“What we must learn is how to deal with that conflict without resorting to violence. At this beginning of the twenty-first century, we are being called upon to face the needs of humanity, in all its tragic urgency. And we must, at the same time, face up to the requirements of the species: this century shall be peaceful or shall not be at all.” —Rodrigo Carazo (President of Costa Rica, 1978-1982)

Potentials and Obstacles for Demilitarization
Nations with no threat of a foreign invasion and civil war have a potential for abolishing their military forces. Nations that depend on weapons production and export face challenges to the process of disarmament and demilitarization.
 

Conditions for Demilitarization
Elements for nations’ demilitarization include:

Regional Security
It is important to have a secure international environment where invasion by another country is not possible. An international body such as the United Nations, European Union, or the Organization of American States needs to ensure peace of the region.

Developed Military Establishment
The nation needs to have a developed military system where soldiers are highly trained and adequately paid. There must be a well- established civilian control.

Stable Political System
The nation needs to have a functional and uncorrupted government with strong and independent civilian institutions so that a military takeover will not be possible.

Public Opinion
It is important that the public supports abolition of their military forces.

Importance of Academic Studies
The first step for demilitarization of a nation is to have an academic study of its demilitarization potential. The topics should include elements favorable for and blocks against demilitarization. Once blocks are identified, sociologists, political scientists, and peace activists should create recommendations on how to remove blocks and proceed with the demilitarization process.

Merits of Demilitarization
Excellent examples on the benefits of demilitarization are provided by Costa Rica, which abolished its military forces in 1949, and Panama in 1994 and currently with no U.S. military bases:

Costa Rica
Costa Rican citizens and residents enjoy universal free healthcare and education (up to the university level). It is leading the world in environmental protection and the Latin American nations in human rights protection. Costa Rica has high life expectancy and almost universal literacy. It is number one on national happiness according to the Happy Planet Index.

Panama
Panama enjoys peace, political stability, and high economic growth. In current purchasing price parity (PPP) terms, GDP per person in Panama exceeded $15,400 in 2012, the highest per capita income in Central America. Panama is projected to achieve a compound annual growth rate (CAGR) of 4.7 percent between now and 2032, compared with 3.2 percent for Latin America, and 3 percent for the world economy.
Cited from Deloitte, Competitiveness: Catching the next wave: Panama; data provided by Oxford Economics, April 2014.