Much before it became popular as a clothing brand, the term “Banana Republic” referred to authoritarian regimes supported by large US companies like the United Fruit Company. Bananas have always been way more popular than apples and oranges, and are a staple in every household across the globe. But did you know that bananas once caused a coup in a Central American country?
This story is an entertaining mix of espionage, rebellion, ambition, corruption, and Guatemalan bananas. The government of Guatemala was overthrown in 1954 by a group of military officers allegedly backed by the CIA. The coup occurred because of the government’s participation in selling Guatemalan bananas to the United States at dirt-cheap prices.
The story that gave us the term Banana Republic
Guatemala is a small country in central America – around the same area as the Indian state of Telangana – that sits right under Mexico’s southern border. During the 19th century, Guatemala granted the U.S. market access to develop the banana trade, which yielded huge profits to producers there. Large fruit companies like Dole, Del Monte, and Chiquita (now known as United Fruit) started large-scale operations in Guatemala and controlled most of the farmlands. They manipulated government officials, as well as the media as per some claims, to get an unfair land distribution share for farmers there. That made the farmers poorer and dependent on the banana for existence.
But things took a turn in 1951 when Guatemalan President Jacobo Árbenzstarted a land reform program called ‘Degree 900’.Only 10% of the land was available for 90% of the population, and the rest was under the United Fruit Company. His plan aimed at distributing 400,000 acres of unused United Fruit land in Guatemala to landless Guatemalan peasants.
The price of bananas
Arbenz offered to pay the United Fruit Company $1,185,000 for the land, the same amount they had demanded while calculating its value for taxation. But there was much more at stake - control over the land and people of Guatemala. So, the company gave a much larger assessment of$19,355,000, which Arbenz refused.
The United fruit Company called US President Dwight D. Eisenhower, who then approved of a clandestine operation along with the CIA to overthrow Guatemala’s government in a coup d'état in 1954. They installed Guatemalan military officer Colonel Carlos Castillo Armas as the new president. Armas was in exile in Honduras after abetting a failed coup and a revolt in the previous years. With the help of the CIA and the U.S. government, Armas finally accomplished a successful coup in 1954. He would serve as President of Guatemala from 1954 to 1957. On assuming office, Armas immediately returned all the landholdings to the U.S. fruit company.
The disintegration of Guatemala
Armas ran a corrupt administration and was assassinated in 1957 by a presidential guard. In the 1960’s, Guatemala was riven by a bloody civil war that lasted thirty years. War is accompanied by bloodshed, and this civil war claimed around 200,000 lives in a country of approximately 4 million people, or 5% of the population.It is due to the efforts of the Guatemalan Historical Clarification Commission that the victims in the Mayan communities were identified. After decades of fighting, the Peace Accords of 1996 finally ended Guatemala’s civil war.
What lessons can we learn from this
The banana market in Latin America is controlled by three main companies—Dole, Chiquita, and Del Monte. These companies weren’t reluctant about exercising political influence. They’re also accused of ill-treating workers and covering up such issues with public relations campaigns and advertising.
In Guatemala, the United Fruit Company dominated banana production and sales for decades, and is often accused of disrupting the development of a middle class in that country. Without a proper middle class, it wasn’t possible for the country to develop normally.
What are the Guatemalan banana workers’ conditions now
One of the most dangerous activities to undertake in Guatemala is organizing workers. This is perceived as a threat by agricultural and industrial owners. In a list published by ITUC (International Trade Union Confederation) on the top 25 most dangerous countries for trade unionists, Guatemala placed second.
Today, the minimum wage in Guatemala is $6.27/day while the basic cost of living is $389/month, indicating that the minimum wage is below the basic cost of living. Reports suggest that the workers are not even paid this fee and that women are paid 24% less than men for the same work.
Guatemalan banana workers have been abused since the early 1900s, when the U.S. intervened in Central America for the benefit of its MNCs.It is a matter of record that American corporations have mistreated workers in Guatemala. Even with the unions fighting for better trade practices and the implementation of DR-CAFTA (Dominican Republic-Central America Free Trade Agreement), it is still no guarantee that such MNCs will ensure proper rights for the workers in these nations. The farm workers on Guatemalan plantations continue to suffer due to violence and abuse while trade unions advocate for their rights.