Panama.
When the GI's were there, there were lots of very cheap whores who would do most of what the young GI's would come up with. The local women are not hard to get to know, either.
The nightclub scene is still about the same, from what I read. Clubs are full of beautiful women who will spend the night with you, and expect you to leave a gratuity. They do not consider this prostitution.
I heard relatively few times anything bad happened, no problems with police, thugs, etc. It's pretty laid back down there, I had a helluva great time.
-Chuck, Vegetarian fanboy