Stable and prosperous, Panama beckons travelers with its famous canal, rain forests, tropical beaches, Indian culture and cities that meld modern America and old-world Spain. Panama has about 500 rivers and more than 1,000 islands. Three-fourths of the country is uninhabited.

The weather is warm year-round in Panama, except in some of the higher-altitude regions in the west. The rainy season, which the locals call winter, is May-October, with the heaviest rainfall on the Caribbean coast. Temperatures in the capital, Panama City, are tempered by sea breezes.

The population is about 60 percent mestizo (mixed Indian and European blood), 14 percent African and 10 percent Caucasian. About 6 percent of the people are Indian (Cuna, Choco and Guaymi). The official language is Spanish.

The best way to reach Panama is by air, though those with the time can drive in from Costa Rica. Within the country, bus service is extensive. Air Panama serves the major cities and towns. A rail link follows the canal from Panama City to Colon. Road conditions are generally good, but driving at night is not recommended. In the island groups, travel is mainly by boat. The communications infrastructure is modern and reliable.

Panama's government is a constitutional democracy, with a president, two vice-presidents and a legislative assembly. The president appoints Supreme Court justices to 10-year terms, subject to approval by the Assembly.

The economy is based on the Panama Canal, agriculture, fishing, offshore banking and tourism, and is stronger than those of its Central American neighbors. Tourists find that prices in Panama are reasonable by Western standards, but higher than most other Central American countries.

Travelers to Panama face threats of personal and property crimes throughout the country. Higher crime rates are present in areas of urban poverty and in locations where government presence is reduced. In the Darien Province, the threat to personal security includes insurgency activity from Colombia.

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