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Panama was inhabited by several indigenous tribes prior to settlement by the Spanish in the 16th century.On January 28, 1671, the original city (see Panamá Viejo) was destroyed by a fire when privateer Henry Morgan sacked and set fire to it.The city was formally reestablished two years later on January 21, 1673, in a peninsula located 8 km (5 miles) from the original settlement.With the backing of the United States, Panama seceded from Colombia in 1903, allowing the Panama Canal to be built by the U. Revenue from canal tolls continues to represent a significant portion of Panama's GDP, although commerce, banking, and tourism are major and growing sectors.In 2015 Panama ranked 60th in the world in terms of the Human Development Index.
Panama broke away from Spain in 1821 and joined a union of Nueva Granada, Ecuador, and Venezuela named the Republic of Gran Colombia.