Banana Republics in Central America

This discussion talks about the similarities of natural resource exploitation by North Americans and their chosen entrepreneurial targets with contemporaneous accounts in the late 19th century. Gold and precious metal mining is uniquely positioned to benefit few, and have deleterious consequences on the inhabitants of the culture: labor exploitation, water problems and civil unrest due to displacement [1].


The first attempt to understand Honduras is through a historical biographic narrative of a man named Washington Valentine, who traveled to the country to become a miner, encountering substantial resistance from both nature, labor and the government after initial embrace [2]. His mining company, despite its immense logistical and political difficulties, went on to be wholly powerful and solidified the powers of a leadership that (with much urging and prodding) to the will of foreign entrepreneurs. The gist is the influence of foreign consortium (and their need for timber water and land) may have stifled the growth of self-sufficiency within Honduras.

Twain traveled to Nicaragua during a time when it became a competitor in the gold rush as well, with his narration first being focused on the seemingly destitute aspects of the natives there, coupled with extensive detailing of the landscape “In this land of rank vegetation, no spot of soil can be cleared off and kept barren a week.” [3]

It is difficult to ascertain the impact of Valentine’s influence on Honduras, as it has undergone intrepid turnover since Valentine’s mining company effectively disbanded in the 1950s. This paper should the external influence of foreign nations in terms of economic development, a problem suffered by all the countries discussed here. According to the LA Times [4], among other non-profit organizations, wealth is still massively distributed towards a few influential families.

Gold was not the only object of affection for Central Americans in the late 19th century – rubber had a similar nefarious trajectory. The story does not follow traditional land borders as it traces where the rubber meets the San Juan river – the land of the Guatuso-Malekut, including Nicaragua and Costa Rica (this passage had another unique connection to the gold rush, being that it was the best route at the time for American easterners to reach California by sea). The location was the perfect confluence of elite oppression of the indigineous peoples; the government wanted to stifle the insurrection for development purposes and the North Americans and Spanish waged asymmetrical warfare on the river people after they were attacked. Guatuso-Malekuts were caught and kept as slaves to work for the rubber firms [5], a practice that Catholics sought to abolish through an excursion into the forest, and through much toil, it was actually successful. The rubber empresarios had involuntarily subjogated the prime Guatuso-Malekut, leaving the indigineous tribes in an unforgiving climate without their best workers.

The undertaking’s success may have also been borne out of coincidence, as the demand for rubber decreased internationally, the end result being the Guatuso-Malekut’s land claims being reduced from about 11,000 hectares to 300 [6]. Territorial conflicts between Costa Rica and Nicaragua with regards to the San Juan River were occurring during this time, and they are still occurring today [7].

Despite these machinations, today very precious metal mining plays small parts of the Central American economy, and diversification has included less precious metals like zinc, nickel and substantial amounts of limestone [8].

[1] Power, Thomas. 2017. “Metals Mining And Sustainable Development In Central America”.

[2] Vargas, Juan Carlos. 2017. “Mark Twain In Costa Rica?”. 
Revista De Filología Y Lingüística De La Universidad De Costa Rica 31 (1): Too Many.

[3] Finney, Kenneth V. “Rosario and the Election of 1887: The Political Economy of Mining in Honduras.” The Hispanic American Historical Review 59, no. 1 (1979): 81–107. doi:10.2307/2514137.

[4]      In Post-Coup Honduras, Rising Poverty and Inequality, Report Says.” Los Angeles Times, November 6, 2013.

[5] Edelman, Marc. “A Central American Genocide: Rubber, Slavery, Nationalism, and the Destruction of the Guatusos-Malekus.” Comparative Studies in Society and History 40, no. 2 (1998): 356–90. doi:10.2307/179417.


[6] Ibid.


[7] Wacaster, Susan. 2017. “The Mineral Industries Of Central America Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, And Panama”. US Geological Survey.



I will now rely on modern sources to discuss the differences in Central American countries: Costa Rica, Guatemala and Honduras. The focus is ethnic ancestry and the economies.

Guatemala is a unique country in that it still has a starkly significant population of indigenous peoples (given it was a large portion of the Mayan’s geographic outlay), with influence in the government and cultural identity. In contrast, Costa Rican indigenous population is so small special zones have been created where the majority of indigenous inhabitants reside [1].

Honduras is ethnically a mix of the two countries, with primary Spanish European ancestry and 7% indigenous, but suffers from endemic wealth inequality. [2] One of the primary factors for this is the aforementioned banana republics, but also in that the Honduran economy has a plurality of its GDP derived from thin-profit margin commodity agriculture. Of all the nations, Honduras is most affected by a long period of warfare that stifled economic growth (despite Guatemala’s regime change in 1996), coupled with infrastructure damage during a natural disaster [3].



Costa Rica has a majority of the population claiming European ancestry and a minimal influence of indigenous peoples, and those that remain live primarily in special territories. Unlike Guatemala and Honduras, they have been blessed with remarkable stability, and have no standing armies. As a result, the relationship United States and the Costa Rica could be described as cordial [4]. About 40% of tourists to Guatemala are from the United States. Due to this economical prowess in the region, Costa Rica attracts Nicaraguans to perform general labor, and has consistently doubled the per capita GDP of Guatemala [5].

What becomes clear during the readings is the challenges these Central American countries faced, with the cultural clash of Mexican, European and indigenous peoples in Guatemala and the exploitation of resources in Honduras. What is not particularly elucidated in the readings is the question: Why was Costa Rica dealt a better hand? They had geo-political turmoil during the 19th century leading to their leader’s execution; the natives were dominated by Spaniards in the 16th century [6], like their northern counterparts. Perhaps it was the unforgiving jungle.

[1] “The World Factbook — Central Intelligence Agency”. 2017. 

[2] Ibid. “Honduras”

[3] Ibid.

[4] “Costa Rica”. 2017. U.S. Department Of State.



[5] “The World Factbook — Central Intelligence Agency”. 2017. Cia.Gov.



[6] “Central America.” Accessed September 1, 2017.




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