In political science, the term banana republic describes a politically and economically unstable country with an economy dependent upon the export of natural resources. In 1904, American author O. Henry coined the term [1] [2] to describe Guatemala and Honduras under economic exploitation by U.S. corporations, such as the United Fruit Company (now Chiquita). Typically, a banana republic has a society of extremely stratified social classes, usually a large impoverished working class and a ruling class plutocracy, composed of the business, political, and military elites. [3] The ruling class controls the primary sector of the economy by way of exploitation of labour. [4] Therefore, the term banana republic is a pejorative descriptor for a servile oligarchy that abets and supports, for kickbacks, the exploitation of large-scale plantation agriculture, especially banana cultivation. [4]
A banana republic is a country with an economy of state capitalism, whereby the country is operated as a private commercial enterprise for the exclusive profit of the ruling class. Such exploitation is enabled by collusion between the state and favoured economic monopolies, in which the profit, derived from the private exploitation of public lands, is private property, while the debts incurred thereby are the financial responsibility of the public treasury. Such an imbalanced economy remains limited by the uneven economic development of town and country and usually reduces the national currency into devalued banknotes (paper money), thereby rendering the country ineligible for international development credit. [5]
In the 20th century, American writer O. Henry (William Sydney Porter, 1862–1910) coined the term banana republic to describe the fictional Republic of Anchuria in the book Cabbages and Kings (1904), [1] a collection of thematically related short stories inspired by his experiences in Honduras, whose economy was heavily dependent on the export of bananas. He lived there for six months until January 1897, hiding in a hotel while he was wanted in the United States for embezzlement from a bank. [6]
In the early 20th century, the United Fruit Company, a multinational corporation, was instrumental in the creation of the banana republic phenomenon. [7] [8] Together with other American corporations, such as the Cuyamel Fruit Company, and leveraging the power of the U.S. government, the corporations created the political, economic, and social circumstances, that led to a coup of the locally elected democratic government that established banana republics in Central American countries such as Honduras and Guatemala. [9]
The history of the banana republic began with the introduction of the banana fruit to the United States in 1870, by Lorenzo Dow Baker, captain of the schooner Telegraph, who bought bananas in Jamaica and sold them in Boston at a 1,000% profit. [10] The banana proved popular with Americans, as a nutritious tropical fruit that was less expensive than locally grown fruit in the U.S., such as apples; in 1913, 25 cents (equivalent to $7.71in 2023) bought a dozen bananas, but only two apples. [11] In 1873, to produce food for their railroad workers, American railroad tycoons Henry Meiggs and his nephew, Minor C. Keith, established banana plantations along the railroads they built in Costa Rica; recognising the profitability of exporting bananas, they began exporting the fruit to the Southeastern United States. [11]
In the mid-1870s, to manage the new industrial-agriculture business enterprise in the countries of Central America, Keith founded the Tropical Trading and Transport Company: one-half of what would later become the United Fruit Company (UFC), later Chiquita Brands International, created in 1899 by merger with the Boston Fruit Company, and owned by Andrew Preston. By the 1930s, the international political and economic tensions created by the United Fruit Company enabled the corporation to control 80–90% of the banana business in the U.S. [12]
By the late 19th century, three American multinational corporations (the UFC, the Standard Fruit Company, and the Cuyamel Fruit Company) dominated the cultivation, harvesting, and exportation of bananas, and controlled the road, rail, and port infrastructure of Honduras. In the northern coastal areas near the Caribbean Sea, the Honduran government ceded to the banana companies 500 hectares per kilometre (2,000 acre/mi) of a laid railroad, despite there being neither passenger nor freight railroad service to Tegucigalpa, the capital city. Among the Honduran people, the United Fruit Company was known as El Pulpo ("The Octopus" in English), because its influence pervaded Honduran society, controlled their country's transport infrastructure, and manipulated Honduran national politics with anti-labour violence. [13]
In 1924, despite the UFC monopoly, the Vaccaro brothers established the Standard Fruit Company (later the Dole Food Company) to export Honduran bananas to the U.S. port of New Orleans. The fruit-exporting corporations kept U.S. prices low by legalistic manipulation of Latin American national land use laws to cheaply buy large tracts of prime agricultural land for corporate banana plantations in the republics of the Caribbean Basin, the Central American isthmus, and tropical South America; the American fruit companies then employed the dispossessed Latin American natives as low-wage employees. [11]
By the 1930s, the United Fruit Company owned 1,400,000 hectares (3.5 million acres) of land in Central America and the Caribbean and was the single largest landowner in Guatemala. Such holdings gave it great power over the governments of small countries, one of the factors confirming the suitability of the phrase "banana republic". [14]
In the early 20th century, American businessman Sam Zemurray (founder of the Cuyamel Fruit Company) was instrumental in establishing the "banana republic" stereotype, when he entered the banana-export business by buying overripe bananas from the United Fruit Company to sell in New Orleans. In 1910, Zemurray bought 6,075 hectares (15,000 acres) in the Caribbean coast of Honduras for use by the Cuyamel Fruit Company. In 1911, Zemurray conspired with Manuel Bonilla, an ex-president of Honduras (1904–1907), and American mercenary Lee Christmas, to overthrow the civil government of Honduras and install a military government friendly to foreign businesses.
To that end, the mercenary army of the Cuyamel Fruit Company, led by Christmas, effected a coup d'état against President Miguel R. Dávila (1907–1911) and installed Bonilla (1912–1913). The United States ignored the deposition of the elected government of Honduras by a private army, justified by the U.S. State Department's misrepresenting Dávila as too politically liberal and a poor businessman whose management had indebted Honduras to Great Britain, a geopolitically unacceptable circumstance in light of the Monroe Doctrine. The coup d'état was a consequence of the Dávila government's having slighted the Cuyamel Fruit Company by colluding with the rival United Fruit Company to award them a monopoly contract for the Honduran banana, in exchange for the UFC's brokering of U.S. government loans to Honduras. [12] [15]
The political instability consequent to the coup d'état stalled the Honduran economy, and the unpayable external debt (c. US$4 billion) of Honduras was excluded from access to international investment capital. That financial deficit perpetuated Honduran economic stagnation and perpetuated the image of Honduras as a banana republic. [16] Such a historical, inherited foreign debt functionally undermined the Honduran government, which allowed foreign corporations to manage the country and become sole employers of the Honduran people, because the American fruit companies controlled the economic infrastructure (road, rail, and port, telegraph and telephone) they had built in Honduras.
The U.S. dollar went on to become the legal-tender currency of Honduras; Christmas became commander of the Honduran Army, and later was appointed U.S. Consul to Honduras. [17] Nonetheless, 23 years later, after much corporate intrigue among the American businessmen, by means of a hostile takeover of agricultural business interests, Zemurray assumed control of the rival United Fruit Company in 1933. [13]
Guatemala suffered the regional socio-economic legacy of a 'banana republic': inequitably distributed agricultural land and natural wealth, uneven economic development, and an economy dependent upon a few export crops—usually bananas, coffee, and sugarcane. The inequitable land distribution was an important cause of national poverty, and the accompanying sociopolitical discontent and insurrection. Almost 90% of the country's farms are too small to yield adequate subsistence harvests to the farmers, while 2% of the country's farms occupy 65% of the arable land, the property of the local oligarchy. [18]
During the 1950s, the United Fruit Company sought to convince the governments of U.S. presidents Harry S. Truman (1945–1953) and Dwight D. Eisenhower (1953–1961) that the popular, elected government of President Jacobo Árbenz of Guatemala was secretly pro-Soviet for having expropriated unused "fruit company lands" to landless peasants. In the Cold War (1945–1991) context of the proactive anti-communist politics exemplified by U.S. senator Joseph McCarthy in the years 1947–1957, geo-political concerns about the security of the Western Hemisphere facilitated Eisenhower's ordering and authorising Operation Success, the 1954 Guatemalan coup d'état by means of which the U.S. Central Intelligence Agency deposed the democratically elected government of Árbenz and installed the pro-business government of Colonel Carlos Castillo Armas (1954–1957), which lasted for three years until his assassination by a presidential guard. [4] [19]
A mixed history of elected presidents and puppet-master military juntas were the governments of Guatemala in the course of the 36-year Guatemalan Civil War (1960–1996). However, in 1986, at the 26-year mark, the Guatemalan people promulgated a new political constitution, and elected Vinicio Cerezo (1986–1991) president; then Jorge Serrano Elías (1991–1993). [20]
Chiquita Brands International and the Dole Food Company have shifted their focus of maintaining the environments on their plantations and making agriculture more efficient by breeding and growing more resilient versions of foods, such as Cavendish bananas.[ promotion? ] Both companies have been working to employ better farming practices, especially regarding the use of pesticides, as both companies have received heavy criticism for the amount and effects of the pesticides they have used on their products. Although the pesticides do not generally represent a safety concern for consumers abroad, they can be harmful to residents and the ecosystems in which they are used. [21] Many banana farmers from Central and South America were exposed to Dibromochloropropane (DBCP) from the 1960s to 1980s, which can lead to birth defects, elevated risk of cancer, central nervous system damage, and most commonly, infertility. [22] [23]
Both the Dole Food Company and Chiquita Brands International have argued that their labourers and farmers are being treated much better in the 21st century than they were during the height of the banana republics. While workers do have better conditions than they did during the 20th century, these large corporations still suppress labour union movements through alleged intimidation and harassment. Working conditions on banana plantations are dangerous, with very low wages and long hours in difficult conditions. The workers are not cared for and are often replaced as they have very little policy about job security in the case of sickness or injury. The plantation workers are also exposed to toxic pesticides on a daily basis, causing harm. Unionists who pressure these corporations for better working conditions are commonly targeted and forced to leave their positions. The workers also receive no benefits, and as the plantations are in countries with lax safety regulations, there are minimal health policies. [24] [25]
Honduras and Guatemala have faced significant challenges with governmental corruption as a result of the dictatorships backed by the U.S. government, Effraín Ríos Montt (1982–1983) for Guatemala, and Roberto Suazo Córdova (1982–1986) for Honduras. The political instability caused by the dictators falling and being replaced with democratically elected presidents left the government with very little power, leading to corruption of the government and the rise of drug cartels. Today, the governments of Guatemala and Honduras still have very little power, as drug cartels control much of the land and are allied with corrupt officials and law enforcement officers. These drug cartels serve as the main transporters of cocaine and other drugs from Latin America to the United States. This has also caused extreme levels of violence, with Honduras having one of the highest homicide rates in the world: 38 per 100,000 people according to UNODC. Guatemala and Honduras also continue to have very low economic diversity, with their primary exports being clothing items and food items. 53% of all exports continue to be sent to the United States.[ citation needed ]
In his book Canto General (General Song, 1950), Chilean poet Pablo Neruda (1904–73) denounced foreign corporate political dominance of Latin American countries with the four-stanza poem "La United Fruit Co."; the second-stanza reading in part: [26]
... The Fruit Company, Inc.
Reserved for itself the most succulent,
The central coast of my own land,
The delicate waist of the Americas.
It rechristened its territories
As the "Banana Republics",
And over the sleeping dead,
Over the restless heroes
Who brought about the greatness,
The liberty and the flags,
It established a comic opera ...
The novel One Hundred Years of Solitude (1967), by Gabriel García Márquez, depicts the imperialistic capitalism of foreign fruit companies as voracious socio-economic exploitation of natural resources of the fictional South American town of Macondo and its people. Domestically, the corrupt national government of Macondo abets the business policies and labour practices of the foreign corporations, which brutally oppress the workers. In the novel, a specific scene depicts the real-life 1928 Banana Massacre, related to the death of workers who struck against poor conditions in banana plantations in Colombia.
The Kingdom of Hawaii, now the U.S. state of Hawaii, was once an independent country under political pressure from American sugar plantation owners, who in 1887 forced King Kalākaua to write a new constitution that benefited American businessmen at the expense of the working class. [27] [28] This constitution is known as the "Bayonet Constitution" due to its threat of force. In the case of Hawaii, the U.S. was also interested in the strategic military significance of the islands, leasing Pearl Harbor [27] and later acquiring Hawaii as a territory. [29]
In July 2018, a Guardian article on the resignations from the Cabinet of Boris Johnson and David Davis [30] referred to a tweet from a Spanish correspondent, [31] which described Britain as "officially a banana republic" when sunny weather [32] and footballing success [33] were combined with other attributes usually considered to be characteristic of a banana republic. The country has often been referred to as a "banana monarchy", [34] [35] [36] [37] a phrase which combines the concept of a banana republic with the United Kingdom's constitutional monarchy.
Countries that obtained independence from colonial powers in the 20th century have, at times, tended to share traits of banana republics due to the influence of large private corporations in politics; [38] examples include the Maldives (resort companies) [39] and the Philippines (the tobacco industry, the U.S. government, and corporations). [40] [41]
On 14 May 1986, then Australian Treasurer Paul Keating stated that Australia might become a banana republic. [42] This has received both commentary and criticism [43] [44] [45] and is seen as part of a turning point in Australia's political and economic history. [46]
In March 2023, PTI Chairman and former prime minister of Pakistan Imran Khan said his country had “become a banana republic”. [47]
Honduras was inhabited by many indigenous peoples when the Spanish arrived in the 16th century. The western-central part of Honduras was inhabited by the Lencas, the central north coast by the Tol, the area east and west of Trujillo by the Pech, the Maya and Sumo. These autonomous groups traded with each other and with other populations as distant as Panama and Mexico. Honduras has ruins of several cities dating from the Mesoamerican pre-classic period that show the pre-Columbian past of the country.
The economy of Honduras is based mostly on agriculture, which accounts for 14% of its gross domestic product (GDP) in 2013. The country's leading export is coffee (US$340 million), which accounted for 22% of the total Honduran export revenues. Bananas, formerly the country's second-largest export until being virtually wiped out by 1998's Hurricane Mitch, recovered in 2000 to 57% of pre-Mitch levels. Cultivated shrimp is another important export sector. Since the late 1970s, towns in the north began industrial production through maquiladoras, especially in San Pedro Sula and Puerto Cortés.
The United Fruit Company was an American multinational corporation that traded in tropical fruit grown on Latin American plantations and sold in the United States and Europe. The company was formed in 1899 from the merger of the Boston Fruit Company with Minor C. Keith's banana-trading enterprises. It flourished in the early and mid-20th century, and it came to control vast territories and transportation networks in Central America, the Caribbean coast of Colombia, and the West Indies. Although it competed with the Standard Fruit Company for dominance in the international banana trade, it maintained a virtual monopoly in certain regions, some of which came to be called banana republics – such as Costa Rica, Honduras, and Guatemala.
Chiquita Brands International S.à.r.l., formerly known as United Fruit Co., is a Swiss-domiciled American producer and distributor of bananas and other produce. The company operates under a number of subsidiary brand names, including the flagship Chiquita brand and Fresh Express salads. Chiquita is the leading distributor of bananas in the United States.
Samuel Zemurray, nicknamed "Sam the Banana Man", was an American businessman who made his fortune in the banana trade. He founded the Cuyamel Fruit Company and later became president of the United Fruit Company, the world's most influential fruit company at the time. Both companies played highly controversial roles in the history of several Latin American countries and had a significant influence on their economic and political development.
Standard Fruit Company was established in the United States in 1924 by the Vaccaro brothers. Its forerunner was started in 1899, when Sicilian Arberesh immigrants Joseph, Luca and Felix Vaccaro, together with Salvador D'Antoni, began importing bananas to New Orleans from La Ceiba, Honduras. By 1915, the business had grown so large that it bought most of the ice factories in New Orleans in order to refrigerate its banana ships, leading to its president, Joseph Vaccaro, becoming known as the "Ice King".
Fyffes plc is a fruit and fresh produce company. The Fyffes brand is most closely associated with the banana industry, although it is applied to a wide range of fruits and fresh produce, including the Fyffes Gold Pineapples, and Fyffes melons.
The Banana Wars were a series of conflicts that consisted of military occupation, police action, and intervention by the United States in Central America and the Caribbean between the end of the Spanish–American War in 1898 and the inception of the Good Neighbor Policy in 1934. The military interventions were primarily carried out by the United States Marine Corps, which also developed a manual, the Small Wars Manual (1921) based on their experiences. On occasion, the United States Navy provided gunfire support and the United States Army also deployed troops.
Joseph, Luca, and FelixVaccaro, known as the Vaccaro brothers, were Italian-American businessmen originally from Sicily.
The Union of Banana Exporting Countries was a cartel of Central and South American banana exporting countries established in 1974, inspired by OPEC. Its aim was to achieve better remuneration from the North American banana trade oligopoly, which consisted of three US companies. UPEB's proposal of an export tax was undermined by the U.S. oligopoly bribing Honduran and Italian officials. The UPEB cartel collapsed when bribes became public. What is referred to as the Bananagate scandal paved the way for the U.S. Congress to create the 1977 Foreign Corrupt Practices Act.
Leon Winfield Christmas, usually called Lee Christmas, was an American mercenary in Central America.
Banana production in Honduras plays an important role in the economy of Honduras. In 1992, the revenue generated from banana sales amounted to US$287 million and along with the coffee industry accounted for some 50% of exports. Honduras produced 861,000 tons of bananas in 1999. The two corporations, Chiquita Brands International and the Dole Food Company are responsible for most Honduran banana production and exports.
Honduras is a republic in Central America, at times referred to as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize.
The 1963 Honduran coup d'état was a military takeover of the Honduran government on 3 October 1963, ten days before a scheduled election. Oswaldo López Arellano replaced Ramón Villeda Morales as president and initiated two decades of military rule.
Although bananas have been planted for thousands of years, the development of an intercontinental trade in bananas had to wait for the convergence of three things: modern rapid shipping (steamships), refrigeration, and railroads. These three factors converged in the Caribbean in the 1870s, and would lead to the development of large-scale banana plantations, usually owned and operated by highly integrated large corporations such as Dole and Chiquita Brands International.
Cuyamel Fruit Company, formerly the Hubbard-Zemurray Steam Ship Company, was an American agricultural corporation operating in Honduras from 1911 until 1929, before being purchased by the United Fruit Company. The company was founded in the 1890s by William Streich to export bananas and sugar from the northwestern Cortés region of Honduras to international markets. It was bought by Samuel Zemurray around 1905, who took the company name for his own operation. Zemurray would later become the president of the United Fruit Company. Both Cuyamel and United Fruit are corporate ancestors of the modern-day firm Chiquita Brands International.
The period in the history of Guatemala between the coups against Jorge Ubico in 1944 and Jacobo Árbenz in 1954 is known locally as the Revolution. It has also been called the Ten Years of Spring, highlighting the peak years of representative democracy in Guatemala from 1944 until the end of the civil war in 1996. It saw the implementation of social, political, and especially agrarian reforms that were influential across Latin America.
Banana production in Ecuador is important to the national economy. Ecuador is one of the world's top banana producers, ranked 5th with an annual production of 8 million tonnes as of 2011. The country exports more than 4 million tonnes annually. The crop is mostly grown on private plantations which sell their crop to national and international companies such as Chiquita, Del Monte, Dole, and Noboa. and others.
The banana industry is an important part of the global industrial agrobusiness. About 15% of the global banana production goes to export and international trade for consumption in Western countries. They are grown on banana plantations primarily in the Americas.
The Cuyamel River flows past the city of Cuyamel, Honduras and into an off branch of the Motagua River that marks the boundary between Honduras and Guatemala. American businessman Sam Zemurray purchased his first banana plantation along this river and named his company Cuyamel Fruit Company after it. A proposed dam on the river was approved by the Honduran National Congress in 2014, but has run into local opposition and has not yet been built.