Banana republic

Inpolitical science, the termbanana republicdescribes a politically and economically unstable country with an economy dependent upon the export ofnatural resources. In 1904, American authorO. Henrycoined the termto describeGuatemalaandHondurasundereconomic exploitationby U.S. corporations, such as theUnited Fruit Company(nowChiquita). Typically, a banana republic has a society of extremelystratifiedsocial classes, usually a large impoverishedworking classand a ruling classplutocracy, composed of the business, political, and military elites.The ruling class controls theprimary sector of the economyby way ofexploitation of labour.Therefore, the termbanana republicis a pejorative descriptor for a servileoligarchythat abets and supports, forkickbacks, the exploitation of large-scaleplantationagriculture, especiallybananacultivation.
A banana republic is a country with an economy ofstate capitalism, where the country is operated as aprivatecommercial enterprise for the exclusiveprofitof the ruling class. Such exploitation is enabled by collusion between the state and favoured economicmonopolies, 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 theuneven economic developmentof town and country and usually reduces the nationalcurrencyinto devaluedbanknotes(paper money), thereby rendering the country ineligible forinternational development credit.
In the 20th century, American writer O. Henry (William Sydney Porter, 1862–1910) coined the termbanana republicto describe the fictional Republic of Anchuria in the bookCabbages and Kings(1904),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 theUnited Statesforembezzlementfrom a bank.
In the early 20th century, the United Fruit Company, a multinational corporation, was instrumental in the creation of the banana republic phenomenon.Together with other American corporations, such as theCuyamel 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.
The history of the banana republic began with the introduction of the banana fruit to the United States in 1870, byLorenzo Dow Baker, captain of theschoonerTelegraph, who bought bananas inJamaicaand sold them inBostonat a 1,000% profit.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 $7.71 in 2023) bought a dozen bananas, but only two apples.In 1873, to produce food for their railroad workers, American railroad tycoonsHenry Meiggsand his nephew,Minor C. Keith, establishedbanana plantationsalong the railroads they built inCosta Rica; recognising the profitability of exporting bananas, they began exporting the fruit to theSoutheastern United States.
In the mid-1870s, to manage the newindustrial-agriculturebusiness enterprise in the countries ofCentral America, Keith founded the Tropical Trading and Transport Company: one-half of what would later become the United Fruit Company (UFC), laterChiquita Brands International, created in 1899 by merger with theBoston Fruit Company, and owned byAndrew 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.
By the late 19th century, three Americanmultinational corporations(the UFC, theStandard Fruit Company, and theCuyamel 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 theCaribbean 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 toTegucigalpa, the capital city. Among the Honduran people, the United Fruit Company was known asEl 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.
In 1924, despite the UFCmonopoly, theVaccaro brothersestablished the Standard Fruit Company (later theDole Food Company) to export Honduran bananas to the U.S. port ofNew Orleans. The fruit-exporting corporations kept U.S. prices low bylegalisticmanipulation of Latin American nationalland uselaws to cheaply buy large tracts of prime agricultural land for corporate banana plantations in the republics of theCaribbean Basin, theCentral American isthmus, and tropical South America; the American fruit companies then employed the dispossessed Latin American natives as low-wage employees.
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".
In the early 20th century, American businessmanSam Zemurray(founder of theCuyamel Fruit Company) was instrumental in establishing the "banana republic" stereotype, when he entered the banana-export business by buying overripe bananas from theUnited Fruit Companyto 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 withManuel Bonilla, an ex-president of Honduras (1904–1907), and American mercenaryLee 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 acoup d'étatagainst PresidentMiguel R. Dávila(1907–1911) and installed Bonilla (1912–1913). The United States ignored thedepositionof the elected government of Honduras by aprivate army, justified by theU.S. State Department's misrepresenting Dávila as too politically liberal and a poor businessman whose management had indebted Honduras toGreat Britain, a geopolitically unacceptable circumstance in light of theMonroe Doctrine. Thecoup d'étatwas 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.
The political instability consequent to thecoup d'étatstalled the Honduran economy, and the unpayableexternal debt(c. US$4 billion) of Honduras was excluded from access to internationalinvestmentcapital. That financial deficit perpetuated Honduran economic stagnation and perpetuated the image of Honduras as a banana republic.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.
TheU.S. dollarwent on to become the legal-tender currency of Honduras; Christmas became commander of theHonduran Army, and later was appointedU.S. Consulto Honduras.Nonetheless, 23 years later, after much corporate intrigue among the American businessmen, by means of ahostile takeoverof agricultural business interests, Zemurray assumed control of the rival United Fruit Company in 1933.
Guatemalasuffered 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, andsugarcane. 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.
During the 1950s, the United Fruit Company sought to convince the governments of U.S. presidentsHarry S. Truman(1945–1953) andDwight D. Eisenhower(1953–1961) that the popular, elected government of PresidentJacobo Árbenzof Guatemala was secretly pro-Sovietfor having expropriated unused "fruit company lands" to landless peasants. In theCold War(1945–1991) context of the proactiveanti-communistpolitics exemplified by U.S. senatorJoseph McCarthyin the years 1947–1957,geo-politicalconcerns about the security of theWestern Hemispherefacilitated Eisenhower's ordering and authorising Operation Success, the1954 Guatemalan coup d'étatby means of which the U.S.Central Intelligence Agencydeposed the democratically elected government of Árbenz and installed the pro-business government of ColonelCarlos Castillo Armas(1954–1957), which lasted for three years until hisassassinationby a presidential guard.
A mixed history of elected presidents andpuppet-mastermilitary juntaswere the governments of Guatemala in the course of the 36-yearGuatemalan Civil War(1960–1996). However, in 1986, at the 26-year mark, the Guatemalan people promulgated a newpolitical constitution, and electedVinicio Cerezo(1986–1991) president; thenJorge Serrano Elías(1991–1993).
Chiquita Brands Internationaland theDole Food Companyhave 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 asCavendishbananas.Both companies have been working to employ better farming practices, especially regarding the use ofpesticides, 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.Many banana farmers from Central and South America were exposed todibromochloropropane(DBCP) from the 1960s to 1980s, which can lead tobirth defects, elevated risk ofcancer, central nervous system damage, and most commonly,infertility.
Both theDole Food CompanyandChiquita Brands Internationalhave 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 allegedly still suppresslabour unionmovements through 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 aboutjob securityin 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 laxsafety regulations, there are minimal health policies.
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, andRoberto 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 highesthomicide ratesin the world: 38 per 100,000 people according toUNODC. 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.
In his bookCanto General(General Song, 1950), Chilean poetPablo Neruda(1904–73) denounced foreigncorporatepolitical dominance ofLatin Americancountries with the four-stanza poem "La United Fruit Co."; the second-stanza reading in part:
The novelOne Hundred Years of Solitude(1967), byGabriel García Márquez, depicts theimperialisticcapitalism of foreign fruit companies as voracious socio-economicexploitation of natural resourcesof 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 1928Banana Massacre, related to the death of workers who struck against poor conditions in banana plantations inColombia.
TheKingdom of Hawaii, now the U.S. state ofHawaii, was once an independent country under political pressure from American sugar plantation owners, who in 1887 forced KingKalākauato write a new constitution that benefited American businessmen at the expense of the working class.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, leasingPearl Harborand later acquiring Hawaii as aterritory.
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;examples include theMaldives(resort companies)and thePhilippines(the tobacco industry, theU.S. government, and corporations).
On 14 May 1986, thenAustralian TreasurerPaul Keatingstated thatAustraliamight become a banana republic.This has received both commentary and criticismand is seen as part of a turning point in Australia's political and economic history.
In March 2023,PTIChairman and formerprime minister of PakistanImran Khansaid his country had "become a banana republic".