Panama, officially the Republic of Panama ( ; ), is the southernmost country of Central America. Situated on an isthmus, some categorize it as a transcontinental nation connecting the north and south part of America. It is bordered by Costa Rica to the north-west, Colombia to the south-east, the Caribbean Sea to the north and the Pacific Ocean to the south. It is an international business center and is also a transit country. Although Panama is also the third largest economy in Central America, after Guatemala and Costa Rica, it has the largest expenditure on resource consumption, making the country the largest consumer in Central America.

Pre-Columbian heritage of native populations whose presence stretched back over 11,000 years.Fact: date=January 2008 The earliest traces of these indigenous peoples include fluted projectile points. This changed into significant populations that are best known through the spectacular burials of the Conte site (dating to c. AD 500–900) and the polychrome pottery of the Coclé style. The monumental monolithic sculptures at the Barriles (Chiriqui) site were another important clue of the ancient isthmian cultures. Prior to the arrival of Europeans, Panama was widely settled by Chibchan, Chocoan, and Cueva peoples, among whom the largest group were the Cueva. There is no accurate knowledge of size of the indigenous population of the isthmus at the time of the European conquest. Estimates range as high as two million people, but more recent studies place that number closer to 200,000.Fact: date=January 2008

Colonial Panama: discovery, conquest and decay

Christopher Columbus arrives in Panama on his fourth travel, which started in Nicaragua and ended in Panama. It is in this trip he discovers the Chagres river, which in the XX Century it would be the main resource to build the Panama Canal. He arrived to the Caribbean coast where he baptized the area with the name of Portobelo (in English, Beautiful Port). Columbus then explored Veraguas and founded Santa Maria de Belen, which would be the first Spanish settlement on the continent, leaving Bartolome, his brother, in charge.

Eventually, this settlement was destroyed by the local native population and the few surviving members returned to Spain.

Founding of Panama La Vieja

It wasn´t until 1519 when the Spanish decided to settle the new city. This time they chose a site in the Pacific ocean, which was discovered six years before by Vasco Nuñez de Balboa. The new city, today known as Panama La Vieja, was founded in August 15th, 1519 by orders of governor Pedrarias Davila and became an important port during the Spanish gold trade from Peru to the Caribbean islands and finally to Europe. The merchandise from all over South America would come into Panama and travel to Portobelo using the Camino de Cruces (old stone road) crossing the jungle and navigating the Chagres river. From Portobelo it would distribute to the islands and then to Spain.