Panama: Political and Economic Conditions and U.S. Relations
Abstract
With four successive elected civilian governments, the Central American nation of Panama has made notable political and economic progress since the 1989 U.S. military intervention that ousted the regime of General Manuel Noriega from power. The current President, Martin Torrijos of the center-left Democratic Revolutionary Party (PRD), was elected in May 2004 and inaugurated to a 5-year term in September 2004. Well into his fifth and final year in office, President Torrijos has faced such major challenges as dealing with the funding deficits of the country's social security fund; combating unemployment, poverty, and crime; and developing plans for the expansion of the Panama Canal. In April 2006, the government unveiled its ambitious plans to build a third lane and new set of locks that would double the Canal's capacity; the project began in September 2007. Panama's service-based economy has been booming in recent years, but the global financial crisis and U.S. economic recession has begun to slow economic growth and the economy is expected to contract in 2009. The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the canal was under U.S. control and Panama hosted major U.S. military installations. The current relationship is characterized by extensive counternarcotics cooperation, assistance to help Panama assure the security of the Canal, and a proposed bilateral free trade agreement (FTA). U.S. aid to Panama (including Peace Corps assistance) amounted to $12.2 million in FY2007 and an estimated $10.6 million in FY2008, including $2.9 million in FY2008 supplemental assistance under the Merida Initiative. That program provides aid to Mexico and Central America to combat drug trafficking, gangs, and organized crime. For FY2009, an estimated $20.5 million will be provided to Panama, including $8.9 million under the Merida Initiative.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 26, 2009
- Accession Number
- ADA497771
Entities
People
- Mark P. Sullivan
Organizations
- Library of Congress