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The government is transferring that housing to private owners but is committed by treaty to conserve the natural rainforest areas of the former Zone to prevent the canal from silting.A few neighborhoods of upper-class walled villas have appeared.Survivors of the burning of Panama City in 1671 rebuilt a walled bastion on a rocky promontory to the west.This became the home of the colonial administration and the Creole elite, who lived in two-story mansions.After 1538, it was used as a land route to Spain's South American colonies and a transshipment point for Andean gold.From 1568 to 1671 there was series of pirate raids, and in 1671 Panama City was sacked by buccaneers under the command of Sir Henry Morgan.Together, these two groups constitute 70 percent of the population.

The isthmus runs east-west in the form of an inverted "S." Low mountains run through most of the country, leaving a gap in the center that is nearly at sea level.People of African descent account for 15 percent of the population.These "Afro-colonials" descend from slaves who were imported in colonial times. The "Afro-Antillean" group descends from Caribbean residents who came to work on the construction of the Panama canal.In 1977, after lengthy negotiations, President Jimmy Carter signed a treaty that abolished the Canal Zone as a colonial enclave, arranged for Panamanian ownership of the canal in the year 2000, and provided for the closing of American military bases.In 1925, the United States intervened in a revolt by Kuna Indians on the northeast Atlantic coast and established a tribal reserve. In the 1930s, the United States' military hired Kuna laborers to work at army bases.

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The Pacific coastline, with the Azuero Peninsula jutting south to define the Gulf of Panama, is longer than the Atlantic coastline.