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The walled city survives as the Casco Viejo, and the areas adjacent to it are now densely populated slums.
Because the former Canal Zone abuts the old city on the north and west, the growing population was forced to fan out along the bay to the north and east.
There are four officially recognized Indian ethnic groups (the Kuna, Guaymi or Ngawbe, Embera, and Waunan), which number fewer than 200,000.
At that time, it was referred to as the Castilla de Oro, a source of gold and potential converts.
From 1519 through 1538, the area that is now Panama was a base for soldiers sent to conquer the Andean civilizations in South America.
The presence of this judicial-legislative-executive government body led to the building of a sense of independent nationhood. Unlike the former Canal Zone, the government has always repudiated racism and segregation.
Because of its nationalistic policies, the government also forbade the use of English in public schools, thus discriminating against the black population.