I have a good friend who lives in Boquete, Panama and we talk a lot. Living costs are similar to Santo Domingo but without the perks of a large city. Lots of English-speaking people, with real estate on the expensive side that is easy to buy, and difficult to sell if you later change your mind about living there. To buy anything other than basics generally means a 45 minute trip to the next city which is David. They have blackouts, and lots of heavy rain this time of year. Good emergency medical care is 45 minutes away in David.
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Morelia, Mexico might not be the best place to choose to live cheap for most foreigners. And greydread is right - the rest of Mexico is absolutely horrible. (I just don't want anyone else coming to my area of MX to spoil my personal paradise of the past 3+ years.)
Living costs in my part of MX are about 40%-50% of Santo Domingo's, with cheap 24/7 electricity and water. Garbage pickup and street cleaning every day of the week. Cheap internet up to 8mg speed and cable TV. Right now, it's sunny and 80 degrees, and will be 60 degrees tonight. I didn't need A/C in either place, but sometimes need a room heater here at night in the winters.
I can find all of the historical colonial stuff nearby (granted, with 50 years less colonial history than Santo Domingo). We have Sam's Club, Wal-mart, Costco, Sears, and about 5 other large national chains.
We have a good local private clinica /hospital with similar services but a much smaller facility than Abel Gonzalez, and the costs are reasonable - about US$125 a night. There are many other small private hospitals, and two large public hospitals as well. Many medical laboratories. There is also a large, well regarded regional hospital in a nearby city with all specialties available.
A doctor's visit here runs US$35-$40, and specialists run $50-$60. Many doctors here do continuing education / additional training in either the US or Cuba. Once you have residency in MX, you are eligible to join and pay for the MX public medical care system.
I have some medical issues under good control, but I don't lose sleep about suffering an emergency because I know that good care is less than 5 minutes away. I also have all of my doctors' home and cell telephone numbers and without exception, have told me to call them any time, any hour if I need to do so.
Comparison to Santo Domingo for me?
Benefits for me in MX - Lower living costs. 90% less stress. 90% cleaner. 90% less noise. Neighbors respect each other better in terms of not creating inconveniences for each other (I previously lived in Gazcue for 6 years). Reliable utilities. Very little air pollution, with the exception of January when the farmers outside of town burn off their fields. Good medical care. Spicier food. Great tequila. The learning curve for how things work was about the same as in the DR.
Drawbacks for me here in MX: Beaches are 8 hours away. Regular telephone service is much more expensive (but Skype solves that). More graffiti here. More of a "system" - for utilities, taxes, licenses, permits, etc. Forget to pay your light bill or telephone bill on time - they cut you off immediately. Slower mail/package services that cost more than Sto Dgo. Sometimes tough to find good plantano and mangos. Much fewer beautiful women. No Presidente, but many other varieties of beer for US$1 a bottle. Hard to find books/magazines in English locally. The MX banking system and the casas de cambio both suck here.
BUT, it could probably not be done in my area of MX without fluency in Spanish.
There are safe areas in MX such as Lake Chapala and San Miguel de Allende with concentrations of English-speaking gringos, but the cost of living is much higher - probably equal to Sto Dgo. If someone speaks Spanish, they could live on a low budget in a less-populated area of the DR, but the three remaining issues for me would still be reliable electricity; cheap, truly fast internet service; and probably too far from good, immediate medical attention in case of a medical emergency. This last one could be a killer.