We soar above the Central American isthmus and over the Bridge of the Americas — an ironwork structure that from the air looks like a giant clasp fastening North and South America together on either side of the Panama Canal. It has been eight years since my last visit to Panama City, and even from above I notice the city’s exponential upward growth. Upward or, perhaps more fittingly, skyward — the city now resembles something of a mirrored and glass condominium complex, although realtors and residents will tell you that the city now has a “Manhattan” skyline.

Sitting in the shade of a jacaranda tree one day, in a handsome plaza in the colonial Casco Viejo quarter of the city, my reflections on Panama’s history as key to Spanish imperial ambitions through Central and South America are interrupted by a raucously loud mobile phone. I cast a glance over my shoulder to see an impeccably dressed North American woman, sipping tonic water, sitting before a pile of office files. There’s no doubt about it, I think. She’s a real estate agent. And by the sound of things, business is good.

Her phone conversation reveals that she is brokering deals in Panama to North Americans. Right here, ice-cold Balboa beer in hand, surrounded by recently restored colonial- and republican-era architectural gems, I have stumbled upon a representative for the baby-boomer retiree denizens — arriving for the most part from North America and in smaller numbers from Europe — who are buying up affordable parcels of land and luxury apartments up and down the country.

To be perfectly honest, I wasn’t expecting the expatriate community to be so visible, but it occurs to me that Panama City has always consisted of an interesting mix of nationalities.

Panama was a Colombian department before annexation by the United States and development by French and American planners to construct the canal. It is the canal, the beating heart of the country and the capital city, that has defined the nation — over the years attracting French engineers and laborers from nearby Caribbean islands and as far afield as Albania and China.

Once the United States took a serious interest in the canal and engaged in the day-to-day security of this magnificent feat of engineering, a new breed of settlers arrived: the Zonians, Americans who lived in leafy suburbs along the banks of the canal in the American-run Canal Zone. The Zonians rarely integrated with the Panama that existed beyond their secure area; they lived alongside Panamanian land but in a world and society apart. The current-day expats, however, do seem more amenable to mingling.

Here in Panama with their pensions and some savings, they can buy a plot of land, build their dream home with a swimming pool and dine out every evening with no thought of a financial repercussion. In effect, they are “residential tourists.” It remains to be seen how the global economic slowdown and Panama’s elections will affect the numbers of arriving retirees. In a downtown restaurant favored by this crowd, however, conversations loop like a broken record regarding the affordability of the city and of real estate.

I am benefiting now from the United States’ role in developing modern-day Panama. Rather than check in to a hotel amid the downtown mayhem and rush-hour traffic of El Cangrejo or Marbella, I am staying in Balboa, the heart of the former Canal Zone. Here the streets are wide, a breeze takes the edge off the stuffy mornings, people tend to their lawns and there is an appreciation of personal space. A basketball net hangs from the eaves above a garage door: It’s like I’m in a parallel version of Americana with little resemblance to Latin America.

But there are differences. Over breakfast on a terrace, looking out at the exotic birds-of-paradise, I can identify a family of coati scavenging for food near the bottom of the garden, and up above a pair of toucans whistle through their colorful beaks.

Panama has done well in recent years; growth has stimulated a rising middle class and significant progress — although perhaps not as evident in the neighborhoods of Curundu and Chorrillos. Catch any Diablo Rojo — redecorated and revamped second-hand U.S. school buses — as it careens around rutted street corners (25 cents for a ride) and chat with a Panameño about the city’s situation: It’s likely his outlook will be less than rosy. One fellow passenger gave me his opinion of the ruling Revolutionary Democratic Party, President Martin Torrijos and presidential hopeful Balbina Herrera; it did not take a stretch of the imagination to understand that he backed the Opposition. With elections slated for May 2009, it appears at this point that the incumbent PRD may run away with the prize once again; the Opposition has yet to marshal its alliances.

Whatever the outcome, Panama City most likely won’t change much. Just as in previous decades when the Zonians did not interact with their neighbors across the fence, the expatriates of this decade will continue to move mostly in their own circles; and the tourists will stick to the beach resorts, high-rise condominiums and eco-lodges in the national parks.