Our flight from Cartagena to Panama City was due to depart at 7.42am and so we were up very early to get to the airport. This only takes 15 mins in a cab and its a fairly small airport to navigate. When we checked in the ground staff were very concerned that we didn´t have any booked onward transportation from Panama and you could tell they must get some grief from Panama customs for letting people through on one-way tickets. After some controlled arguing they let us proceed as we politely explained we can´t be the first people to have done this!

Our flight was only 50mins and given we couldn´t find any food in the airport we looked forward to our on-flight breakfast. We shouldn´t have...it was a museli bar! When we landed in Panama we realised we hadn´t written down our hostel address. whoops! We couldn´t even remember its name! The ladies at tourist information were very helpful and when they couldn´t guess which one it might be they pulled a PC out of a drawer and had IT come and install it so we could check our email for the confirmation. Service like that is rare!

We shared a taxi into the city with a guy from Ecuador so it would be cheaper. Watching the city take shape felt like we were looking at Miami...and we both only have this view from watching CSI Miami!! It is a seaside city with many highrise apartment and office buildings and lots of development in progress.

Our hostel, Mamallena, was very centrally located and in a fairly quiet street. It was run by a Tasmanian guy called Stuart who has the most sarcastic sense of humour and at times shouldn´t really be dealing with guests. Mark and he got on famously as they shared taunts to outwit the other and generally laughed at other guests. Stuart liked him so much that he offered Mark a job!

We only had 24 hours in Panama City as we planned to catch a night bus to the Costa Rican border the next day. Our first stop was Panama´s version of Borders where Mark found one of the biggest english book collections of the trip. He was salivating as he did his best to choose only a few.

In the afternoon Mark went to watch the football and I took a nap. When I asked him which bar he found the game in I wasn´t surprised to hear he had followed some others from the hostel to Hooters! He claims it was for the football, burgers and beer but we all know better!

We had some great sushi for dinner and were really impressed with all that the city had to offer in terms of restaurants and bars. If we had more time it would have been great to explore.

The next day we cooked our free pancake breakfast and mine came out as thick as a victoria sponge! Next time I´ll leave that to Mark. We met a couple from Frankston (out of Melbourne) at breakfast that had done a 4 hour city tour the day before and highly recommended it. So off we went with a kiwi and aussie guy and our taxi driver/tour guide, Rafael.

The tour took us to Panama Viejo first, which is the oldest spanish settlement on the Pacific coast of America. It was built in 1519 and destroyed by Sir Henry Morgan´s invasion in 1671. Morgan was essentially a pirate and wanted to capture Panama from the spaniards. The town was never rebuilt and these are the photos of ruins in the album.

From here we went to Casco Antiguo (Viejo), where the new town was bulit in 1673 after Panama Viejo was destroyed. The new town gave greater protection from the open seas via a reef and was walled off from the shore. This area is currently being rejuvenated as it had become an area that many of the poorest people lived in. Developers are now seeing opportunity here to renovate these colonial buildings and try to benefit, like Cartagena, from the tourist dollars that come in from promoting an old town as part of the city. Many had been completed and looked great. We walked through the safe parts and Rafael drove us through the problem areas which unfortunately have to put up with gang street crime.

Our next stop was the causeway. which was an area of reclaimed land that became a new development for parks, restaurants and a big marina. This is where many of the cruise ships let their passengers dock for day trips to the city. We saw some stunning yachts in this marina. Rafael described it as an area that many Panamanian´s come to exercise, picnic or dine with their families on the weekends. Historically, it had been an area owned by the US and occupied their administration buildings and expat houses for people running the canal.

The final stop of the tour was the Miraflores Lock which is the Pacific entry/exit point to the Panama Canal. This was definitely a highlight and very well organised. For $US8 you can enter the Lock area to view ships pass through, tour a museum that outlines the history of the canal being built and watch a movie that explains the governments plans for expansion of the canal. We both loved it and were pleased we got to see a massive Dutch cruise liner pass through as well as an Australian cargo ship. The liner had all the passengers out on deck so we waved to all the baby boomers with cocktails in their hands!

The ships only have 2 feet either side as they squeeze through the lock. Little carts on tracks guide them through but the ships have to create their own power. The cost of the passage is based on weight and is usually in the hundreds of thousands for cargo ships but this is a far smaller cost than if they had to go around South America. It was fascinating!

The US handed back the canal on the 31st December 1999 and since then Panama has been prospering from the income generated by the canal. It sounds like it was a shaky handover but they are now in the early building stages of expanding the canal at both lock points so that even larger liners can pass through. This is due for completion in 2014.

We ended our tour with Rafael after a great day and felt it was a really good use of time to see the city and its main sights so quickly. Panama is one of those countries that is currently prospering economically and is not feeling the full effects of the global recession like so many others. They had just had presidential elections the weekend before and a new president was elected. Rafael had pretty cynical views on this guy as he is from big business and worth billions with no experience in politics. He felt he had bought the people´s vote through the offering of free whitegoods etc so was politically pessimistic about the future but generally optimistic for Panama.

Later, we caught a cab to the bus station and were lucky to make it. Our taxi had no headlights and was about to break down so could only travel at about 20km/h. The rest of the traffic is much crazier and almost clocked us given they couldn´t see us on the road! Never again!

We thoroughly enjoyed our time in Panama City and were so pleasantly surprised by this. If we weren´t meeting the girls then we could have easily spent more time here and also exploring other parts of the country. We think it would be very interesting to visit again in 5 years to see how it has changed and hopefully prospered further.