Panama is an international business center, and has the largest economy in Central America. It is also the fastest growing economy and the largest per capita consumer in Central America.
Panama has extremes of wealth and poverty.The wealthiest 20 percent of Panamanians control more than 50 percent of the country's wealth, while the poorest 40 percent control only 12 percent. A worker making minimum wage in some areas of Panama would only earn US $2,080 per year. Regulations on the minimum wage, social security provisions, and working conditions are rarely enforced by the government which means that many workers are unable to earn even the minimum wage.
Poverty in Panama tends to be concentrated in specific geographic regions. For instance, the nation's second largest city, Colón, has the highest rates of poverty and crime in Panama. Unemployment among youth (ages 15 to 25) in Colón is estimated to be 50 percent. Among the poorest in Panama are the indigenous native peoples, who make up about 8 percent of the population (194,000), and suffer from malnutrition and higher levels of disease and illiteracy. This minority tends to live in the more remote areas of the nation where access to education and health care is limited.
Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With U.S. backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the United States allowing for the construction of a canal and U.S. sovereignty over a strip of land on either side of the structure (the Panama Canal Zone).The Panama Canal was 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 century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With U.S. help, dictator Manuel Noriega was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999.