A wide inlet of the Pacific Ocean on the southern coast of Panama. a country on the Isthmus of Panama, a narrow piece of land connecting Central and South America, between Costa Rica and Colombia. Population: 2,846,000 (2001). Capital: Panama City. The Panama Canal, a long, narrow stretch of water, was built across the country in 1914 in order to allow ships to sail between the Atlantic and Pacific Oceans. officially Republic of Panama Country, Central America. Republic of Panama Panama Canal Zone Panama Canal Panama City