The Panamanian Federation unites most of West Panama under a single political body. Governed more as a loose confederation of settlements than as a single republic, the federation has nevertheless brought peace and order to what had been a lawless region. It is commonly known either as Panama or West Panama.
The Federation is recognized by many of the independent nations of the Americas, most notably Mexico and Costa Rica, which are also important sources of aid. Its status is complicated by Colombia, which claims the entire territory of Panama. But Colombia has not attempted to exert any control west of the Panama Canal, except for the island of Coiba. Colombia's claim is nominally recognized by the South American Confederation, though as the Federation has grown many SAC member nations have urged Colombia to drop its claim. The other major world powers, namely ANZ and Siberia, recognize neither Colombia's claim nor West Panama's status as an independent state.
The current federation is in fact the fourth attempt to create a federal government for the region. The federations of 1991 and 1996 collapsed due to infighting. The third, founded in 2006, was an extremely loose organization that had only three members, along with Costa Rica which acted as an observer. Most of the independent communities of West Panama saw the need for a new federation in 2012, when Colombia effected its takeover of East Panama and occupied Coiba. The fourth Federation began on 20 June 2013.
The states are ranked according to their tax contributions, which are based on an assessment of the size of their economy. In addition to the members, Costa Rica still acts as a permanent observer in the Assembly.
|Rank||Name||Official designation||Capital||Government||Membership in past Federations|
|1st (1991)||2nd (1996)
|2||Azuero||Republic||Las Tablas||Democracy with limited franchise||✓||✓|
|3||Bocas del Toro||Province||Bocas del Toro||Democracy||✓||✓||✓|
||Comarca||Butäbiti||Democracy with traditional characteristics||✓||✓|
|10||Veraguas del Caribe||Town (Pueblo)||Veraguas||Paternalistic||✓|
|11||El Valle||Cooperative||El Valle||Direct democracy|
|12||Santa Fé||Cooperative||Santa Fé||Direct democracy|
West Panama has mostly adopted the symbolism of prewar independent Panama. It has replaced the national motto and coat of arms, which largely represented the Canal. Its new motto, "By their own virtue," is a quote from Simón Bolívar describing the first attempt by Panamanians to declare independence in 1821. It represents the spirit of self-determination that animated the movement for reunification.
Despite its name, the Federation is governed as a loose confederation. Each member state acts with virtual independence. The Congress has authority only over matters that affect interstate and external relations. The President is considered the Head of State, but he is chosen by the Assembly and his role is more like the secretary-general of an international alliance. The federal government does not impose direct taxes; instead, each state is required to contribute money in proportion to the size of its economy.
Each state is free to choose how it names its delegates to Congress. Many of the member states, like Veraguas and Hicaco, are still under authoritarian military rule; in these the ruling junta picks the delegates. Others like David and Azuero have regular elections. In the smaller, newer members of Santa Fé, El Valle, and Coclecito, citizens choose their delegates informally via a form of direct democracy.
Being both better funded and less volatile than its predecessors, the current government has built up a modest federal bureaucracy with several ministries, whose heads form a restored Cabinet that reports to the President. The Ministry of Economy is perhaps the most important; its role is to assess the tax contributions that each member state must provide. The Ministry of Public Works has also been very active, responsible for restoring the highways and postal service. The Foreign Ministry is active in many countries throughout the Americas; its top priority is still to obtain diplomatic recognition from the world community.
The great powers, namely the ANZC and Socialist Siberia, were reluctant to get involved in Panama after the new Federation was established. The memory was still fresh of the Canal Crisis of 2005, when war had looked likely between the two and South America. However, both still rejected Colombia's claim to all of Panama, leaving the door open for an independent government with a credible claim to legitimacy. So for now, ANZ and Siberia recognize neither the Federation's nor Colombia's claim to West Panama.
The Fourth Federation has found much more support in the non-aligned nations of the region. Costa Rica, West Panama's champion for years, of course immediately recognized the government. In the next few years the federation obtained recognition from the Caribbean Federation, which includes the United States Atlantic Remnant. A real breakthrough came in 2017 when the government exchanged ambassadors with Mexico. Mexico is by far the strongest non-aligned power in the hemisphere, and its support has helped change perceptions of the country.
Panama has attempted to reach out to friendly South American nations. Chile and Peru in particular have become hostile to Colombia's ongoing territorial ambitions in Panama; they see it as an impediment to trans-Pacific relations, which are increasingly important to their economies. To a lesser extent, the landlocked countries Bolivia and Paraguay, as well as Brazil, would rather see Colombia resolve the issue quickly and peacefully. But so far no SAC member has been willing to take the step of formal recognition.
Venezuela, Ecuador, and Argentina have been stalwarts for the Colombian claim. Venezuela and Argentina have also occupied new territory since 1983, namely western Guyana and the Falklands, and are inclined to support Colombia's ambitions. Ecuador also has strong interests in Panama as a permanent member of the Canal Zone Governing Commission, or CGZCP.
CARICOM was established in 2020 as a regional organization not aligned with any of the major blocs; and specifically it is intended as a counter to the expansionism of some of the South American nations. The organization was a perfect fit for West Panama as its membership closely overlapped with the list of nations recognizing the federation's independence. And as Costa Rica was not interested in membership, it allowed the government to participate in international affairs on its own without relying on its usual sponsor. Panama became a member in 2021.