canal and other shipping and port activities.
The Panama Canal
The Panama Canal is still one of the engineering wonders of the world. Even by today's standards it is awesome to see giant container ships gliding through massive locks and past a rain forest. Put the Canal in the context of turn-of-the-century technology and the feat of its construction is staggering. The possibilities of a waterway linking the Atlantic and the Pacific in this region had been well appreciated for four centuries before anyone started to dig. Spain's King Carlos V ordered a survey of the canal route in 1524 but it was presumably decided that cutlasses would not be adequate for the job. The French started a canal in 1880 under de Lesseps, builder of the Suez Canal, but after 20 years of struggle with the jungle, disease, financial problems and the sheer enormity of the project, they were forced to give up. In 1903 Panama seceded from Colombia and the United States signed a treaty in which the concession for a public maritime transportation service across the Isthmus was granted. The following year, the U.S. purchased the French Canal Company's properties for $40 million and began to dig. On August 15th, 1914 the U.S. cargo ship "Ancon" made the first transit. 
The Canal handles more than 13,056 ships every year, under the flags of about 70 nations, hauling an estimated four percent of the world's goods around the globe. The average toll for a ship using the canal is about $44,000.00, but many save about ten times this figure by eliminating the journey around Cape Horn. The Canal is about 50 miles long and ships are lifted 85 feet in three locks as they cross the Isthmus. The journey through the Canal takes about 8 hours and a ship is normally in Canal waters between 14 and 16 hours. Record tolls: The cargo ship "Sizzler" which transited for $184,114.80 and Richard Halliburton who swam the Canal in 1926 and was charged 36 cents after his displacement tonnage was calculated.
Colon Free Zone
The Colon Free Zone (CFZ) is the second largest free zone in the world after Hong Kong. Created in 1948, the Free Zone houses 1,751 merchants, receives more than 250,000 visitors yearly and generates exports and re-exports valued at more than US$11 billion annually (Ricardo Alemán, 1999). Any company may set up operations in the Colon Free Zone by applying to the administration and supplying commercial and bank references, a Panamanian Government tax clearance and articles of incorporation. Free zone laws establish that businesses may operate with a minimum of taxes. For example, there are no taxes or duties on imports or exports to/from foreign countries. Goods destined for the domestic market, however, must pay duties. Income tax on profits derived from export businesses are based on a scale between 2.5 percent and 8.5 percent, however, companies established in the Free Zone have a five-year tax holiday.
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