Before the arrival of the Spanish, present-day Panama was home to two tribal groups: the Cuevas and Cocole peoples. Little is known about them today, and they were quickly destroyed by Spanish conquerors moving from southern Mexico into Peru and Ecuador. Panamaâ€™s eastern coast was scouted by the Spanish in the early colonial period, but the importance of the area was not known until 1513, when a Spanish expedition under Blasco NuÃ±ez de Balboa crossed the central highlands, making them the first Europeans to see the Pacific Ocean. As early as 1520, the Spanish considered digging a canal through Panama, but the idea was abandoned as impractical.
Spanish Conquest and Rule
The area became part of the Spanish Empire, and was very important in the centuries to come. In the sixteenth and seventeenth centuries, gold and silver from Peru was brought by ship to Panama City, on the west coast, where it was carried across the narrow isthmus on the Camino Real, or Royal Highway, to the eastern coast where it was then shipped to Spain. The presence of so much mineral wealth was irresistible to pirates, and before long, pirate bases covered the Caribbean around Panama. Two notable pirates were Sir Francis Drake, who plundered Spanish shipping from 1572 to 1597, and Henry Morgan, who attacked and sacked Panama City in 1671. Burned to the ground, the city was rebuilt two years later. By 1740, most of the Spanish ships went around the southern tip of South America in order to avoid piracy, and Panama returned to being a sleepy little outpost of the Spanish Empire.
In 1821, Colombia declared independence from Spain and took Panama with it, considering it one of their territories. In the 1850's, it again became an important crossing point, this time from east to west as thousands of prospectors headed to California to take part in the gold rush. A railway was completed in the mid 1850's, and the area enjoyed a huge boom which lasted until a transcontinental railroad was completed in the United States a few years later and Panama once again returned to obscurity.
In the 1880's, a French company made the first serious attempt to build a canal through Panama. The venture failed within twelve years, however, and more than 22,000 workers lost their lives to malaria and yellow fever. The United States continued the canal effort, but not before first securing themselves certain rights. American agents stirred up a rebellion in Panama, which declared independence from Colombia in 1903. American warships and troops were on hand to ensure that Colombia did not attempt to re-take Panama by force (in 1921, the United States paid Colombia $25 million to forever relinquish any claim to Panama). The Hay-Bonau-Varilla treaty was signed, which granted the United States a number of rights to the canal and surrounding area in perpetuity. Interestingly, Panama was not a party to the treaty, which was basically a deal between the United States and the French.
The canal was completed in1914 and is still considered one of the engineering marvels of our age. It was of particular importance during World War II, when it was protected at all times by United States warships.
In 1968, the head of Panamaâ€™s National Guard, Omar Torrijos Herrera, staged a coup and made himself dictator. Like many dictators, Torrijosâ€™ record is mixed. During his administration, Panama entered into the lucrative trades of international banking and free trade. He encouraged rural development programs. He also negotiated with the United States for the repeal of the hated Hay-Bonau-Varilla treaty and eventual return of the canal to Panama, which made him a national hero in a nation that had always resented the United States for their control over the canal. But the Torrijos regime was also corrupt, repressive, and ran up a lot of debt.
Corruption and the US: Gen. Manuel Noriega
In 1983, Torrijos was killed in a plane crash and General Manuel Noriega seized power. Many would later blame Noriega for the fatal plane crash. Noriega was supported at first by the United States, who considered him friendly to their desire to control the canal. But Noriegaâ€™s involvement in Colombian drug running and his repressive government soon caused his former allies in the United States to disown him. By 1987, the United States had severed all ties with Noriega and considered Panama a rogue state. Meanwhile, Noriegaâ€™s grasp on power was weakening and the repression, murder of dissidents, and election fraud increased. In 1988, grand juries in Tampa and Miami indicted Noriega on charges of drug smuggling.
General elections were held in 1989, and international observers claimed that the opposition candidate, Guillermo Endara, had won by a four-to-one margin. Noriega invalidated the election, claiming fraud. In December of that same year, the United States invaded Panama with 26,000 troops. The fighting took less than one week. Noriega hid out in the Vatican embassy, which eventually turned him over, in part to put an end to the non-stop barrage of loud rock music that American troops played at all hours outside in the street. The former dictator was jailed, convicted of drug smuggling, and sentenced to forty years in prison. Endara was sworn in, although his administration was later tainted by accusations of corruption.
In May of 1999, Mireya Moscoso, the widow of former president Arnulfo Arias Madrid, was freely elected president of Panama, and she made education, welfare, free trade, and efficient administration of the Canal Zone her priorities. The canal was formally handed over to Panama in January 1, 2000, although a vague clause in the new treaty allows for foreign intervention if needed to re-open the canal for any reason. In 2004, the people of Panama elected MartÃn Torrijos president, son of the late dictator.