The name Panama is very likely to evoke memories of the massive canal connecting the Atlantic and Pacific oceans, the 1980s rock song by the group Van Halen and the straw hat which has the country’s name attached to it. Yet in reality, the "Panama hat" is not a traditional product or garb of Panama but rather Ecuador and American president Teddy Roosevelt adorning the hat on various visits to the canal during its construction resulted in the term "Panama hat".

A visitor to today’s Panama will surely find more than enough activities and attractions to make up for the lack of such hats—a perfect place to start a tour of Panama is the canal itself located on the outskirts of the capital, Panama City. The small entrance fee includes a multimedia presentation on the history of the canal, and afterwards visitors can languish on the roof of the welcome center and watch ships of carrying nationalities make the slow, smooth and expensive transition from the Atlantic to the Pacific ocean and vice versa. The ultra-sleek capital with its stunning skyline does have its fair share of classical charm be it from the ruins of the enclave set up by early Spanish explorers in the 16th century to the streets of Casco Viejo (Old City) which closely resemble the ancient quarters of New Orleans and Havana.

Despite the huge influence that the narcotics trade from neighboring Colombia has on Panama in terms of cash laundered through many of the banks in Panama City (which supposedly is also the main source of funding for the impressive skyline there), visitors taking common sense safety precautions should not have much to worry about in terms of crime. A friendly local or a taxi driver in the capital is a very good way to steer one away from any possible danger zones.

For those in a "shop till you drop" mode the short and scenic train ride from Panama City to the Free Trade Zone of Colon is a sure treat—bargain prices for new electronics are the biggest draw there. Boquete is a scenic little town in Western Panama that has gradually become overrun by American retirees since being named in various US magazines as one of the top places in the world to retire to. Most young budget travelers (aka "backpackers") make sure to include a stay in the Bocas Del Toro archipelago off the Caribbean coast of Panama. Isla Colon (Colon Island) is the part of the archipelago that draws in the most foreign tourists with its abundance of cheap lodging, jumping nightlife and fantastic water sports, while other islands of BDT cater more and more to free spending eco-tourists.

The name Panama is an indigenous word meaning "abundant fish" and one famous fishing fanatic from Hollywood was so impressed by this country that he bought an island off the coast of it! Today John Wayne Island (Isla Taborcillo) is open to guests with the prior approval of its current owner. Another unique attraction for those willing to take a short flight off the mainland are the San Blas Islands where indigenous Kuna Indians still live much the same way they did before the arrival of European conquistadors.

American visitors will feel more at home in Panama than perhaps anywhere else in Latin America as this nation owes its independence to America (it was originally a part of Colombia) and today the economic and political bonds between the two nations remain so strong that Panama uses the American dollar as an official currency.

Arya is a freelance travel writer/photographer, and a post-graduate student to boot! His website is www.hetrippin.com