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The first known inhabitants of Panama—the Cuevas and the Coclé—were wiped out when the Spanish arrived in the 16th century. Weapons and diseases, both brought from Europe, eradicated the native populations; with their conquest complete, the Spanish settled along the Pacific Coast and founded Panama City in 1519. In search of gold, Spaniards headed south to Peru, and the riches that they brought back drew the attention of pirates. It wasn’t long before travel through the Caribbean was ripe with the threat of piracy and many Spanish, in an effort to protect their cache, brought it all the way back to Europe via Cape Horn.
As a result, the once-rich Panama slipped into poverty. When neighboring Colombia declared its independence in 1821, it claimed Panama as a province. It wasn’t until 1846 that the U.S. became involved in the region, signing a treaty to allow America to build a railway from the Pacific to the Caribbean, and to defend it with force. U.S. interests aligned with the revolutionary ambitions of Panama’s opposition party, and the former supported the latter as it declared its sovereignty in 1903. Soon after, a new treaty was signed, granting the U.S. a canal zone in perpetuity ten miles wide and five miles on either side. The Panama Canal would soon become reality.
The canal treaty also granted the U.S. liberal rights to intervene in Panamanian affairs, resulting in tense relations. Canal construction began in 1904, and the first ship was negotiating its waters only ten years later. In 1936, the U.S. relinquished its right to interfere with Panama’s affairs outside the Canal Zone—but it wasn’t until 1999 that Panama formally gained control of the canal.
In 1984, General Manuel Noriega—once head of Panama’s secret police and once a CIA operative—rose to power as dictator. Over the next five years, he murdered his opponents and stomped on attempts at democracy, trafficking drugs and laundering money along the way. Election results in 1989 seemed to promise new leadership, but a victory motorcade the day after the election was ambushed, with election winners severely beaten. The election was annulled shortly thereafter—Noriega was becoming an embarrassment around the world. Still, he declared himself the winner and announced a state of war with the U.S. The killing of an unarmed U.S. soldier fueled these flames.
U.S. military Operation Just Cause was launched with 26,000 U.S. troops sent in to bring down Noriega and bring democracy to Panama. More than 2,000 civilians lost their lives in the operation, and thousands were left homeless. Noriega fled, claimed asylum in the Vatican embassy, and was ultimately captured and convicted of money laundering.
Panama has seen five presidents since, its first female president among them. Privatization has increased, infrastructure has improved, and more attention has been paid to health care and education.