Panama: The History and Challenges Behind a Revolutionary Canal

The arrival of the Spanish in present-day Panama (1501)

The arrival of Europeans in Panama marked the end of the pre-Columbian period and the beginning of profound changes in Panamanian territory. In 1501, the Spanish explorer Rodrigo de Bastidas was the first European to arrive in Panama. Shortly afterwards, Vasco Núñez de Balboa crossed the isthmus and saw the Pacific Ocean in 1513, highlighting the strategic importance of the region.

There were several indigenous peoples in the region, who bravely resisted colonization, but many were decimated by wars, slavery and diseases brought by the Europeans.

In 1519, Pedro Arias Dávila founded the city of Panama (Panamá Viejo), which quickly became an administrative and commercial center for the Spanish Crown. The city was used as a starting point for expeditions to Peru, where the Spanish would conquer the Inca Empire.

The Way of Crosses and the Royal Way (16th-17th century)

Panama became vital to the Spanish colonial system due to the Camino Real and, later, the Camino de Cruzes, routes used to transport gold and silver extracted from the South Americas to Spain. These metals were taken from Peru to the Pacific port of Panama, crossed the isthmus and were shipped back across the Atlantic.

This wealth made the region a target for pirates and privateers. In 1671, the famous English pirate Henry Morgan sacked and destroyed Panama Viejo, leading to the founding of a new city, known as Panama City, in a safer location.

In the late 17th and early 18th centuries, Panama’s role as a commercial center diminished due to new trade routes, such as Cape Horn, which directly connected the Atlantic to the Pacific.

In addition, internal conflicts within the Spanish Empire and competition from other colonies reduced Panama’s importance. The region became a peripheral area in the empire, dependent on the administration of the Viceroyalty of New Granada (now Colombia).

Independence and Simon Bolivar

At the beginning of the 19th century, the Spanish colonies began to fight for independence, influenced by Enlightenment ideas, the French Revolution and the independence of the United States.

On November 28, 1821, Panama declared its independence from Spain. This process was relatively peaceful, as there were no major battles in the territory. Instead of becoming an independent country, Panama chose to join Gran Colombia, a republic formed by Simón Bolívar that included Colombia, Venezuela, Ecuador and Panama itself.

However, integration was complicated. Panama felt neglected by the central administration in the capital (Bogotá). This dissatisfaction grew as promises of investment in the region went unfulfilled.

The union with Colombia brought new challenges for Panama, including separatist movements that emerged throughout the 19th century. Panama would continue to be of vital strategic importance due to its isthmus, especially with the construction of railroads and, later, the idea of a transoceanic canal.

In 1831, Gran Colombia was dissolved, leading to the creation of the Republic of New Granada (the future Colombia). Panama remained part of New Granada, but tensions between the isthmus and Bogotá increased. Between 1831 and 1903, there were around 50 secession attempts in Panama, motivated by a lack of autonomy, economic inequality and political neglect.

With military and financial support from the US, Panama declared its separation from Colombia in 1903. The process was almost peaceful, as the Colombian troops were unable to react due to the presence of American warships.

Foreign interventions and interest in the canal

Throughout the 19th century, foreign powers, especially the United States and France, began to show an interest in building a canal across the isthmus.

In 1879, French engineer Ferdinand de Lesseps, famous for his participation in the construction of the Suez Canal, began the Panama Canal Project. However, the initiative was marred by corruption, mismanagement and a large number of deaths due to tropical diseases (malaria and yellow fever), leading to the collapse of the project in 1889.

The Dream of Connecting Oceans

The Panama Canal, inaugurated in 1914, is one of the greatest achievements of modern engineering. Linking the Atlantic Ocean to the Pacific, it drastically reduced shipping times and made Panama a strategic global center. But the history of construction is marked by gigantic challenges, innovations and a lot of persistence.

The idea of a canal in Panama dates back to the 16th century, when the Spanish explorer Vasco Núñez de Balboa crossed the isthmus and realized the potential of a link between the oceans. Centuries later, at the end of the 19th century, the French took the first step with Ferdinand de Lesseps, famous for building the Suez Canal. However, problems such as tropical diseases, engineering failures and poor management led to the project’s failure.

The Entry of the United States and the Rebirth of the Project

A few days after independence, Panama signed the Hay-Bunau-Varilla Treaty with the United States, granting the Americans control of a 16-kilometer-wide zone for the construction and operation of the canal.

After the French project failed, the United States took on the challenge in 1904. They faced the same obstacles, but with a more efficient approach. They invested in controlling diseases such as malaria and yellow fever, led by doctor William Gorgas, and redesigned the project, creating a system of locks instead of trying to dig a canal at sea level.

The Panama Canal’s lock system was a revolutionary technological innovation, allowing ships to be raised and lowered as they crossed the isthmus. The construction employed thousands of workers from all over the world, and its completion transformed global trade, reducing the travel time between New York and San Francisco by thousands of kilometers.

The Fight for Canal Sovereignty

For much of the 20th century, the canal was administered by the United States, but this caused dissatisfaction among Panamanians, who claimed sovereignty over their territory. After intense negotiations, the Torrijos-Carter Treaties of 1977 established that the canal would be returned to Panama on December 31, 1999, marking a historic moment for the country.

The Channel Today and in the Future

Today, the Panama Canal is one of the country’s main sources of income, accounting for around 6% of Panama’s GDP. With the expansion inaugurated in 2016, the canal now accommodates larger ships, known as Neo-Panamax, reinforcing its relevance in global trade.