Same, same but different, Panama vs Costa Rica

If you ever thought, as I did, that two teeny tiny (in size and population) neighboring Central American countries sharing culture, geography, history, nature, roots, colonization, language and much more, the characteristics that (at least on the paper) appear to be identical or at least very similar… you’d be wrong. So, so wrong. For, as far as I know, there are no two other countries having such potentials of being twin brothers or sisters that differ as much as Panama and Costa Rica.

For many years both countries top the lists of ‘best retirement destinations‘ and are home to large expat communities, primarily from the US and Canada. To compare the two is almost impossible. It all comes down to personal preferences. It all depends on who you are, what type of lifestyle you’re looking for, your economy, how much heat (literally) is too much and even your age.

But if I were to attempt generalization, I’d say Panama may appeal more to the younger generation while Costa Rica to somewhat older not only in age but also in experience (been there, done that).

The Vibe and The People

Panama: The ‘talk of the town’ is that Panama City is becoming a new Miami, and the city loves that talk. Panama is all about business and making money… at the same time, Panama is also about partying and reggaeton (latino reggae). When the music plays the Panamanian dance. Period. If you don’t you must be sick for there is no other excuse.

The predominant ethnic group is Mestizos, European ancestors are in a minority. The economy is stable, plenty of jobs attracting the less privileged from neighboring countries (Colombians, El Salvadorians, Mexicans). Old, run-down neighborhoods (like Casco Viejo) are being refurbished to attract young and hype hipsters with deep pockets. High tempo. Work hard and play hard.

Work, nightlife, party, dance, reggaeton. Latino way. All the way.

Costa Rica: Small town vibe in a democratic setting. Costa Rica is all about Pura Vida (pure life). Lower tempo and chill. Nature, environment, and bio-culture. The greenest country in the world where almost all electricity is generated from green sources. Costa Rica is also the happiest country in the world – according to National Geographic 2017. Well educated, mostly from European ancestry population. No Latino blood vibe as far as I could see but polite and softly spoken locals hiding their temperament and emotions well.  Salsa and romantic Western tunes are their favorite music. And… surprise… surprise, most drivers follow traffic rules. Did you know Costa Rica is lacking its own army?

Maximize joy, minimize stress and live the life to its fullest. Pura Vida.

Public infrastructure and wellbeing

Panama: Filthy and noisy. Rubbish everywhere. Plenty of stray cats. Sidewalks are either missing or are full of potholes, even in front of 5-star hotels.

Not once did I dare to purchase anything from street vendors. Meat and vegetables in local supermarkets look disgusting. For better quality of goods, you need to shop in Western supermarkets. Food, like anything else, is very expensive, more expensive than in Western countries which is quite shocking for the visitors as they do not expect to find developing country to be more expensive than their own. Expats often fly to Miami to shop, especially electronics, as it is more economical than shopping locally even though they need to buy an airline ticket.

Panama is doing its best to drop the third world country label, but as long as they do not clean up their act I cannot see that happening anytime soon. For me, Panama is a presumptive first world country in a third world country infrastructure.

Costa Rica: Nice and clean. No rubbish anywhere.

Fresh, tastefully presented and packaged goods (meat, veg, and fruit) sold in the clean and welcoming hole-in-the-wall family-run corner shops. Supermarkets, even the local ones, are of a good standard. Many biological shops. Was never restrained from purchasing anything due to contamination or poor hygiene scare. Food is more expensive than in Panama but if you shop locally and at farmers markets, you will manage just fine. Great quality, great taste, and much better prices than in supermarkets.

Costa Rica is the most expensive Central American country. With a bit of planning you can still make it on a budget should you choose to do so. (Retirement on a budget)

The Weather

Panama: Tropical – all year around.  Approx 30C. Could be very nice and pleasant but it isn’t due to high humidity. If you add the factor it feels more like 40C or even higher and very muggy. Doesn’t get much better at night. Temperature drops few degrees but not humidity. Hardly any breeze. Rains a lot. When it doesn’t rain it pours. Best places to settle down are by the sea or on higher latitudes where you get more breeze and less humidity. An air con is a must, also at night.

On a positive (and negative) note, even though Panama City is a coastal town there are no beaches in the city – well, there are two (or three?) teeny tiny ones in the Casco but unusable. Neither are there any nice beaches in the proximity of the city. The closest one, Coronado, popular with weekend visitors and expats, is only (?) a two-hour drive away.

Costa Rica: Also tropical. Officially. In reality – total shock – COLD during the winter months. I was not prepared for that. San Jose and other towns in the Central Valley are in various microclimates zones due to surrounding mountains … and I hate them all. Hard, stormy, freezing cold winds go right through you. No need for air con, you will not find any either. Instead, you’d need a warm sweater and socks, so don’t forget to bring them. It can get warm on a sunny and windless day, the nights, however, are always chilly and you’d need a warm blanket/duvet to survive. You may even need two blankets if you live in a house with natural air con.

On a positive note, it only takes an hour drive to warm up as it is all it takes to get to on one of the Costa Rican’s lovely beaches where the temperatures (and humidity) are higher. The Caribbean coast is warmer than the Pacific one, not by much. Summer months are warmer but rainier.

Money Issues

Panama: Panama has (so conveniently) employed USD as an accepted alternative to native Balboa. All prices are in USD. You get paid in USD and you pay in USD. And you also get the change in USD – for the most part.

Occasionally you may get few Balboa coins, however, the exchange rate of Panamanian official currency Balboa is tied to US dollar (1 ISD = 1 Balboa).

In ATMs you withdraw USD. Each withdrawal will cost you 5.25. USD in service/transaction fees if you use a foreign card.

Costa Rica: In Costa Rica, the official currency is Costa Rican Colón but USD is widely accepted. Most supermarkets, malls, restaurants, and taxis accept USD, however, you get the change in local currency at the exchange rate that is lower than in banks. Hotels and tour operators quote USD but you can pay in either currency.

Coins are huge, heavy and not worth very much. You need a big bag and/or deep pocket to carry them.

In ATMs you withdraw Colons or USD. Each withdrawal will also cost you 5.25. USD in service/transaction fees if you use a foreign card.

Summa Summarum

So, where do the expats, the retirees fit into that equation?

If you’re a young(ish) entrepreneur with the not too bad economy you may want to give Casco in Panama City a try. But once you retire (or even earlier) you’d be looking for a place on the beach, maybe Coronado or David. You may also want to live in a cooler place in the highlands e.g. Boquete. Or …

You will follow many other expats’ footsteps and move to Costa Rica where most of the retirees end up eventually.

In Costa Rica, the expats/retirees live about everywhere, in the mountains, on the beach and even in the Central Valley. For most, the Pura Vida way of living is simply irresistible.