assy at Avenida Balboa and
Calle 38, Apartado 6959, Panama City 5 (mailing address is Box E,
APO Miami 34002); telephone p507o 27-1777

Flag: divided into four, equal rectangles; the top quadrants are white
with a blue five-pointed star in the center (hoist side) and plain red, the
bottom quadrants are plain blue (hoist side) and white with a red five-pointed
star in the center

- Economy
Overview: The GDP contracted an estimated 7.5% in 1989, following a
drop of 20% in 1988. Political instability, lack of credit, and the
erosion of business confidence prompted declines of 20-70% in the
financial, agricultural, commercial, manufacturing, and construction
sectors between 1987 and 1989. Transits through the Panama Canal were
off slightly, as were toll revenues. Unemployment remained about 23%
during 1989. Imports of foodstuffs and crude oil increased during 1989,
but capital goods imports continued their slide. Exports were widely
promoted by Noriega trade delegations, but sales abroad remained
stagnant.

GDP: $3.9 billion, per capita $1,648; real growth rate - 7.5%
(1989 est.)

Inflation rate (consumer prices): - 0.1% (1989 est.)

Unemployment rate: 23% (1989 est.)

Budget: revenues $598 million; expenditures $750 million,
including capital expenditures of $NA (1989 est.)

Exports: $220 million (f.o.b., 1989 est.); commodities--bananas 40%,
shrimp 27%, coffee 4%, sugar, petroleum products;
partners--US 90%, Central America and Caribbean, EC (1989 est.)

Imports: $830 million (f.o.b., 1989 est.); commodities--foodstuffs
16%, capital goods 9%, crude oil 16%, consumer goods, chemicals;
partners--US 35%, Central America and Caribbean, EC,
Mexico, Venezuela (1989 est.)

External debt: $5.2 billion (November 1989 est.)

Industrial production: growth rate - 4.1% (1989 est.)

Electricity: 1,113,000 kW capacity; 3,270 million kWh produced,
1,380 kWh per capita (1989)

Industries: manufacturing and construction activities, petroleum refining,
brewing, cement and other construction material, sugar mills, paper products

Agriculture: accounts for 10% of GDP (1989 est.), 26% of labor
force (1987); crops--bananas, rice, corn, coffee, sugarcane; livestock;
fishing; importer of food grain, vegetables, milk products

Aid: US commitments, including Ex-Im (FY70-88), $515 million;
Western (non-US) countries, ODA and OOF bilateral commitments (1970-87),
$568 million; Communist countries (1970-88), $4 million

Currency: b