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Its strategic position and glorious terrain - from wildlife-rich jungle to sun-soaked beach - suggests that it will remain an important country for a long time yet.
The country has been a pivotal trade route for 500 years, first under Spanish rule, then as part of independent Gran Colombia and modern Colombia, and in 20th century, as an independent nation. However, the Panama Canal Zone, completed in 1914, became an American Protectorate for many decades. It was only in 1977 that the Americans agreed to turn over the canal to full Panamanian control by 1999.
In the 1980s, the country was run by Head of the Armed Forces, Manuel Noriega, who was very unpopular in Washington. In 1989, after an unsuccessful coup (thought to have US backing), US President George Bush authorised an invasion to remove the troublesome dictator.
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