First spotted by the Spaniards in 1501, Panama's colonization started on the Caribbean coast. In 1513 the Conqueror Vasco Núñez de Balboa crossed the Isthmus and reached the Pacific Ocean. The Spaniards began to settle colonies in the south of the country and Panama became a starting point for expeditions to South America and the cornerstone of Spain’s colonial trade. Nowadays it is still a very important axis for world trade thanks to the Panama Canal which has been operating non-stop for 100 years and is now undergoing expansion.

Panama City is considered as the most cosmopolitan city in Central America. A city of contrasts between shimmering skyline and the colonial architecture of its Casco Antiguo, growing day by day with a vibrant community of a great cultural diversity that makes this country a unique melting pot.

Colonial Period

The coast of Panama was first spotted by the Spanish adventurer Rodrigo Bastidas in 1501. One year later Christopher Columbus explored the Caribbean coast in search for a passage that would take him further to the west. During one of these expeditions the conquistadores learned from the natives that a vast ocean not far away south promised a way to rich and distant kingdoms, but in is not until 1513 that Vasco Nunez de Balboa crosses the Isthmus of Panama and discovers what we know today as the Pacific Ocean.

In 1519 Spain decides to build Panama City on the Pacific and a town called Nombre de Dios on the Caribbean side to control what would become the most important colonial trading route. Panama is used then as a starting point for expeditions to South America and soon enough huge quantities of gold, silver and other precious items were being shipped from Lima to Panama City and then carried through the jungle to the Atlantic coast before being sent to Spain.

Of course all this gold readily startled the interest of the pirates, and the history of colonial Panama is marked with a great number of attacks, looting and destructions from the infamous privateers. The most famous of them, Henry Morgan, took the fort of San Lorenzo in 1671 before attacking Panama City. The defeated Spanish governor ordered the city to be burnt so it wouldn't fall intact in the hands of the pirates.

The Gold Rush and the Panama Railroad

It would be again the thirst for gold, but this time from California, what would awake the sleepy western Colombian province of Panama in 1849 and put it back on the map as one of the safest and fastest routes for the forty-niners to reach El Dorado.

This human rush directly led to the decision of building the first transoceanic railway ever. A train through the tropical forest was not an easy task. Chinese were brought to Panama to work for the railway and though many died, they represent today a large minority among Panamanians.

The task was completed in 1855 and its overwhelming financial success over the following decade proved once again the advantages of Panama's exceptional location.

Ferdinand de Lesseps and the French Canal

In the meanwhile on the other side of the world, an event of considerable importance occurred: Ferdinand de Lesseps and its French engineers opened the Suez Canal, allowing ships to go directly from the Mediterranean Sea to the Indian Ocean without having to go all around Africa.

After his immense success Ferdinand de Lesseps turned its eyes to Panama and went headfirst like a bull in what was going to be the most gigantic human work site of all times. Convinced by the old man's extraordinary charisma the ''Compagnie Universelle du Canal'' was soon created by private investors.

The French started digging in January 1881 and the first serious problems occurred with the rainy season 3 months later. De Lesseps stubbornly stuck to his technical option of a sea level canal up to 1886, when he was forced to change for a lock system. But it was not problems on the field that caused the French to fail. Nor was it the 25.000 or more dead of malaria, yellow fever or more generally dysentery. The French failure is a financial one. From the beginning De Lesseps deliberately underestimated the investment necessary to obtain funds more easily from its investors. In 1889 investors simply refused to put more money, and the company went bankrupt.

This occurred in the middle of a huge corruption scandal that stained all the French political class. The financial director of the company, Baron De Reinach committed suicide and De Lesseps' own son, Charles, who was the company's chairman, was sent to jail.

After the bankruptcy of the Compagnie Universelle du Canal another company was created, the "Compagnie Nouvelle", that continued working on a small scale until it was sold to the USA in 1903.

The Panama Canal under U.S. administration

In 1903, Panama got its independence from Colombia and the USA could resume works in 1904. In 1914 the canal was opened to navigation, and that great human adventure finally ended in a big success.
In 1977 Panama and the USA signed the Carter-Torrijos treaty which stated that the control of the Canal operation and the adjacent Canal Zone should be handed over to Panama by the turn of the century. So it wasn't until December 31st of 1999 that Panama could officially claim its sovereignty and absolute control over this country.
More recently Panama's government took the decision to expand the existing canal by building larger locks. The opening of the new locks is scheduled for august 2014 and there is hope that this will bring financial benefits for the whole country.