Feb
Panama vs. Costa Rica
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I’ve been visiting Costa Rica since 2002, and since that time I’ve spent more than 24 months of my life there. I view Costa Rica as one of the most wonderful places in the world to live in and travel to.
But Costa Rica is not perfect — and no country is, really. But sometimes the shortcomings of Costa Rica are frustrating, so I’ve also looked into Panama, Costa Rica’s most affluent neighbor.
After three trips to Panama and a lot of research on the subject, I think the two countries have a lot in common, but also important differences.
Which place is better to live? It will be up to you to decide but here are the most important differences:
Pros for Costa Rica
Let’s start with where Costa Rica excels.
“No Artifical Ingredients”
Costa Rica has positioned itself to the world tourism market as an “eco-tourism” destination. “No Artificial Ingredients” is the advertising slogan. While it’s not always true, I can say that overall there’s a lot more environmental awareness in Costa Rica than in most places in the world. In large part, this is due to the influx of eco-loving expats that have bought huge tracks of lands in order to protect it.
A lot of the locals have also realized that they can make more money by bringing tourists to their area rather than clear-cutting forests or hutting endangered animals. Costa Rica protects over 25% of its territory in national parks.
Costa Rica is overall cleaner, especially when compared to Panama City. Panama City is three times the size of San Jose, so that brings advantages when it comes to conveniences but disadvantages when it comes to cleanliness.
San Jose is a pleasant city that looks more like a large sprawling town. The air is fresh and clean (which wasn’t so much the case years ago when toxic diesel fumes filled the air), and also considerably cooler than steamy Panama City.
Beyond “tree hugging”, Costa Rica feels more pristine and ridiculously beautiful. Panama has many amazing treasures and beautiful areas, but they are more remote and less accessible than Costa Rica, where tourism is a major industry.
More Tourism
Costa Rica gets over 2 million visitors per year, whereas Panama just about 800,000 (and a lot of them are business visitors going to Panama City). That’s a huge difference and it shows when you visit the country.
In Costa Rica, literally every beautiful area has been discovered and there are hotels of all classes to cater the tourism market. I find that an advantage in a certain way because there’s always something new to do in Costa Rica. I’ve been coming here for many years and I still haven’t visited every place I wanted to visit, nor done every tour or visited every attraction I wanted to see.
You can’t really get bored in Costa Rica, so it’s probably a better place to come for a short vacation than Costa Rica.
This also means that Costa Rica tends to be more expensive, and certain popular areas are overrun by tourists. But even in extremely popular places like Lake Arenal, I don’t find that to be a problem.
More Expats
More North American expats live in Costa Rica than almost any other country in the world. The country offered tempting incentives for retirees to come spend the rest of their lives back 20 or 30 years ago. Now most of these incentives are gone, but the country still remains open for retirees and many take advantage of the warm climate and lower cost of living.
There’s a lot of services available for expats, and more possibility to mingle with people who speak your language, which again can be viewed as an advantage of disadvantage.
More Fruit
For raw-food enthusiasts like me, it’s hard to beat the variety and quality of fruit you can find in Costa Rica. Panama has a lot to, but not nearly as much variety as Costa Rica. There are more farmer’s markets in Costa Rica all over the country where you can buy really fresh produce.
Organic produce is rare (compared to the States), but available if you know where to look for it. In Panama, every type of fruit I tasted was delicious (melon, pineapple, etc.), but the variety is more limited, unless you grow your own or can buy from local gardens.
No army
Simon Black, of the “International Man” newsletter writes:
Costa Rica has no military. Technically Panama has no military either, but with so many national police (green uniforms), tourist police (tan uniforms), and Presidential guard (black uniforms) running around the country with automatic weapons, they might as well be an army, albeit a poorly trained, dysfunctional one.
I doubt that the Panamanian police forces have the capability or iron will to go house-to-house against the locals, but Costa Rica lacks the manpower resources altogether.
Pros for Panama
Lower cost of living
Panama is cheaper than Costa Rica, by about 10 to 25%. For example, a plate of food at a local cafeteria in Panama will cost you around $2. In Costa Rica, the same would be $3-4. A medium to small watermelon at a farmer’s market in Panama is about $2. In Costa Rica, it’s $3-4 for the same size of watermelon.
The expat and tourist markets in Costa Rica have driven up the prices, so almost everything is a bit more expensive than Panama, from Real Estate to water bottles.
Also, Costa Rica has a fairly protectionist economy. They derive a lot of their tax income from import taxes on luxury items like cars, electronics, appliances, etc. It’s nearly impossible to find a good refrigerator in Costa Rica from a name brand you can trust, unless you go to the tax-free port of Golfito, where you’re allowed to get $500 worth of goods every year, tax-free.
Cars are also much more expensive because of these extreme import taxes. Panama also has import taxes, but not as high as Costa Rica’s. That’s also why almost every imported item is cheaper in Panama.
US Dollar
One major advantage of living in Panama is the US dollar (especially when you are getting paid in US dollars, like me). Simon Black, writes:
Panama is dollarized, but Costa Rica has its own currency (the colon); you might think this is a good thing, but the colon is so small and thinly traded that it essentially follows the dollar, without necessarily getting any of the benefits of being the world’s reserve currency.
The bottom line is that the Costa Rican colon (CRC) is essentially the worst of both worlds, and in a currency crisis, the country will likely be hit hard between the eyes.
A side benefit of using the dollar is the “change” situation. In Costa Rica, there’s a lot of heavy coins that take a lot of space for all these crazy amounts of colones you have to pay every day. For example, one dollar is worth about 550 colones at the time of the writing, and there’s no 500 colones bill. So you end up with a large amount of change that weighs a lot, but is worth almost nothing! In Panama, the one-dollar bill and small US coins solves the situation. I love that!
Way Better Infrastructures
The current president of Costa Rica, Oscar Arias, recently said “we’re a country of five-star hotels and one-star highways”.
He’s exactly right when admitting a big shortcoming of Costa Rica: the infrastructures. But I can say that in the last 6 years, the roads have improved at least 200%. But they still can’t compared to the Americanized, excellent roads of Panama.
Costa Rica is also burdened by a centralized, socialized public utility company called ICE (pronounced EE-SAY) that handles everything from cell phones to electricity to Internet. It handles everything… poorly!
The cell phone system in Costa Rica is at least 5 years behind the rest of the world, and even though the Internet works and you can get high-speed, truly fast Internet (In my books: 3+ MB per second) is impossible to find in most areas.
If one day your Internet crashes and you need help from ICE, all I can say is “good luck.” I’ve been lucky because I’ve rented places where the owners would handle the situation and wouldn’t mind standing in line for hours at ICE’s offices, but others have often waited several weeks often to get someone to come over.
Want to get a cell phone in Costa Rica? Good luck if you’re not a resident. You’ll need to open a local corporation and put the cell phone it the corporation’s name. Same for many utilities which are difficult to get as a non-resident.
What about the same in Panama? Just walk to the cell phone store and walk away 30 minutes later with your own phone that works!
Less Bureaucratic
Panama overall is less bureaucratic and more business friendly. It’s still quite corrupt like most Latin American countries, but getting things done is easier.
It’s also easier to immigrate to Panama and get your residency under a variety of programs.
Other Random Differences
Here are other little differences I noticed between the two countries.
- Safety: I cannot say for sure which country is safer. But I can say that Costa Rica is currently fighting a rising crime situation. Although I’ve never had any problems myself and I feel safe even in San Jose, increased crime seems to be a problem. I cannot tell for sure whether Panama has more or less crime, but some people say that Panama is at least better at fighting it.
- Taxi: The taxis are definitely better in Costa Rica. They use a meter (and are obliged to do so by law) so you know what you’re paying. In Panama, there are no meters and unless you know the exact fare, you can easily get ripped off.
- Noise. In Panama City, there’s a big honking problems. All drivers seem to be angry and impatient and constantly and madly honk. Costa Rica is at least 1000% better. However, Costa Rica has more dogs that bark all night.
- Society. Panama is a more conservative society, whereas Costa Rica is more Americanized in that regard. In Costa Rica, women wear provocative and revealing clothing (which does not suggest that they are promiscuous, but it’s just the local trend), whereas this would be frowned upon in Panama. In Costa Rica, you can wear shorts in the city and nobody will look twice at you, whereas in Panama wearing shorts in the city will quickly label you as an ignorant tourist or a hobo.
Both countries have a lot to offer. My fiancée and I are still unsure about where we want to ultimately spend most of our time. When we come back to Central America in 2011 after our trip around the world, we might consider Panama as our place of choice. But it would also be hard to leave beautiful Costa Rica behind. We’ll see then!
As part of my course “How to Move to a Tropical Paradise”, I have reviewed both countries in detail. Check it out here.
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Actually, neither Costa Rica nor Panama holds *any* allure, but rural western New York State sure sounds good. , something in Chautauqua, Cattaraugus, or Allegany counties. Great place to grow food, and a great place to stay raw and healthy! You keep Costa Rica and Panama, okay, Frederic? And don’t tell people to come to WNY, as it is GREAT that people don’t know how fine a place it is to live a rich and full life.
I personally enjoy the best of both worlds… North America in the summer and fall…, and Costa Rica in the winter
Thanks, Frederic
I like the fact that you gave a fairly thorough comparison of both Costa Rica and Panama. I have also read quite a bit from Roger Haeske and his sojourn to Panama and I think about the idea of checking them both out, although I like the idea of the
American Dollar and the lower cost of food in Panama.
Also, visit my blog http://www.rawsomegal.wordpress.com and read about my 42 day cleanse using coconut water and stevia in my water, and finished mid-January. I have also written about my transition back to food. I continue to write about health related topics and post daily (off on weekends). To read about my cleanse from day 1, click on December 2009. Share this with others who may be interested and I love to receive comments.
Namaste!
Chef Mindy aka Ageless Raw Beauty
Hmmm… neither Panama or Costa Rica sound that wonderful..
I want to be able to sleep in a cabin-like structure near a beach or near any body of water for easy access to swimming/tanning… be able to pick local produce or buy organic produce somewhere without having to travel too far.. I want to feel safe for me and my family.. I want high speed Internet access.. don’t care about cell phones.. I want a gym close by…. someone to keep the living quarters tidy… lots of “nature” type things to do.. like hiking, snorkeling, scuba diving, boating, fishing… nice hot weather during the day, cool at night… fresh air to breath… friendly people… natural disaster free… options for educating my children (strictly against the public school system)… that’s about it… where’s THAT place Frederick
Great sites BTW… very informative.. thanks!
Very useful comparisons, thank you! I have always been put off Panama after a very well travelled friend of mine classified it as “absolutely ghastly”, but loved Costa Rica. I have not been to either country but CR definitely has an allure for this sun starved Brit!
As always, you have given us really useful information that makes it much, much easier to get an idea of what it would be like to live in those countries. Really enjoyed reading it.
Hi Fred,
You’ve CLEARLY haven’t spent enough time in Panamá to give it a FAIR comparison to Costa Rica!
Comparing all the years you’ve spent in Costa Rica to a few weeks you’ve spent in Panamá City is like someone comparing their time spent in the beautiful Chiriquí Province of Panamá to spending a few days in yucky San José, Costa Rica–it’s simply not fair.
I really wished that you two came to visit us in Chiriquí last month–we could have showed you some places that would have COMPLETELY blown your mind!
Here’s a few videos for you to check out:
Boca Chica, Panama
http://www.youtube.com/watch?v=EWkYsc-CJRA
Raw Food Family In Panama By River
http://www.youtube.com/watch?v=Y8RxTCJwS5Q
Side by Side Comparison of Panamá and Costa Rica (border towns):
http://www.youtube.com/watch?v=32ffica9evU
I’m currently on week 6 here in Panamá (not including the 5 days I spent in Bocas del Toro last year) but I will be happy to submit to you my thoughts comparing the 6 months I lived in Costa Rica to the 6 months I’m currently living in Panamá (I can have it ready for you this summer).
I also have some more videos to share with you that were shot in Boquete and I got some videos shot at Playa La Barqueta and Volcán–I just need to upload them to youtube!
I have some pictures of Bocas Del Toro somewhere that I can send you that will AMAZE you!
We will take a trip there soon and I will shoot some videos for you!
I agree that Costa Rica is a BEAUTIFUL place, but you know what? Panamá is just as BEAUTIFUL, with better roads and services. There’s also LESS taxes (5% vs 16% in Costa Rica).
Now how can a place that charges TRIPLE the taxes that Panamá charges have roads in such POOR condition?
To be fair Panamá does have some bad roads (whenever I’m on them it reminds me of Costa Rica, lol) just as Costa Rica has some roads in GREAT condition (which will make me think of Panamá, lol).
Also home rentals are less in Panamá than in Costa Rica. For instance did you know that the place in Boca Chica rents for $1,000/month? How much do you think a similar place would rent in Costa Rica? My guess: $1300/month.
I really think that once you two return to Central America in 2011 you really should give Panamá a fair shot–by spending half a year here instead of half a month you will have enough information to write a FAIR article comparing the two countries–hey you can live near us so at least you will know some people who can show you around!
I’m sure in the next few months we are here we will learn about even MORE beautiful treasures that we can share with you.
Here’s a few places that we plan on visiting and things we want to do:
Rio Serreno (we drove on the mountain road towards Serreno and it was INCREDIBLE)
Chiriqui National Park
Bocas Del Toro
Whale Watching
Dolphin Watching
Visiting the ISLAND part of Boca Chica
Visiting other ISLANDS here in Panamá
Checking out the jungle in Darien
Visiting Cerro Azul
Well the list goes on and on!
Also in regards to transportation it’s EASY to get to all the great destinations.
Depending on one’s budget there are plenty of planes that can fly you to different destinations (just like Costa Rica) such as Air Panamá (www.flyairpanama.com) and Aeroperlas (www.aeroperlas.com).
There are also buses as well as some ferries or you can simply rent a car!
As for places that cater to tourists there are plenty here in Panamá.
If you want an EXPERT that can steer you to where all of Panama’s treasures are, simply contact Arturo:
Panama Horizons Tourism Agency
Apartado 0426-00829
David, Chiriquí
República de Panamá
Telefax (507) 774-4588
Celular 6578-9772
panamahorizons (at) hotmail (dot) com
http://www.panamahorizons.com
As for the number of North American expats here, there are PLENTY! We’ve met so many.
A great way to connect with some expats is through “Noticias” which is an e-mail list that notifies you of things to do in and around Boquete.
For instance, this Friday there’s a group that meeting to go bird watching in Boquete.
To subscribe send an e-mail to newslady (at) noticiasdeboquete (dot) org
As for FOOD variety I’ve been able to find almost every fruit and vegetable I found in Costa Rica (with the exception of sapodilla, but I don’t think they’re in season yet–they didn’t show up in Costa Rica until March when I was there last year and I expect that I’ll be able to find them next month here)
Also the supermarkets here in Panamá actually have more variety than the ones in Costa Rica. For instance you can buy raw medjool dates in the supermarket, Rey.
The only dates that are in Costa Rica are the cooked variety (pitted dates have been steamed).
Also I’ve found honeydew melons in Rey (never saw honeydews in Costa Rica) as well as cherries (don’t recall seeing cherries in Costa Rica) and there are a few other fruits I never saw.
A recent green that Rey now carries is Baby Spinach from California as opposed to that strange “espinaca” that’s grown in Costa Rica and Panamá! Also Rey has Baby Romaine and California Spring Mix.
Fortunately Cerro Punta grows similar greens to make Spring Mix so there’s no need to pay extra for the imported variety.
The Persian Cucumber is grown here at it’s one of Andrew’s favorite snacks.
Now there is something that Costa Rica has that is better than Panamá–the government schools are better in Costa Rica. This is a non issue for us since we’re homeschooling Andrew.
If I’m not mistaken the PRIVATE schools are equal in both countries.
Well I can go on and on …
To sum things up although I enjoyed living in Costa Rica (I really did) I feel that Panamá is a better fit especially since both countries are equally beautiful, the cost of living in Panamá is less (and you get better services, too), I don’t have to deal with those pesky colones and I don’t have to hear “Pura Vida!” dozens of time a day (sorry, but it got old QUICK for me)
So will we be seeing you both in Panamá next year?
Your future neighbor,
Karmyn
http://karmynmalone.com
“Team Panamá”
Thanks Karmyn! I thought my article was pretty much “pro-Panama?” In any case, I think Panama has a lot of beauties. There’s just more “off the tourist path” than Costa Rica. About schools, from what I’ve heard people who want alternatives schools like Waldorf (spelling?) go to Costa Rica because there’s more of that. Hey we might visit you in 2 months after all!
Hi Fred,
We’re looking forward to having you both here!
We’re coming up to Costa Rica sometime next month–we’re hoping to come up during the Orotina fruit festival. Do you have any idea when it is?
Anyway we’ll see ya next month!
Love, Karmyn
A couple more notes on Panama.
I’ve found the tomatoes here to be better quality than Costa Rica. But they still aren’t as good as the tomatoes in the United States.
Also I find the greens here to be better quality and or more available on a regular basis. But I only have about 3 weeks of experience in Costa Rica. So who knows maybe that’s not true and maybe it depends where you are. Though the spinach is similarly as bad as in Costa Rica.
It did seem like there were more kinds of tropical fruits available in the big farmer’s markets of Costa Rica. But we’ve yet to explore the market in Boquete. Of course there are fruiterias all over the place and sometimes they have their own unique stuff. You’ve just got to know where to look.
We want to try this yellow kind of avocado that’s supposed to taste like butter. We learned about it while taking a trip to Volcan and just asking the woman what kind of fruit and produce she grew on her property.
I am also able to consistently get frozen strawberries and blueberries at the Price Smart. Not sure if you can get those in Costa Rica. Also many supermarkets at least carry frozen strawberries. I use these regularly in my smoothies.
We’ve also had a much better overall experience with taxis here than in Costa Rica. We now have a driver we’re friends with in which we can have his driving services for $10 an hour.
We go shopping and he waits for us if we know we’re going to be in and out quickly. Then he takes us to our next destination. If we plan to stay a long time we just call him to pick us up and or we just get another taxi.
In fact, yesterday we left our bags in his trunk while we went shopping in the mall and he picked us up over an hour later. We’ve become quite friendly with him and we trust him.
But otherwise they’re very honest here in our area and if we’ve been ripped off it may have been for an extra dollar at most. However a cabbie in San Jose, Costa Rica was trying to rip Karmyn off by charging her triple the normal fair for a long trip.
The taxis are plentiful and yes they don’t use meters but the rate is quite reasonable and once you start using the taxis regularly you know what the going rate is and you give the money to the driver before he even asks you about it.
Either place a little street savvy will take you a long way.
And one other thing.
The shopping here is incredible. So many great and really modern and well equipped stores. Anyone who’s been in Costa Rica’s supermarkets will be shocked when shopping at El Rey. I couldn’t believe how many of the brands I’m used to from the US they carry there. You can simply get way more stuff here than you can in Costa Rica and at great prices. Even the imported stuff is usually a similar price you’d pay for it in the United States.
Not only is the food a lot cheaper but much of the other stuff you can shop for is a lot cheaper as well. And Costa Rica doesn’t even come close in the shopping department (even non-supermarket) as far as my experience there.
Can get a nice queen size bed mattress for around $200. Not a cheap foam one.
The other night we were able to get a great fruit and vegetable cuber like the Vidalia Chop Wizard which sells on the infomercials. We got it at the Do It Center for about $7.50 (we were really surprised to find it there) and yet the same thing from Amazon.com will cost you about $25 plus shipping these days.
Great shopping and cheap prices for most things. And yet I haven’t even explored the shopping in Panama City which I heard is much cheaper and with better selection than in our area.
Finally the Internet. Seems to me not much better than in Costa Rica. But I believe in the Panama City area you can get much faster connections.
In this area 2megs per second seems to be around the tops unless you get a more expensive business account which can give you 4 megs.
Cheers,
Roger Haeske
The 42-Year Old Teenager
Thanks for bringing up “The Gringo Tax” Roger!
I experienced “the gringo tax” in both countries–this is when they charge you slightly more for an item just because you’re not a local.
Typically you will be charged a few cents (or colones) more for something, which is fine because it’s such a small amount and few would argue over a few cents.
I had an EXTREME experience with the gringo tax while in Costa Rica where a cabbie tried to charge me $225 for a taxi ride from the Alajuela aiport to Atenas–the ride should have only cost between $20-$25–that’s 10 TIMES the normal fare!
Needless to say that cabbie did not get the $225 he wanted–he got $25 and an “F-YOU”
Not to say this couldn’t happen in Panamá, but whatever country you choose just be aware of the gringo tax.
The easiest way to avoid this is to ask what the rates should be for various fares. You can ask the receptionist at your hotel, for example.
Also ask people you meet if they know of any drivers with reasonable rates–they will give you the cell phone numbers of honest drivers–I have a few contacts myself.
Just because the taxis in Costa Rica are supposed to use meters it doesn’t mean they work! Although sometimes they don’t work, just be aware that there are times when they do work and the driver refuses to use them.
I’ve had some interesting over charge stories from my adventures in San Jose (this is where the gringo tax is most likely to happen)
Once I got into a cab and the driver had no idea how to get where I needed to go. He took my directions and went to where he thought the place was. Once we realized that it was wrong we drove around asking local people where to find the place.
Ticos (Costa Ricans) don’t use the term “No sé” (I don’t know) very often so they will tell you anything even if they have no idea! (Panamanians are familiar with the term, though)
Needless to say we were led on a wild goose chase that ended up costing me around 4500 colones ($8)
The cab fare back was less than $1 (500 colones)
Pura vida! (What else can I say, lol)
I must say that most of the above ever happened to me… In 7 years of coming to Costa Rica. Except the occasional confused taxi driver. Could it be because I can speak SPanish?
Maybe that helps, Fred, but why that driver thought that I would pay $225 for a $25 cab fare is beyond me!
Hi Fred,
I found an article I wrote last year about the first time Andrew and I visited Panama.
I put it on my blog:
http://karmynmalone.com/?p=504
I’m finding a lot of articles about the time we were in Costa Rica as well–reading them is bringing back such FUN memories!
Here’s a great website that lists things to do in Panamá:
http://www.gonomad.com/destinations/0012/mitchell_panama.html