Answer:
European and American investments in Latin American countries were often not helpful to their economies for several reasons:
1. Resource extraction: Many of the investments were in industries such as mining and agriculture that relied on exporting raw materials. This led to a dependence on foreign markets and left little room for domestic industries to develop.
2. Unequal trade relationships: The terms of trade were often unfavorable for Latin American countries, with low prices paid for raw materials and high prices paid for manufactured goods from Europe and the United States.
3. Debt: Many countries borrowed heavily to finance development projects, but often these projects did not generate enough income to pay back the loans. This led to a cycle of borrowing to pay off previous debts, with interest payments consuming a large portion of government budgets.
4. Political instability: External investments often supported authoritarian regimes or undermined democratic processes, which led to political instability and social unrest. This made it difficult to create a stable environment for economic growth and development.
Overall, the investments were often focused on short-term profits for foreign companies and governments rather than long-term development and sustainability for the Latin American countries themselves.