Panama (PAN)
Country Risk Assessment v2.3 - assessed 2026-09-19 - skew: negative
Flags
- Live-data refresh (2026-09-19): discovery-first sweep of the 2026-09-08 -> 09-19 window (six parallel regional sweeps, all source rating central), with state, belligerent, single-chain and recirculated claims excluded or direction-only. Dominant arc: the US-Iran war widened to a second maritime chokepoint as Houthis seized Mocha, Perim and Mayun, declared a Red Sea blockade on Saudi ports, and Iraqi drones shut Saudi Arabia's East-West Petroline, while Iran struck more tankers in Hormuz, the IAEA referred Iran to the UN Security Council, and Brent traded above $100. Second arc: the global tightening cycle landed, with the Fed hiking 25bp to 3.75-4.00%, the ECB to 2.50% on Sept 10, and the BOJ to 1.25% on Sept 18, all on war-driven energy inflation. Third arc: institutional strain, as Georgia moved to ban all five parliamentary opposition parties, Sudan's chemical-weapons dossier was published by NYT/WaPo, Brazil's STF froze the Moraes probe, and Cuba's grid collapsed nationwide Sept 18. Notes mark what moved.
- Live-data refresh (2026-09-08): discovery-first sweep of the 2026-09-03 -> 09-08 window (six parallel regional sweeps, all source rating central), with state, belligerent, single-chain and recirculated claims excluded or direction-only. The shared WebSearch budget was exhausted mid-run and the Asia-Pacific and global-macro sweeps fell back to self-hosted SearXNG, so Asia-Pacific coverage is a known gap this pass. Dominant arc: the US-Iran war moved decisively to sea. Iran fired ballistic missiles at two US warships near Hormuz and the US struck three Iranian oil tankers in reply, Iran's Artesh hit al-Minhad air base in the UAE and Ahmad al-Jaber in Kuwait, and Tehran announced it will declare a Gulf and Gulf-of-Oman exclusion zone within days while saying an Iran-Oman corridor deal awaits signature. Second arc: the global rate cycle turned to tightening on war-driven energy. Fed funds futures priced roughly a 58% chance of a September HIKE with PCE sticky at 3.7% and WTI back above $90, and the ECB is expected to hike to 2.50% on Sept 10 with euro-area August inflation at 3.3% on energy. Third arc: institutions under strain in large democracies. Brazil's Supreme Court turned on itself as police intercepts from the Banco Master fraud probe implicated Justice Moraes, who led the Bolsonaro prosecution, and the AfD took 43.8% in Saxony-Anhalt, the first outright far-right state win in Germany since WWII. The US peace push on Ukraine produced a 72-hour capital-strike pause and an IAEA-brokered repair ceasefire at Zaporizhzhia, which had been running on emergency diesel since Aug 20, but no deal. CORRECTION: Niger's Aug 28-29 coup attempt, missed entirely by the 09-03 pass, is booked late here. Notes mark what moved.
- Live-data refresh (2026-09-03): discovery-first sweep of the 2026-08-25 -> 09-03 window (six parallel regional sweeps, all source rating central), triangulated across multilateral bodies and diverse independent press, with state, belligerent, single-chain and recirculated claims excluded or direction-only. Dominant arc: the US-Iran war RESUMED and WIDENED after the Aug 25 exit-diplomacy moment. Iran and Oman finalized a Hormuz corridor framework (Aug 26, inbound via Iranian waters, outbound via Omani, revenue-sharing, a 30-60 day mine-clearing programme), then the US struck missile launchers on Larak Island (Aug 31) and Iran retaliated across FIVE countries at once, hitting US-linked bases in Jordan (Camp Titin, Prince Hassan), Bahrain (Sheikh Isa), Kuwait (Ali al-Salem) and Iraq (Erbil). A US strike hit a wedding at Kuhestak, Iran alleged a war crime at the UN, and Iran struck the Saudi supertanker Sidr in Hormuz, killing two Filipino sailors. Trump claimed 'almost total control' of the strait, floated renaming it, and told Iranians to rise up against their leadership. The rial hit a fresh record past 2.1 million per dollar and Reuters reported the blockade achieving what sanctions never did, with exports stalled outright. Second arc: a global long-bond rout deepened into September. Japan's 10Y JGB crossed 3% for the first time in 30 years with the 30Y at a record 4.18% and the yen at 160; France sold 10Y OATs at 4.23%, the highest since 2008, with debt at 117.5% of GDP; UK gilt yields hit a 19-year high in the new Burnham government's first Commons week; the US crossed $40 trillion in debt and doubled its long-end buyback ceiling. Third arc: catastrophe and consolidation elsewhere. A glacier-collapse flood on the Nepal-Tibet border killed 1,252 by Sept 3, passing the 2015 earthquake toll, with thousands missing. DRC's Ebola outbreak reached 3,007 deaths and 6,186 cases across six provinces at a 48.6% fatality rate, still expanding. Nicaragua's congress barred opposition parties from elections and extended the presidential term, drawing a near-unanimous OAS rebuke; Zimbabwe swore in senators and appointed 14 judges under a contested constitutional amendment; Zambia's Hichilema took a second term amid a disputed count and opposition arrests. Syria's SDF dissolved into the national military. Indonesia closed its central-bank vacuum. TRAPS CAUGHT and excluded: Peru's February 'Chifagate' removal, France's October-2025 Lecornu resignation, a 2020 Belarus protest piece, a 2025 DRC Uvira piece, a 2019 Zimbabwe crackdown piece, pre-window Cuba, and a FOURTH clean Thailand-Cambodia verification. CORRECTION: Serbia's Aug 20 snap-election announcement, missed by the 08-25 pass, is booked late. Notes mark what moved.
- Generated 2026-05-28 under v2.0: triangulated across multilateral bodies (IMF Article IV 2025, FATF, World Justice Project, Transparency International, Freedom House, RSF) + Panama official sources (INEC, ContralorΓa, Superintendencia de Bancos, ACP) + Panamanian/regional independent press (La Prensa, La Estrella, Al Jazeera, NACLA).
- Source-lean: the canal-sovereignty and port-deal coverage is heavily US/UK-framed; counterweighted with Panamanian and regional outlets, but the geopolitical scores carry residual US-press lean (confidence held moderate there).
- Dollarization is the defining macro fact: no monetary autonomy, but no devaluation risk and low inflation.
- civil_military_relations carries a v2.3 provisional baseline scored from coup history and military-in-politics status. It has not been through a full source-disciplined pass and its confidence is set low to reflect that.
Transparency & confidence ceiling
Tier: mixed - every composite below is confidence-capped at 0.75 (TIER_CAP.mixed).
Partial observability: official data is unreliable, but independent reporting still gets the truth out. Confidence is capped accordingly.
Economic
Dollarized stability and a large banking/logistics hub, against a fiscal hit from the 2024 copper-mine closure and structural canal-water risk. (skew: symmetric)
ββββββββββββββββββββββββββββββββββ¬βββββββββ¬βββββββ¬βββββββ¬ββββββββ¬βββββββ
β Sub-factor β Weight β Conf β Near β Mid β Long β
ββββββββββββββββββββββββββββββββββΌβββββββββΌβββββββΌβββββββΌββββββββΌβββββββ€
β Fiscal State β 0.22 β 80% β -4.0 β -2.50 β -1.0 β
β Monetary Independence β 0.22 β 90% β -3.0 β -3.0 β -3.0 β
β Reserve Currency Intl Monetary β 0.16 β 85% β +1.0 β +1.0 β +1.0 β
β Inflation β 0.13 β 85% β +3.0 β +3.0 β +3.0 β
β Banking Stability β 0.10 β 78% β +3.0 β +3.0 β +3.0 β
β Trade Actions Capacity β 0.17 β 78% β -5.0 β -1.50 β +2.0 β
ββββββββββββββββββββββββββββββββββ΄βββββββββ΄βββββββ΄βββββββ΄ββββββββ΄βββββββ
Fiscal State - The 2024 deficit hit ~7.4% GDP (from 3.9%), driven by the Cobre PanamΓ‘ mine closure; debt ~50-55% GDP. New fiscal-responsibility ceilings (4% in 2025 to 1.5% by 2030) are credible if enforced. (IMF Art IV 2025)
Monetary Independence - Dollarized: no central bank, imports US Fed policy wholesale, zero countercyclical tool - scored negative for lost autonomy (the offsetting no-devaluation-risk benefit is captured under inflation and sanctions). (IMF Art IV)
Reserve Currency Intl Monetary - Not an issuer, but full USD usage confers hard-currency stability and no FX/convertibility risk - a mild positive. (IMF)
Inflation - Near-zero/negative CPI (the dollarization anchor): -0.2% YoY end-2024, -0.7% by mid-2025. Low and durable. (IMF Art IV)
Banking Stability - A large international banking center (~$160bn assets, 60+ international banks, liquidity well above minimum); removed from the FATF grey list (Oct 2023) and EU high-risk list; the lack of a lender of last resort is the structural caveat. (Superintendencia de Bancos, FATF)
Trade Actions Capacity - Worsened near -4 -> -5: Canal Authority capped daily transits at 34 from Sept 4, dropping to 32 from Sept 15 on El NiΓ±o rainfall deficit (Al Jazeera, Reuters). Record $5.3M auction for a single transit slot (Bloomberg). Hormuz diversion is adding volume pressure. Long held 2; near-term chokepoint stress is the move. Confidence 0.75 -> 0.78.
Category composite by horizon (categoryComposite, confidence-capped by transparency tier):
βββββββββββ¬ββββββββββββββββββ¬βββββββββββββ
β Horizon β Composite score β Confidence β
βββββββββββΌββββββββββββββββββΌβββββββββββββ€
β near β -1.54 β 75% β
β mid β -0.61 β 75% β
β long β +0.31 β 75% β
βββββββββββ΄ββββββββββββββββββ΄βββββββββββββ
Institutional
Entrenched corruption and weak courts, partly offset by a genuinely insulated, world-class Canal Authority and a press that remains plural. (skew: negative)
ββββββββββββββββββββββββββββ¬βββββββββ¬βββββββ¬βββββββ¬βββββββ¬βββββββ
β Sub-factor β Weight β Conf β Near β Mid β Long β
ββββββββββββββββββββββββββββΌβββββββββΌβββββββΌβββββββΌβββββββΌβββββββ€
β Rule Of Law β 0.31 β 78% β -5.0 β -5.0 β -5.0 β
β Statistical Integrity β 0.22 β 65% β +2.0 β +2.0 β +2.0 β
β Civil Service Capacity β 0.22 β 60% β -1.0 β -1.0 β -1.0 β
β Press Freedom β 0.13 β 65% β 0.0 β 0.0 β 0.0 β
β Civil-Military Relations β 0.12 β 45% β +5.0 β +5.0 β +5.0 β
ββββββββββββββββββββββββββββ΄βββββββββ΄βββββββ΄βββββββ΄βββββββ΄βββββββ
Rule Of Law - Ranks poorly on rule of law (low among high-income peers on WJP); entrenched top-level corruption and impunity, weak commercial courts. (WJP, Freedom House 2025, TI)
Statistical Integrity - INEC and the ContralorΓa are broadly credible and used by the IMF; the ContralorΓa has shown institutional teeth. (ContralorΓa; IMF)
Civil Service Capacity - A genuinely world-class, insulated Canal Authority, but politicized line ministries and weak judicial administration drag the average. (Freedom House; US State ICS)
Press Freedom - Generally free, plural press (La Prensa, La Estrella), but defamation laws and a 2025 protest-era rights suspension in Bocas del Toro are warning signs. (RSF; Freedom House 2025)
Civil-Military Relations - No standing armed forces. The factor reduces here to the politicization of the police or gendarmerie. It is scored positive by default. Confidence is held low, as the usual evidence base does not apply.
Category composite by horizon (categoryComposite, confidence-capped by transparency tier):
βββββββββββ¬ββββββββββββββββββ¬βββββββββββββ
β Horizon β Composite score β Confidence β
βββββββββββΌββββββββββββββββββΌβββββββββββββ€
β near β -1.13 β 65% β
β mid β -1.13 β 65% β
β long β -1.13 β 65% β
βββββββββββ΄ββββββββββββββββββ΄βββββββββββββ
Political & Social
A legitimately elected but contested government amid 2025 pension-reform unrest, with a favorable residency pathway and a sharply de-escalated migration crisis. (skew: negative)
ββββββββββββββββββββββββββ¬βββββββββ¬βββββββ¬βββββββ¬βββββββ¬βββββββ
β Sub-factor β Weight β Conf β Near β Mid β Long β
ββββββββββββββββββββββββββΌβββββββββΌβββββββΌβββββββΌβββββββΌβββββββ€
β Political Stability β 0.30 β 72% β -3.0 β -2.0 β -1.0 β
β Civil Liberties β 0.20 β 65% β -1.0 β -1.0 β -1.0 β
β Treatment Non Citizens β 0.25 β 78% β +3.0 β +3.0 β +3.0 β
β Social Violence β 0.15 β 75% β -1.0 β -1.0 β -1.0 β
β Demographics β 0.10 β 80% β +3.0 β +3.0 β +3.0 β
ββββββββββββββββββββββββββ΄βββββββββ΄βββββββ΄βββββββ΄βββββββ΄βββββββ
Political Stability - Mulino (since July 2024) governs but with very low approval; a 2025 pension-reform law triggered 70+ days of strikes and a temporary constitutional-rights suspension in Bocas del Toro; legitimate but contested. (Al Jazeera; NACLA)
Civil Liberties - Generally respected, but 2025 protest crackdowns, union repression, and a rights suspension are real erosion. (Freedom House; OHCHR)
Treatment Non Citizens - The Friendly Nations Visa (which includes US citizens) is a lawful, durable pathway; a 2021 reform raised the bar (two-year provisional to permanent; property/deposit or job) and 2025 trimmed the temporary permit to six months - accessible, if less frictionless than before. (Embassy of Panama; immigration firms)
Social Violence - Homicide ~13/100k (concentrated in PanamΓ‘/ColΓ³n), moderate by regional standards and slowly rising; the DariΓ©n Gap migration crisis collapsed (~-99% in 2025), a major de-risking. (INEC; InSight Crime; DHS)
Demographics - Median age ~30, ~70% urban, population growing ~1.5%/yr; a favorable working-age dividend. (UNFPA)
Category composite by horizon (categoryComposite, confidence-capped by transparency tier):
βββββββββββ¬ββββββββββββββββββ¬βββββββββββββ
β Horizon β Composite score β Confidence β
βββββββββββΌββββββββββββββββββΌβββββββββββββ€
β near β -0.14 β 72% β
β mid β +0.16 β 72% β
β long β +0.46 β 72% β
βββββββββββ΄ββββββββββββββββββ΄βββββββββββββ
Geopolitical
Open capital account and no external war, but uniquely exposed as the object of great-power contestation over the canal and its ports. (skew: negative)
ββββββββββββββββββββββββββββββ¬βββββββββ¬βββββββ¬βββββββ¬βββββββ¬βββββββ
β Sub-factor β Weight β Conf β Near β Mid β Long β
ββββββββββββββββββββββββββββββΌβββββββββΌβββββββΌβββββββΌβββββββΌβββββββ€
β Alliance Reliability β 0.40 β 70% β -4.0 β -3.0 β -2.0 β
β Conflict Involvement β 0.35 β 70% β -1.0 β -1.0 β -1.0 β
β Sanctions Capital Controls β 0.25 β 85% β +3.0 β +3.0 β +3.0 β
ββββββββββββββββββββββββββββββ΄βββββββββ΄βββββββ΄βββββββ΄βββββββ΄βββββββ
Alliance Reliability - The US is the essential partner, but the current US administration's canal-sovereignty rhetoric, China-influence claims, and pressure forcing the CK Hutchison port divestment make the relationship coercive rather than reliable. (Atlantic Council; CFR; FT)
Conflict Involvement - No external war and no military, but uniquely exposed as the object of US-China contestation over the canal and ports. (CFR)
Sanctions Capital Controls - Fully open capital account, dollarized, no controls; post-FATF clean. (IMF; FATF)
Category composite by horizon (categoryComposite, confidence-capped by transparency tier):
βββββββββββ¬ββββββββββββββββββ¬βββββββββββββ
β Horizon β Composite score β Confidence β
βββββββββββΌββββββββββββββββββΌβββββββββββββ€
β near β -1.13 β 71% β
β mid β -0.73 β 71% β
β long β -0.34 β 71% β
βββββββββββ΄ββββββββββββββββββ΄βββββββββββββ
Physical & Practical
Hurricane-free with a strong capital-city core, against a material and recurring canal-watershed drought risk and thin rural services. (skew: symmetric)
ββββββββββββββββββββββ¬βββββββββ¬βββββββ¬βββββββ¬ββββββββ¬βββββββ
β Sub-factor β Weight β Conf β Near β Mid β Long β
ββββββββββββββββββββββΌβββββββββΌβββββββΌβββββββΌββββββββΌβββββββ€
β Climate β 0.20 β 75% β -4.0 β -4.50 β -5.0 β
β Healthcare β 0.30 β 68% β +1.0 β +1.0 β +1.0 β
β Infrastructure β 0.20 β 75% β +1.0 β +1.0 β +1.0 β
β Crime Safety β 0.15 β 75% β -2.0 β -2.0 β -2.0 β
β Disaster Insurance β 0.15 β 60% β 0.0 β 0.0 β 0.0 β
ββββββββββββββββββββββ΄βββββββββ΄βββββββ΄βββββββ΄ββββββββ΄βββββββ
Climate - Canal drought (2023-24 draft restrictions) plus dual-coast plus watershed stress, relatively higher readiness. (WB CCDR)
Healthcare - Strong private care in Panama City (a regional medical hub), uneven and thin in rural/indigenous areas. (Freedom House; US State ICS)
Infrastructure - Worsened 2 -> 1: the Panama Canal Authority warned on Sept 7 that a worsening El Nino drought may force daily transits down from 36 to 32 starting Sept 15, with lake levels near record lows (Tico Times). The authority is describing a restriction on its own revenue-generating asset, which is a statement against interest and therefore usable. A climate-driven capacity cut to the single asset that defines the country's infrastructure position is a direct hit. Confidence 0.72 -> 0.75.
Crime Safety - Moderate; safe expat enclaves but specific high-crime zones in Panama City/ColΓ³n and rising petty crime. (OSAC; INEC)
Disaster Insurance - Low seismic and no hurricanes reduce catastrophe exposure; drought/flood risk and an underbuilt insurance market roughly offset. (reinsurance context)
Category composite by horizon (categoryComposite, confidence-capped by transparency tier):
βββββββββββ¬ββββββββββββββββββ¬βββββββββββββ
β Horizon β Composite score β Confidence β
βββββββββββΌββββββββββββββββββΌβββββββββββββ€
β near β -0.67 β 71% β
β mid β -0.77 β 71% β
β long β -0.88 β 71% β
βββββββββββ΄ββββββββββββββββββ΄βββββββββββββ
Decisions
Confidence-weighted composite of every category above (decisionComposite), at each decision's native horizon (HORIZON_BY_DECISION), with the threshold reading (readingFor).
ββββββββββββ¬ββββββββββ¬ββββββββ¬βββββββββββββ¬ββββββββββ
β Decision β Horizon β Score β Confidence β Reading β
ββββββββββββΌββββββββββΌββββββββΌβββββββββββββΌββββββββββ€
β Living β long β -0.33 β 70% β mixed β
β Assets β mid β -0.69 β 71% β mixed β
β Currency β near β -1.34 β 72% β mixed β
ββββββββββββ΄ββββββββββ΄ββββββββ΄βββββββββββββ΄ββββββββββ
Same weighting projected across all three horizons (near 1-3y, mid 3-7y, long 5-10y):
ββββββββββββ¬ββββββββ¬ββββββββ¬ββββββββ
β Decision β Near β Mid β Long β
ββββββββββββΌββββββββΌββββββββΌββββββββ€
β Living β -0.82 β -0.57 β -0.33 β
β Assets β -1.16 β -0.69 β -0.22 β
β Currency β -1.34 β -0.69 β -0.04 β
ββββββββββββ΄ββββββββ΄ββββββββ΄ββββββββ