Panama’s political institutions are democratic, with competitive elections and orderly rotations of power. Freedoms of expression and association are generally respected. However, corruption and impunity are serious challenges, affecting the police, the judiciary, and the highest levels of government. Discrimination against darker-skinned Panamanians is common, and indigenous groups have struggled to uphold their substantial legal rights with respect to land and development projects.

Panama’s authorities continued to grapple with corruption in government and the private sector in 2016. More than 200 investigations were under way into wrongdoing linked to the administration of former president Martinelli, who had fled to the United States in 2015. The Supreme Court ordered his detention late that year, and in September 2016 Panama requested his extradition.

The Panama Papers, a trove of documents leaked from a Panama-based law firm and unveiled by media organizations in April 2016, provided further evidence of the country’s role in a global network of money laundering and other hidden financial dealings. That month, President Juan Carlos Varela created an independent committee to evaluate the financial system, but two prominent members resigned in August, accusing the government of restricting the scope of their work and failing to guarantee that their findings would be made public.

Independent or critical journalists reportedly faced editorial pressure from the government during the year. Both public officials and private businessmen regularly bring defamation cases against the media. In November, Dutch journalist Okke Ornstein was detained over a 2012 defamation conviction in a case filed by a Canadian businessman. He had been sentenced to 20 months in prison, though authorities had made no attempt to arrest him before. Following objections from press freedom groups and Dutch diplomats, President Varela signed a decree that enabled Ornstein’s release in late December.

The number of recorded homicides declined to 374 in 2016, from 434 in 2015. However, the prison population was at 121 percent of intended capacity, with pretrial detainees accounting for a majority of the total. The overall incarceration rate remains one of the highest in the world at more than 420 per 100,000 inhabitants.

A dispute between the government and indigenous communities over a hydroelectric dam project continued in 2016, prompting a series of demonstrations and the arrest of some protest leaders. A negotiated agreement was rejected by an indigenous congress in September, but a pair of Supreme Court rulings in December favored the project, and flooding of land above the dam was under way at year’s end.