“BANANA REPUBLIC” – Not just the name of a clothing store

Before the popular brand Banana Republic even existed, back in the 1900`s the expression “Banana Republics” described Latin American countries whose economy relied solely on the export of bananas. Today it is used to describe developing countries whose economies rely heavily on a single crop or export product and are pushed around by foreign enterprises. Honduras (the original banana republic) still bears the reputation, although bananas have greatly receded in its economy. Still, the term has lived on and is used beyond small countries of the tropics. But where did the expression come from?

It was introduced in 1904 in the book Cabbages and Kings, by O. Henry. Henry was a banker who embezzled money and hid from authorities in Honduras, a country that still lacked extradition laws. His book takes place in a “small maritime banana republic” whose economy relies on the fruit and is controlled by foreign forces. In the time that Henry lived in Central America, the Cuyamel Fruit (a New Orleans based company) supplied guns for a coup d’etat in Honduras and the CIA did the same in Guatemala.

Intervention in Honduras

In 1903 the president of Cuyamel, Samuel Zemurray, backed a Honduran general, Manuel Bonilla, in the country’s first civil war. When Bonilla was victorious and proclaimed president, he gave Zemurray a vast expanse of land for his banana plantations and agreed not to charge him with taxes. He built infrastructure and ports to transport his crop, at one point having thirteen steamships traveling between Honduras and New Orleans. In 1930 Zemurray sold Cuyamel to the United Fruit Company (UFC), which controlled as much as 90 percent of the market, and became its largest shareholder. Two years later Zemurray became its president. He lead the company until his retirement and according to Rich Cohen, “In the end, lived in the grandest house in New Orleans, the mansion on St. Charles that is now the official residence of the Tulane president.” 

Effect in Guatemala

In Guatemala, it was the UFC who exerted control over the nation. In 1924 it owned up to 40% of the land available for farming and 40% of the shares of the national railway system. But trouble started for the company when president Jacobo Arbenz expropriated land from private companies, of which the UFC was the most severely affected. United Fruit pressured the United States government to engineer a coup and fortunately for them, every major official involved in the plotting had a family or business connection to the company. The US government named Arbenz a socialist ally of the Soviet Union and supported a coup that toppled the government in 1951. However, people’s discontent kept mounting until 1965 when the UFC decided to sell its land and leave the area.

Since these events, Central American countries have expanded their trade and rely less on a single export. Even though foreign companies have less control over them, the effects of their actions on these Banana Republics are still felt today, for better or worse. But in other areas of the world developing countries have increasingly more concentrated exports in a few products, compared to more advanced economies.

 

 

By: Cristina Rivas