Panama City is a smelly, busy, glitzy and fascinating place. Cars play a constant game of chicken as they weave and barge their way through the maze of roads winding betwenn the rows upon rows of skyscrapers. Cars beep, lights flash on some skycrapers while others remain mysteriously deserted. They say that many of the blocks here are built with drug money and don´t really have people living in them.

A night out in a bar in the gringo district will typically involved a top quality covers band, waiter service and a few prostitutes swinging their implants past your face. This gets a bit seedy when you see the guy who was the computer geek at school with his arm around a stunnin ggirl twenty years his junior. But who cares? Everyone here seems to be on holiday, even if they work here!

It is a very freindly city. OK so we didn´t walk throught the dodgy areas, and we have seen some from the bus windows. But this is a truly multinational city. Spainish, French and North Americans have all had a big say in this country at various times in the past.

And now Panama can welcome foreigners on its own terms, rather than on theirs. For on December 30th 1999 they finally got their land back. Or rather, a narrow strip of land that got snuck off them by the US a hundreed years ago - the Panama Canal.

A fascinating achievement, amazing to look at, and surely one of the wonders of the modern world. Panamanians are rightly very proud of this canal. Everyone thought they would mess it up when they took over. Quite the opposite. It´s bringing them in millions of pounds in profit per day and will soon be expanded in to a dual carriageway for boats, thus doubling its cargo capacity. We went therre yesterday anbd watched a container ship and cruise liner go right past our noses.

Meanwhile Lucy and I prepare to go by boat tomorrow to Colombia, via the San Blas Islands.

We stay in a hostel that is actually more like an apartment. Airy, clean, with a lovely kitchen, a lovely couple running it, and a swimming pool on the roof. How cool? Very. How expensive? Quite. But hey, we´re on holiday!