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Panama, officially the Republic of Panama, is the southernmost country of Central America. Situated on the isthmus connecting north and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The capital is Panama City. Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Nueva Granada, Ecuador, and Venezuela – named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama and Nueva Granada stayed joined. Nueva Granada later became the Republic of Colombia.

With the backing of the United States, Panama seceded from Colombia in 1903, allowing the Panama Canal to be built by the US 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.

Revenue from Canal tolls represents today a significant portion of Panama's GDP. Panama has the third or fourth largest economy in Central America and it is also the fastest growing economy and the largest per capita consumer in Central America. In 2010 Panama ranked 4th among Latin American countries in terms of the Human Development Index, and 54th in the world in 2010. As of 2010, Panama is the second most competitive economy in Latin America as well according to the Global Competitiveness Index from the World Economic Forum (WEF). Panama has the largest rainforest in the Western Hemisphere outside the Amazon Basin and its jungle is home to an abundance of tropical plants, animals and birds – some of them to be found nowhere else in the world.

Panama's politics take place in a framework of a presidential representative democratic republic, whereby the President of Panama is both head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The judiciary is independent of the executive and the legislature. For all people national elections are universal and mandatory for all citizens 18 years and older. National elections for the executive and legislative branches take place every five years. Members of the judicial branch (justices) are appointed by the head of state. Panama's National Assembly is elected by proportional representation in fixed electoral districts; so many smaller parties are represented. Presidential elections do not require a simple majority; out of the four last presidents only one, the incumbent president, was elected with over 50% of the popular vote.

The government of Panama does not collect statistics on the religious affiliation of citizens, but various sources estimate that 75 to 85 percent of the population identifies itself as Roman Catholic and 15 to 25 percent as evangelical Christian. The Bahá'í Faith community of Panama is estimated at 2.00% of the national population, or about 60,000 including about 10% of the Guaymí population; the Bahá'ís maintain one of the world's seven Baha'i Houses of Worship in Panama. The Church of Jesus Christ of Latter-day Saints (Mormons) claim more than 40,000 members.

The U.S. influence in Panama can be seen in the country's sports. Baseball is the National Sport of Panama and has regional teams and a national team that represents them in international events. Many Panamanians have played on professional teams in the United States, including Rod Carew, who was one of the game’s greatest hitters, and Mariano Rivera, who is widely considered the best closer of all time. From the List of Major League Baseball players from Panama it can be seen that no other Central American nation has had as many Major Leaguers as Panama. At least 140 Panamanian players have played professional baseball in the United States.