The setter in Panama, say, and one Caribbean country (5)
I believe the answer is:
haiti
'caribbean country' is the definition.
(country in the Caribbean)
'the setter in panama say and one' is the wordplay.
'the setter' becomes 'I' (the person who set this crossword).
'in' indicates putting letters inside.
'panama say' becomes 'hat' (Panama is a type of hat).
'and' means one lot of letters go next to another.
'one' becomes 'i' (Roman numeral).
'i' placed within 'hat' is 'hait'.
'hait'+'i'='HAITI'
(Other definitions for haiti that I've seen before include "Caribbean isle" , "Island of West Indies" , "West part of Hispaniola" , "I hit a West Indian island" , "Republic on island" .)