When North Americans look at a map of Central America, all the countries look fairly small and close together. They all speak the same language too, so it’s hard to imagine that they have such distinct cultures.
However, the geography is deceptive. Panama and Costa Rica share a border, but the cultures developed in relative isolation. Even today, it’s an 18 hour drive between the capital cities.
Because I lived in Costa Rica for a while, and now live in Panama, people often ask me a question that’s obvious, yet still leaves me a bit baffled: “Which one is better?”
Better for what? To live, to work, to vacation, to invest, to explore? And for whom? A retired couple, a family, a young single person? The question itself is so oversimplified that I usually just respond by saying that the decision to move was the right one for me personally. But that’s not really an answer, so over time, I’ve compiled this list of points on which to compare the two.
Note that the contents are based entirely on my own experiences and viewpoints. If yours are different, I’d love to hear them. Post a comment.
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Climate. Both of these countries are tropical, but there are many different sub-climates within. Panama is smaller and the terrain varies quite a bit. Because of that, plus the better roads, one can be in an entirely different climate by driving just an hour. Panama City is right on the coast, so it’s hot and humid most of the time. Costa Rica’s capital, San Jose, is in the cooler central valley, but it’s a 3-to-5 hour drive to most beaches.
Cost of living. Food and rent are cheaper in Costa Rica. Real estate, gasoline and all imported goods are much cheaper in Panama.
Pace of life. Costa Rica is a good place for relaxing and for outdoor activities. It’s great for a vacation. Panama has parts that are also great for that, but it’s got a business atmosphere too.
Time has a different meaning in Costa Rica. When North Americans say that something would be “easier” or “better” if it were done a certain way, they often mean “faster”. A Costa Rican will characterize a process as being “easy”, even if it takes a long time. For instance, getting a phone line might take six months, but the process of ordering one is not difficult, so a Costa Rican would say, “Oh, it’s easy to get a phone line.” Easy means easy. It doesn’t imply anything about timeliness.
Panamanians, though not as time-conscious as North Americans, do have an understanding of the word that’s culturally closer. This results in a faster-paced lifestyle than Costa Rica. That works for me, and is one of the primary reasons I moved.
Availability of goods. Panama wins this one by a long shot. Because of the canal, Panama has been a hub of international trade for a century. Products from all over the world are readily available.
In contrast, Costa Rica imposes huge taxes on all foreign goods, resulting in prices so high that it’s simply not cost effective to import many of them. Those that do come through have especially high prices. The most noticeable example is cars, which sell for roughly double what they would in the U.S.
Politeness and warmth. Ticos (as the Costa Ricans call themselves) are extremely polite, in both their language and their demeanor. But it’s part of the culture, so it can sometimes be disingenuous. Panamanians are more direct. But interestingly, in Panama I am frequently invited to the homes of people who I’ve just met. Ticos, despite being outwardly polite and friendly, are less likely to do this.
Standard of living. The two countries are roughly equivalent in their range of living standards.
Infrastructure. This one’s not even close. Panama has near first-world infrastructure and Costa Rica’s is dismal. I have heard that the new President in Costa Rica is doing a decent job fixing the roads, but they have a long way to go. The rest of the infrastructure — phone lines, power, water, garbage collection, cell phones, etc — is all owned or controlled by government monopolies, resulting in terrible service. The Ticos are stiffly resisting the kind of competition that would be brought in by the Central American Free Trade Agreement, but honestly, it would do them a lot of good. In Panama, there are multiple companies competing for your phone, television, internet and cell phone services. That’s driven prices down and service up.
The beaches. Costa Rica wins this one. There are some great tropical islands off Panama with luxurious resorts, but if you’re looking for long stretches of gently-sloping white sand beaches bordered with palm trees, Costa Rica is the place to be. They’re lined up one after the next on the Pacific side.
The cities. Panama City is a big and bustling modern metropolis. Costa Rica’s capital, San Jose, is ugly and decrepit by comparison. However, San Jose does have some very nice suburbs, like Heredia and Escazu. Panama City has problems with traffic and bad odors, especially in certain areas. The city has grown faster than its infrastructure, so until the new sewage treatment plant is completed and a new traffic plan is implemented, the stinky bay and long commute times will remain a problem. San Jose has traffic too, but there’s a more concerted effort to address it, which seems to have helped.
Banking. Panama has far superior banking. There are more banks per capita in Panama than anywhere else in the world. The competition yields great advantages for the consumer. Getting home or commercial loans is relatively simple, and rates are good for both borrowing and savings. Banks in Costa Rica are just getting started with consumer financing, and the process of getting a loan is very cumbersome.
Food. This would seem to be obvious because Panama has had so much more international influence, and Costa Rican food has the reputation of being bland. Indeed there is a lot more variety in Panama. However, the locally grown and raised products in Costa Rica are some of the best in the world.
Costa Rica is one of the few places I’ve been where store-bought produce tastes like it’s home grown. You gardeners in the bunch know what I’m talking about. The variety isn’t there, but the quality is. You can walk to your corner grocery store and buy a pineapple for under a dollar that’s just about the most delectable juicy experience you can imagine. Even though they grow the same kind of pineapple in Panama, for some reason, they’re just not as good. And the locally raised chicken is almost sweet with flavor in Costa Rica.
You can get good lettuce in Panama, which is almost impossible in Costa Rica. In fact, much of Panama’s produce is imported, so you get a lot of choices, even for items that don’t grow well in this climate.
For dessert, Costa Rica has great dairy products; especially Pop’s ice cream. However, it is difficult to find dark chocolate there, which is at the top of my personal food pyramid. Panamanians don’t seem as into sweets, but because it’s easier to get good imported items here, I don’t have to search far and wide to get a chocolate fix.
Water. I drink the water in both countries, but depending on the area, I generally think it tastes and “feels” better in Costa Rica, though it is also much harder (more minerals). The water in Panama City leaves a slight film on my teeth. I notice it after only a day or two here. My dentist once described it as a “thin shell”, while scraping it off. I’m guessing that something added to the water here, probably a softener, is leaving behind a residue. I’ve since installed a filter in my apartment, which has removed all residue, as well as the chemical taste. I’ve never gotten sick from the water in either country. In fact, I’ve hardly gotten sick at all in the tropics, whereas I catch something almost every time I go back to the US these days.
Service. Ticos will bend over backwards with politeness to serve you and expect nothing in return. Panamanians take no crap and expect a tip.
Language. The Costa Rican Spanish is easier to understand. Costa Rica has a culture of language, especially in San Jose. They speak clearly and slowly, with proper pronunciation, making it easier for foreigners to understand. For that reason, I think Costa Rica is an excellent place to learn the language, especially if you can do an immersion program with a small class size; preferably one-on-one.
Panamanian Spanish is closer to Mexican Spanish, so those learning in the US should find fewer differences in vocabulary than they would when visiting Costa Rica. However, the Panamanians talk fast and cut off the ends of many words, especially those which end in “s”. They also tend to run many of the words together. This makes it quite difficult for a non-native to understand. On the other hand, more people speak English in Panama than Costa Rica, so if you barely speak a lick of the language, you can probably get by.
Travel. Getting to Panama is $200-300 more expensive per round trip, even though it’s just about the same distance from the US or Europe. If you’re traveling back and forth a lot, this can add up. Once inside the country, Panama has better roads to travel on, and less expensive regional airlines that criss-cross the country every day.
Political stability. Both countries have stable democracies with very minimal political unrest. Costa Rica’s democratic system has been in place for 60 years, making it the longest running democracy in Central America. Panama’s democracy was restored when the US ousted Noriega almost 18 years ago, and has had entirely peaceful changes of power since.
Both countries have abolished the military. They rely on strategic alliances for protection from foreign aggression.
Economy. Panama is experiencing an unprecedented economic boom right now. Unemployment is low and wages are rising. Costa Rica’s 15-year boom has slowed, but there is still impressive growth in many sectors.
Visa restrictions. Panama and Costa Rica have the same policy regarding tourist visas. For citizens of most countries, your visa is automatically in force for 90 days just by getting your passport stamped upon entry. Before your 90 days is up, you must leave the country for at least 72 hours, after which you can return for another 90 days. Getting a long-term visa or residency status is easier in Panama.
Dating. I meet more single people in their twenties and thirties in Panama. In Costa Rica, people seem to marry younger, so there are single people under 21, and divorced people over about 45, but not much in between. If you’re looking to date someone in his/her 20s or 30s, Panama is a better choice.
Medical care. Both countries have surprisingly good medical care. Panama City has a couple top notch hospitals and ready access to high quality services. Similarly, Costa Rica has very well-regarded hospitals in San Jose. The difference seems to be in medical education, as people from all over the world come to Costa Rica to train as doctors. That, plus the mandatory residency program in rural clinics, results in better overall care outside of the capital. In fact, the World Health Organization ranks care in Costa Rica as 36th worldwide, right above the United States. Panama is further down the list, primarily because there are rural communities without clinics nearby.
Crime and personal safety. Crime is the dirty little secret of both of these countries. Nobody likes to talk about it, but it does exist. In the United States, you hear about crime every day, but statistically, the per capita crime rate is nowhere near the highest in the world. The murder rate in both Costa Rica and Panama is higher than the US.
That being said, I have never felt unsafe in Panama. There is a huge and visible police presence here, which brings up the biggest contrast in the approach of these two countries: In Costa Rica people are afraid of the criminals. In Panama, people are afraid of the cops.
When I was younger, I believed that the former was much better, but having now lived in a place with a degree of lawlessness, I can tell you that a balance must be struck. Up to a point, I’d rather the people (especially the criminals) be afraid of the cops.
Costa Rica’s law enforcement is under-staffed and under-budgeted, and the laws are heavily skewed towards protecting the rights of the accused. That makes it quite difficult to arrest, hold, charge and convict someone of a crime. Of course, the criminals know this, so there’s very little deterrent effect. Panama takes more of a “tough on crime” approach.
You see houses with bars on the windows in both countries, but to be fair, part of that is an architectural choice. In very safe parts of Spain, every house has barred windows. Locals will tell you that the house just looks “naked” without them.
Pets. The cultural fear of dogs, especially large ones, is very obvious in this part of the world. It’s stronger in Panama than anywhere else I’ve been. When I’m walking down the street with Bandi (my very mellow German Shepherd), many people will cross to the other side in order not to pass us. In the building where I live, over half of the people would prefer to wait for the next elevator than to share a ride with us. There seems to be a belief here that large dogs are prone to unprovoked attacks on random people.
Interestingly, the Colombians I’ve met seem very comfortable, even enthralled, with Bandi. Yet Panama used to be part of Colombia… curious. In Costa Rica, especially outside of the city, the fear of dogs is noticeably less than in Panama. Very few people keep cats as pets in either country, although it is common to see them on the street.
Both countries have good veterinary care.
Schools. Public schools in both countries are somewhat lacking. There’s high literacy, but that’s about it. However, both countries have well-regarded private schools. In Costa Rica, there are a few outside of the capital, but most are in San Jose. In Panama City, the best-regarded schools are in the canal zone. I meet people who grew up there and they are indistinguishable from your average North American… not even a trace of an accent.
Retirement. Panama has excellent incentives for retirees right now. They’re really trying to attract foreigners, and it’s working. Most of their ideas were borrowed from Costa Rica, but while the Panamanians have taken them one step further, the Ticos have slowly eliminated most of their incentives. Also, real estate is still considerably more expensive in Costa Rica, meaning the pension dollar doesn’t go as far there. The town of Boquete, in the mountains of Panama, is consistently ranked as one of the top five places in the world to retire.