In Case Study 14, three countries - Costa Rica, Guatemala and Honduras – are analyzed. These countries were Spanish colonies in the past and share similar geographic features (Todaro & Smith 767). However, they are very different in terms of the economic and human development. Costa Rica is the most developed of three countries, because it has been able to stay away from the military conflicts for 65 years (Todaro & Smith 770). On the contrary, Guatemala and Honduras are very unstable countries. Nevertheless, all three countries have good prospects nowadays.
The foreign aid is very important for the developing economies that lack sufficient foreign direct investment due to the multiple economic, social and political problems. The foreign aid programs usually have specific targets and contribute to the development of strong public institutions. In Honduras and Guatemala people receive many remittances from abroad, but this money is not invested in the local economies effectively and the economic development in two countries remains very low. Therefore the bilateral and multilateral aid programs may be of great importance for Guatemala and Honduras nowadays. Bilateral aid is usually the assistance that a donor country provides to another country. In turn, multilateral aid means that the money is sent to an international organization that later distributes the funds to several countries. Multilateral aid is probably the best option for the developing countries, because it helps to avoid political self-interest and involves a lot of unbiased parties. Therefore, the funds are spent in the most effective way and bring the change.
The historical experiences and internal conflicts in Costa Rica and Guatemala show that it is of great importance to prevent political instability and excessive use of the military power in order to create a strong country. Costa Rica was an isolated country for many centuries and there was a very short period of violence in 1948 that did not lead to the creation of an undemocratic state like it happened in Guatemala or Honduras. In Guatemala the civil war lasted for 34 years and could not be stopped partly because of the international influence (Todaro & Smith 771). The USA supported the government that fought against the indigenous people with the leftist views.
One may come to the conclusion that sometimes foreign influence is destructive and in order to limit the negative consequences there should be strong political institutions and civil society that are capable of conducting independent policies. At the same time, not always the foreign influence was so negative in Guatemala. Under the Spanish rule it was a relatively rich country in comparison with the neighboring countries including Costa Rica. The transition to the independent state led to the tensions within the country that were fueled by the international influences. Now the foreign influence is very positive for Costa Rica and Guatemala, because they depend on the foreign aid or foreign direct investment and need to be integrated into the regional and global context in order to develop further.
Works Cited
Todaro, M., Smith, S. Economic Development, Twelfth Edition. Pearson. 2014. Print.
