Although Panama is part of the Central American isthmus, geographically it is always seen as part of South America. It is bordered on the west by Costa Rica and Columbia on its south-east. The Caribbean Sea is on the northern coast and the Pacific on the south. After its independence from Spain in 1821 it was part of Columbia instead of the Federation of Central America, like its northern neighbours. In 1903, with the help of the United States, it seceded from Columbia and became a sovereign state. The period between 1904 and 1914 was when its famous canal was built.
The population is a mix of mainly Amerindians and mestizos, but it also has whites and Caribbean blacks. Panama also has a small, but significant Chinese minority. Both the blacks and the Chinese are descended from immigrant workers who came to build the canal. Since its settlement Panama has been a transit point, starting with the transhipment of gold from Spain’s New World Empire in the south. In them days it was only a road called El Camino Real or Royal Road. Panama has the smallest population of the republics and much of it is still covered in thick forest and jungle. Cut in two by the Cordillera Central, it has over 500 rivers, seven indigenous tribes and the only break in the Pan-American Highway, in the Darien Gap.
The capital is Panama City. The population is around three and a half million. Official language is Spanish. The government is the presidential system. Currencies are both the Panamanian Balboa and the U.S. dollar. Climate is tropical. Traditional exports are sugar, coffee, bananas and shrimp with tourism becoming more and more popular.