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APPROVED FOR RELEASE: 2009/06/16: C |A RD POl- 070780002000800 4 94sz t 3 f 2 R (7 Panama March 1974 f G r NATIONAL|NT[[UG[NG e R FOR OFFICI USE ONLY A APPROVED FOR RELEASE 2009/06/16 CI DPO1- 070780002000800 4 9 APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080044 -9 WARNING The NIS is National Intelligence and may not be re- leased or shcwn to representatives of any foreign govern- ment or international body except by specific authorization of the Director of Central Intelligence in accordance with the provisions of Notional Security Council Intelligence Di- rective No. 1. For NIS unclassified material, however, the portions so marked may be made available for official pur- poses to foreign nationals and nongovernment personnel provided no attribution is made to National Intelligence or the National Intelligence Survey. Subsections and graphics are individuolly classified according to content. Classification /control designo- tions are: (U /OU) Unclassified /For Official Use Only (C) Confident9al (S) Secret c. E APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080044 -9 I i'VNrivivi WA a I_1 �:160 :1 1j;161 :a 0:1 111 11":W4111Y1L4'1li [W03 F-M N 11:111 11111HIN:11I41Y44411 -I1I111 El Page 3 Metals and minerals 8 4. Manpower 4. Manufacturing and construction 8 a. Labor force 5. Canal Lone 10 Growth of real CDP and selected b. Levels of training 8. Domestic trade 10 3 Fig. 3 Land use, 1970 (chart) 4 Fig. 4 c. Rages C. Government finance and economic policy 10 area harvested table) d. Labor movement 1. Economic policy and programs 10 9 Fig. 8 2. Public finance 11 D. International economic relations a. Revenues of the central government 11 1. Foreign trade h. Expenditures of the central govern- It nues (table) 12 ment 2. Relations with the Canal Zone and the c. Publ'.c debt 12 Colon Free -one 3. Financial institutions, monetary policy, 3. Balance of payments and prices 12 4. Foreign aid FIGURES Fig. 8 Central government expenditures (table) Page Fig. I Real gross domestic product by Participation of population in sector table) 2 Fig. 2 Growth of real CDP and selected sector (chart) Fig. 12 components chart) 3 Fig. 3 Land use, 1970 (chart) 4 Fig. 4 Principal crops; Production and Fig. 16 Balance of payments ;table) area harvested table) 5 Fig. 5 Value added in manufacturing table) 9 Fig. 8 Cross receipts from the Canal Zone (table) 11 Fig. 7 Central government current reve- nues (table) 12 Fig. 8 Central government expenditures Page 13 13 14 14 I5 15 15 16 17 17 Page 13 14 14 14 I5 18 16 IT 18 APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080044 -9 (table) Fig. 9 Financing of public debt (table) Fig. 10 Participation of population in labor force (table) Fig. 11 Labor force by major economic sector (chart) Fig. 12 Balance of foreign trade chart Fig. 13 Merchandise exports (table) Fig. 14 Composition of imports (table) Fig. 15 Direction of trade (chart) Fig. 16 Balance of payments ;table) Page 13 13 14 14 I5 15 15 16 17 17 Page 13 14 14 14 I5 18 16 IT 18 APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080044 -9 I_1 :160 IM161 :A 1111 1-i": 4111Y11i'M MW 1113 F-M N 1 1:111 1141MIN :11I41Y441111.11II11 El &I The Economy A. General characteristics One of till- smallest nations in Latin Anu�ric�a �in both .1re'a and pupuhtIi4111-- I'nnarna transcends the lirltilatirtns of its size b% Oriole of its location It Ilas our of the Itigbest per capita incuures in iartin 1nu'ricu_ uiainlN because' of 160 highly advanced urban ectmooi 111M has dev4-loped around tilt Canal Lonv Gross Doi l-%tie Product ((;I)P) e'as an v%Iinialed 51.322 million in I9e2 (in current it ri cv%), or S868 porcapita, "ItIIdirec't and indirect earnings from tie Canal Zuni accounting for more than one -third of the total. LDP bas grown rapid1% during the past duc�ade Irivonu' distribution is strikingly otimc'n. 'File upper lt)s: of incYnne recipients receive Amer �I r of (lie "Bill s inarnup "Illlr tu' Inner one -third ry vi%e Iess than W, In Latin America onh Colombia has .1 more income (listributinn, although Venezuela alld Mexivo approach it Despite this oneven irieornr dlstribntlnit. 11411vt -er, general health and education indices in Panama Aire among the Ieighest in lattin America 1. Structure of the economy Panama divides at tilt- Canal 7.nne into two p�irts kith different gnu �riphical characterislics. (Sep the inset reap of the Gen4-rd Survey Summary Map in the Countn Profile chapter.l The section from [lie Costa Rican Murder to the Zone resembles inosl of Central O"Ft 'I'lu� rrdlm nnaeal of this rhaph�r is CNCIASSIFIED lout t, FOR OFFICIAL ('SE ONLY .inn �a. ssith cenlr l Itigltlands, %%et Caril,bean loMarlds, and moist Pacific slope Tile eastern third of the� c'oirntr%, himeu'r begins to l-xhibit [and forms� elite :lie. and vegetation characteristic of unrtli%vestern South Aint�rica. 4losl of I':ulannt's 1.5 million inhabitants live in t%%o %sell defined regions_ Ovl-r 0110 -1114d are concentrated within the Irinsit area that inciudes tilt- Canal lone. I'anania City and Colon' while inure than one -half iollabit the Pacific lowlands and adjacent ouunitain sloths west of the Canal. 'These t .hens of population mucentrati011 uildencor(' the clualit% of Panama's geognrphical personality The transit is chiefly urban, and its people are vosnaolxolilarl of man> races and nilti(lnali(ICS. 1 1 14- %l esterrl Pacific him l and is rural� and its people are Irie Panamanians, of mixed Indian. white. and sometimes Negro blood. Thi pattern of population distribition dates front the lair sixteenth century, after the rise of Peruvian trine with Spain and the establishment of the transit mute across the isilunus near the present ca na l, l'amina's dual personality is exhibited even ittore in its economy than in its population distribution. The more important of its two ccunonaic systeins is tine highly sophisticated urban economy of Panama Laity� Colon, and their envimns, which is based orh domestic and foreign trade and services and provides a comparatively high -'andard of living for most residents. The bustling eccmomic activity in this 'For dinrrinn on plum flames ur talc list of n:atos's on ill(, aparar Of tits� Sunlm tryy %.1ap in khc (:utsnln YrslGlr ehaptrc and ilu� map ilwif APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080044 -9 I_1 :160 IM 161 :1 1111 11":W4111111i'M [W413 F-M N 11:111 11111MIN :11I41IN4411 -I1I111 El &7 srcti.,n of thr cyHmlry gc�ncrac, more tharl half all tilt� n.etional snot erne. Pa rth In Ihe� turn) of ttage, pasd to 1'.amirtiarnan natty 1.111 ltork llg III Ihe (:anal zone jild parch a reuvipls frrtlll trad I,% tilt ;t H.d /J like rt'11dUll 1 �Ile] t titIt Inan,ls .Ind Snrelt;n Irautmerils i�he Other ocom11111C ,tent t, tht� agnculture��bast�el ecun41111% that pnnide, I Obskit -Ove ur Iou�incnnte Standard of Ming Agric�ullure produces a consl;vah decre,wrig pvrveritaev of C1)P Onh 17 in 1972 i Figure i lie ma)e�ritc of firmer produce nmmIN for favW4 ttl +si%tencc and riu,e littir fox inarket IAM rlutpnt nl the igrlr'11ltllral lector and cost 1% domu�,tic tI.lnsportatutn mean that tilt- urflan arc.%, Often can buv mury cht-aph (ill tilt- ttndd market [hall from the inlersor Of tilt- cnnntrt 2. Economic growth and gos�cmmenl policy Rvat (;DI' grew ooh about -V, per tear of tnug the 1954) s, but the rate inc�rcawd to about per ,ear during 1900 (Figure� 21 In onh 2 sear, since 1960 o Iht- grm %th rkte,ignific11nth helots lilt, averatge 19(11. �he�n real GDP Brett onit d 4`1 breads( husimw confident-'( �e�ikkencd following not, ill fa11uan. and 1968. when political instabiliiy ag:un caused a loss of burin(�,-, confidence 111111 the gruu tit rat- sh iwed to 5 :3''o The growth of real GDP %%a�, sparked b expansion Ilk construction and rrtanuf leturiitg. ht strong expnrl performance, and by rising tt ;egos for the 10'+ of the country urban labor force employed in tilt- Canal Zone (:rntrth Oho was aided by sizable direct L' S. itivestnlcnt. especially in Ill(- hiller years of the period 7 ht- book value of stick investment rose from $1,072 million in 1969 to 61.461 million in 1971 The U S ur %shit-) Is cone�e�ntr