Review Corner: “Chapter Analysis: 7. Escaping the lost Decade: Militarization and Economic Growth in Costa Rica and Honduras.”

20 Sep

Chapter Analysis

Book: Militarization, Democracy, and Development: The Perils of Praetorianism in Latin America by Kirk S. Bowan.

Section: Part III: Guns Versus Butter: Militarization, Economic Growth, and Equity.

Chapter: 7. Escaping the lost Decade: Militarization and Economic Growth in Costa Rica and Honduras.

Reviewed by Simon S. Sundaraj-Keun

            Kirk S. Bowan main thesis for Chapter 7 is to examine the relationship between militarization and economic growth in a comparative analysis in Costa Rica and Honduras. Bowan demonstrated that qualitative does not always show how militarization undermines economic growth. The chapter also analyzes the negative effect of economic growth in Honduras and the positive enhancement of Costa Rica economy with demilitarization.

            Bowan research on Costa Rica and Honduras in this chapter was during the ‘Lost Decade’ of the 1980s. Most nations in Latin America suffered a drop in productivity due to high interest rates, low prices for primary exports, and drastic energy shortages. In order to survive entire economic sector needed to be overhauled. The reason was import substitution industrialization was outdated or exhausted and success in the new global economy required an economic opening and export led-growth (ELG). It also calls on government to focus on policy flexibility and added financial resources to boost economic development.

            The problem face by nations in Latin America is militarization which undercuts two pillars of state capacity required to design, implement and sustain successful economic policies. First pillar was absorbing scarce economic resources needed for investment which in Honduras it was impossible because its military spending was 8.4% of its GDP. The other pillar was military power autonomy undermine political and organizational capacity and irrational shifts of priorities away from development to national security. It also hampers quick and effective response by governments in face of an economic crisis.

            The author used Honduras as a place where the military run the state. Honduras military controlled the government which hampered its capacity to make quick and decisive decision. Plus the infighting among junior and senior officers within the military hierarchy diverts time and effort in effectively developing the economy. Unlike Costa Rica who enjoyed a stable government was able to pass legislation to enforce and develop new markets in order to safe its beleaguered economy.  The Honduran military investment in its economic infrastructure was a disaster because military capitalism did not benefit Honduras but drove the nation into a spiral of debt and economic recession.

            United States of America aided Honduras and Costa Rica by providing economic assistance to build its infrastructure. Costa Rica unlike Honduras who did not have a standing military used its US aid to rebuild its economy. Honduras on the other hand received military and economic aid but was not able to safe its economy. The Honduran military used US aid for personal used and squander the rest in building potential economic infrastructure in the middle of nowhere to combat the Sandinistas and aid the Contras. On the other hand Human Rights became an issue that caused the US to stop providing aid to Honduras until a civilian government come to power. Costa Rica on the other hand being a torn to and humiliating the US on Oliver North, Contra’s secret base, and human rights issues still receive enormous aid to its economy.

            This in turn gave Honduras an image of a military driven culture but for the Costa Ricans it gave them a peace-loving society that produce a Noble Price Winner. Militarization in Honduras failed to exploit the economic potential of tourism but Costa Rica with the used of its peace-loving image manage to increase its revenue in eco-tourism. Even the Honduran tried implemented its tactics from the war room to board room it did not work but only generated corruption and manipulation of US aid in the hands of the elites. Costa Rica free and fair government used its image to promote its ecology, tourism, and economic potential to foreign investment.

            However the author did not explain the benefit of militarization to the economy and the qualitative data did illustrate the undermining of the military on a nation’s economy. Bowan did an excellent job in explaining the different influences that contributed to the demise of the Honduran economy and the revitalization of the Costa Rican financial market. The significance of the issue is that militarization does cast a heavy hand on the economy and corruption becomes rampant if the control of the government falls in the hand of a single party or an oligarch.

            Personally, I agree with Bowan assessment that the organizational capacity of the military in combating economic crises is inefficient. There is no flexibility in a military regime like Honduras compared to a civilian government like Costa Rica. The point that stood out was the comparative examination of military and tourism industry. For one if the political and military objectives are primary then the process of economic reform and policy reform may have been slower as seen in Honduras. The other is if the international image of a repressive and powerful military will have a negative impact on the economy as not seen in Costa Rica.  The importance a stable civilian controlled government is the a key factor in the development of its economics and politics.


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