Banana republics are Central American and Caribbean nations exploited by multinational companies and imperial governments. The term „banana republic” refers to a country whose economy is based on the export of a single product. Colonial forces assigned this outdated term to an exploitable, defenceless land with a population they saw as inferior. The use of plantation systems by foreign corporations has a long history in the Americas. The local populace exhibited resistance in response to injustice. Although the monopolies departed in the 1960s, the impacts of this system continue to exist today.

Introduction: Colonialist History in Latin America

These colonial systems were the result of centuries of overseas imperialism. After their first contact in 1492, the Spanish conquered vast new world territories, followed by the Portuguese, British, French, and Dutch. Early colonies sent raw resources such as precious metals and sugar to the controlling country, and they were controlled by similar systems of oppression. The revenue and materials derived from the Spanish and Portuguese colonies enabled the European royalty to maintain their position in Europe. Private enterprise surpassed the wealth of the crown, enriching entrepreneurs who participated in early global capitalism. Spanish authorities in the New World exploited their lack of supervision to achieve personal gain. Charles II made positions available for purchase, resulting in widespread corruption. Magisterial hopefuls frequently sought office to enrich themselves, and positions were deemed to be of varying value based on the individuals they governed. Spaniards classified native groups according to the value they could produce for officials. They imposed taxes and remuneration on the indigenous populace. These fees were so high that they were in debt. If an individual failed to pay or produce their goods on time, they would be subjected to disciplinary action. Furthermore, authorities also subjected indigenous people to forced labor, particularly in mines. This system of corruption and exploitation was accepted by the royal government as it developed the colonies and filled their coffers. The Independence movements advocated for the gradual separation of colonies and colonizing states, with varying degrees of success. Late Latin American countries gradually achieved liberation in the early 1800s. As with any emerging nation, they encountered obstacles in establishing a stable government and economy. Britain seized the opportunity to demonstrate a new form of imperialism. British banks offered large loans to fledgling countries, which soon fell into debt. In order to fulfill their obligations, they frequently organized their economy around the production and export of a singular profitable commodity. This competition hindered the young nation’s ability to develop domestic industry.

It wasn’t all about bananas.

Countries bearing the banana republic label did not consistently produce bananas. This system extracted minerals, coffee, sugar, grains, and beef. Although bananas are the most well-known product, most affected countries rely on these other goods. Sugar was cultivated on every island in the Caribbean, and coffee was a significant industry in Central America.

Different locales produced different items, and plantation labor may have been dominant in one area. Throughout Central America, “coffee townships” were present as distinct municipal zones centered on the intensive cultivation of coffee. These regions gained political power through their strong revenue generation. National governments frequently became obligated to large landowners, whether individuals or corporations. The use of intimidation and violence was employed to maintain control and maintain the status quo in these regions, despite the diversification and industrialization of the economy.

The United Fruit Company

The banana story may be the most famous of the products generated by this structure. Lorenzo Dow Baker purchased 160 bananas from Jamaica in 1870 and sold them for a profit in Jersey City. The fruit was previously a rare and expensive treat in North America. This batch sparked public interest, and subsequent advancements in transportation rendered transporting delicate bananas a much more feasible and profitable undertaking.

Baker, with the support of Boston businessmen, founded the Boston Fruit Company in 1885. In 1899, Boston Fruit merged with other players in the industry to establish the United Fruit Company. As a result of the merger, the new corporation was able to consolidate its holdings across the region. United Fruit owned plantations to produce crops and the infrastructure to transport them. It exerted significant influence over the industry of fruit importation, akin to a monopoly.

United Fruit expanded beyond its single products by offering cruises on its steamers, establishing radio and telegraph stations, and building railroads. The Guatemalan government even contracted with the corporation to manage their postal service in 1901. By 1930, United Fruit was worth over 200 million dollars and owned over 3.5 million acres.

The acquisition of influence and power by companies

Conglomerates such as United Fruit have constructed and possessed infrastructure to facilitate their commerce. The acquisition of majority of the country’s communication, agricultural land, and transportation resources resulted in an increase in profits and a greater dependence on foreign corporations. Multinational corporations constructed roads and habitations near each labour camp. The company also provided services such as schools, hospitals, and water and sewage facilities. This development also harmed the prospects of domestic enterprises that were unable to contend with these services.

These communities have developed remote regions, while also contributing to the environmental degradation of their surroundings. The material abundance, isolation, and relatively high, yet still exploitative wages compelled workers to persist. Sometimes, employers obstructed labourers from leaving the confines of the camps where they worked or paid wages in currency only valid at company stores.

Imperialist corporations rarely invested their profits back into their respective nations. This was only possible if it proved beneficial to the corporation. While local workers were given menial and dangerous tasks, they reserved management positions for white employees. Managers were separated from manual labourers, who were viewed as inferior.

The United States intervened in the affairs of these nations, supporting presidents who were sympathetic to US interests. Marines were involved in invasions and occupations to protect American financial interests. The frequent occurrence of revolutions and political turmoil had a profound impact on the affected citizens and their confidence in the government institutions.

Resistance of the locals

Workers responded with resistance to oppression. In 1934, a nationwide strike initiated by Costa Rican banana workers was extended to thirty-one unions. The parties reached a settlement within one month, but United Fruit failed to meet their end of the bargain. United Fruit, working with the Costa Rican government, accused the leaders of being communists, and had them arrested. One labour action against United Fruit in Honduras in 1954 culminated with approximately sixty percent of the workforce striking across all industries. After months of demands, strikers were granted pay increases and formed unions.

These strikes sometimes ended in bloodshed. United Fruit claimed in 1928 that a strike on their Colombian plantations was a communist movement. The United States demanded that Colombia cease the strike independently or face the possibility of invasion. In the crackdown, Colombian soldiers killed hundreds of workers. The rise in support for labour movements occurred during the 1930s as national governments sought to regain control over their nation’s finances.

The demise of the Banana Republic system

The United Fruit conglomerate was compelled to sell its operations and property to its rivals following the settlement of an antitrust case brought by the US government in 1958. American stockholders were frightened by rising labour movements, and in the 1960s, companies sold most of their properties. The cultivation of bananas imposes a significant strain on the soil’s nutrients. After the companies had exhausted most of the agricultural land, they ceased their operations. Chiquita, Dole, and other businesses continue to operate in the region with a capacity far below that of United Fruit a century ago.

The impact of the Banana Republic period.

These systems continue to negatively impact the victimized countries and their citizens. Guatemala is the foremost exporter of bananas to the United States, with a trade worth 1.1 billion dollars annually. The workforce of the nation has a limited view of that proportion. Sixty-five percent of agricultural land is owned by two percent of agricultural companies. Guatemala’s agricultural minimum wage is $416 per month, whereas the rural living wage is $440 per month. In numerous instances, employers fail to adhere to the legally mandated minimum wage, resulting in employees working overtime without being compensated. Approximately three-quarters of small farmers reside below the poverty line. Despite the protection provided by unions, over one hundred union leaders were killed between 2004 and 2018.

Existing ethnic hierarchies were strengthened as wealth inequality increased. Latino landowners relied on a majority Indigenous labour force for their livelihood. Throughout this period, there were numerous incidents of racial violence. This tension culminated into genocide in the 1970s and 1980s. Political instability continued to exist in the power vacuums left by the decline of colonial-friendly governments. Despite the end of the „banana republic” era, Guatemala and other nations continue to encounter human rights violations resulting from their history of exploitation.

Central American countries have made significant strides since 2000. They have increased literacy rates and improved public health. Economically, enterprises operating in diverse industries facilitate commerce and generate employment prospects. Free and secure elections are essential for ensuring peaceful transitions of power. Despite the legacy of imperialism, these nations continue to develop and advance.

Sources:

Let’s Go Bananas! U.S. Imperialism Through the Lens of a Fruit: https://teachers.yale.edu/curriculum/viewer/initiative_22.02.01_u

Political Economy, Race, and National Identity in Central America, 1500–2000: https://oxfordre.com/latinamericanhistory/display/10.1093/acrefore/9780199366439.001.0001/acrefore-9780199366439-e-521

Imperialism: https://pressbooks.cuny.edu/amodernworldsince1815/chapter/imperialism/

Five Centuries of Pillage and Resistance: Latin America and Africa: https://roape.net/2020/11/05/five-centuries-of-pillage-and-resistance-latin-america-and-africa/

The Controversial History of United Fruit: https://hbr.org/podcast/2019/07/the-controversial-history-of-united-fruit

The Octopus (United Fruit Company / Dole Food Company): https://www.youtube.com/watch?v=_65wFeHIgiA

How the US Stole Central America (With Bananas): https://www.youtube.com/watch?v=WWBCl8huNMA

How CIA Created a Banana Republic – Guatemala 1954 – Cold War DOCUMENTARY: https://www.youtube.com/watch?v=63y237ybCuw

Banana Wars: When US Marines Fight For Big Fruit (Documentary): https://www.youtube.com/watch?v=Ux_HBUsy1_4

L’entreprise qui a pillé l’Amérique latine: https://www.youtube.com/watch?v=j8NVpke3chk

When the United Fruit Company Tried to Buy Guatemala: https://www.thenation.com/article/economy/united-fruit-guatemala/