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The phrase ‘Banana Republic’ was coined by one of the greatest American writers William Sydney Porter, popularly known as O. Henry in the year 1901. Besides it’s etymological history, it has several political as well as literary interpretations.


The history of the banana republic began with the introduction of the banana fruit to the U.S. in 1870, by Lorenzo Dow Baker, captain of the schooner (a type of sailing vessel) Telegraph, who bought bananas in Jamaica and sold them in Boston at 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. 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 American multinational corporations (the United Fruit Company, 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. By the 1930s the United Fruit Company owned 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”.

The political instability consequent to the coup d’état stalled the Honduran economy, and the unpayable external debt (the total debt which the residents of a country owe to foreign creditors) of the Republic 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.

Guatemala suffered the regional socio-economic legacy of a ‘banana republic. The inequitable land distribution was an important cause of national poverty, and the concomitant socio-political discontent and insurrection (a civil war). 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 (a form of power structure in which power rests with a small number of people, distinguished by nobility, wealth, education, corporate, religious, political or military control).

Courtesy Wikipedia

image courtesy : Council on Hemispheric Affairs

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