<P> Costa Rica has been known for its stable democracy in a region that has had some instability and for its highly educated workforce, most of whom speak English . The country spends roughly 6.9% of its budget (2016) on education, compared to a global average of 4.4% . Its economy, once heavily dependent on agriculture, has diversified to include sectors such as finance, corporate services for foreign companies, pharmaceuticals, and ecotourism . Many foreign companies (manufacturing and services) operate in Costa Rica's Free Trade Zones (FTZ) where they benefit from investment and tax incentives . </P> <P> In spite of impressive growth in the Gross domestic product (GDP), low inflation, moderate interest rates and an acceptable unemployment level, Costa Rica in 2017 was facing a liquidity crisis due to a growing debt and budget deficit . By August 2017, the Treasury was having difficulty paying its obligations . Other challenges facing the country in its attempts to improve the economy by increasing foreign investment include a poor infrastructure and a need to improve public sector efficiency . </P> <P> Costa Rica was sparsely inhabited by indigenous people before coming under Spanish rule in the 16th century . It remained a peripheral colony of the empire until independence as part of the short - lived First Mexican Empire, followed by membership in the United Provinces of Central America, from which it formally declared independence in 1847 . Since then, Costa Rica has remained among the most stable, prosperous, and progressive nations in Latin America . Following the brief Costa Rican Civil War, it permanently abolished its army in 1949, becoming one of only a few sovereign nations without a standing army . </P> <P> The country has consistently performed favourably in the Human Development Index (HDI), placing 69th in the world as of 2015, among the highest of any Latin American nation . It has also been cited by the United Nations Development Programme (UNDP) as having attained much higher human development than other countries at the same income levels, with a better record on human development and inequality than the median of the region . </P>

Central americas oldest democratic republic which has had no standing army since 1948 is