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The culture of Panama is derived from European music, art and traditions that were brought over by the Spanish to Panama. Hegemonic forces have created hybrid forms of this by blending African and Native American culture with European culture. For example, the tamborito is a Spanish dance that was blended with Native American rhythms, themes and dance moves. Dance is a symbol of the diverse cultures that have coupled in Panama. The local folklore can be experienced through a multitude of festivals, dances and traditions that have been handed down from generation to generation. Local cities host live Cuban, Colombian, jazz, blues, salsa, reggae and rock performances. Outside of Panama City, regional festivals take place throughout the year featuring local musicians and dancers. Another example of Panama’s blended culture is reflected in the traditional products, such as woodcarvings, ceremonial masks and pottery, as well as in its architecture, cuisine and festivals. In earlier times, baskets were woven for utilitarian uses, but now many villages rely almost exclusively on the baskets they produce for tourists.

An example of undisturbed, unique culture in Panama stems from the Kuna Indians who are known for molas. Mola is the Kuna Indian word for blouse, but the term mola has come to mean the elaborate embroidered panels that make up the front and back of a Kuna woman's blouse. Molas are works of art created by the women of the Central American Cuna (or Kuna) tribe. They are several layers of cloth varying in color that are loosely stitched together made using an appliqué process referred to as "reverse appliqué".

The best overview of Panamanian culture is found in the Museum of the Panamanian, in Panama City. Other views can be found at the Museum of Panamanian History, the Museum of Natural Sciences, the Museum of Religious Colonial Art, the Museum of Contemporary Art, the Museum of the Interoceanic Canal, and the national institutes of culture and music.