The former banana port of GOLFITO , 33km north of the Panamanian border, straggles for 2500m along the water of the same name ( golfito means "little gulf"). The town's setting is spectacular, backed up against steep, thickly forested hills to the east, and with the glorious Golfo Dulce - one of the deepest gulfs of its size in the world - to the west. The low shadow of the Osa Peninsula shimmers in the distance, and everywhere the vegetation has the soft muted look of the undisturbed tropics.

Golfito's history is inextricably intertwined with the giant transnational United Brands company - locally known as "La Yunai" - which first set up in the area in 1938. United Brands built schools, recruited doctors and police, and brought prosperity to the area, but following fluctuating banana prices, a three-month strike and local social unrest, they eventually decided Golfito was too much trouble and pulled out in a hurry in 1985. The town died, and in the public eye became synonymous with rampant unemployment, alcoholism, abandoned children, prostitution and general unruliness.

Today, at the big old muelle bananero , container ships are still loaded up with bananas processed further up towards Palmar Norte. This residual traffic, along with tourism - Golfito is a good base for getting to the Parque Nacional Corcovado by lancha or plane - has combined to help revive the local economy. The real rescue, though, came from the Costa Rican government, who in the early 1990s established a depósito libre - or tax-free zone - in the town, where Costa Ricans can buy manufactured goods imported from Panamá without the 100-percent tax normally levied. Ticos who come to shop here have to buy their tickets for the depósito 24 hours in advance, obliging them to spend at least one night, and therefore colones, in the town.

Golfito straggles for ages without any clear centre. The town is effectively split in two - by a division in wealth as well as architecture. In the north is the zona americana , where the banana-company executives used to live and where better-off residents still reside in beautiful wooden houses shaded by dignified palms. Here you'll find the depósito libre , an unaesthetic outdoor mall ringed by a circular concrete wall. To the south, the pueblo civil (civilian town), is a very small, tight nest of streets; hotter, noisier and more crowded than the zona . It's here you'll find the good-value hotels and sodas, as well as the lancha across the Golfo Dulce to Puerto Jiménez and the Osa Peninsula.