he US allowing for the construction
of a canal and US sovereignty over a strip of land on either side of
the structure (the Panama Canal Zone). The Panama Canal was built by
the US Army Corps of Engineers between 1904 and 1914. On 7 September
1977, an agreement was signed for the complete transfer of the Canal
from the US to Panama by the end of 1999. Certain portions of the
Zone and increasing responsibility over the Canal were turned over
in the intervening years. With US help, dictator Manuel NORIEGA was
deposed in 1989. The entire Panama Canal, the area supporting the
Canal, and remaining US military bases were turned over to Panama by
or on 31 December 1999.

Papua New Guinea
The eastern half of the island of New Guinea -
second largest in the world - was divided between Germany (north)
and the UK (south) in 1885. The latter area was transferred to
Australia in 1902, which occupied the northern portion during World
War I and continued to administer the combined areas until
independence in 1975. A nine-year secessionist revolt on the island
of Bougainville ended in 1997 after claiming some 20,000 lives.

Paracel Islands
The Paracel Islands are surrounded by productive
fishing grounds and by potential oil and gas reserves. In 1932,
French Indochina annexed the islands and set up a weather station on
Pattle Island; maintenance was continued by its successor, Vietnam.
China has occupied the Paracel Islands since 1974, when its troops
seized a South Vietnamese garrison occupying the western islands.
The islands are claimed by Taiwan and Vietnam.

Paraguay
In the disastrous War of the Triple Alliance (1865-70),
Paraguay lost two-thirds of all adult males and much of its
territory. It stagnated economically for the next half century. In
the Chaco War of 1932-35, large, economically important areas were
won from Bolivia. The 35-year military dictatorship of Alfredo
STROESSNER was overthrown in 1989, and, despite a marked increase in
political infighting in recent years, relatively free and regular
presidential elections have been held since then.

Peru
Ancient Peru was the seat of several prominent Andean
civilizations, most notably that of the Incas whose empire was
captured by the Spanish conquistadors in 1533. Peruvian independence
was declared in 1821, and remaining Spanish forces defeated in 1824.
After a dozen years of military rule, Pe