The Republic of Panama has an elected government consisting of the executive and legislature. In 2004, elections held on the basis of universal suffrage and a secret ballot and deemed free and fair resulted in the Democratic Revolutionary Party gaining the presidency and control of the legislature.

Women hold 11 of 78 National Assembly seats, 2 of 13 Cabinet seats and senior positions in the justice system. There are 5 minority representatives in the National Assembly (2 Kuna Yala and 3 Ngobe Bugle) and 1 in the Cabinet. 1 additional seat was gained by an Ngobe legislator. Neither the Madugandi nor the Embera-Wounaan have any elected legislators.

Discrimination on the basis of race, gender, disability, language, or social status is prohibited, and the law is enforced, but prejudice is noted.
Police and prison guards are accused of abuse, and the executive and legislature are accused of corruption; in fact a poll ranked corruption as the third national problem.

Freedom of speech and of the press are guaranteed. There has been a decrease in the use of libel laws to threaten journalists. The media provide a variety of views without restriction, and the censorship board has been abolished. The Internet is not restricted, though there are ongoing investigations of computer crime and Internet pornography.

Trafficking to, from and within the country are reported. Panama is also a transit point for economic migrants. The government works with the ILO on trafficking issues.

Legislation prohibiting homosexuality is not enforced. Discrimination against persons with HIV/AIDS in employment and education is illegal but reported to be common. A gay rights group claims employers discriminate against gay people.

Education is compulsory for ages 6 to 11. It is tuition-free in primary and secondary schools. Other costs, such as uniforms, meals and transportation, have to be borne by families, which places great burdens on poor households and often forces children to leave school. Around 40.5% of Panamanians live below the official poverty line, and 25.6% live in conditions of extreme poverty.

Many children's opportunities are limited by traditions, financial and economic constraints, a lack of transportation, too few secondary schools and insufficient government resources. The easternmost province, Darien, and areas with high populations of indigenous groups suffer most from a lack of facilities.

It is estimated that indigenous and poor children have 7 to 9 years' fewer education than children from households with higher levels of income. Nationally, 64% of children aged 15 to 19 have some schooling beyond Grade 6, though in the Embera and Ngobé-Buglé areas that proportion drops to only 18% of children. Nationally, 1 out of every 5 men and 1 out of every 4 women from households with low levels of income have not attended school.

There are no mechanisms to guarantee access to education by poor and indigenous populations. On average, indigenous people have 3 years of schooling. Illiteracy rates among indigenous groups are about 40%. Among the Ngobé-Buglé, an illiteracy rate of 46% is reported, with 50% of women being illiterate. More girls than boys attend school after completion of compulsory education. Parents have the right to exempt their children from religious instruction in public school.

A 2-year programme begins at age 4. At this level 23% of education is private. The Net Enrolment Rate (NER) is 52%. There are 4,168 teachers (96% female) working at this level. The pupil/teacher ratio (PTR) is 18 : 1. About 75% of children from poorer households do not have access to ECE.

Education is compulsory for ages 6 to 11. Primary school begins at age 6 and continues for 6 years. At this level 10% of education is private. The NER is 98% (48% female). Of students who enrol in Grade 1, 81% reach the last grade of primary school. 5% of students repeat grades. At this level there are 17,882 teachers (76% female) work, 74% of whom are trained. Almost 66% of Panamanian teachers do not have university-level training.

Education is mostly provided in Spanish, and only half of indigenous children speak the language. Bilingual education has yet to be further developed. 75% of schools at this level are multi-grade. Access to textbooks and materials is very limited for poorer children: 30% of poor children in primary schools do not have textbooks. In indigenous areas, 60% of students do not have access to textbooks in any language. The PTR is 24 : 1.

Secondary education begins at age 12 and is completed in 6 years. At this level 15% of education is private. 32% of students in lower secondary and 53% in upper secondary education study in technical vocational programmes. The NER is 64%. 5% of students repeat grades. There are 16,109 secondary teachers, 9,418 (60% female) in lower secondary and 6,619 (53% female) in upper secondary. 83% of secondary teachers are trained. The PTR is 16 : 1 in lower secondary and 15 : 1 in upper secondary schools.

130,026 students (61% female) study in tertiary institutions, giving a Gross Enrolment Rate of 46%. 1,818 Panamanian students study abroad, mainly in the USA (958), Cuba (429), El Salvador (89), Costa Rica (72) and the United Kingdom (39). Only 3% of people from households with lower levels of income attend higher education programmes. The indigenous population does not have access to tertiary education.

Discrimination on the basis of disability is illegal but continues in society. Public schools do not have adequate facilities for children with special needs. Some steps have been taken to mainstream children with disabilities into the regular school system. Some 65 public schools have built ramps and admitted deaf, blind and mentally challenged children into school. Children with severe physical disabilities are not mainstreamed. Very few private schools admit children with special needs.

Since August 2005, persons with disabilities have free medical treatment. Mandatory employment of at least 2% of disabled persons has not been implemented because of the reluctance of employers to hire disabled workers, even though they need not be paid as much. A national plan to address disability is being developed. An NGO provides classes on arts and crafts to some minors in detention.

The law provides for the granting of asylum or refugee status in accordance with the 1951 UN Convention relating to the Status of Refugees and its 1967 Protocol, and the government has established a system for providing protection to refugees. Displaced persons from neighbouring Colombia have temporary protected status, but they cannot work outside assigned villages. Some have lived in Panama for years without formal refugee status. The government cooperates with the UNHCR and other humanitarian organisations in assisting refugees and asylum-seekers.

Discrimination is reported against blacks, indigenous people and other minorities. Newer immigrants also face overt racism; Asians are particular targets. Resident Chinese are reported to be treated as second-class citizens. Middle East and Indian residents also claim discrimination. Blacks are often denied admission to restaurants or other establishments and are under-represented in positions of power. Preferential hiring practices in the public and private sectors are reported to continue discriminatory practices. The President has formed the Black Ethnic Commission to develop a plan for the inclusion of blacks in all aspects of society.

Indigenous people have protection for ethnic identity and native languages. Bilingual literacy programmes are provided in indigenous communities; they also have the right to take part in decisions affecting their lands and the allocation of natural resources. The intellectual property rights to indigenous artwork are protected, but indigenous medical knowledge is not. Indigenous people have higher levels of poverty, disease, malnutrition and illiteracy. A United Nations Development Fund report notes that over 45% of the population in the Ngobé-Buglé reservation are illiterate.

Indigenous labourers on plantations work under worse conditions than their non-indigenous counterparts; housing and food are reported to be inferior and hours of heavy farm labour longer.

Reports do not indicate any restriction of academic freedom.

Discrimination on the basis of gender is prohibited; women and men have equal rights in family and property law. Equality of women in the workplace is encouraged, and equal pay for work of equal value is promoted, but women on average still earn 30% to 40% less than men.

Sexual harassment in employer/employee and teacher/student relations is illegal, and violators can receive prison sentences. Legal reforms to reduce sexual harassment are discussed. Women constitute the majority of workers in service jobs but fill only 40% of management positions. Discriminatory hiring practices based upon age and appearance are cited. Domestic violence is a serious problem.

The minimum age for employment is 14, though children as young as 12 can work at light farm chores for up to 6 hours a day if it does not stop them from attending school. Children under 15 cannot work if they have not completed primary school. Under age 18, minors cannot work more than 6 hours a day and cannot work at night. Child labour legislation is enforced in the formal sector, but not in agriculture or in the informal sector.

In rural areas violations of child labour legislation are common during the harvest. Farmers pay according to the amount harvested, so labourers bring their children to the fields to help with the work.

Indigenous families are most affected. Child domestic labour is also a problem. More than 6,000 children aged 10 to 17 work as domestic servants. An ILO survey estimates that 52,000 children aged 5 to 17 work in the informal sector. The government estimates 15,000 children are employed informally in urban areas. Some 45% of working children do not attend school. Gang recruitment and trafficking in children are increasing problems.

Workers have the right to form and join trade unions. In 2005, the ILO Committee of Experts asked the government to amend national legislation requiring a threshold of 50 civil servants to establish a public servants union. Some 13% of the labour force is organised. Private sector workers have formed unions; public sector workers have 19 associations. Public employees, except for those in essential services, have a limited right to strike. 50% of essential service workers must continue to provide service during strikes.

The ILO has requested that the government amend legislation to allow federations and confederations to have the right to strike. The Panama Canal Authority is autonomous; it prohibits the right to strike for all employees and allows limited collective bargaining. Collective bargaining is permitted in export processing zones. The ILO has asked the government to clarify whether workers in such zones have the right to strike.

The minimum wage rates are for regions and for categories of workers; public sector workers are excepted. The minimum wage ranges from US$0.82 (0.82 balboas) to US$1.56 (1.56 balboas) an hour. This does not provide a decent standard of living for a worker and family. Some 40% of the population works in the informal sector and earns below the minimum wage. The standard work week is 48 hours.