32 - The Impact of Colonialism and post-Colonial Imperialism on Mesoamerica

Early in the conquest of the New World, Spain moved their attention from the Caribbean Islands to what is now known as Central America. They were drawn there by the regions’s gold and silver deposits. The first conquistadors arrived in Mexico in 1519. By 1524 they had defeated the Aztecs and had pushed their way south into what are now Guatemala, El Salvador, and Honduras.

When the mineral wealth of these regions was exhausted, Spain recognized the tremendous agricultural potential of the region and large estates were built on lands expropriated from native peoples, who were then enslaved to work the estates.

After acquiring independence from Spain in 1821, the economic history of Central America was tied to two products neither of which was native to the region: coffee and bananas.

By the First World War, coffee was the region’s primary source of foreign exchange. 85% of Guatemala’s exports were coffee; 80% of El Salvador’s. As the market for coffee increased, the estates were enlarged, again by dispossessing the native population. As in Africa, the best agricultural lands were used for raising export crops, leaving the native population only the less fertile areas in which to produce food for themselves.

In 1899, several US-based companies merged to form the United Fruit Company, one of the first multinational corporations in history. They acquired huge tracts of land in Costa Rica, Honduras, Guatemala, Nicaragua, Panama, as well as further south in Colombia and Venezuela. The land was used for banana production, and bananas became the basis of the economy in countries like Honduras and Guatemala, earning them the title of “banana republics.” The United Fruit Company plantations were run as independent states, providing little economic benefit to the countries where they were located; the profits went back to Northern investors. Company towns were established, where specialists from North America lived in luxury with their families. They imported their clothing and vehicles from the US; motion pictures, newspapers, and even food was brought to them from “home.” The local population did the labor and lived in poverty while the American managers and the government officials they paid lived lives of luxury.

United Fruit had millions of acres of land which were reserved for future use. But when the Arbenz government in Guatemala sought to provide land for peasants by expropriating areas owned by, but not cultivated by, the United Fruit Company, a CIA-backed coup ousted the government in 1954. A military state was then established which reigned for 20 years, during which time 100,000 persons were killed or “disappeared.”

In Honduras, the national railway was built not to serve the needs of the citizens but rather to facilitate the transportation of bananas to costal ports. The country’s capital, Tegucigalpa, still isn’t on the national railway. By 1980, the descendants of the United Fruit Company owned 20% of the arable land in the country. Honduras remains the poorest and least developed nation in Central America. It is estimated that as much as three-quarters of rural children in the nation suffer some form of malnutrition, and yet Honduras continues to export bananas, coffee, sugar, oranges, and even beef for American hamburgers.