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Is Panama the next Costa Rica?

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Is Panama REALLY the next Costa Rica?

by Casey Halloran

When I first began hearing about Panama eight years ago, it was from the typical band of barfly gringo expats who always think the grass is greener somewhere else. They made claims about how much cheaper, safer and more modern Panama was compared to Costa Rica. As with my tequila, I take bar room talk with a giant lump of salt, so I decided to see for myself what all this Panama talk was about.

My first trip to Panama was in late 2001. Minutes after arrival, I was in awe of the modern skyline of Panama City and its unique, cosmo air. Different “barrios” evoked memories of New York, Madrid, New Orleans and of course, Miami. As I toured the countryside, the raw beauty and lack of tourism stood in stark contrast against the ultra developed city. The potential was obvious, and I was hooked.

Nearly a decade later Panama is a boomtown. Over 50 cranes dot Panama City the skyline, indicators of the next fancy condo tower to be built. The mountain town of Boquete, at one time a haven for “el gringo cheapo” who sought affordable living, is now home to thousands of expats. Prices there have risen with demand and dozens of residential projects are in various stages of completion. Pacific Coastal development is underway at a solid pace and an explosion of Caribbean construction is focused on the Bocas Del Toro area. Tourism, investment and retirement is on the rise countrywide.

So, Can Panama Become the “Next Costa Rica”?

Well…yes, and no. Panama has a few advantages over Costa Rica, some inherent setbacks and some strengths that may actually work against it.

Panama’s strengths

• Infrastructure --- A network of highways, airstrips and modern bridges connect Panama City to even the remote areas. Cell phone and Internet coverage is excellent and easy to obtain.

• Banking & Lending --- Panama has always been famous as an offshore banking jurisdiction. Banks here are professional, lend at reasonable rates and still respect privacy laws.

• Diversity --- The country is an incredibly diverse country with immigrants from all over the world, active indigenous communities and a rich culture.

• Safety --- The Panamanian police force is tough, well-equipped and well-trained, especially compared to their Costa Rican counterparts. Certainly Panama hasn’t yet faced the many issues that Costa Rica is now seeing, most of which are symptoms of success, but presently I feel much safer in Panama.

Panama’s weaknesses

• Poor Customer Service --- Costa Ricans are some of the friendliest people on the planet and genuinely enjoy working in tourism. Panamanians meanwhile have a lot to learn about service and hospitality.

• Lack of Tourism Experience --- Panama’s economy has always been driven by the Canal and banking, so the best and brightest are not yet drawn to the tourism sector.

• The Ghost of Noriega --- Many tourists still associate Panama with the Noriega era. Despite two decades of healing, changing this image is an uphill battle.

• Tight Immigration Policies --- Costa Rica may not admit it, but the country depends on a foreign work force of Nicas, Gringos and Euros who all serve the tourism sector. Panama has tighter immigration and foreign hiring policies than does Costa Rica. The limited talent pool for tourism staff could hinder Panama’s tourism development.

Strengths that may actually be weaknesses

• A Penchant For Building Towers --- Although Panama City’s skyscrapers are impressive, they should be limited to the city. Both the lack of capital and legal restrictions that kept Costa Rica’s coastal skyline low profile are in my opinion, a grand part of the country’s allure. Panama is in danger of going the route of Cancuun, Waikiki, Daytona and other destinations that littered their beachfront with ugly, dated skyscrapers. This is not an easy mistake from which to recover.

• Velocity Of Capital --- As it is easier to obtain loans in Panama, development will occur at a much faster pace. In Costa Rica, developers sullied once charming towns like Tamarindo and Jaco at a cancerous pace. One can only imagine how quickly Panama’s landscape could be rendered unrecognizable with the leverage of first world financing.

• The World Seeking “The Next Costa Rica” --- Because the world is so desperately seeking the next big hot spot, I fret a bit that they may be a little to eager to foist the crown upon Panama’s head before the country is truly prepared for the invasion.

Whatever happens to Panama, I am in madly in love with the country and plan to stay. There will be fits and starts of growth, some good, bad and very ugly developments. But the untapped potential and energy of the country are just contagious. Neither Costa Rica nor Panama are perfect, but for now, I am perfectly content to travel between both countries to get my fix of each. No other 50 minute flight I know that travels so far.

Casey Halloran is co-owner of a travel agency in Costa Rica and a travel and real estate firm in Panama. He has resided and worked in Central America since 1997. Web: http://www.panamarealestatepros.com

Finca Dracula in Guadalupe
Is Panama the next Costa Rica?

A trip to the library in Ephesus