Introduction
Panama has a population of approximately 4.5 million people and occupies the narrow isthmus connecting Central and South America. Its ethnic composition is roughly 65 percent mestizo (a mix of Indian and European), 12 percent Indigenous (Guna, Ngäbe-Buglé, Emberá, and others), 9 percent Afro-Panamanian, and 6 percent white. Panama City is one of the most cosmopolitan cities in Central America.
Panama is a presidential republic, with a president, two vice-presidents, a cabinet, a unicameral National Assembly, and a supreme court. The president is both head of state and head of the government.
The official language is Spanish. Because of the extensive U.S. historical influence and the Canal Zone legacy, most Panamanians in business and urban areas are bilingual in Spanish and English. The majority of the people (approximately 75–85 percent) are Roman Catholic, although Panama has no official religion. There are also small numbers of Protestants, Muslims, Hindus, and others, reflecting the country’s crossroads character.
Panama’s economy is dominated by the Panama Canal (expanded in 2016 with a third set of locks), the Colón Free Trade Zone (the largest free-trade zone in the Western Hemisphere), a robust banking and financial services sector, and growing logistics, real estate, and tourism industries. Panama uses the U.S. dollar (locally called the balboa) as its currency.
Columbus reached Panama in 1502 on his fourth and final voyage to the New World. The country was first explored by Balboa in 1513. The Panama Canal was completed in 1914 and returned to Panamanian control on December 31, 1999. The 2016 expansion allows passage of New Panamax vessels nearly three times larger than the original locks could accommodate. Panama City’s skyline is the most dramatic in Central America, with more skyscrapers than any other city in Latin America outside of São Paulo and Mexico City.
Hofstede Analysis
The Geert Hofstede analysis for Panama is similar to its Latin American neighbors. There is a high Power Distance indicating that inequalities of power and wealth have been allowed to grow within the society. Uncertainty Avoidance ranks high which indicates a high concern for rules, regulations, controls and issues with career security.
Panama has Power Distance (PDI) as the highest ranking Hofstede Dimension at 95. This score is tied with Guatemala as the highest Power Distance of all Latin American countries, where the average is 70. This high Power Distance ranking is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as part of their cultural heritage.
Panama’s second highest Hofstede Dimension is Uncertainty Avoidance (UAI) at 86, which is more typical of all Latin American countries with an average of 85. This indicates the society’s low level of tolerance for uncertainty. Strict rules, laws, policies, and regulations are adopted and implemented to control the unexpected.
Panama has a relatively low Individualism (IDV) ranking at 11, compared to other Latin countries’ average of 21. The society is strongly Collectivist — loyalty to family and group is paramount.
Of note is that Panama has the second largest divergence of Power Distance (PDI) to Individualism (IDV) of any country surveyed in the world, with a difference of 84 (PDI 95 minus IDV 11 = 84). Guatemala is first with 89 and Malaysia third with 78.
In many of the Latin American countries, including Panama, the population is predominantly Catholic. The combination of Catholicism and the cultural dimensions reinforce a philosophy predicated in the belief that there is an absolute “Truth.”
Religion. Approximately 75–85 percent of Panamanians identify as Roman Catholic. Protestant denominations have grown substantially. Panama’s position as a global crossroads is reflected in its religious diversity, including small but established communities of Muslims, Jews, Hindus, and Buddhists. There is no official religion. In our study of predominantly Catholic countries, we found the primary correlating Hofstede Dimension to be Uncertainty Avoidance (UAI). Only 2 countries out of 23 did not follow this correlation: Ireland and the Philippines.
Appearance
body language
& gestures
- Conservative business suits are appropriate for men. Panamanian businessmen in higher positions wear suits; others wear camisillas (a lightweight, open-necked shirt that is not tucked inside the trousers), which is considered appropriate professional attire in Panama’s tropical climate.
- Women should wear a dress or skirt and blouse, or a professional pantsuit. Women should avoid wearing any kind of revealing clothing.
- Most North American gestures are understood.
Behavior
meetings &
general conduct
- Panamanian women are taking more and more managerial jobs, but still it is relatively rare at senior levels. Women should emphasize the fact that they are representing their company.
- Have business cards and other material printed in Spanish as well as English.
- When dining, the host usually sits at one end of the table with the guest of honor at the other end.
- Foreign businesswomen should always include spouses in invitations to business dinners.
- Gifts are not normally exchanged when entertaining.
Communication
introductions &
conversation
- Handshaking is the custom; old friends embrace.
- Titles are important and should be included on business cards. Address a person directly by using his or her title only: Doctor, Profesor, Ingeniero, Arquitecto, Abogado. Without a professional title, use Señor, Señora, or Señorita plus the surname.
- Most Hispanics have two surnames: one from their father, which is listed first, followed by one from their mother. Only the father’s surname is used when addressing someone.
- In business, conversations begin with much small talk. Don’t rush to the agenda.
- Good conversation topics: family, hobbies, the Canal, basketball, baseball, soccer.
- Topics to avoid: the former Canal Zone, race problems, local politics, the Noriega era.
Resources
Government & Data
- CIA World Factbook — PanamaDemographics, economy, government
- ITA — Panama Market OverviewU.S. International Trade Administration
News & Culture
- Newsroom PanamaEnglish-language Panamanian news
- Visit PanamaOfficial tourism portal
Cultural Framework
- Cyborlink Hofstede ExplainerThe six-dimension model explained
- Hofstede Insights — Country ComparisonCompare Panama scores with any nation
- Cyborlink Resource PageBooks, world press, language tools